If you want to paint a picture of the typical inclination toward change and flexibility in industrial manufacturing, it might help to call on a few clichés. “Old habits die hard” would work. Or perhaps “You can’t teach an old dog new tricks.” But wait, here’s another one: “If it ain’t broke, don’t fix it.”
But in fact, the automation landscape is in desperate need of change. Growing complexity has capital projects running over time and over budget, and billions of dollars are lost every year because of project excesses. As Jim Nyquist, president of Emerson Process Management’s Systems and Solution business, puts it, “It’s broken, and we need to fix it.”
Emerson launched a new engineering approach this week that aims to do just that—improve capital efficiency and provide more reliable schedules in capital project execution. Called Project Certainty, it relies on the early engagement of automation during engineering and design to decouple supply dependencies and allow concurrent workstreams.
Due to project excesses, billions of dollars are lost annually in oil and gas exploration and production, hydrocarbon and gas processing, chemical, pharmaceutical, and other process industries.
“We have a project crisis in this industry,” Nyquist said. “While the budgets have increased, the actual spending has increased even faster. It seems the larger the budget, the greater the project will expand.”
According to industry data, more than 65 percent of projects greater than $1 billion fail, meaning that they’re 25 percent over budget or 50 percent over schedule. Projects with smaller budgets (under $500 million) do not fail as often, but still 35 percent of those projects are failing as well.
“We can’t keep doing things the same way. The lower oil price might be the wakeup call that we get, but the way we operate needs to fundamentally change,” Nyquist said, referring to the hit that oil companies have taken and the need to find ways to cut back on capital costs.
Increasingly facing issues with project complexity and outdated methods, process industries must have change. “Simply following best practices probably won’t get us completely back in line with budget,” said Michael Kane, vice president of technical services at Sasol North America.
“We’ve got to change the paradigms of how projects are done,” said Sandy Vasser, facilities instrumentation and electrical manager for ExxonMobil Development, who’s been pushing all the major vendors to get on board with a significant change in how projects are automated.
Vasser has for some time been putting the pressure on the automation suppliers to help ExxonMobil and process industries as a whole buck the traditional I/O approach, in which a typical project for the oil and gas company has hundreds of junction boxes, marshaling cabinets and controller I/O cabinets—all custom-engineered. Given that push, Emerson isn’t the only automation supplier to talk about this sort of concept in which schedule performance with concurrent workstreams are being helped along by virtualization, cloud computing and a more universal type of I/O.
Though Honeywell beat Emerson to the marketing punch with its Lean Execution of Automation Projects (LEAP) service, Emerson executives contend that they have been working with ExxonMobil and Vasser for several years on making this transformational change in automation, and are well ahead of the competition. “Everything on his list either we’ve done or we’re about to do,” said Steve Sonnenberg, president of Emerson Process Management.
Emerson’s electronic marshaling got the ball rolling, along with CHARMs, which was introduced at Emerson Exchange in 2010, said Peter Zornio, chief strategic officer for Emerson Process Management. Pointing to several technology differentiators, he also noted Emerson’s instrumentation technology. “We can also affect the physical design of a plant because of our depth of knowledge on the instrumentation and valving side,” he said.
Project Certainty is a concept that brings together several product innovations introduced by Emerson over the past few years, with some still to come. Electronic marshaling and CHARMs are a big part of that, along with pervasive wireless field instrumentation.
Electronic marshaling brings a typical I/O scenario from 32 cabinets (for controllers, I/O and marshaling) down to 20 (for controller and I/O). “With electronic marshaling, all that cabinet space went away,” said Kevin Jackson, vice president of global project operations at Emerson Process Management, who explained that smart junction boxes can save even more control room space, bringing the number of cabinets down to just one for controllers.
According to Emerson, Project Certainty can eliminate centralized control system room requirements by 70-80 percent, and can eliminate piping in some applications by 50-60 percent. Tens of millions of dollars in capital spare parts can be eliminated through project-wide equipment reliability analysis.
As Nyquist described it, there are three imperatives to reset the industry approach to capital projects: eliminate cost, reduce complexity and accommodate changes.
“The first thing we have to try to do is bring the costs and projections back into line,” Nyquist said. “We can apply best practices, but that isn’t going to get us all the way back to budget or plan alignment here. We’ve got to wipe the slate clean; we need to reset these capital budgets.”
But leaders agree that complexity is at the heart of the problem, Nyquist said. “Complexity is a fact of life, and it’s not going to go away anytime soon,” he added. “The challenge is breaking through the complexity.”
Emerson’s approach for reducing complexity is geared toward coordination (eliminating dependencies and aligning automation with the overall project schedule) and information (reducing errors and rework).
Typically, projects run linearly, with hardware and software linked tightly, Jackson said. If a change was made in the hardware, then the software had to be changed and the process would start again. Virtualization lets software and hardware work run concurrently. “Now the software is in the cloud. Now we can check the software without having a bed of equipment out there,” he said. “We’re not waiting until the end to see that it all works.”
On the information side, Emerson also introduced a tool this week called Project Data Link. It translates project information, including tag databases and instrument indices, from multiple sources into project deliverables. It mitigates project risk by normalizing specifications into “a single source of truth,” Jackson said, reducing the configuration schedule and hours, as well as rework errors.
Accommodating change is important for getting automation off the critical path. Electronic marshaling with CHARMs, smart junction boxes and virtualization all help with that. Project Data Link reduces the impact of change by 50 percent, Jackson said.
At a press briefing during Emerson Exchange, Vasser, along with executives from Fluor and Sasol, expressed how important this kind of change in automation is, and described how they’re making the concept work for their operations. But although the industry’s top performers are already on board with the kinds of concepts Project Certainty addresses, these practices are executed on probably less than 15 percent of projects, Nyquist said. “Too many companies just aren’t challenging the status quo and methodologies they’re using,” he said. “As an industry, we’re wasting valuable and scarce resources.”
There needs to be a sea change among the owner/operators and EPCs to adopt these new techniques, Emerson insists. “It’s time to think about projects differently,” Nyquist said. “It’s time for us to challenge the status quo, and it’s critical that we do it now.”
“The story’s the same with every customer. Exxon’s probably done better with project execution than anybody. But every one of our customers faces the same problems,” Sonnenberg said. “It’s an easy message. But changing the work process, oh, my golly, that is not an easy thing to do.”