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Operational excellence depends on digital discontent

March 16, 2017
To discover opportunities for improvement, be dissatisfied with the status quo

From equipment productivity, reliability and energy efficiency to project engineering, sourcing and distribution, operational excellence offers myriad opportunities for improvements. Attendees of the panel discussion, “Next level operational excellence: Benefits of digitalization” at ABB Customer World this week in Houston learned that these opportunities come in many forms, but only by opening your mind to the possibilities.

“For us, digital is leveraging data and technology to develop new business models,” said Narinder Pal Singh, vice president of engineering at OLAM International, a seed-to-shell agribusiness operating 200 facilities in more than 70 countries with 16,000 employees. “Digital has a role to play from farming through processing and distribution, through the entire chain. With every click we are generating data and the potential for bottom-line improvements.

“We can improve our machine efficiency (OEE), material efficiency (less waste), manpower efficiency (reduce labor and do more with the people we have), and energy efficiency (when and where we do what) by collecting data and pulling it together.”

Do things differently

“Doing things differently is essential for us,” said Sandy Vasser, leader (retired), ExxonMobil. “Our projects became extremely costly do deliver. We already needed to lower the costs and shorten schedules, then the price of oil dropped.”

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After the project is completed, “We have to maintain them for 30 to 40 years,” Vasser said. “We need to operate at minimum cost, and maximize uptime and throughput.”

People and facilities are at different points on the digitalization adoption curve. “Some customers are at about 2.2—how can we get them to Industrie 4.0?” said Sami Atiya, president, Robotics and Motion, ABB. “Others are pushing the envelope on digital, with advanced robotics, but when you’re making a car a minute, you can’t let the plant shut down. At night, when the workers are gone, you can shut it down. So we monitor through the day, anticipate maintenance requirements, and perform them when the plant is off.”

Get up the curve

“Manufacturing executives see digital as critical, but only 10% rate themselves highly on their capability,” said Greg Scheu, Americas Region president, ABB, and panel moderator. “How can we improve this?”

At ExxonMobil, “We had to overcome the burden, bias and baggage of doing things the same way they’ve always been done,” said Vasser. They tried incremental improvements, but still had the same problems. No matter which contractors or what project, the result was the same, he said. “The common denominator was us.”

“So we had to almost forget how we’ve been doing things for decades. Instead, we identified all the things we needed to do—to shorten schedules, lower costs. We found the core issue was that we were doing things the same way we always had, even though today’s problems and technologies are different. People realized this and saw the need to change.”

At OLAM International, the emerging availability of new devices signals possible opportunities. “We have shortlisted the areas of digital inventory management, smart plants and energy efficiency, and we are trying a lot of pilots,” said Singh. One example is remote monitoring. Tomato processing plants run 80 days a year. During that time, they will process 500 semi truckloads a day of tomatoes. “By using sensors and remote monitoring 24/7, we’ve reduced downtime by 30%,” he said. “That’s something we can’t do ourselves—we’re partnering with ABB.”

Take people with you

“In 2030, 70% of the workforce will be millennials. How do you work with them—how do you collaborate?” asked Scheu.

Digitalization has led to a generational challenge, where one generation is distinctly different from the next in its abilities and inclinations, but applications bridge the gap. “There are multiple ways to enter the digital world—it depends on where you are,” said Atiya. “In production planning, we see virtualization bringing tools that help experienced engineers design more efficient cells and facilities. In operations, sensors can be used to monitor machines for improved reliability. We give a customer three wireless motor sensors to try out, and they ask for more.”

OLAM includes people in its adoption process. “We bring digitalization on in three steps,” said Singh. “First, we are always asking what digital information can do for us, how it can affect our business, and what its disruptions could do to affect our business.”

“Second, when we have something, we bring our managers in and bring them up to speed. Third, we partner to implement.”

Be wary of disruption

“Uber and Airbnb didn’t check in with the taxi and hotel businesses before they disrupted them,” said Scheu. “What do you do to deal with similar potentials in your industry?”

Singh sees similarities in food and beverage. “Where food safety and sustainability used to be competitive advantages, they are now base requirements,” he said. “The supply chain is flattening, with more companies sourcing directly from the farm and shipping direct to consumers. If you want to stay in the game, you need technology.”

At ExxonMobil, it’s about the supply of technology. “There are many opportunities in the supply chain. Every participant needs to work to make transformational change, as success depends on the weakest link,” said Vasser.

For example, ordering based on internal standards and specifications “results in massive inquiry packages with inconsistencies and errors that vendors must work to understand,” Vasser said.  “Then there are debates about specification deviations, custom designs, approvals and manufacturing. Then a factory acceptance test [FAT] before we arrive, then it’s done all over again. The cycle takes six to 18 months.”

“Most of that could be eliminated if we would just buy a standard product. If we don’t customize it, we don’t have to FAT it. Instead, key suppliers make standard solutions and maintain the specifications. We order it, we buy it, we use it.”

(Round of applause)

“True transformational change will only come through partnerships with different perspectives and areas of expertise,” Vasser said. “We need to work with suppliers to come up with the best solutions.”

“It’s been a journey, one step at a time. Instead of how you do it, examine what you are trying to do.”

Download the full report from ABB Customer World 2017

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