By Ron Beck

FOR refiners, the future is full of uncertainty. Due to market forces such as the macroeconomics of oil and gas supply and demand, increasing demand for petrochemicals and marine low sulfur fuel requirements, organizations are faced with a number of business challenges, which require increasingly flexible operations. Here is where digital transformation creates a clear opportunity.

Digitalization, which flattens organizations and supports agility, offers the promise of competitive advantage in these unpredictable times when business models are adjusting to changing operating conditions. With workforce demographics rapidly shifting, newcomers to the industry bring with them a greater level of comfort with new technology.

Creating high expectations with digital transformation

In recent years, terms like “Digital Transformation,” “Digital 4.0” and “Industry 4.0” have caught the attention of industry pundits, consultants and business social media. However, these are not new concepts for the process industry as it has been pursuing digitalization for the past 40 years.

The best performing companies are the ones who apply digitalization to their business initiatives in a pragmatic manner. The emergence of new digital technologies such as machine learning, advanced robotics and distributed high performance computing have added to the momentum for digitalization initiatives

While it is clear that there is a lot of opportunity for organizations in the process industries, there are also some major roadblocks to overcome. AspenTech surveyed global refiners and discovered that only 38% of several hundred respondents anticipate achieving a significant business return from digital transformation in less than two years. Success will require focus.

Pulling the trigger on digital transformation initiatives

In order to achieve success with digital transformation, executives need to first take a step back and look at the big picture. Below are some key factors to consider before embarking on digitalization:

Maximize value from current technology. First and foremost, organizations need to understand the current level of digital infrastructures and solutions in place in refineries. Any new initiatives should be designed to fit in with and build on existing digital infrastructure. Areas such as refinery planning and scheduling systems, process historians, advanced process control, rigorous unit models, and yield accounting are all valuable and crucial underpinnings to further extensions of “digitalization” of refineries.

Understand the organization’s maturity level. Digital transformation is strongly tied to organizational change as digitalization enables collaborative work among operating teams. Traditionally, operating teams have been working within siloed organizational walls. With digitalization, workers are empowered to make immediate and informed operating decisions. Until an organization is mature enough to thrive in this type of environment, it should make stepwise moves, both technology- and organization-wise, to evolve.

Define key business drivers and challenges of the organization. All technology investments and digitalization initiatives should be undertaken with a clear view as to the expected business benefit, payback and return. This requires that executives sponsoring these activities play close attention to “use cases” and “case studies” which can demonstrate and guide the organization as to how certain technologies will advance operational excellence.

Identify key success metrics for digital initiatives. Key measures of refining excellence today include (i) feed and product flexibility, (ii) reliability and uptime, (iii) energy use optimization and overall cost leadership. Projects should be measured and conceived with end points and success metrics that tie together.

Encourage work force skills development. In order to take full advantage of digitalization, a range of technical experience, operational experience and competence are required. While many companies choose to outsource technical teams to keep operating functions lean, there is a danger of draining technical resources expert in the enterprise’s core assets.

Leading downstream companies have been making progress in achieving significant benefits from applying digital innovation in surgically focused ways. For example, a major north slope operator increased revenues by over $1 million in one week by embedding digital rigorous models online, running concurrently on real-time data and providing updated and clear operator advice every few minutes.

Additionally, a Gulf of Mexico LNG firm employed machine learning based prescriptive maintenance to obtain early warning of compressor operating risks. As a result, the organization reduced compressor downtime and maintenance expenses worth several millions of dollars per year in increased uptime.

The future of digital transformation

Digitalization will continue to gain momentum in upcoming years as technology evolves and new advancements are introduced. In order to take advantage of digital transformation opportunities and remain competitive, organizations need to create a pragmatic roadmap to take them from where they stand today.

It will be companies that prepare themselves now to take advantage of the digital transformation initiative tomorrow that will also benefit today.

— The writer is industry marketing director, AspenTech