Live from WBF 2008-- Getting $$ from Process Data

Getting $$ from Process Data Dr. J. Patrick Kennedy, CEO of OSIsoft, provided the closing keynote for WBF 2008. PC Vs IT -- IT Does it Right -- IT Doesn’t Matter IT -- Part of All Things Modern but No Stand Alone Value -- Peer to Peer Redesign PC -- Difficult, Treacherous -- Stand Alone No Value About OSIsoft -- Based on Idea Plants needed Real Time Data Mgmt-- something people said wasn't needed... -- 28 Yrs Old -- 2008 - $250MM/600 People -- PI Killers Secret ----  Listened ----  Focused on Value The Math of  Success --- $$ IN --- $$$$ OUT --- High Expected Present Value The people upstairs are looking for projects that will provide high current value at low risk. There are enough troubles running a public company... Reality --- Mythical Man Month --- Low Hanging Fruit --- System – Continuous Improvement --- Improvement over Time Three Examples:  Batch Digesters  Steel Mill  Chemical Park The batch digesters...1% improvement is worth 1% of the value of the mill! You have to be aware of the value of what is being done...NOT the COST! The steel mill...steel mills are industrial archaeology havens...it is sometimes hard to tell the scrap metal from the process units. They break a lot...and they were the typical maintenance people...fix it when it breaks. This doesn't give you time for improvements or engineering. Proactive maintenance...you do the things you have to do to make things work. They went from 70% reactive maintenance to 20%. Was that worth anything? 16 % improvement in availability of the steel mill. Yes, these things are worth the money. The chemical park...Kodak. And you all think you are in a bad business... try making film. 1300 Acres >20,000,000 Square Feet 11,000 Employees 30 Miles Road Fire Department, Railroad Water and Waste Water Treatment Plants Operates Two Power Plants They went from three distilled water plants to one, firewater went down, reducing catalyst regen costs, and all sorts of stuff like that. They moved their power peaks to where they were paying negative dollars. Kodak got savings in every department:  Water Management Environmental Regulation Asset Management Troubleshooting Operating Effectiveness Energy Management Inlet Vanes Utilities (Power, Steam, Air) Trading/Power Purchase Lessons Learned No BIG BANG – 1000 little bangs Continuous Improvement Process Combined Capital and Intelligence Operation Infrastructure Approach – Remove Infrastructure from Projects Value Monotonic w/Scope Lowers the Cost of Curiosity To Get the $ You Have to Deliver $$$$ In March of last year, Kodak shut down an entire power plant. That system is now making $28 million a year for Kodak. World Competition No long cheap raw materials/labor Biggest market in the world Compete on Strategy and IP RT Data Management New Great Way to be Seen What has to happen is you have to create a forum (perhaps at WBF) where you can share IN DETAIL that you can PROVE where you can make money for your companies. Where users can come and talk to each other about where the benefits are. Your management will come up with reason after reason why you should not do these projects...so you need rigorous papers that allow you to prove your case. Forget the technology...they don't care if the models are linear or not...they don't care about S88...they care that what you do works and makes the company money...that's your job. What they need from you is how they're going to pay for it. Scare tactics don't work. Security doesn't sell. Safety doesn't sell. What sells is proving that you can make your management more money. Performance based pricing never works, because by the time the company sees what the value actually is, they don't want to pay the price. Piloting really doesn't work either...do it first.

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