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Leveraging SAP Intelligent Enterprise to Support Industry 4.0 for Oil, Gas, & Energy Companies

The Industry Challenge and Trends

Our world is moving toward renewables and low-carbon alternatives. And as the global population is expected to exceed eight billion people by 2025, the standard of living is rising throughout the world, and emerging economies evolve fast. The transition is already underway throughout the entire value chain. The speed, scope, and impact of the fourth industrial revolution replacing its predecessors is unprecedented, as processing power and access to knowledge is accelerating innovation and empowering customers (see Figure 1).

Industry trends:

  • Dual challenge with the need for more energy and less carbon: With increasing consumer awareness of environmental and climate impacts, societal expectations are driving companies to embrace sustainability as a core part of their business strategy. Major oil and gas companies are making increasingly sizable investments in new and alternative energy companies and technologies to bring renewable, lower-carbon energy to consumers, and simultaneously reducing their environmental and carbon footprints.
  • Energy mix is changing as natural gas is here to stay: Natural gas continues to grow as a source of lower-carbon power generation globally. The wave of new investment in petrochemical facilities is driven by the growing global natural gas and LNG supply. The non-combusted use of oil, gas and coal, e.g. as feedstocks for petrochemicals, lubricants and bitumen, grows robustly driven by strong growth in plastics.
  • Disciplined capital planning and productivity will be a differentiator:  The previous downturn saw tremendous gains in cost containment, capital asset high-grading, and operating efficiency. Industry players will focus on three key lessons: adopting a disciplined approach to capital investment, sustainable cost containment and leveraging digital technologies to achieve higher capital productivity.
  • Digital technologies are increasingly intertwined with the entire oil and gas value chain: Oil and gas companies are deploying artificial intelligence, analytics, robotics, and blockchain to increase efficiency, productivity, reliability, and predictability of operations. Digital technology adoption will unlock further value, ensuring that oil and gas companies thrive through business cycles and are responsive to customer and societal expectations.
  • Mergers & Acquisitions/divesting: Significant movement in M&A as companies divest and/or buy companies to rebalance their portfolio.

Figure 1:Today’s oil, gas, and energy trends and challenges

Evolution of the production and manufacturing platform and software:

With production & manufacturing energy companies rolling out Industry 4.0 technologies, the traditional production software stack – standardized through ISA-95 with a manufacturing operations management layer at the factory level connected to both enterprise systems such as Enterprise Resource Planning (ERP) and shop-floor control systems (Programmable Logic Controllers (PLCs) and Supervisory Control and Data Acquisition (SCADA) systems, for example) – will see a seismic shift from transactional production execution to data-driven business process execution and optimization. As a result of technology trends and buying decisions, the traditional ISA-95 production stack is evolving into a digital manufacturing platform (see Figure 2) with the following key drivers:

  • All sensors, devices, machines, and other equipment in factories, plants, and warehouses will be connected. This includes not only traditional controllers but also a variety of gateways, Internet protocol connectivity, mobile (5G) industrial networks, and short-range and wide-area technologies

Figure 2: The Traditional ISA-95 Stack is Evolving into a Digital Production & Manufacturing Platform

How did the SAP Industry 4.Now Future of Productivity Develop?

SAP has been engaged in the Industry 4.0 discussion and its strategy all along. In 2011, Industry 4.0 became an academic discussion of the concept. In 2015, the Industry 4.0 strategy was expanded to include input from additional companies, associations, trade unions, science and political parties. In 2019, the Industry 4.0 consortium and its partners including SAP presented the 2030 Mission Statement for Industry 4.0, which highlights sovereignty, interoperability and sustainability as central guard rails for global open, digital ecosystems. (see figure 3)

Figure 3: SAP Industry 4.Now Building Blocks for Oil, Gas, & Energy

With this complete approach customers will be able to move digitalization and Industry 4.0 from plant/factory-focused initiatives to company-wide real-time monitoring and decision making, driving;

  • From siloed applications, to standardized digitization.
  • From process data, to data-driven processes including the intelligent handling of exceptions in production, manufacturing and the supply chain
  • From deterministic processes, to predictive and prescriptive processes
  • From many digital twins, to one lifecycle thread of the asset throughout the entire lifecycle
  • From managed on-premise, to managed EDGE – this means that customers can choose to run critical production, manufacturing and business processes independently of cloud system availability at the EDGE.

SAP‘s solution portfolio for Industry 4.0 is focused on production and manufacturing excellence, but also on the connection to the business process to support the customer in the best possible way.

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