According to the World Energy Outlook 2014, global energy demands are expected to rise by 37 per cent by 2040.
The same report states that the APAC region, encompassing Australia, India, Indonesia and China, will account for 70 per cent of global coal output by this time. The Australian Energy Market Operator (AEMO) confirms that due to a continued population growth and an ever-increasing energy demand, Australia has invested heavily in the oil, gas and process industries at large.
For the industrial sector, more people and more demand will require more manufacturing – which means more capital expenditures.
There is immense pressure on the process industries to be productive, profitable and efficient, but at the same time, numerous challenges, such as rising capital and labour costs, export challenges and skills issues, make this increasingly difficult. It is critical for industrial sites to find ways to maximise their return on investment. Any new or expanded sites must operate safely and efficiently, and as such, the process industry has been forced to look for innovative ways to reduce costs and increase efficiencies.
In the near future the industry will reach a tipping point where mass processing using conventional technology is no longer viable.
These shifting realities mean that productivity improvement of a few percentage points won’t be enough. The world needs a plan to safeguard the future of these vital economic building blocks. We need a productivity revolution.
Historically, there have been revolutions that have greatly affected the world. Arguably, the most important was the industrial revolution which transformed the world from hand production to machines, that could do work faster and more consistently. More recently, the digital revolution changed the world with computers making huge improvements the way the steam engine replaced manual labour.
We believe data is the next major revolution – specifically the digitisation of manufacturing. The process industries have not been as quick to adopt IT as some other enterprise industries due to a widely held belief that control systems and IT infrastructures need to be kept separate in case of failures from either sector.
However, by embracing digitisation, and having so much critical information at their fingertips, process manufacturers can produce the vital products and energy we need more efficiently, and more safely, than ever before.
Of course, the role of hardware remains pivotal, but increasingly a plant’s value is about much more than machinery, pipes and equipment. Digitisation shifts the source of competitive advantage away from physical infrastructure and towards leveraging valuable data and information.
Real and sustainable productivity improvements require significant adjustments to the existing way of operating. These changes need to be for the long term and necessitate a transformation across all areas of the organisation, from the boardroom, to the assembly line, to the pit.
The key is not simply more information, as that won’t boost productivity. In fact, the volume of information available to control rooms has grown significantly over the last decade, and adding more data can actually reduce productivity. It is the quality of information and turning these bits and bytes into meaningful, actionable insights that will actually make the difference. Innovation is vital, and companies must overcome their traditionally conservative tendencies by utilising emerging technologies, embracing a new digital ecosystem, and preparing for new operational realities.
Data can be captured from almost any industrial application. For example, every aspect of the mining industry from minute processes through to massive haul truck payloads, warehousing and maintenance are measured, tracked and stored. Productivity depends on rich, tailored information, delivered in real-time to the places where it can have the greatest impact.
Employees should only see the information they need to work efficiently and safely. The higher the quality of information, the better the decisions control room operators and engineers can make, whether reacting to events in real-time, or making accurate assumptions about the future.
Quality of information lays the foundation for safer, more productive and profitable plants. The more intuitive the information, the more empowering it is. And when information is integrated across the whole business, connecting finance to operations, or marketing to manufacturing, that’s when employees can see the business impact of the decisions they make, increasing the likelihood of those decisions being good ones.
As a plant is only productive when it’s running and downtime can cost significant amount of money. One of the biggest threats to production is uncertainty. If employees doubt the information on their screens operations can be interrupted.
Delays of even a day can cost millions. That’s why we design our control systems with quality of information in mind, giving employees the confidence to run machinery to its limits for longer periods of time.
The resource crunch presents a clear threat to our global and local economies, and introduces new challenges to doing business. To put the issue into context, EY, a global leader in assurance, transaction and advisory services has stated that labour productivity in Australia has declined by roughly 50 per cent since 2001, and the same is being seen globally, in both developed and emerging markets.
Shifting industry realities mean that companies in the process industry will need to commit to exploring new talent management systems and invest in more targeted training for existing employees.
The Australian process industry faces multiple challenges and trials in 2015. The on-going ambition to move to a more productive and cost effective model of operation demands a break from traditional process and a move towards digitisation across multiple sectors.
Real productivity gains will only come from complete business, end-to-end transformation. By leveraging new technologies to gather real-time information, organisations within the process industries can consolidate data from dissimilar sources to streamline operations.
There is no doubt digital transformation would impact process manufacturing and it is up to us as an industry, to decide how we embrace these developments, and make them a big lever for business transformation.