Industry 4.0 – Intelligent & Smart Factories: Technologies Shaping the future of Oil, Gas & Energy (OGE) Industry
In the current world, OGE companies need agility to respond to market needs, looking into the new business model such as EV charging networks & non-fossil fuels. Sustainability is more at center stage for OGE with respect to carbon footprint tracking & reporting, focus on worker’s safety & sustainable operation & efficiency on how to increase productivity for an employee to enable all these following digital technologies plays a very important role.
The OGE Intelligent factories and refineries incorporate recent technological advancements in connectivity and computing power—as well as access to Industrial Internet of Things (IIoT) data—in order to progressively improve performance and take informed operational decisions based on data analytics, AI, and first-principal models without significant human intervention.
By applying intelligent technologies such as the Internet of Things (IoT), artificial intelligence (AI), machine learning, and advanced analytics, leading OGE companies to transform into event-driven businesses. Event-driven businesses automate repetitive tasks, enable employees to focus on higher-value tasks, and allow companies to invent new business models and revenue streams by monetizing data-driven capabilities and applying core competencies in new ways.
With Intelligent Factories, Oil Gas & Energy companies can:
- Reduce emissions by monitoring leaks from oil tank batteries, vapor recovery units and venting operations
- Optimize drill rig operations by calculating real-time well improvements
- Predict equipment failures before they happen
- Increased safety by reducing human intervention with “Always On” connected systems
- Ensure the right parts, for the right people, at the right time with optimized field service
So, to summarize, Intelligent Factory is connected to different sources such as shop floor systems, equipment, and supply chain systems in an oil, gas & energy company to provide customers with better insights into your factory while customers enjoy the experience by sitting in their office. So, what are customers getting rid of is a manual task, paperwork, incidents, and clarity on data. And, as a result, they are getting better insights into a refinery, products, employees, equipment, margins, company performance, and others.
The Intelligent factory is also one of the core pillars of Industry 4.0 which we at SAP believes is the future of productivity. This is how customers will connect all the critical parts of their company directly to suppliers, and that’s how customers will create exceptional experiences that keep customers coming back. Every link in your supply chain is connected to your intelligent enterprise. Using the framework of Industry 4.0 Intelligent factories for OGE leverage the following digital technologies to gain significant improvements in productivity, quality, flexibility, and service.
- Cloud connectivity: Whether public, private, or hybrid, the cloud is the conduit through which all data and information flows across a smart factory. Business-wide and global cloud connectivity ensure that each area of the business is operating with real-time data and that there is immediate visibility into all the connected assets and systems within the supply chain.
More OGE companies are moving into the cloud because they would like to be agile and innovative.
How it applies at Phillip 66, a Houston-based OGE company – Digital Transformation at Phillips 66 | SAP News Center
Benefits of cloud computing
- Reliable: Secure, safe, and available. Get 24×7 cloud system access from anywhere with excellent response time. Run on secure servers with a staff of full-time security experts. Know that your data is redundant and remotely backed up.
- Flexible: Get the computing power you need when you need it. Add or reduce servers, networking, or storage. Get new users on board instantly. Expand to new geographies. All done fast and easy.
- Financial: Only pay for what you need. No up-front financial expenses for hardware or facilities. Reduce IT staff time used to maintain and upgrade the systems. Instead, invest your funds and people in revenue-generating projects.
- Up to date: Always have the latest version of the platform, database, and software applications. Plus, take advantage of emerging technologies such as machine learning (ML), artificial intelligence (AI), the Internet of Things (IoT), and more. Always stay up to date on the latest innovations.
- Artificial intelligence: Operational systems that use integrated AI technologies have the speed, power, and flexibility to not only gather and analyze disparate data sets but to provide real-time insights and responsive recommendations. The automated processes and intelligent systems within a smart factory are continually optimized and informed by artificial intelligence.Big data, analytical platforms, and artificial intelligence (AI) are making data analysis more effective than ever before. The more sophisticated resulting data insights can innovate the maintenance of assets, identify better areas to drill, decrease unplanned downtime, and optimize production. As a result, AI and data science help oil and gas businesses increase operational efficiency.
- Machine learning: One of the most valuable benefits that machine learning brings to the Intelligent factory is its capacity for advanced predictive maintenance. By monitoring and analyzing manufacturing processes, alerts can be sent out before system failure occurs. Depending upon the situation, automated maintenance can take place or, if necessary, human intervention can be recommended.
Machine learning is comprised of different types of machine learning models, using various algorithmic techniques. Machine learning algorithms are basically designed to classify things, find patterns, predict outcomes, and make informed decisions. Algorithms can be used one at a time or combined to achieve the best possible accuracy when complex and more unpredictable data is involved
Predictive maintenance seeks to prevent equipment failure and downtime by connecting IoT-enabled enterprise assets, applying advanced analytics to the real-time data they deliver, and using the resultant insights to inform educated, cost-effective, and efficient maintenance protocols.
How it applies at Motor Oil Group, a Greece based OGE company: Motor Oil Group monitors refinery equipment health and performance, reduce unexpected downtime, and lower maintenance costs. To gain a holistic view of its equipment, the company embraced machine learning and predictive analytics using SAP Business Technology Platform (SAP BTP).
Read more in detail about Motor Oil Group Digital Transformation story – SAP and Motor Oil Group Success Story | Customer Reviews and Testimonials
- Big Data: Robust and large data sets allow predictive and advanced analytics to take place in an Intelligent factory. Businesses have long understood the strategic value of Big Data but, until recently, have often lacked the systems necessary to make meaningful use of it. Digital transformation in supply chains and Intelligent factories has opened up a world of potential for businesses to optimize and innovate using Big Data insights. Following are some of data set in an Intelligent Factory
- Industrial Internet of Things (IIoT): In an Intelligent factory, when devices and machines are fitted with unique identifiers and the ability to send and receive digital data, they comprise an IIoT network. Modern machinery may already have digital portals, but even decades-old analog machines can be fitted with IIoT gateway devices to bring them up to speed. Essentially, data sent from the device reports on its status and activity, and data sent to the device controls and automates its actions and workflows.
The Industrial Internet of Things, or IIoT, is transforming the way Oil, Gas & Energy companies do business. By connecting field assets and equipment to an IIoT platform with smart sensors, companies can benefit from automated monitoring and diagnostics. This allows them to build real-time insights, operations, and processes that can optimize equipment utilization and maintenance planning.
In addition, the IIoT can help companies to improve safety, quality control, and environmental compliance. As the IIoT continues to evolve, it will provide even more opportunities for companies to increase efficiency and drive down costs.
How it applies at SASREF, a Saudi Arabia based OGE company: SASREF integrated their PIMS, Data historian & vibration monitoring equipment using the SAP MII integration layer to get the data which was then used to run the unit-based product costing & take informed decision on product cost and asset management, using the IT-OT technologies/
Read more in detail about SASREF Digital Transformation story – SASREF: Taking Leadership in the Oil and Gas Industry to Transform Itself into a Digital Refinery (sap.com)
- Digital twins: An exact, virtual replica of a machine or system becomes its digital twin. It allows for maximum innovation and creativity with minimal operational risk. A digital twin can be pushed to its limit, reconfigured in multiple virtual ways, or tested for its compatibility within an existing system – all without ever incurring risk or resource wastage in the physical world. (67) Digital twins and the future of Industry 4.0 – YouTube
- Virtual reality (VR) and augmented reality (AR): some of the applications of VR wearables in the smart factory as “being able to tie together environmental conditions, inventory levels, process state, assembly error data, utilization, and throughput metrics in a context-dependent manner (where you look or walk).” This immersive sensory experience lets users augment their natural senses with real-time data from across any location or point in time – to give unobstructed awareness of factory status
ARC Advisory Group projects that AR applications for industry will grow 21.2% between 2019 and 2023, driven by the defense, oil and gas, and chemical industries. The biggest use cases now are collaboration and training. The pandemic caused many companies to pause their technology investments, but there were exceptions, and one of those was AR.
Beyond the production line, the pandemic’s travel and contact restrictions got a lot of companies interested in remote maintenance and using AR to guide fixes.
For oil and gas platforms, this technology is justified because it’s less expensive than the US$10,000 or more it costs each trip to send a person out to a rig, often on a helicopter. Instead, an employee already on the platform can use an AR-powered device to receive instructions and guidance from an off-site expert, rather than dispatching a person to the field, these companies look to augmented reality.
Benefits of AR provides in Intelligent Factories:
- Simplified processes: Visualized workflows offering step-by-step instructions can support predictive troubleshooting while reducing mistakes that cause rework and speeding up complex assembly tasks for workers.
- Streamlined warehouse management: AR can save time by managing inventory levels, guiding product picking, minimizing downtime by making it easier for technicians to diagnose and fix problems, and enhancing employee training.
- Increased worker engagement: Because AR is a relatively new technology, the immersive quality of the 3D experience and the ability to learn by virtually doing is still novel for workers which boosts their engagement with the task at hand.
- Reduced risk: AR doesn’t just replace the work or function of real equipment and people; it also creates a safe, experiential learning environment that allows workers to practice tasks virtually without risk. This improves worker safety, inspection, training, and workflow.
How it applies at other OGE companies: Following video shows AR Object Tracking for Smart Assets with #SAP and #VisionLib – Pilot Project (67) AR Object Tracking for Smart Assets with #SAP and #VisionLib — Pilot Project – YouTube.
These systems work by overlaying a connected graphic interface through AR software on top of reality, so, for example, workers on a production line wearing AR glasses will see the component they’re working on plus an instruction diagnostic or a video showing them what to do. AR can also be used with smartphones and tablets, which are held in front of a machine, component, or other object.
- Blockchain: Fortunately, as Intelligent factory technologies advance, security solutions are keeping pace alongside them. Blockchain has many applications in the supply chain, from creating “smart contracts” with suppliers to tracking the provenance of goods and handling across the supply chain journey. In Intelligent factories, blockchain is especially useful to manage access to connected assets and machines across the business – protecting the security of the system and the accuracy of records held by those devices.
One of the examples of blockchain in OGE Industry is that of SAP GreenToken which is SaaS-based network solution for end-to-end traceability and transparency of sustainability information. It’s used for tracking the source of green hydrogen.
How Green Token applies at Unilever to support their sustainability goals: Unilever uses the solution to further increase traceability and transparency in their global palm oil supply chain.
Read more in detail about Unilever story – SAP and Unilever Support Deforestation-Free Palm Oil | SAP News Center
- Modern database: In-memory databases and modern ERP systems are the “brains” behind Industry 4.0 and all Intelligent factory and intelligent supply chain solutions. Legacy, disk-based databases are pushed – often well beyond their limits – to keep up with the complex data management and analytics functionality needed to run Intelligent factories and modern supply chains.
Benefits of in-memory
Speed of reading and writing data is the primary characteristic of in-memory data, which enables faster processing and improved response in business applications. But application developers have been quick to realize that this faster response and increased capability are also valuable in allowing the re-design of several other tools and programs that deliver more value. When the database is architected and built from the ground up on an in-memory database, numerous improvements can be made in the design of internal data models and processes.
Value Drivers & Business Process consideration
For OGE Intelligent Factories following are the few Values drivers & business processes which should be considered
|Value Drivers||Business Processes|
· True cost visibility
· Increased production flexibility
· Improved labor efficiency
· Reduction in paper-based execution
· Reduces system downtimes
· Improved equipment efficiency
· Improved defect detection
· Decreased inspection times
· Reduced inspections
· Lower cost of quality
· Inventory Visibility
· Increased production output
· Improved operational visibility
· Reduction in rework
· Reduced cycle time
· Improved data accuracy
· Reduction in time to action
· Reduced time to action
· Reduction in production interruptions
· Carbon footprint tracking
· & Others
· Refinery Execution
· Inventory management
· Incident Management
· Demand management
· Material requirements planning
· Monitor material coverage
· Manage production orders
· Manage shop orders
· Schedule Labor
· Shop floor execution
· Change machine status
· Shop floor quality control
· Automated defect detection
· Automated Shop floor quality control
· Automated Shop floor execution
· Quality Management
· Sustainability measurement & reports
· New business model of hydrogen and other renewable fuels
· & Others
Benefits of the Intelligent Factory to across organization of OGE Customers
- CEO/COO – enables Oil, Gas & Energy companies with traceability & end to end view of the Organization to get the upper hand on competitors by delivering high-quality products. This leads to a continuous increase in profitability and cost reduction.
- VP of Operations – provides you with out-of-the-box integration to ERP for end-to-end process planning, traceability, and visibility of all activities across systems. Improving quality and maintaining compliance with customer, industry, and government mandates.
- Refinery Head- allows access to real-time manufacturing data and performs continuous process control to ensure product quality. Plant managers can drive ongoing improvement initiatives by analyzing web based KPI dashboards for employees and keeping everyone posted on real-time effectiveness.
- Maintenance Head/Quality Manager – allows manufacturers to analyze production details and equipment status changes against quality data to identify trends in product quality and minimize repair. In case of a quality issue, Intelligent Factory allows us to trace the problem in real-time to a specific product (batch) or process and take corrective action in near-real time with minimum negative impact.
- Production Operator – With the easy-configurable role-based and touch and Mobile device Smart Factory UIs, operators are prompted with instructions for performing production activities, logging tools, assembling components, recording component usage, and collecting quality test results. Intelligent Factory mistake proofing capabilities help to reduce operator errors.
SAP Solutions Live in Action at Industry 4.0 Pop-Up Factory
At SAP Industry 4.0 Pop-Up Factory is built like an actual factory and features, among other things, robots for component production that support the worker during manufacturing. The exhibit has an entire production line for mixing and filling liquids, as used in the process industry, and even driverless transport systems. You can read further on SAP’s Pop-up Factory Industry 4.0 Pop-Up Factory | SAP News Center
A call to action
The gradual introduction of automation represents significant additional business potential for the OGE industry; hence, companies are planning substantial investments into automation technologies over the upcoming years.
Our experience shows that those organizations which build a vision for automation across all critical business functions are most likely to benefit from the opportunity. Gaining buy-in across the business, understanding how automation enables new operating practices and new business models, and adopting a structured approach to implementation are all key to driving increased efficiency and productivity.
Most importantly, business leaders need a framework showcasing the critical business process impact areas, automation enablement for these areas, and strategic alliances for addressing the energy industry gaps.
To create a strong market position and market advantage for the medium to long term, OGE companies will depend heavily on innovation and digital technology. Challenges remain in quantifying the impact of automation on the OGE industry.
Thinking big, piloting small projects, and scaling fast are the best ways that organizations with successful programs proceed, taking into consideration total lifecycle costs and economics. Organizations should build a digitization team and make automation part of a corporate digitization program as a best practice. Automation programs should be integrated with all aspects of complex organizations, work processes, and human behaviors. Once the concept is proven, rapid scaling is needed to secure the payoff. Such a scale-up requires tools, capabilities, and a multidisciplinary team with experience ranging from process automation, domain expertise, data management, and cybersecurity, through interface design. These multidisciplinary teams should include representatives from every area of the organization’s IT function.
- SAP Insights Home | SAP Insights
- SAP News Center SAP News Center | Company & Customer Stories | Press Room
- com Oil, Gas, and Energy Software Solutions | SAP Industry
- Mckinsey & Company Analysis – The autonomous plant: Entering a new digital era The autonomous plant: Entering a new digital era | McKinsey
- Cognizant 20-20 Insights