Austin is the live music capital of the world, home of the U.S. Grand Prix, and headquarters of Emerson’s Systems and Solutions business, so it’s the perfect place for company management to kick off the 2016 Emerson Global Users Exchange. “Time here is well spent getting fresh ideas, making good connections, finding the energy and urgency to solve tough problems and work with rapid technology change,” said Steve Sonnenberg, chairman, Emerson Automation Solutions.
2016 has been a difficult year for industry. Low energy prices have affected oil and gas, and despite low feedstock costs, refining and chemical industries have been affected by low demand. “One bright spot is life sciences, where we’ve seen growth and investment,” Sonnenberg said. “At Emerson, our philosophy is to never let a challenge be wasted—in slow times, do things to make things better when the economics turn around.”
Emerson has transformed its internal structure to focus on two business platforms, combining its Emerson Process Management and Industrial Automation businesses into one: Emerson Automation Solutions. “We’re continuing the same sales, support, engineering and services as in the past, and now we can better address life sciences, food and beverage, and packaging industries,” Sonnenberg said. “We’re working harder to be a trusted partner.”
Emerson also has made strategic acquisitions including Pentair Valves and Controls. “This adds pressure management, isolation valves and controls, and gives us the most complete valve offerings and services in the world.” Other recent acquisitions include Permasense (wireless corrosion monitoring) and FMC (blending and transfer).
“In my new role as chairman, I get to decide exactly what I work on,” Sonnenberg said. Along with examining potential acquisitions, he’s been visiting customers around the world, “seeing their passions and concerns,” he said, to help the company continue “earning trust, listening, and being your problem solver.”
Sonnenberg’s former role is being filled by Michael Train, executive president, Emerson Automation Solutions, who, along with experience as president, global sales; president, analytic group; president, Asia Pacific; and playing Elwood at the Emerson Exchange music jams, speaks Japanese, and enjoys working on 1960s muscle cars.
“In the fall of 2008, Steve took over from John Berra, who presided during the first digital transformation and redefinition of automation systems,” Train said. “Steve focused on customer service, listening, partnering and advising, and brought faster delivery and more efficient engineering services. He expanded our offerings to the industry’s most complete, allowing us to win and succeed in complex projects such as Shell Prelude and BP Whiting.”
At last year’s Exchange, Emerson introduced the concept of Top Quartile Performance, a management-focused initiative to identify how top producers perform. It introduced levers--incremental improvements in products, engineering and services that result in big improvements in performance—and announced Project Certainty, a system of products, engineering, and services to improve success of large, complex projects.
Top Quartile is defined as achieving operations and capital performance in the top 25% of peer companies. “Compared to a fourth-quartile company, a top-quartile company spends less than half the cost and needs half the time to execute a project,” Train said.
Now, Emerson is taking the concept into operations. “Many companies have had OpEx programs for years. They’re good, but not good enough,” Train said. “The pressure to meet KPIs has never been higher. Many companies feel they need to be in the top quartile just to survive.”
Top-quartile companies recognize safety, reliability, productivity and energy/emissions as “the four horsemen of OpEx,” Train said. Improvements in these areas could save industry significantly since “approximately one trillion dollars in company value is lost every year to suboptimal operating performance.”
For example, compared to industry averages, top-quartile companies have “three times fewer recordable safety incidents,” Train said. They spend half as much on maintenance, with 4% higher uptime. Their operating costs are 20% lower, they emit 30% less greenhouse gases, and consume 15% less energy.
“By helping customers leverage the best practices and strategies of Top Quartile performers, Emerson is able to help customers improve their earnings as much as 15%,” Train said.
Despite years of operations improvement programs, many producers are increasingly disappointed with nominal improvements achieved. Due to limited peer benchmarking and uncertainty about which approaches will yield the greatest improvements, companies are trapped by decades-old work practices that fail to take advantage of advanced digital technologies, resulting in stagnant financial performance.
Recognizing this opportunity, this year, Emerson Automation Solutions announces Operational Certainty, a consulting practice plus expanded project execution methodologies and resources.
“Manufacturers are stuck in a ‘grind it out’ mindset, frozen in a paradox of needing dramatically better results yet being risk-averse to try new approaches,” said Train. “Companies lack the confidence in knowing which investment option will move the needle on financial performance. Operational Certainty provides a clear roadmap.”
With its industry expertise, consulting services, comprehensive automation technologies portfolio and new Industrial IoT solutions, Emerson is able to help customers extract greater value from their investments and deliver measureable results to the bottom line. Train said, “We know precisely what behaviors are delivering industry-leading performance and what is required for other companies to reach those levels.”
To help customers establish path to Top Quartile performance, Emerson starts with Operational Certainty Workshops, consultant-led sessions that help them pinpoint causes of poor performance, prioritize actions that can yield the improvement and establish a scalable work plan for achieving those results.
“Emerson introduced Project Certainty at precisely the right time, when the industry was desperately seeking new ideas for improving capital projects,” said Train. “We believe the same is now true for Operational Certainty.”