How Changing Market Dynamics Drive Technology Innovation

Sept. 11, 2018
At the AVEVA World Conference North America, customers from a wide variety of industries explain how they are adapting to changing marketplace demands.

Market dynamics—changes in things like commodity prices, labor force, etc.—tend to transcend traditional boundaries that exist inside manufacturing operations. Over the past several years, these forces have begun to break down traditional silos between operations and technology sectors and are driving the need for a digital transformation of industrial manufacturing.

“The market dynamics in basically every industry we serve necessitate some pretty major changes—in not only the way in which we operate and run industrial manufacturing operations, but also the way that we design, build, manage and maintain them,” said Rob McGreevy, vice president of portfolio management for AVEVA.

Although market changes are happening across the board, how those changes take root can differ from vertical to vertical. At the AVEVA World Conference North America, taking place this week in Dallas, presentations from AVEVA and its customers show how specific industries are reacting to the changes around them—how they are using various forms of digital transformation to answer demands related to sustainability, transparency, workforce, customization and more.

Meeting market demands
Hybrid industries like food and beverage, life sciences and consumer packaged goods are particularly affected by demographic changes and demands. “Hybrid’s deeply affected by consumer expectations—around consumption of materials, food, where they’re sourced from, GMOs, healthy, organic—all that envelops the hybrid industries, along with the need for variety, regulatory obligations and such,” McGreevy says. “At the same time, the hybrid industries are very obviously under a bit of a pinch margin-wise, and hence have a bunch of challenges around capital expenditures.”

Several presentations at the AVEVA World Conference highlight how companies in the hybrid industries are adapting to these changes with AVEVA technologies. Increased digitalization is helping the food and beverage industry effectively deal with the many consumer demands. New Belgium Brewery’s Ray Matthews, for example, explained how making the digital transformation helped his company address specific market imperatives and also improve operational efficiencies.

In another session, which focused on enhancing decision support and increasing collaboration, Clif Bar described how it integrated an outsourced facility with its new greenfield facility to tightly integrate systems and processes. In this same session, International Dehydrated Foods described its journey from process historian to the cloud as part of its digital transformation.

Also addressed at the event was the importance of tracking and traceability in the manufacture of pharmaceuticals, and how digitalization has become increasingly important as it relates to reducing the amount of time it takes to scale up manufacturing after receiving approval from the U.S. Food and Drug Administration for a new drug. Speaking of pharma’s ability to digitalize, McGreevy highlighted the issue of the aging systems in place throughout the industry. “Because it goes through such tight regulatory approvals and requirements, in a lot of cases they leave those systems in place and don’t touch them for as long as possible,” McGreevy explained. “So, the other thing that’s affecting that industry is the need to modernize the equipment—the software and the systems—at a much higher rate.”

Applying digital twin technology
Highly influenced by commodity prices, continuous process industries such as metals and oil and gas have gone through some pretty wide swings, McGreevy noted. “Things like globalization, transportation and supply chain pressures are driving a lot of what’s going on in the process industries.”

Digital transformation is, of course, a big part of how companies in these sectors are responding, and it’s where new capabilities are beginning to make a big impact in both asset management and production processes and procedures. Knowing how your plant is performing requires the ability to monitor and then adapt operations. A presentation from Air Liquide showed how the industrial gas supplier is able to use that knowledge to improve profitability within given operating constraints.

The water/wastewater industry is a cost-sensitive environment where continuity of service is non-negotiable, so increased digitalization is focused on demand planning and water leak management, in particular. Las Vegas Valley District Water was one of several water utilities that presented at the event about using digital transformation to maximize asset performance.

Even the engineering, procurement and construction (EPC) companies serving the continuous process industries are facing new demands from owner/operators that necessitate a move to digital twins and digital definitions. For a long time, the EPC business, especially in oil and gas, largely dealt with bespoke projects; for example, custom building each platform or floating production storage and offloading unit. “What’s changed there is that the owner/operators are driving more of a repeatability set of initiatives” to streamline the services they receive from EPCs, McGreevy said.

This was already common in the nuclear power industry, which has traditionally taken more of a cookie cutter approach to stamp out the same design to save on cost and complexity, McGreevy said. The owner/operators in oil and gas have taken a page from the power playbook and decided they don’t want to start from scratch with each project. “That has some fairly significant implications for how they engineer, procure and construct the new generation of assets that are out there,” he added.

And it’s here that digital twins and digital definitions shine. “If you need more repeatability, it necessitates truly digital manifestations of any asset that you design or build,” McGreevy said.

It’s also driving owner/operators to demand up-to-date digital information about the as-designed, as-engineered and as-built assets in the field. “What used to happen is an EPC would build something and they’d hand over some documents to the owner/operator, and they’d go into a drawer or a bunch of cabinets,” McGreevy says. “And the owner/operator in that case would not necessarily know if that stuff was still accurate. Did we make modifications on site? Did we tweak certain pumps? Did we upgrade certain pieces of equipment? They become out of date because those documents are artifact-based. And so, the owner/operators, because of all these industry dynamics, they need that [information] to be evergreen. They need that to be accurate and trusted data, and the only way really to do that is to keep it in a digital form.”

The value of analytics
With so much focus on digital data, analytics has also become an important topic—most noticeably around reliability-centered maintenance and predictive asset analytics as they apply across industry verticals. In the oil and gas and power generation industries, analytics is almost all reliability-based, McGreevy said. “These [industries all have] large capital assets—[so] making sure that we can predict how those things are behaving in order to increase safety records and maximize output for power generators or refineries” is critically important.

Power generation has a few key market dynamics—decarbonization, decentralization and deregulation—that are having a big impact on how they operate and underline the importance of asset analytics. “A big thing with these guys in power gen is resiliency and reliability. As you add more of these different alternative energy sources, that adds stresses to the infrastructure, and that has all sorts of implications for how you need to deal with the reliability of the assets, hence predictive asset analytics,” McGreevy said.

Breaking down technology silos
We’ve heard a great deal lately about the need for IT/OT convergence as part of industry’s digital transformation, McGreevy said, but there’s also been an increasing need to converge the design and engineering side of the asset lifecycle and the operational side. “We’ve got single companies that are starting to look at both the design and engineering sides of their business—CAD, 3D, build, construction—and starting to marry that with the production operations side of the business, which is being driven by these industry trends and market dynamics,” he said.

In its presentation at the event, Southern Company, an energy utility headquartered in Atlanta, showed itself to be a perfect case in point for this trend. The company is using AVEVA’s full suite of design and engineering tools, as well as runtime software for predictive asset analytics. Southern Company’s Tedd Weitzman described projects that directly impact the time it takes to access asset information and leverage it in a plant virtual environment to support activities related to both operations and maintenance.

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