Revealed: the formula that turns digital transformation into competitive advantage

Our world is changing fast. Scarcer resources are putting a premium on sustainable practices. Witness, for example, the predicted 40% gap between the supply and demand of fresh water by 2030. Or the projection that, by 2040, we will somehow have to meet a 37% increase in the demand for global energy (Source: International Energy Agency’s ‘World Energy Outlook 2014’).

Given these global concerns, the world’s opinions are changing fast too. Environmental issues and increasing public scrutiny are driving the escalating interest in alternative solutions that disrupt traditional business models. And whether a business takes an ethical, economic or even a Machiavellian standpoint, there is no choice but to reduce its environmental footprint. Not to be seen doing so would be political – and therefore business – suicide.

Unsurprisingly, aging organizational infrastructures are finding it difficult to cope. The add-ons they have applied to try and keep up are not only proving pricey and complex to run but also failing to deliver the hoped-for results.

Getting more competitive

The Energy, Processes and Utilities industry is not just getting more complex and costly, it’s getting more competitive too. The profitably of established businesses is being challenged by accelerating commoditization eroding their legacy of competitive advantage.

These days, if you can’t compete on price as well as quality and expertise, you’re out of the running. Which means that companies involved in, for example, product development and specialty chemicals are being challenged by a highly competitive market that never stops investing in science and new technology.

This competitive pressure is being felt right across the industry. Companies hungry to win new projects face expanding costs from a specialized workforce that’s shrinking as many hit retirement age, plus the need to operate more complicated processes and create more involved designs.

The multitasking owner-operators of complex facilities are also feeling the pressure. They need to handle the proper maintenance of their assets, invest for long-term operations, manage procurement strategies and deliver ROIs set by over-optimistic boards in an environment where the challenges and expectations are always changing.

Faced with these mounting, multifaceted challenges, how is it possible to ramp up competitive advantage?

The necessity of innovation

To increase margin and profit organizations have got to – in the simplest terms – ‘do more, better and for less’. In reality, that means increasing quality and productivity while reducing non-value adding activities and compliance risk.

So, what will deliver those outcomes? That’s the question that bridges the differences between power, chemical, oil and gas companies – and applies to everybody in the industry – from product developers and design experts to process specialists and facility operators.

The answer is ‘innovation’. Innovation isn’t only about having ‘the big idea’ and creating brand new product lines, revenue streams and markets. It’s about taking existing processes and making them simpler, quicker and more efficient. That means reducing time spent on repetitive tasks, avoiding duplication by improving organizational and infrastructure processes, while speeding up research and development to quicken the pace of innovation and diversify into new ventures.

Materials innovation is crucial to future profitability. For example, it’s forecast that, by 2020, 40% of chemical industry revenue will come from products developed over the last three years. Which means a digital solution delivering speed – and efficiency – is of the essence.

On average, Dassault Systèmes’ capabilities for virtual testing can reduce the number of experiments by 40%. Integration and automation reduces time spent on documentation by 44%, and that spent on tracking samples by 90%. The result? A 66% acceleration in R&D.

Working together on one platform

Innovation is also about improving the way individuals work together. By making sure relevant real-time information is available to all project stakeholders – from the remotest field engineer to the director of manufacturing at head office. That way everyone can collaborate both vertically across the boundaries of functions, departments, organizations and geography, as well as horizontally, weaving a digital thread throughout the lifecycle of their projects, from fundamental research to industrialization. Then they can freely – yet securely – capitalize on knowledge and know-how by sharing and building on their ideas and expertise, bringing together data from different sources in intelligent ways to reveal yet undreamt of formulas, designs and methodologies.

Thomas Grand, VP of Energy, Process and Utilities at Dassault Systèmes, said the major benefit of companies working together in real time was that “there is no longer the need to synchronize between different systems, between different information to ensure that everything is aligned.

“Once the information exists only once for the entire organization – once we are all working with a single source of truth – it is possible to consume it in real-time and that means that in any point in time, different people, with different priorities in the organization can collaborate.”

In short, the industry must seek to accelerate innovation in all things, throughout the full organizational lifecycle, to counter the challenges to profitability. That’s the theory, but how do you accelerate innovation in practice?

Thomas Grand says: “Optimization across the different stages of the lifecycle can give companies more improvements in terms of cost, but the main improvement is an acceleration in terms of cycle time, including innovation cycle time. This means that companies can speed up how quickly they go to market, and they can react more swiftly to market changes.

“By digitizing and taking a data-centric approach, it’s possible to accelerate the cycle and go to market faster. This is a way to remain on top of the pack and to remain differentiated.”

To achieve all the above, an organization needs to establish a scalable business platform connecting people across disciplines, processes and related organizations, such as suppliers. A platform that connects the virtual and real worlds, allowing a global business to re-imagine its engineering and operations while planning for excellence.

CASE STUDY

Yellow River Engineering Consulting Co. Ltd (YREC), a Chinese firm specializing in river management, water conservation and hydropower, put the theory into practice.

To compete for market share, the company needed to improve its efficiency and the quality of its designs – delivering greater value throughout the project lifecycle. Hence its choice of Dassault Systèmes’ 3DEXPERIENCE® platform for collaborative design and innovative production.

“Today’s engineering design teams face difficult challenges that include higher design complexity, shorter cycle times and clients asking to view their project’s progress throughout the creation process,” explained Shunqun Yang, Leader of YREC’s Engineering Design Academy.

“The platform has revolutionized our traditional design approach thanks to its ‘what you see is what you get’ capabilities. This way, our clients have a precise idea of what the end result will be and how it fits into the surrounding environment before construction teams even break ground.

“In the past, we mainly relied on 2D drawings for our projects. On the construction site, the owner and supervisor were not easily able to see last minute, onsite changes. Geographic conditions in the field often change and 2D drawings are unable to reflect these changes in real-time, making field response time very slow.

“Now, thanks to 3D models, and the collaborative capabilities of the 3DEXPERIENCE platform, communication between those working on site and our designers in the office has considerably improved. Everyone can access the latest models and make decisions and changes in real time, saving significant time and money.”

Seeing is believing

Vaseem Khan, VP at McDermott International, the US-based provider of technology, engineering and construction solutions to the energy industry, is in consensus with Yang. In his presentation about creating a digital twin to unify the virtual and real worlds, he emphasises the benefits of being able to visualize the most complex of products and processes, including their inter-relationships: “Our brains are tuned to work in 3D… when we look at an Excel spreadsheet or Word doc it’s very hard to visualize, but put all that data into a single 3D model and you can see how liquids are flowing through a pipe, how data is being generated from a compressor.”

New generation capital projects demand sustainable and innovative approaches to achieve ‘zero-defect’ design and engineering that is construction and operation-ready. With the latest virtual tools to develop, test and refine their model ideas, innovation is never slowed by the costly introduction of flawed designs and processes when applied in the real world.

Simulating success creates real success

In the virtual world we can develop, simulate and test everything to the limit – exploring the real-world behavior of products and nature itself. Here we can afford to make mistakes before they become a reality. This applies to simulations at all scales from a molecular level for materials to a systems level for entire buildings. This saves time, money and materials – helping to create economically sustainable companies with less wasteful, more environmentally sustainable processes.

Better still, we can make collaboration not just possible, but extremely sophisticated – like testing a dam’s ability to resist an earthquake, with an unprecedented robustness and efficiency across teams. We can also make the difficult easy, simulating complex and novel plant processes before they are put in place. And we can make the dangerous safe, such as seeing how a volatile chemical will react in multiple scenarios. What’s more, unlike physical testing, we can do this faster and 24/7, leading to greater reliability and accelerated economic returns over longer asset lifespans.

From optimizing project delivery and enhancing operational efficiency, to improving safety and achieving plant certification, the benefits of realistic simulation are as diverse as they are considerable.

Just look at the positive experience of the nuclear industry. Dassault Systèmes’ solutions are used to support hundreds of reactors worldwide. The ASE Group attributes the fact that it can reduce the time it takes to construct a nuclear unit from 58 to 48 months to that software. It has also reduced engineering and operator hours by 25% during commissioning, saved $5-10M per reactor in data collection and transfer during handover, and even reduced accidents by 50% – thanks to the sharing of higher quality, less ambiguous information between fieldworkers.

The knowledge necessary for innovation

Recent innovation in wind energy is an excellent example of a field that can benefit from sophisticated multiphysics simulation tools. In this case, it enables accurate prediction of the very complex behavior of turbines or entire wind farms – thereby facilitating the design and manufacture of more economic, safer machines that can further reduce the cost of clean, alternative energy.

At the Technical University of Munich Research Associate Stefan Sicklinger used Dassault Systèmes’ SIMULIA’s co-simulation engine (CSE) to link four physics – flow, structure, multi-body dynamics and control – into highly accurate 3D models of wind.

“Modeling flow conditions for wind turbines is especially challenging,” explained Sicklinger, “but it pays off for a product like a wind turbine for which testing is very expensive – or even not fully possible at all. The next generations of larger wind turbines are very nice candidates for this kind of modeling because you can’t do any testing on them at the real scale.”

Beating the challenges to profitability

Visibility is key to profitable innovation. Everybody is sharing the same information, everybody can see what is – and what isn’t – going well and everybody can also see how to change those things for the better. Because, in the end, it’s all about how we work together as teams.

Which is why improving innovation and operational efficiency requires consideration of the human as well as the technological. Management must leverage their human capital because innovation inevitably requires shifts in corporate culture. It requires agility, faster decision-making and project cycles.

Becoming a digitalized organization impacts the type of work that teams do and how they work together. There will be pressure to achieve results more quickly. New skills and knowledge will be required. And a new mindset. For innovation to succeed everyone in the organization needs to adopt an ‘owner mindset’. To take responsibility and think like the customer.

Consequently, it’s important to have processes in place that will put the right people in the right jobs, redeploying current talent and attracting new talent. Indeed, the engineers, innovators and leaders of tomorrow will choose those organizations that are differentiating themselves by endeavoring to increase their rates of innovation and renewal today. These are organizations that aim to grow strong, accountable leaders with succession plans and professional development. That aspire to teach teams to be more effective and to proactively manage change.  

That way we can ensure that everyone within the business embraces the principles, platforms, supportive apps and technologies that deliver digital continuity in everything we do. That’s how we’ll get an edge on the competition. That’s how we’ll win.

Hope to see you at the WECA event December 4th, were Dassault Systèmes is taking part of the panel Digitalisation – is the Oil & Gas Sector keeping up?

 

Innovation Blog

Innovation Blog, brought to you by Dassault Systèmes UK.