Stepping into a new digital frontier. Insights from a Downstream Innovation Leader
We’re stepping onto the threshold of a new digital frontier. With the majority of operators wanting to embrace innovation into their infrastructure in the near future, and the promise of $1.6 trillion in unlocked value from digital transformation waiting to be unleashed on the industry by 2025, Refinery 4.0 is our new business as usual.
But when digital is the norm, how do you excel? And as we cross the next digital threshold, which operators are setting the pace, and how?
One Innovation Leader at a leading oil and gas supply chain operator, shared with Asian Downstream Insights his definition of digital excellence, tips on how to drive value from data, and thoughts on getting your digital champions on board.
Revamping a traditional industry
Downstream is a conservative industry. Described by digital trainer and specialist, Geoffrey Cann as “extremely slow and cautious at making changes”, the sector has lagged behind others in the race towards industry 4.0. “We love our rubber stamps, we love our pen and paper!”, smiles the Innovation leader.
But as remote working and demand for more streamlined operations drive digital acceleration across an increasingly competitive market, he admits that “already, digitising processes [is] providing us with massive productivity gains”. This is about “not just doing digital integration for the sake of it, [but based around] clear value drivers [such as] productivity, sustainability, and cost”
The real value, and the next step, is “when all that data comes together.” With different departments working in siloes, and solutions providers working with their own system and platforms, the challenge is creating a connected overview of all your digital assets and “monetising that data”.
Simulations for success
One way to achieve this is through digital twin simulation, a virtual model of the plant or refinery’s assets that uses data analysis to monitor and predict issues before they occur, prevent downtime, and even suggest potential solutions and new business opportunities.
“Digital twin is a great buzzword”, nods our Innovation Leader. “It is very much about integrating data sources into a single platform”. With research from AVEVA revealing that 50% of downstream organisations plan to invest in AI and digital twin over the next three years, the era of pen and paper is making way for the age of predictive analytics. And with advances in Cloud technology opening new avenues for Big Data storage, there are options to further enhance the digital picture of your physical assets by incorporating and linking new information across the upstream and downstream supply chain, such as subsurface conditions “and even the weather!”
Digital post honeymoon period
While the digital bandwagon is running full steam ahead, ADI’s Innovation Leader warns that without clear ROI and buy-in from the business, you’ll eventually hit bumps in the road.
Once we’ve implemented [the digital tool], then the honeymoon is over, and the business is asking: “when are you going to reap the full benefits? And when will it be scaling?”, he admits. [There are lots of] questions about what is your business model?”
The real question savvy operators need to ask themselves is “who holds main accountability for driving innovation in your business?” And the answer isn’t always what you think. “Our senior leadership conceptually fully supports industry 4.0”, explains the Innovation leader. “The shop floor is very enthusiastic about bringing innovation to the workplace. [But] it’s the middle management that makes or breaks such programmes”
With departmental business owners as that critical connection, our source explains, “we make sure that each business owner is responsible for driving innovation [in their department].” With this autonomy, they are able to assess and understand the specific benefits digitalisation can bring to the “daily struggle” and communicate that effectively to the board and budget holders.
“People are often unwilling to release funding unless the benefit structure is crystal clear”, he explains. “And that’s the problem with innovation. There’s not always a clear benefit structure”.
New technologies may be saving us time, but operators equally need to commit to training and education for the business benefit of innovation to be seen, and understood. “The message is great, the financial support is great, [but] what we need is for the business to embrace innovation. And the challenge there is education”, says the Innovation Lead. “With all these buzzwords flying around, it’s easy to be intimidated”.
Finding time in employees’ “busy daily schedules” to digitally upskill is a challenge. But, with the majority of ADI community members recently surveyed agreeing that people are the most important part of the digital transformation process, it’s worth the investment.
The next digital frontier of downstream is not a sci-fi vision governed by robots. It’s a collaboration of man and machine, working towards a shared and clear business vision.