Everyone is talking about Industry 4.0, an environment where machine learning will predict equipment failures and technologies such as the Internet of Things (IoT), artificial intelligence (AI), the Cloud and augmented reality (AR) offer huge potential for the energy industry.
But harnessing this opportunity has been complicated by the coronavirus pandemic, market volatility and net zero emissions targets that have intensified pressure on margins. Indeed, several months after the first outbreak of COVID-19, its resurgence is leading to another big shock to the industry, with the International Energy Agency (IEA) stating in October 2020 that the oil demand rebound over the summer is now slowing due to the second wave of coronavirus cases and new movement restrictions.
In this context, it is not easy to find many positives. However, the adoption of new digitalisation technologies which were already gaining ground prior to the pandemic is now pivotal as remote workers are increasingly adopting basic digital tools in the ‘new normal’. According to Forbes, ‘89% of operations teams say COVID-19 is already impacting their analytics and business intelligence budget and initiatives’. But despite the challenges brought on by the pandemic, market volatility and ever closer scrutiny of the oil industry’s environmental impacts, inertia still persists. This is due largely to a combination of the complexity of operations, costs and confusion over the sheer range of transformative technologies that contribute to Industry 4.0, also known as ‘the fourth industrial revolution’.
What Is Industry 4.0?
Industry 4.0 is an umbrella term for the adoption of IoT and associated technologies which include new digital communication tools and smart manufacturing capabilities. It basically hinges on the connection of physical production and operations with machine learning and Big Data. It is where IoT systems collect process data in a transparent, comprehensive and interactive way. It provides real-time visibility into physical assets and equipment, quality of processes and plant resources, making it much easier to visualise the entire process digitally. According to market consultant Deloitte: ‘The IoT which integrates sensing, communications and analytics has been simmering for a while. But it is ready to boil over, as the core enabling technologies have improved to the point that its widespread adoption seems likely. The IoT’s promise lies not in helping oil and gas companies directly to manage their existing assets, supply chains or customer relationships – rather, IoT technology creates an entirely new asset: information about these elements of their business.’
Starting The Digital Journey
However, many companies are unsure how to harness the benefits digitalisation can provide and they may risk wasting time, effort and money. Companies need to prioritise the processes that will deliver maximum value. The pressure to reduce costs and improve efficiencies is the major driver for digitalisation.
We have already seen advancements in the supply chain that have been made with AI performing automated checks and machine learning, for example, but there is still much to be done as there is a huge amount of inefficiency, usually from using paper – from audits to changeovers and machinery reporting that is impossible to analyse with any accuracy. Done digitally, however, anybody from the worker to the supervisor or auditor can see the characteristics of a check-in real-time, the impact it has and provides digital evidence, such as pictures or data, to know it is done correctly – all in a fraction of the time. One of our clients was asked in a recent audit: ‘How many times was filter “X” changed last year?’ Historically, this would have taken a day to find the information and prove the claim. Today, it takes the team three clicks and less than 10 seconds.
Companies can use digitalisation to help achieve these goals with automated workflow platforms integrated with mobile and wearables to ‘digital twins’ that create a virtual replica of a component or process that allows analysis of operational data to help optimise processes and reduce costs without disrupting real-world processes. While digitisation is a prerequisite to digitalisation, it should not be viewed as an end-goal. In the last three to four years the use of data and technology to enhance business processes has begun. But true digitalisation offers a greater opportunity to change the way organisations operate.
A Granular View Of Operations
It is not simply about the efficiency of processes, it is about gaining a granular view into operations. Digital technology provides access to better supporting information for strategic decision making. By taking data from various sources, operators can analyse it to help predict failures based on historical trends, which can make a huge difference when it comes to limiting unscheduled downtime. It means operators can move away from having a periodic maintenance schedule of machines towards auto-scheduled maintenance when something of concern is detected from IoT sensors. The more data that is analysed, the smarter the decisions.
Digitalisation can deliver more than improved equipment maintenance strategies; it can help operators to become more competitive by improving visibility beyond an individual plant further along the value chain as data is no longer siloed but is visible in real-time. Doing so can generate cost savings as operators can react quickly to fluctuating demand, plant shutdowns and even plan ‘what if’ scenarios as situations change. By optimising operations in this way to reduce costs, digitalisation can also help lower carbon emissions. Fuel extraction is an energy-intensive process; if operators have better visibility of their assets, they can actively address carbon reduction needs through improved processes too.
Innovative wearable technologies are also key to speeding up the journey towards Industry 4.0 by enabling safer real-time monitoring and inspection of equipment in remote locations such as offshore. When equipment failure occurs, it can run into the millions with downtime and repair expenses, particularly if an expert has to be flown out to help fix the problem. Intoware, for example, has developed a data capture and process management platform – WorkfloPlus – which integrates with RealWear’s HMT-1 headset. Featuring augmented reality, this headset receives input via speech recognition and is used for audits and inspections. Step-by-step workflow instructions can be accessed by the technician, with real-time data capture, easy-to-use reporting tools and a powerful dashboard. This system has been extensively trialled by major oil operators to help optimise and maintain operations offshore for audit and compliance purposes and system.
An Untapped Asset
Data, like oil, remains an untapped asset. Like oil, those that recognise its value and extract and use it will gain huge rewards as the industry strives to create new data strategies to help streamline business processes. The ‘new normal’ of lower oil prices and market volatility has revealed current inefficiencies, but it has also accelerated demand for digitalisation, shaking up the oil industry for the better.