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Jon Allwood
Head of Global Digital & Asset Transformation
KBC (A Yokogawa Company)
November 10, 2020
Business Model
Disruption
The Step-wise Transition to
Remote Operations
Operations Management Asset Performance Management Functional Safety Management
Prescriptive Analytics Predictive Analytics Process Analytics
Procedural Automation IIoT Dynamic Simulation
Causes of Abnormal Situations
Safety Moment
The Energy and Chemical Industry Must Digitally
Transform to be Operationally Excellent
This means operating with:
No safety incidents No unplanned outages
Rigorous adherence to
operating plans
Agile response to market changes
and asset disturbances
A motivated and informed
workforce
A culture of profitability
Operating Model
Human Capability
Human Reliability and Discipline
Leadership and Culture
◼ Operating model enhanced and aligned to
support new, better and safer way of working—
organization, processes, tools and technology
◼ Upskilling on new techniques and knowledge
to ensure digitalized operations tasks are
executed safely and efficiently
◼ Employees are compliant to work processes
and routines aligned to the new digital way of
working—do it right and do it well
◼ Visible leadership support demonstrating digital
transformation is a business priority, is the way
forward and push the cultural change
Safe,
Reliable,
Profitable,
Operations
World Class Practices
▪ Challenge the conventional practice
▪ Data driven
▪ Integrated Asset Model
▪ Automation is part of practices
▪ Remote working
System and Processes
▪ Processes modified to adapt to the connected way
▪ Manual tools vs. connected tools
▪ New processes e.g., robotic automation
People
Addressing the Operating Model to Align with Digitalization Is
Often Overlooked as a Key Enabler to Achieving and Realizing
Sustainable, Safe, Reliable and Profitable Operations
Today’s Discussion Topics
Digital Transformation Setting
New Operating Model is Paramount for
Digital Transformation
The Step-wise Transition to Remote
Operations—The Practical Way Forward
1
2
3
Today’s Discussion Topics
Digital Transformation Setting
New Operating Model is Paramount for
Digital Transformation
The Step-wise Transition to Remote
Operations—The Practical Way Forward
1
2
3
High
Low
HighLow
CapitalInvestment
Organisational Impact
Efficiency and
Effectiveness
Digital Process
Re-engineering
Digital
Organisation
Digital Business
Transformation
0 – 10% 10 – 15% 15 – 25% 25 – 50%
Unlocking
Value (ROI)
Digitalization Journey
▪ Business model
re-design
▪ Supported by
advanced
automation for
closed loop control
▪ Digital decision
making
▪ Digital DNA and
culture
▪ Restructure of
organization
structure to work
digitally
▪ New capability
▪ Enhanced roles
▪ Processes and
practices aligned
to digital way of
working
▪ One version of
truth
▪ Point solution
applications
▪ Productivity
improvements
0 – 10% 10 – 15% 15 – 50% > 50%
Reduction
in footprint OperationalAgility
High
Low
Critical Factors to Successful Digitalization
Digitalization Enabled Strategies Will Allow Organizations to
Reach and Potentially Exceed First Quartile Staffing Benchmarks
KBC OpX Maturity Model
So You Must Baseline Against a Maturity Model to Set the Right
Expectations for the Digitalization Journey
▪ We recognize that no
assets are the same
▪ Assessment against
the maturity model
allows organizations
to have a good
baseline on the
current condition and
the efforts that
needed to move the
asset forward towards
“innovative”
▪ The maturity
assessment also
needs to reflect the
operating
performance
indicators of the asset
ROCE
?
LOPC
?
OEE
?
Loss of Primary Containment/Overall Equipment Effectiveness/Return on Capital Employed
Today’s Discussion Topics
Digital Transformation Setting
New Operating Model is Paramount for
Digital Transformation
The Step-wise Transition to Remote
Operations—The Practical Way Forward
1
2
3
The Right Operating Model Drives the
Desired Outcomes
Outcomes
▪ Shareholders’ wealth
created
▪ Business operations
targets met
▪ Financial targets met
▪ Risks minimized and
mitigated
▪ Cost efficiency
improvements
▪ Safe and sustainable
Policies, Boards,
Bodies and
escalation to
ensure compliance
and assurance
Technology
required to drive
the strategy and
improve how the
organization work
Human capital to
deliver the strategy
through talent
management,
performance
management, visible
accountability and
clear roles and
responsibilities
Right culture where
working environment
aligns with the
strategy
Operating
Model
Culture &
Way of
Working
People and
Organization
Performance
insights
Technology
Governance
Processes
Data and analytics to information on performance to decision making
Processes and associated tools that outlines the required steps to effectively manage business operations
We Are Seeing a Move to Centralized Organization
Design to Support the Digital Way of Working
HSE
Maintenance
Operations
Production Planning
SVP Downstream Asset
Information Technology
Technical
SiteSupport
SVP Downstream Asset
Information Technology
HSE ResponseCampaign Maintenance
Field
Surveillance
Response
Maintenance
SiteSupport
Support Services
Technical
Digital Control Center Collaborative Working Environment
…
…
Centralized
Field
Dispatched
CURRENT FUNCTIONAL MODEL
FUTURE ORGANIZATION MODEL
(Matrix and Boundaryless)
Realignment of the Organization and Roles and
Responsibilities Are Needed to Sustainably Realize the Value
Asset Design
and
Improvement
Asset
Management
and Integrity
Supply Chain and
Production
Supply Chain and
Production
Supply Chain and
Production
Margin
Maximisation
Production
Optimisation
CostContainment
AssetMaintenance
Capital
Employed
Design for
Reliability
Risk
Management
and Governance
Mainten
ance
Maintenance
Process
Engineering
Console
Operations
Reliability
Project
Engineering
Operati
ons
Field
Operations
Engine
ering
Capital Projects
Asset configuration
Trading and Marketing
Feedstock and products
Procurement
Materials and services
Asset Design
and
Improvement
Asset
Management
and Integrity
Supply Chain
and
Production
Supply Chain
and
Production
Supply Chain
and
Production
Margin
Maximisation
Production
Optimisation
Cost
Containment
Asset
Maintenance
Capital
Employed
Design for
Reliability
Risk
Management
and Governance
Maintenance
Process
Engineering
Console
Operations
Reliability
Project
Engineering Field
Operations
Capital Projects
Asset configuration
Trading and Marketing
Feedstock and products
Procurement
Materials and services
Process
Knowled
ge
Asset
Knowled
ge
Field
Knowled
ge
Mainten
ance
Operati
ons
Engineer
ing
Traditional model driven by tight “tribal” grouping Realignment of organisation around value and knowledge
Downstream example Downstream example
Employees Job Role Will Significantly Change
Field Operator Example
Training on remote operations
▪ Data analytics and artificial
intelligence
▪ Operating philosophy—digital way
Training with real data in simulated
real world
▪ Improved Operator Simulation
Training—training room is a mirror
image of the asset
▪ Operators practice with real data
▪ Training will become analogous to
flight simulation on training pilots
Rehearse actual work to minimize risk
and improve efficiency
Maintenance can rehearse maintenance
activities prior to Capability assurance
OTS, go out in the field—make it more
efficient, take a pump virtually, constant
practice
Digital Control Center Operator
Compute and record data
Preparing equipment for maintenance
Minor equipment maintenance
Adjust valves/pressures
Perform regular checks and keep records of temperatures,
pressures, concentrations and flows
Walk outside around assigned plant to observe and listen for
anything unusual e.g. spills
Shift team morning meeting (handover log)
Enter a notification into the maintenance database e.g. SAP
Taking samples for analysis
Automated through analytics
Automated equipment
Integrated Activity Planning—maintenance, projects, etc.
Automated control for valves and pressure
Results provided by analytics, surveillance is conducted by
drones, UAV or CCTV or installation of more instrumentations
Surveillance is conducted by drones, UAV or CCTV or
installation of more instrumentations or intelligence sensors
Digital Control Center morning meeting (electronic handover)
Analytics; intelligence sensors reports, data verification, the
anomaly and automated into maintenance plan
Automated sample testing
Capability Assurance – Key
Considerations
Field Operator …. transforms to ….
KEY TASKS
On-site, manual activities, equipment focused, task oriented
Remote, process focused, analytics driven, integrated
function, outcome oriented
Start up and stop equipment Automated—start/stop button
Today’s Discussion Topics
Digital Transformation Setting
New Operating Model is Paramount for
Digital Transformation
The Step-wise Transition to Remote
Operations—The Practical Way Forward
1
2
3
An Integrated and Staged Approach to Digitalization
Will Deliver Sustainable Value
Define “way we work” and coach for behaviors to be a competitive global producer—quality, reliability and cost
Optimized
Manpower
Minimum
Cost of
Production
Agile Operations
Digital Shift Team
Full Automation
Enhance Support
Infrastructure for Remote
Support
Predictive
Maintenance
Digital Supply
Chain Mgmt.
Field Assisted
Worker
Enable Remote
Supported
Operations
Minimal
In-Plant Presence
AI Driven
Operations
Digital Twin for
Optimization
Autonomous Area
Surveillance
Operating
Philosophy
Capability
Leaps
Base
Infrastructure
Business
Goals
Mindset
Transition
Integrated Management
System
Supply
Chain
Optimization
Safe
Operations
Operational
Discipline
Predictive
Operations
Digital Asset
Mgmt.
Your Resourcing Strategy Moving Towards Semi-autonomous/
Autonomous Must Be Linked to an Effective and Embedded
Change Management Program
Number of Employees ▪ Enforce adoption and operating discipline
through upskilling, empowerment,
accountability and compliance to process
Manning Level Reduction by Phases—Change Management Approach
Role Clarity
Structure
Capability
Behaviors
Performance
1
2
3
4
5
Digital Transformation Roadmap Guides Assessment
and Solution Development
READINESS
Data
Infrastructure
Consumption
People
SITUATIONAL
AWARENESS
Hindsight
Insight
Foresight
Oversight
DECISION
MAKING
Forecasting
(“what next?”)
Prediction
(“what-if?”)
Optimization
(“what’s best?”)
OPERATIONAL
EXECUTION
Best practices
Advice-based action
Closed loop control
Procedural
automation
Closed loop
optimization
VALUE
SUSTAINMENT
Goal monitoring
Economic
stewardship
Knowledge
management
Management of
change
Digitalization Needs to Be Seen as an Enabler to Achieve
Sustainable, Safe, Reliable and Profitable Operations
The names of corporations, organizations, products and logos herein are either registered trademarks or
trademarks of Yokogawa Electric Corporation and their respective holders.
Thank You!

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Business Model Disruption - The Step-wise Transition to Remote Operations

  • 1. Jon Allwood Head of Global Digital & Asset Transformation KBC (A Yokogawa Company) November 10, 2020 Business Model Disruption The Step-wise Transition to Remote Operations
  • 2. Operations Management Asset Performance Management Functional Safety Management Prescriptive Analytics Predictive Analytics Process Analytics Procedural Automation IIoT Dynamic Simulation Causes of Abnormal Situations Safety Moment
  • 3. The Energy and Chemical Industry Must Digitally Transform to be Operationally Excellent This means operating with: No safety incidents No unplanned outages Rigorous adherence to operating plans Agile response to market changes and asset disturbances A motivated and informed workforce A culture of profitability
  • 4. Operating Model Human Capability Human Reliability and Discipline Leadership and Culture ◼ Operating model enhanced and aligned to support new, better and safer way of working— organization, processes, tools and technology ◼ Upskilling on new techniques and knowledge to ensure digitalized operations tasks are executed safely and efficiently ◼ Employees are compliant to work processes and routines aligned to the new digital way of working—do it right and do it well ◼ Visible leadership support demonstrating digital transformation is a business priority, is the way forward and push the cultural change Safe, Reliable, Profitable, Operations World Class Practices ▪ Challenge the conventional practice ▪ Data driven ▪ Integrated Asset Model ▪ Automation is part of practices ▪ Remote working System and Processes ▪ Processes modified to adapt to the connected way ▪ Manual tools vs. connected tools ▪ New processes e.g., robotic automation People Addressing the Operating Model to Align with Digitalization Is Often Overlooked as a Key Enabler to Achieving and Realizing Sustainable, Safe, Reliable and Profitable Operations
  • 5. Today’s Discussion Topics Digital Transformation Setting New Operating Model is Paramount for Digital Transformation The Step-wise Transition to Remote Operations—The Practical Way Forward 1 2 3
  • 6. Today’s Discussion Topics Digital Transformation Setting New Operating Model is Paramount for Digital Transformation The Step-wise Transition to Remote Operations—The Practical Way Forward 1 2 3
  • 7. High Low HighLow CapitalInvestment Organisational Impact Efficiency and Effectiveness Digital Process Re-engineering Digital Organisation Digital Business Transformation 0 – 10% 10 – 15% 15 – 25% 25 – 50% Unlocking Value (ROI) Digitalization Journey ▪ Business model re-design ▪ Supported by advanced automation for closed loop control ▪ Digital decision making ▪ Digital DNA and culture ▪ Restructure of organization structure to work digitally ▪ New capability ▪ Enhanced roles ▪ Processes and practices aligned to digital way of working ▪ One version of truth ▪ Point solution applications ▪ Productivity improvements 0 – 10% 10 – 15% 15 – 50% > 50% Reduction in footprint OperationalAgility High Low Critical Factors to Successful Digitalization Digitalization Enabled Strategies Will Allow Organizations to Reach and Potentially Exceed First Quartile Staffing Benchmarks
  • 8. KBC OpX Maturity Model So You Must Baseline Against a Maturity Model to Set the Right Expectations for the Digitalization Journey ▪ We recognize that no assets are the same ▪ Assessment against the maturity model allows organizations to have a good baseline on the current condition and the efforts that needed to move the asset forward towards “innovative” ▪ The maturity assessment also needs to reflect the operating performance indicators of the asset ROCE ? LOPC ? OEE ? Loss of Primary Containment/Overall Equipment Effectiveness/Return on Capital Employed
  • 9. Today’s Discussion Topics Digital Transformation Setting New Operating Model is Paramount for Digital Transformation The Step-wise Transition to Remote Operations—The Practical Way Forward 1 2 3
  • 10. The Right Operating Model Drives the Desired Outcomes Outcomes ▪ Shareholders’ wealth created ▪ Business operations targets met ▪ Financial targets met ▪ Risks minimized and mitigated ▪ Cost efficiency improvements ▪ Safe and sustainable Policies, Boards, Bodies and escalation to ensure compliance and assurance Technology required to drive the strategy and improve how the organization work Human capital to deliver the strategy through talent management, performance management, visible accountability and clear roles and responsibilities Right culture where working environment aligns with the strategy Operating Model Culture & Way of Working People and Organization Performance insights Technology Governance Processes Data and analytics to information on performance to decision making Processes and associated tools that outlines the required steps to effectively manage business operations
  • 11. We Are Seeing a Move to Centralized Organization Design to Support the Digital Way of Working HSE Maintenance Operations Production Planning SVP Downstream Asset Information Technology Technical SiteSupport SVP Downstream Asset Information Technology HSE ResponseCampaign Maintenance Field Surveillance Response Maintenance SiteSupport Support Services Technical Digital Control Center Collaborative Working Environment … … Centralized Field Dispatched CURRENT FUNCTIONAL MODEL FUTURE ORGANIZATION MODEL (Matrix and Boundaryless)
  • 12. Realignment of the Organization and Roles and Responsibilities Are Needed to Sustainably Realize the Value Asset Design and Improvement Asset Management and Integrity Supply Chain and Production Supply Chain and Production Supply Chain and Production Margin Maximisation Production Optimisation CostContainment AssetMaintenance Capital Employed Design for Reliability Risk Management and Governance Mainten ance Maintenance Process Engineering Console Operations Reliability Project Engineering Operati ons Field Operations Engine ering Capital Projects Asset configuration Trading and Marketing Feedstock and products Procurement Materials and services Asset Design and Improvement Asset Management and Integrity Supply Chain and Production Supply Chain and Production Supply Chain and Production Margin Maximisation Production Optimisation Cost Containment Asset Maintenance Capital Employed Design for Reliability Risk Management and Governance Maintenance Process Engineering Console Operations Reliability Project Engineering Field Operations Capital Projects Asset configuration Trading and Marketing Feedstock and products Procurement Materials and services Process Knowled ge Asset Knowled ge Field Knowled ge Mainten ance Operati ons Engineer ing Traditional model driven by tight “tribal” grouping Realignment of organisation around value and knowledge Downstream example Downstream example
  • 13. Employees Job Role Will Significantly Change Field Operator Example Training on remote operations ▪ Data analytics and artificial intelligence ▪ Operating philosophy—digital way Training with real data in simulated real world ▪ Improved Operator Simulation Training—training room is a mirror image of the asset ▪ Operators practice with real data ▪ Training will become analogous to flight simulation on training pilots Rehearse actual work to minimize risk and improve efficiency Maintenance can rehearse maintenance activities prior to Capability assurance OTS, go out in the field—make it more efficient, take a pump virtually, constant practice Digital Control Center Operator Compute and record data Preparing equipment for maintenance Minor equipment maintenance Adjust valves/pressures Perform regular checks and keep records of temperatures, pressures, concentrations and flows Walk outside around assigned plant to observe and listen for anything unusual e.g. spills Shift team morning meeting (handover log) Enter a notification into the maintenance database e.g. SAP Taking samples for analysis Automated through analytics Automated equipment Integrated Activity Planning—maintenance, projects, etc. Automated control for valves and pressure Results provided by analytics, surveillance is conducted by drones, UAV or CCTV or installation of more instrumentations Surveillance is conducted by drones, UAV or CCTV or installation of more instrumentations or intelligence sensors Digital Control Center morning meeting (electronic handover) Analytics; intelligence sensors reports, data verification, the anomaly and automated into maintenance plan Automated sample testing Capability Assurance – Key Considerations Field Operator …. transforms to …. KEY TASKS On-site, manual activities, equipment focused, task oriented Remote, process focused, analytics driven, integrated function, outcome oriented Start up and stop equipment Automated—start/stop button
  • 14. Today’s Discussion Topics Digital Transformation Setting New Operating Model is Paramount for Digital Transformation The Step-wise Transition to Remote Operations—The Practical Way Forward 1 2 3
  • 15. An Integrated and Staged Approach to Digitalization Will Deliver Sustainable Value Define “way we work” and coach for behaviors to be a competitive global producer—quality, reliability and cost Optimized Manpower Minimum Cost of Production Agile Operations Digital Shift Team Full Automation Enhance Support Infrastructure for Remote Support Predictive Maintenance Digital Supply Chain Mgmt. Field Assisted Worker Enable Remote Supported Operations Minimal In-Plant Presence AI Driven Operations Digital Twin for Optimization Autonomous Area Surveillance Operating Philosophy Capability Leaps Base Infrastructure Business Goals Mindset Transition Integrated Management System Supply Chain Optimization Safe Operations Operational Discipline Predictive Operations Digital Asset Mgmt.
  • 16. Your Resourcing Strategy Moving Towards Semi-autonomous/ Autonomous Must Be Linked to an Effective and Embedded Change Management Program Number of Employees ▪ Enforce adoption and operating discipline through upskilling, empowerment, accountability and compliance to process Manning Level Reduction by Phases—Change Management Approach Role Clarity Structure Capability Behaviors Performance 1 2 3 4 5
  • 17. Digital Transformation Roadmap Guides Assessment and Solution Development READINESS Data Infrastructure Consumption People SITUATIONAL AWARENESS Hindsight Insight Foresight Oversight DECISION MAKING Forecasting (“what next?”) Prediction (“what-if?”) Optimization (“what’s best?”) OPERATIONAL EXECUTION Best practices Advice-based action Closed loop control Procedural automation Closed loop optimization VALUE SUSTAINMENT Goal monitoring Economic stewardship Knowledge management Management of change
  • 18. Digitalization Needs to Be Seen as an Enabler to Achieve Sustainable, Safe, Reliable and Profitable Operations
  • 19. The names of corporations, organizations, products and logos herein are either registered trademarks or trademarks of Yokogawa Electric Corporation and their respective holders. Thank You!