Yokogawa is transforming and changing its focus from products to customers, providing value in projects together with our customers. Yokogawa is actively involved in the pre-FEED stage, where it can work with the owner and EPC to anticipate and resolve difficulties in project and technology integration.
Challenges for Customers
Unavoidable issues for projects include their increasing size and complexity and the involvement of many parties such as the owner, process licensor, PMC, multiple international & local EPCs, MACs and multiple third-party suppliers.
Each party’s performance is measured through indexes like HSSE incidents, planned vs. actual hours, etc., communicated and reviewed in scorecards. This complexity is increased by the growing number of countries where execution takes place in parallel, and locations change with each phase of the project. The long-term schedules increase technology selection risks how to incorporate better and later technologies to meet the project performance KPIs . As a result, schedule conflicts occur among the parties.
The EPCs themselves face many challenges due to changing economic circumstances and increasing plant size, thus requiring more specialized engineers. Furthermore, larger investments and more complex technologies require multiple partners to work together in JVs.
In this changing environment there are opportunities for EPCs and MACs to work together in mission-critical projects.
IT companies are entering the arena but end-users do not trust their ability to understand what process data really means. These companies approach Yokogawa to collaborate and integrate operation technology (OT) and information technology (IT). Some MACs bundle their capability with process licensing, adding additional value that pure automation vendors cannot deliver. Other MACs focus on the contracting business and buy in the automation part, thus becoming direct competitors with EPCs. Some EPC licensors buy hardware from the DCS and SIS vendors and implement the application themselves, protecting their IP rights and optimizing their implementation cost and work processes.
Yokogawa works closely with customers to anticipate and resolve issues while providing value in projects.
Before the FEED phase starts, Yokogawa can provide value as a main automation and information contractor, integrating the OT and IT, working with pure IT vendors and integrating the MES layer into the EPC FEED package to provide the plant owner increasing value and benefits which cannot be provided by EPCs which compete only on price.
Yokogawa provides pre-FEED consultancy services.
These pre-FEED consultancy services add great value such as:
- As a partner, review every opportunity with EPC to control costs, schedules, and risk during the project
- Together with the EPC, increase innovation to reduce the total cost of ownership
- Providing advanced solutions to increase the value to the owner
- Incorporate maintainability as a key review criterion during the functional design phase (covering data flow, information model, hardware, etc.)
- Network security services to enable the Industrial Internet of Things
- Cabling & panel standards, reduction of multicore cabling, minimization of footprint, modular testing
- L1-L2 integration for IIoT era: Field device definition & integration
- Cloud-enabled execution now and in the near future, remote troubleshooting on site
- Optimal integration & testing: resilient, robust and modular
- Automated C&E validation as a part of functional safety management
- Design validation based on industry libraries & simulation during the project
The project execution phase is typically defined in a sequential manner based on the assumption that design information for the next phase will be available as agreed among all parties. However, instrument & control data is typically late, the schedule is “non-negotiable” and the result is that incomplete works are shipped to the job site. This increases the risk of cost overruns since it is challenging to achieve a fully functional delivery to the owner due to re-engineering and testing and the resulting potentially lower quality. It is also harder to manage and coordinate concurrent work while properly documenting it.
The influence of national oil companies is growing, replacing international oil companies and taking over both design and operation. These national oil companies partner with local EPCs and design houses, requiring international EPCs to step up their local presence. There are also many new entrants in the EPC business, competing on cost. Amid this business environment, EPCs need to compete during the FEED phase to secure the project. Besides increased cost competition, process licensing and information technology are becoming ever more important. When NOCs and IOCs reduce their CAPEX, greenfield projects become fewer. Owners are now focusing on investing in OPEX, making operations more efficient, and adapting to market changes.
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