Technology is an instrument of change. It can be disruptive, enabling, subtle or timely, but recent technological leaps have affected not just research and development (R&D), but the way companies think about R&D in industries as diverse as power, mining, automation and oil & gas.
In a roundtable discussion at ABB Customer World in Houston this week, several technology officers shared their fears and their triumphs in the face of the continuing waves of technology advances.
āIn the utility sector, weāre facing some huge changes with how weāre producing and using energy as a society,ā said Terry Oliver, chief technology innovation officer at Bonneville Power Administation (BPA). āElectricity used to flow one way in the system. Now customers have photovoltaic systems, and weāre seeing two-way flows on systems that were designed for one-way flows.ā To monitor the quality of these new power flows, BPA is using a technology developed in the 19th century to look at the grid 60 times a secondāa significant adjustment to a technology that was used once every two seconds when first introduced.
Luiz Mello is technology innovation director at Vale, a $26 billion global mining company. Vale is a large producer in iron ore and nickel, with the bulk of its mining operations in South America and the largest segment of its product destination being Southeast Asia. āI was brought to Vale to bring a new perspective to structure its corporate R&D function,ā explained Mello. āDespite being a global company in more than 30 countries, thereās a lot of focus on Brazil, where the educational level is similar to the United Statesā in 1910. We try to foster connections with academia. We created ambitious programs in Brazil and Mozambique, as we need to hire people in these areas.ā
Valeās primary investment focus has been on creating an autonomous mine. āMining has a geographical constraint, by nature of where the ore body sits, which is usually in remote countries where the education level is not very high. Getting a job at the mine requires a skillset that the people there do not have, so they must be trained.ā
Although Ahmed Hashmiās job title at BP is head of upstream technology, he thinks of himself as a business leader responsible for driving change. āIāve been with BP 30 years on,ā he said. āOil prices dropped in half in 2014, and we are still not making money at todayās prices, but things have improved a lot. Thereās a desire within the industry to reset itself, whether youāre talking about extraction, refining, logistics or labor costs.ā Everything in oil & gas is being reset, he emphasized.
āPeople talk a lot about change through digitalization,ā added Hashmi. āDigitalization is not something new. But software development is still too slow. If we can automate software development, then weād have something.ā Still, digitalization has compressed development time. When gas was recently discovered in Egyptās Nile Delta, it took only two years for BP to be up and running. āIt used to take seven to 10 years for that,ā said Hashmi.
āThe time from concept to introducing a product is getting shorter: fail fast and fail cheap,ā agreed Bazmi Husain, CTO, ABB. āIn the 36 years Iāve had with the company, I canāt recall another time when business impact, energy efficiency and technology have changed more quickly than today. Last year, there was more renewable energy coming on line than there was conventional energy coming on line. The ecosystem of how we do things is changing.ā
All that stays the same
āWhen we develop something today, it comes out of the factory with a digital twin.ā BPās Ahmed Hashmi explained how technology has changed the oil and gas business at ABB Customer World this week in Houston.
In the electric power industry, the change in consumer behavior is causing utility executives to shake with fear, said BPAās Oliver. āIf you donāt need capital infrastructure and your loads are changing, you have to change your business model,ā he explained. āOur tradition has been to think of least cost as the way of keeping things going. But now we need to look at what weāre doing in terms of a value proposition.ā
A lot of improvements in products used to be in hardware, explained ABBās Husain. āGoing forward the differentiator is going to be more in the software aspects,ā he said. āYour motor will be more reliable because youāre measuring its operating conditions, and youāll be able to predict whether it can take a higher load or be able to predict failure before it even shows physical signs. The connectivity and digitalization are already there, and the sensing will continue to advance.ā
The differentiation between hardware and software will become more outcome-based, predicted BPās Hashmi. āItās not hardware versus software. Itās based more on the outcome. In the past, the biggest problem with changing software was there were new forms that you couldnāt connect to the logic. Now you donāt have to program all the way down to your data structure. You have cloud platforms and new data structures.ā
What shall we build today?
Valeās recently completed Brazilian mine was a huge capital project, costing $14.5 billion, and digitalization played a huge role. āAll of the processing units were built and then brought to the site afterward,ā said Mello. āItās a huge LEGO project, and you need to make sure everything will fit. Visualization was critical on that, and it brought up some faults in the design, which were fixed before construction. Drones with sensors can collect data on the facades, and we combined that with geological data for a much better plan.ā
The oil and gas industry has seen multiple waves of technology, and the digital twin has risen to the surface. āAutomation isnāt necessarily nirvana,ā warned BPās Hashmi. āInsight matters more than automation, and that leads to better decisions sooner. Artificial intelligence and machine learning have been around for a long time. We have a lot of stuff that has been created in a different era. But, when we develop something today, it comes out of the factory with a digital twin. Before you do anything to an asset, you do it to the digital form.ā
How to get it done
Digitalizationās benefits are documented, but the challenge often is in navigating the culture change. For BPA, it was all in the framework. āWe asked, āWhat do we want to be when we grow up?āā said Oliver. āWe asked managers and middle executives, and then we found out what was in the way. That helped us to focus our research investment on stuff that matters to BPA. You can get carried away with engineering curiosity.ā
Thereās often a disconnect between corporate and operations, explained Valeās Mello. āDiminishing that disconnect was critical for us,ā he said. In the first year of an innovation initiative, Vale employees generated 7,000 new ideas. āAnd some of them had patent possibilities,ā said Mello. A slightly overzealous management team was so pleased that it pressed harder the following year and received 22,000 new ideas. āThat was just not manageable,ā explained Mello.
āMore things can go wrong than can go right,ā BPās Hashmi. āIf I donāt understand the business ahead of technology, then Iām not doing my job. There are things we think we should be doing that will change the business in the future, but the business isnāt asking for them now. You have to balance the times. Not everything can be long-term. You have to bring results every day, and then you earn the right to do the long-term stuff.ā
For Vale, training and educating future employees is half of the battle, but replacing certain tasks with automation is equally effective. āWe do not believe people in Brazil and Mozambique are getting the proper training,ā said Mello. āBut weāre also aiming to get a complete fleet of autonomous trucks. Weāre partnering with nearby schools to get the people trained. While there is a perspective of jobs lost from a given community, startups may emerge and provide software solutions that live together with diminished job opportunities in the mines themselves.ā
Mechanized automation has been impacting the labor force since the first industrial revolution, added Hashmi. āAs you work on lower-level stuff that doesnāt require a basic understanding of the mechanism in place, your job will get automated out at some point,ā he said. āThatās true of anything in the world. If you look at unemployment today, itās almost zero if you have a high level of education. It behooves us to invest in that.ā
Husain agreed. āThe jobs that robots take today are dirty, dull and dangerous,ā he said. āThe cage around the robot is not to keep the robot in. Itās to keep the people out. Ā We might have to get used to going to school several times in our lifetime.ā
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