Digitalisation of chemical industry puts the focus on customer centricity and can only be achieved by identifying the most critical customer touch points, and exploring the opportunity to improve those through digitalisation and by changing the organisational structure and attitude to support it. While digitalisation of a chemical plant embraces production, supply chain, manufacturing and distribution, efforts to focus only on a part would usually result in sub-optimal solutions.
Chemical industry in the Middle East has made strong investments and good progress in the last ten years by developing, implementing and executing game-changing projects, building capabilities around digitalisation, and also by implementing innovations. The industry has built in a strong infrastructure. There is a potential to build further on this infrastructure by applying the principles of Industrial Internet of Things (IIoT), which will transform the approach, make use of the huge amount of data that the industry is holding on, and build a lean, efficient and globally competitive industry in the region.
The roundtable was attended by Ali Vezvaei, president and CEO, Bilfinger Middle East; Christian Cravedi, senior vice president, IMEA hub BU manager, oil, gas and chemicals, ABB; Fadi Matar, director, public affairs and government affairs, India, Middle East, Africa and Turkey, Dow Chemical; Fady Sleiman, global chief digital officer, Petrofac; Imre Csoti, vice president, onshore operations, MENA, McDermott; Ishaq Mohamed Al-Sarhni, general manager – engineering, Duqm Refinery; Martin Menachery, editor, Refining & Petrochemicals Middle East; and Naji Masri, head of strategy and controlling, Middle East, BASF.
The roundtable discussed the themes of the ‘Key Role that Digitalisation Plays in the Design, Engineering, Construction and Commissioning of a Chemical Plant’, ‘How does digitalisation optimise operational efficiency in a chemical plant?’, and ‘Creating a Sustainable, HSE-compliant, Volatility-manageable and Profitable Chemical Plant, Using Digitalisation Solutions’. The roundtable was chaired by Cravedi, and co-chaired and moderated by Menachery.
The most significant question now is how chemical industry can transform the huge volume of data it has compiled into smart data? The industry needs technologies like digitalisation to achieve this result. It must not forget the complexity of a chemical plant. And, this complexity is increasing every day. Digital solutions offer many innovative ways to manage this complexity.
“In chemical industry, lot of people are putting lot of data into systems. One of the struggles in our industry is making people understand the importance of the quality of the data,” says Masri.
How to interpret data? How to bring value of data into real life? Digital transformation is not about collecting lot of data and creating big data. It is about bringing out something meaningful out of the collected data into the business. Whatever digital is doing is all about customer satisfaction. It is about health, safety and environment – keeping people and assets secure. And, of course, it is about money.
Managing mega projects
As everyone is aware, chemical industry will develop many more world-class facilities that will drive the human progress in the future. We need to be more competitive and agile in this drive. It is a huge shift from the past and digitalisation will be the key enabler in this paradigm shift. Digitalisation will dramatically change the way chemical industry operates in the near future. And, digitalisation will generate additional revenues, enhance profits and generate new jobs.
“Digitalisation in the chemical sector is not an option anymore. Digital transformation for an organisation in this sector is all about change and productivity, and making sure that there is a value proposition directly for the bottom line. Without this mentality from the top of the organisational structure, it is a major challenge to achieve digital transformation,” Sleiman comments.
“As far as the chemical manufacturing sector is concerned, there are real opportunities out of digitalisation for capital investment projects. In the project phase, the industry can use digitalisation to drive improvements, which is all about cost, schedule and risk,” opines Cravedi.
“As an EPC company, we have seen that digitalisation is essential to be able to manage mega projects,” observes Csoti.
“It means that chemical plants can handle far more processes and signals with actually fewer, better informed and equipped people. IIoT is enabled though cyber physical systems – it is not just the equipment alone, or the digitalisation alone – it is a combination of equipment, increasingly defined by digitalisation,” Cravedi remarks.
“Managing mega projects in the chemical industry, whether in the Middle East, or elsewhere in the world, is faced with big challenges that have been there for decades and have been waiting for to be resolved. These would not be resolved overnight but continuous efforts to bring in modernisation like digitalisation bring value to the industry, and will eventually help break the barriers and make things possible,” declares Al-Sarhni.
“There have been great strides made in all areas of digitalisation in the chemical industry. The industry transitioned over a period of time from pneumatic instruments to digital instruments, to control systems, and to layers of analytical control. All these different developments being done have been really essential to the management of making the mega projects,” Csoti points out.
“Our digital twin approach is an attempt to make an end-to-end data management model not only for the EPC part but also to take these digital models over to the operators and owners so that they can continue to maintain and operate the plants from those models. These models are actually a digital version of what is physically there at the project site,” reveals Csoti.
Real-time exchange of skills and data
The product manufacturing units in Europe and the US are using the convergence between information technology and operational technology to the maximum level. When information technology and operational technology implement the result of R&D on a production floor, then only these two are converged properly. This is happening in many other sectors but not in the chemical industry.
“In my personal opinion, what is going to change by digitalisation is the operation, the environment in which the plant is being operated. The current demand for technology-driven value proposition is going to change the way our end-users are going to operate their plants. It will be a collaborative environment in the future, which is going to be in the cloud, where every customer is going to have the real-time possibility to have a massive volume of expertise, or knowledge, which is through data,” Cravedi asserts.
For the chemical industry, it is advantageous to go for big data and use it for bringing in value. It is a transformation process. Most of the chemical companies are looking at optimisation of plant productivity. By collecting data, and using better data algorithms, it is possible to find potential problems in a chemical plant. It is an innovation process.
“As a technology provider, we need to have all these skills and data available for our customers in the future, who were till yesterday working in an insulated environment, operating their own plants. In the new era of digitalisation, they are going to be obliged to enter into the cloud and share on real-time basis the operational skills and data. Basically, digitalisation will create an environment of real-time exchange of skills and data,” adds Cravedi.
“Digitalisation means different things to different people in different industries. Basically, digitalisation offers connectivity, which is the use of Internet- and IT-based infrastructure in order to be more efficient and agile. Digital transformation is the journey from the present to an autonomous plant where there is the highest degree of automation but more importantly, data- and algorithm-driven decision making. Chemical industry needs to take the course of digital transformation to remain relevant and competitive,” Vezvaei elaborates.
Challenges faced in digital transformation
“In my personal view, I think we still miss a clear direction in digitalisation. I think it will take some time for key leaders in the chemical industry to focus, agree and decide on what is really required in terms of digitalisation. At the moment, a lot of entrepreneurs and smart projects are giving it a shot, trying new ideas, but it would take some time for things to be capitalised and to be actually implemented,” explains Masri.
“While digital landscape is changing continuously and very quickly, chemical industry is slower in adapting its technological advantages. The industry actually invest a lot of money in hardware, and build all the systems in place. And then, of course, you need to back up the systems with software for support. It again costs a lot of money,” Matar observes.
“In the chemical space, when I look at the maturity curve of digitalisation, the segment is actually quite at the low end of the scale. So, it is an opportunity for everyone. Everyone has to begin this journey of digitalisation because it has a direct impact on operational costs. If you do not digitalise, your competitors would become cheaper and smarter than you because they are using data much more intelligently compared to you,” comments Sleiman.
“Technology changes practically every day. On our customer side, technology is changing at a pace beyond what we imagined, and it is also changing our industry. I think the challenge that we need to face is adapting to change to have the right technologies. Live digital platforms in place will really help us get stronger in the fast-paced markets. The greatest challenge for us is to really leverage on the best digital practices that exist – not just to bring them on board – but to get those active as quickly as possible,” Matar declares.
“Digital transformation is of primary importance for sustainability and growth in the chemical industry. Digitalisation is the number one topic for the future, in order to increase whatever is going to be the productivity and reliability of chemical plants in the region. Productivity per dollar, per hour, and per molecule are the game-changers going forward in the era of digitalisation,” remarks Vezvaei.
Chemical industry, which is a science-based and high-technology business, is under tremendous pressure to deliver better value for its customers and shareholders. With resources like finance and expertise becoming global and the impact of digitalisation sweeping all spheres of our lives, chemical industry enterprises are taking the extra step to develop and implement revolutionary and strategic business plans to meet the challenges around it. Complex design, continuous technology innovation, reduced manpower, cost control and profitability maximisation are some of the key drives to be managed by these companies continuously. Success of any enterprise depends on how it tackles these tasks.
There are opportunities presented by IIoT as its implementation allows for an examination of the existing operational technology infrastructure and the potential for its convergence with the information technology infrastructure. While this can be seen as an indirect benefit, it is in fact one of the main benefits of digital transformation. It is driven by assessing the existing infrastructure for its readiness to support implementation of IIoT and the amount of data that would be generated by the end points.
The new digital technologies will enable remote operations in chemical plants and projects. It is still at the infant stage. Many pilot projects are already there in this direction. Digital transformation will become a reality in the chemical industry in the near future. The biggest enabler for the digital drive in the chemical industry would be the customer demand. Everyone sees the huge need to go through this route for operational excellence. There is no survival in the future without using the novel concept of digital transformation. Technology is no longer the constraint. The need is to bring in clarity into the digital structure.
Digitalisation done in the right way will further improve the uptime, productivity, energy efficiency and safety in the chemical industry. The direction of this technology development is not just connecting systems but running them in a collaborative way with an increasing degree of autonomy.
There is already a massive impact of digitalisation in the chemical facilities, and this trend is going to be more powerful in the future. In every conference, seminar, workshop and industry events in the region, digitalisation is a core discussion point.
“We witness thousands of digital projects being discussed but only ten out of this will likely succeed. We still do not have a clear direction where digitalisation is going to take us. There are lot of ideas from potential entrepreneurs on digitalisation, including robotics and artificial intelligence. We have lot of buzzwords on digitalisation ideas but it still lacks direction about where we are heading through digitalisation. What are the important aspects which we all should consider to actually traverse the path of digital transformation?” Masri asks.
Human talent is a key factor
All the operators in the chemical facilities are trained for specific operations. But they might not be trained on how to use the digitalisation solutions. All the operators should be upgraded with digitalisation capabilities. That will solve the problems of the synchronisation of information technology and operational technology in operating plants. This requires some major investments and time. Many people are continuously talking about the integration between information technology and operational technology. But, there is lot of improvement needed in the Middle East chemical industry in the integration of information technology and operational technology.
A chemical project is divided into many phases – conceptual stage, pre-FEED, FEED, detailed engineering and design, EPC, and commissioning. These stages are not integrated in project management. Once these get integrated, there is convergence of information technology and operational technology in project management. There is a huge gap in this in the Middle East, compared to the US and Europe.
“When we consider the human talent, it includes the ability to create future operators and train future technicians and engineers, who would be able to operate and maintain the chemical plants in a better and more efficient way that can bring value to the business owners,” Al-Sarhni says.
“The academic institutions and the training and education systems need to come on board in order to make sure that the future generation of operators, technicians and engineers are empowered to work in a new era of digitalisation. This full chain of collaboration is important and is the foundation stone in making the first step towards bringing digitalisation into the industry and making a very successful transformation,” adds Al-Sarhni.
The future direction
Many companies in the Middle East are on hype when it comes to the adoption of digital transformation. Some of the companies in the region are really advanced in digital transformation, and those companies have innovation departments.
“One of the stimulating outcomes of digitalisation for the chemical plants of the future is that it easily connects expertise across company boundaries during the project planning and execution phases. And, during the operations phase, beyond connecting subsystems and systems, digitalisation connects people for better productivity,” Cravedi observes.
“I think none of the chemical plants now we are building, in general, are going to grab fully the digital technology challenges we are talking about today. But, I believe that this region is going to be somehow one of the first locations to show the world the fully digitalised chemical plant with the latest digital applications available in the market. This may happen by 2025,” concludes Cravedi in his closing remarks at the roundtable.
Monetisation of IIoT to be a priority
By offering third-party-enabled IIoT-based products and solutions, industrial automation vendors have evolved to provide proprietary digital platforms via the Product-as-a-Service (PaaS) business model.
The trend of digitalisation in end-user industries prompted automation vendors to invest in IIoT technologies across diverse applications, and they are now looking to integrate these technologies to complement conventional automation systems and give end-users better control over the systems’ functionality.
Frost & Sullivan’s recent analysis, ‘Global Industrial Automation Market Outlook, 2018’, highlights the IIoT platform offerings of major automation companies and compares their products and services. It underlines the role of start-ups with niche capabilities in operational and information technologies in 2017. The analysis also details the market landscape of the key participants in process automation, hybrid automation, and discrete automation markets.
In addition to maximising market expansion opportunities, proactive automation vendors will also explore opportunities in: forging strategic partnerships with pure-play IIoT providers to add value to their existing offerings and becoming a single point of contact for end-users; diversifying into electrification products – automation vendors have to focus on developing solutions that will enable traditional oil and gas companies to foray into the power business; promoting open-source controllers – the introduction of app logic controllers (ALC) has bolstered the market as the system is driven by open-source programming, wherein end-users can download and use an app to control a specific application. This, in turn, has created revenue streams for app developers, hardware providers, and system integrators; and shifting from hardware to software and services – vendors can ease clients’ shift to digital technologies by minimising their investment risks by employing novel business models such as PaaS, pay-per-use, and licensing.
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