Authored By: Ron Beck, Director of Marketing Strategy and Sunil Patil, Business Consulting Director, AspenTech
Accelerated digitalization is transforming the process industry – comparable to how the sharing economy has democratized access to jobs and income. Home grown Asian based mobile application heavyweights, such as Grab and Go-Jek, have shown how digital innovation has disrupted the land transport industry. These super platforms have democratized digital access to local populations and provided great value to customers while changing business models. At the industry level, accelerated digitalization is impacting capital intensive industries via increased productivity and sustainability in Asia.
Artificial intelligence (AI) gives process companies a competitive market advantage to advance strategically. According to MIT Sloan Management Review (USA), about 60% of industry executives believe that it is urgent for companies to develop an AI strategy and 87% believe that AI will help build a competitive advantage. As investor guru Warren Buffett puts it, “If you’ve got a wonderful castle, these are people out there who are going to try and attack it and take it away from you. And I want a castle that I can understand, but I want a castle with a moat around it.” With the ability to transform businesses, AI will become essential to fending off competition.
Companies can also systematically increase profit and agility in a sustainable manner via the latest software – built upon existing technology infrastructure. Yet, digital transformation will remain elusive without critical changes in place. Workers need to be flexible generalists with the ability to think critically. The process industry has a reputational challenge with the younger workforce, as technical graduates tend to shy away from the hydrocarbon industry. With greater use of exciting technology, companies can attract more millennial workers to address the current skills shortage situation. Workers can also be at safer, more centralized locations and be empowered to make more strategic decisions. AI will help organizations cope with their relative lack of experience.
Digital Innovation in Fast Growth Asia
According to Oxford Economics, most of the top ten fastest growing emerging market economies are in Asia – with Thailand in seventh place; Malaysia in fifth place; China in fourth place; Indonesia in third place; the Philippines in second place and India in the lead with 6.5% projected gross domestic product (GDP) growth. The caveat in this amazing race is the ability to transform digitally, with the economic engine in Asia at stake. Driven by demand from the burgeoning Asian middle-class populations, plastics and related chemicals are essential to increasing the production of end products. This makes the innovation of new sustainable materials a crucial element to success. A spate of new multi-billion dollars production complexes are nearing completion or being designed in Southeast Asia and India. This calls for an effective digital end-to-end software environment to empower workers and allow them to make complex decisions as accurately as possible.
This is where digital transformation becomes an urgent priority. Knowledge captured in intelligent software will help new technical workers get guidance in decision making, as well as keep plants safe and sustainable. Machine learning and artificial intelligence can help workers decipher a treasure trove of data streaming off sensors in smart plants. Digital innovation can also help plants produce the right products at the right time, while staying safe and profitable. Integrated enterprises across the value chain and companies will bring agility to Asia and strengthen their market positioning globally. With the use of low touch machine learning, companies can deploy business generalists to make the best decision possible. As such, the industry in a good position to tackle sustainability hurdles, which is the next big challenge for process companies.
Prescriptive Analytics – a Key Building Block
Industrial data continues to proliferate with the increasing use of intelligent sensors and the growing Industrial Internet of Things (IIoT) market. Research firm, Markets and Markets, expects the IIoT market to grow from USD 64 billion in 2018 to USD 91.4 billion by 2023, at a CAGR of 7.39%. Companies need to improve asset reliability via predictive and prescriptive maintenance techniques. Prescriptive maintenance is well poised as an industry game changer in the energy sector where millions of dollars per asset of revenue are lost yearly due to unplanned downtime. Prescriptive maintenance offers companies a disruptive solution to reduce downtime and gain competitive edge.
Prescriptive Analytics goes further than just accurately predicting outages but identifies the root cause. In doing so, it tells companies what to do, to avoid or mitigate the consequences of an impending event. This works because in complex plants, processes, activities and systems are interconnected. Prescriptive analytics looks at millions of data points and pinpoints sophisticated signatures and patterns that can be detected well in advance of an event. With this approach, failure warning can be obtained up to 60 days in advance to tell the operator the root cause of the problem, pending problem and what actions can be taken to avoid it. The insight gained allows the operator to adjust its operating strategy and drive improvements in the plant or refinery. With more data gathered, the autonomous system learns on an ongoing basis.
In conclusion, the process industry needs to continue its journey of operational excellence and invest in solutions that incorporate AI, machine learning, visualization and prescriptive analytics built on domain knowledge. All of which, will form the agile foundation for the next stage of growth, as companies capitalize on investments made by the industry in the past three decades. Disruptive technologies help revolutionize businesses and set in motion, future growth by capturing the benefits of digitalization today to be more sustainable businesses tomorrow.