Unified Engineering - An Analyst

Perspective on the Present and Future

Direction of Simulation Technologies
October 20, 2016
A Hydrocarbon Processing Live Webcast
Peter Reynolds
Industry Analyst
ARC Advisory Group
PReynolds@arcweb.com
Agenda

• The Current State of Process Simulation and The Impact of Engineers

Entering the Workforce

• Unified Engineering Simulation: Collaboration Across Multiple Roles

• What is Driving the Simulation Markets

• Digital Manufacturing: The EPC Perspective

• Changing How We Consume Engineering Data

• Pro-Active Operations and Maintenance

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 2

Research & Consulting
Peter D. Reynolds
Oil and Gas Industry Analyst
20 Years Automation & IT, Downstream Refining
5 Years as Analyst and Consultant

• Unique research company, focused on Industrial Automation

• Senior people with IT- OT experience and expertise
• Global presence: US, Canada, Germany, France, Japan, China,
India, Brazil, Argentina, Middle East
• Established in 1986
VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 3
About ARC Advisory Group

ARC Ecosystem – Automation Users and Suppliers

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 4

Many Engineering Point Solutions To Solve Different Problems

3D Immersive
Process Simulation
Simulation (VR) For Machine
Engineering 3D Plant 2D Plant Training - Low
and On-line Operations Leaning and
Simulation Design Design and High
Optimization and AI
For Design Fidelity
Maintenance

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 5

The Current State of The Process Simulation & OTS Markets
Global Operator Training (OTS) Market

2.9% 80%
Refining,
CAGR Chemical, Pulp
& Paper, Power
Total Market Gen,
2015 is $540M

Global Process Simulation and Optimization Market

3.7%
CAGR
Total Market
2015 is $940M

CAGR = Compound Annual Growth Rate. Source: ARC Advisory Group Process Simulation and Optimization Global Market
Study and Global OTS Market Study (2015) VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 6
The Simulation Challenge: To Serve and Acquire Users
Challenge:
Serve All Users
Challenge: Frequent
Users

84%
Serve All Users
Frequent
23% Users Of industrial
36% companies are
Usage
23%
challenged to
36% Hrs/Year acquire and
retain
Usage
Hrs/Year engineering
41% talent
Occasional
Over 63% of workforce is 45+ years old Users
41%
40% of users are new
Occasional
Over 63% of workforce is 45+ years old
8 © 2015 Aspen Technology, Inc. All rights reserved
Users

40% of users are new

Source: ARC Advisory Group Process Simulation and Optimization Global
8 © 2015 Aspen Technology, Inc. All rights reserved

Market Study

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Expectations of Younger Engineers: Enter the Millennials

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 8

Collaboration Must Be Agile and Span Multiple Project Roles

Process Quality Equipment Cost Safety Production Mechanical

Engineer Specialist Engineer Estimator Specialist Engineer Engineer

Shared Platform, Converged Systems

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 9

 Operations to Engineering: It is Difficult To Capture The
Important Bits

Incomplete, Inaccurate And Difficult To Access And

Poor Handovers
Missing Asset Data Visualize Data
• EPCs focused on project • Imbedded IP In 3D CAD • Tools Geared Towards
Performance – not models Design – Not Visualization
operations performance • Project Data Is “As- Of Operations Data
• Operations minimal designed” – Not “As-is” • Many simulation point
involvement In project • Plants Change Over Time solutions
process • Data Is Highly Siloed Into
Systems

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 10

Meanwhile Back in Operations: The Very Busy Process Engineer

Reliability and Maintenance Issues impede optimization

Too Many Point Solutions

Process Engineers wear many hats and become generalists

Lack of time to train

Model design has been too complex

Too much Data entry

Difficult to Establish context with other Models and

systems

Your Average Plant Process Engineer Erosion of Workforce

Difficult to Predict Events

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What’s Driving the Simulation Markets?

$10B
CAD
Market

$100B
Gaming
Market

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Field Operator And Console Operator: Linking the Physical
Model with the Mathematical Model

Context Between Physical (Field) and the Operating Model is Difficult

Field Operator Console Operator

Source: Cenovus

3D, Immersive, Virtual 2D, 1st Principle,

Experience Empirical, High fidelity
Rigorous
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Unified Engineering Simulation? What if Science Fiction Had It
Right?
3D Plant View
Process Simulation
2D Flowsheet

Minority Report Spatial Operating

Star Trek Engineering Interface
Environment
Equipment History Equipment Datasheet

Machine Learning Prediction

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 14
Digital Manufacturing: Systems Engineer View for Virtual
Production Systems
Concept Design Simulate Validate Build Maintain Improve

EP,EPC Asset Owner

Systems Systems Design & Subsystem System Validation &
Engineering Breakdown Commissioning

Product
Design Integrated Product & Process Definition Platform
Discipline Domains

Mechanical Physical Asset Mechanical Design Simulation & Risk Reduction, Validation
Design Equipment Modeling Constraints Validation
Engineering

Process Cost Estimation and Process Simulation & Optimize, Improve,

Design Base Case Optimization Validation Economics

Controls Controls Software Simulation &

Design Logic Model Design/HMI Operate Maintain
Validation

As-Designed As-Simulated Updates

As-Built

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© ARC Advisory Group
Digital Manufacturing: Systems Engineer View for Virtual
Production Systems

Concept Design Simulate Validate Build Maintain Improve

Servitization
Not at the EP,EPC Asset Owner At the Plant
Plant OEM Engineering
Services
Integrated Product & Process Definition Platform

The Physical World will be

Validated by the Virtual Extend On-
Extend Value- World Process Data
added Services to to Service
Operations Providers

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© ARC Advisory Group
The Deployment of Simulation in the Cloud Will Accelerate
Progress

Engineering
Predictive Simulation
Analytics

ERP Manufacturing
Execution
Applications
Planning
and
Scheduling
Enterprise Asset
Management

Email CRM

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And What About the Next Generation of Engineers?

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The Way We Learn and Consume Computer Simulation is
Changing

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Virtual Simulation for Power, Process, Energy, & AEC

• PLM technology offers 3D simulation tools that enable

the Process, Energy, and AEC industries to create a
fully Immersive Virtual Environment
• Complete Virtual Environments can be created for
Plants, Refineries, Drilling Platforms, Nuclear
Reactors, Power Generation Facilities, and Large Scale
Construction Sites.

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© ARC Advisory Group
Augmented Reality Scope: Guidance from a Remote Expert

“Hands on”
guidance from
Execute Work Order an expert while
in the field

HoloLens contains
miniaturized Kinect
technology in the
headset for “seeing”
One 3D space
Headset Microsoft HoloLens

DAQRI Smart Helmet

Source: Microsoft Vuzix Smart Glasses
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Operations and Maintenance are Becoming More Pro-active
How Will Simulation Play a role? Types of Work Orders - Ranked

Approach Method Cost Operations Impact Preventive 23%

Hard to Meet Plan,

Corrective or
Run to failure - repair $$$ highest risk to Inspections 14%
break-fix
production ops
Introduce unnecessary Safety 10%

Preventive or work, New Failures,

Service in a fixed interval $$$$
scheduled, frequency of Predictive 10%

unplanned downtime
Corrective 19%
The Vibration or alert
Monitor single process variable,
Condition-based $$ is too late, highest
alert, automatic work flow Emergency 11%
false positive
Project 6%

Rigorous models, Analytics with

multi-variable time series data Administrative 5%
Predictive contextualized with Trust Assets and
$
unconventional data. Predictable 0% 5% 10% 15% 20% 25%

Equipment-specific algorithms, ARC Survey with 141 user

machine learning. responses March 2015
Describe the Fix or Repair Operations, Downtime
$
Prescriptive reaches zero
Fix the Process 10% is
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Predictive© ARC Advisory Group • 22
Operational Analytics Provides Answers to More Questions

Descriptive Discover Predictive Prescriptive

What Why is it When will it What can I

happened? happening? happen? do about it?
Static Interactive
Reports Machine Learning Big Data
Dashboards Algorithms Aspects
Static Trend Tools
Dashboards Cross-Functional Asset Failure
Excel Context Applied to Codes
Flowsheet Process Data
X-Y Ploys SOP’s
Graphics
Statistical Supervised, Human
Example: Unsupervised
Process (SPC) Performance
KPI's
Data

Last Decade Emerging and Future

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 23
The Emergence of Predictive Analytics Will Compliment Process
Models

Process Process Quality Asset Health Incident

Variability - Customer Impact - Predictable Prediction
- Low Production Behavior - Reduce
-Reruns
- High Energy -Asset Performance Unplanned
- High Operating Downtime
Consumption -Workforce
Cost
- Process Trips Utilization -Lower Operational
- Waste Risk
-Worker Safety

VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 24

Unified Modelling and Machine Learning (AI)

The Current Plant Model

Real-Time Plant
Probabilistic Data
Waveform
Centralized
Remote Operations
Engineering

This presentation may be not be reproduced without prior permission from ARC. 25
© ARC Advisory Group
Modern Engineering Requires a Different Approach to
Technology

From Sequential Engineering Simultaneous Engineering

Modelling and Simulation Optimizing

Chemical Equations Chemical + Physical

2D 3D

Physical Virtual

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Summary

Cost and Risk Drive the Need for unified Platforms and Predictive Work Processes

EPC's Expand offerings from Plant Design and Asset Optimization

New employees entering the workforce will change technology expectations

Engineering Simulation will converge the mathematical & physical models

For Operators the Virtual Will Combine with The Physical

Artificial Intelligence (AI) will be require a check against the operating model to
eliminate false positive predictions
VISION, EXPERIENCE, ANSWERS FOR INDUSTRY © ARC Advisory Group • 27
Where To Get More Information

www.industrial-iot.com

Linkedin.com/in/pdreynolds

@PeterDReynolds

Thank
You.
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