Synaptic Business Automation

Synaptic Business Automation ermöglicht nachhaltige Wertschöpfung, indem alles in den Unternehmen unserer Kunden miteinander verbunden wird. Yokogawa realisiert dies, indem es seine Geschäfts- und Fachkenntnisse mit der digitalen Automatisierungstechnik verknüpft und darüber hinaus gemeinsam mit seinen Kunden Innovationen entwickelt, die die Transformation ihrer Geschäftsprozesse vorantreiben.
 
Synaptic ist von dem Begriff „Synapse“ abgeleitet – einer Struktur im Nervensystem, die bei der Übertragung von Signalen an andere Teile des menschlichen Körpers eine wichtige Rolle spielt. Mit Synaptic helfen wir Kunden, neue Mehrwerte zu schaffen, indem wir alle Aspekte wie etwa Daten, Systeme, Organisationen und Lieferketten mit Wissen und digitalen Automatisierungstechnologien miteinander verbinden und integrieren – nach dem Prinzip der neuronalen Netze.
 
Mit Business Automation kreieren wir gemeinsam mit Kunden unternehmerischen Mehrwert, indem wir mit Co-Innovation und Digitalisierung die Anlagenleistung maximieren sowie die Lieferketten und Betriebsabläufe optimieren.
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Wir arbeiten eng mit Kunden zusammen, um nachhaltige Werte zu schaffen

Unsere Geschäftsumgebung ist immer mehr von immer schnelleren Veränderungen geprägt.  Unsere Kunden in den Produktionsindustrien stehen vor verschiedenen Herausforderungen wie etwa einem verstärkten Kostensenkungsdruck aufgrund der globalen Konkurrenz, Änderungen gesetzlicher Anforderungen, der Verbesserung der Cybersicherheit und einer alternden Belegschaft.  Kunden fordern einen klareren und schnelleren Überblick über die Situation, damit sie Entwicklungen im Voraus erkennen und Veränderungen agil und proaktiv bewältigen können.

Wenn alle notwendigen Daten in allen Prozessen und Lieferketten synaptisch integriert und intelligent in sinnvolle Informationen für Unternehmen umgewandelt werden, hilft dies Kunden, Geschäftsentscheidungen schnell zu treffen und die Effizienz in allen Bereichen – von Produktions- bis hin zu Geschäftsprozessen – zu verbessern. Wir bezeichnen dies als Synaptic Business Automation.  

Um Kunden bei der Bewältigung ihrer geschäftlichen Herausforderungen zu unterstützen, hat Yokogawa seine Expertise in OT (Operational Technology) und IT (Information Technology) um BM (Business Management) durch Prozess- und Geschäftsberatung erweitert. Unsere langjährige OT-Erfahrung gewährleistet die zuverlässige Handhabung von Prozessdaten. Die Möglichkeiten der IT wie etwa IIoT (Industrial Internet of Things), Secure Cloud und Remote-Technologie, Cyber Physical System, Digital Twins, künstliche Intelligenz, Machine Learning und Big-Data-Analytik bieten zusätzlichen Nutzen auf Grundlage der neuesten Technologien.  Durch die Kombination aus OT, IT und BM bieten wir eine allumfassende Komplettlösung vom Management bis hin zum laufenden Betrieb.

Um das Konzept Synaptic Business Automation bei seinen Kunden zu implementieren, arbeitet Yokogawa eng mit seinen Kunden zusammen. Das gemeinsame Ziel ist es, die Konkurrenzfähigkeit zu verbessern und das nachhaltige Wachstum durch Steigerung der Produktivität, Rentabilität und Betriebsstabilität zu ermöglichen.
 

Yokogawa erhält den Frost & Sullivan 2017 Global Customer Value Leadership Award in der Industrial Automation Solutions and Services Industry

Diese Auszeichnung würdigt den Beitrag des Unternehmens zum Aufbau enger Beziehungen zu seinen Kunden durch Premium-Werte, die einen außergewöhnlichen Return on Investment bieten. Frost & Sullivan würdigt mit den Best Practice Awards Unternehmen, die sich durch herausragende technische Innovationen und die strategische Entwicklung von Produkten und Dienstleistungen für regionale und globale Märkte ausgezeichnet haben. Die Analysten von Frost & Sullivan führen für jede dieser Auszeichnungen unabhängige Befragungen durch, analysieren Daten und betreiben Recherchen in vielen verschiedenen Feldern. Für den Global Customer Value Leadership Award beurteilt Frost & Sullivan Unternehmen anhand verschiedener Faktoren, die die zwei Hauptaspekte der Kundenwirkung und Auswirkung auf das Unternehmen betreffen.

Mehr erfahren

Global Customer Value Leadership Award (PDF)

 

 

  • Unser neues Geschäftskonzept konzentriert sich auf die nachhaltige Wertschöpfung für unsere Kunden durch Zusammenarbeit und Co-Innovation.

  • Wir verfügen über die wesentlichen Voraussetzungen, die Unternehmenswerte unserer Kunden zu steigern und den kontinuierlichen Wertschöpfungszyklus (Continuous Value Creation Cycle) zu wiederholen.

  • Diese Zusammenarbeit ermöglicht es uns, zusätzliche Werte für unsere Kunden zu schaffen.

  • Gemeinsam mit KBC und seinen Co-Innovationspartnern bietet Yokogawa mit Synaptic Business Automation den Weg zu Operational Excellence – und zwar durch die digitale Transformation. 

  • Wir haben über die Jahre hinweg festgestellt, dass immer wieder ganz bestimmte Herausforderungen bei unseren Kunden – über alle Branchen hinweg – auftreten.

  • Yokogawa bietet seinen Kunden vielfältige Lösungen, um nachhaltiges Unternehmenswachstum und „Operational Excellence“ zu erzielen – unter Betrachtung aller technischen als auch aller kaufmännischen Aspekte.

  • Unser wichtigstes Anliegen ist es, unsere Kunden in jeder Hinsicht zufriedenzustellen. Wir möchten unsere Kunden zufriedenstellen und die Leistung erbringen, die von uns erwartet wird. Die folgenden vier Punkte beschreiben die Art und Weise, in der wir dieses Ziel erreichen.

Übersicht:

Yokogawa has a long history of co-innovation in process control and safety.  Combined with recent strategic know-how and IP-rich acquisitions, the company can now apply its deep domain expertise to create a differentiated offering in the industrial automation space. From analog or manual data being digitized to the complete digitalization and improvement of work process, with recently-acquired KBC, Yokogawa is helping industrial organizations transform their businesses to help meet both current and future challenges.

Übersicht:

Background and Company Performance

Industry Challenges

The primary global trends that are disrupting, collapsing, and transforming the process automation markets include Industrial Internet of Things (IIoT), uncertainty in operations/commodity prices, impact of advanced software technology, shifts in demographics and demand. These trends are driving the need for sustainable business performance with certainty in operations (e.g., business, production, manufacturing, supplychain). This is especially true of process automation industries, which are at an interesting juncture. There are four major shifts happening in this market that are challenging global
process automation end users:

  • An aging workforce and need for reliability: Nearly 35% to 40% of the process automation workforce is eligible for retirement over the next 5 years.
  • Digitization and cybersecurity: End users are willing to connect assets over the Internet in order to realize better asset performance, but are restrained by the security threats.
  • Operational efficiency: Volatile commodity price swings are forcing companies to take drastic measures to maintain baseline performance efficiency.
  • Asset reliability: Competitive pressure and an acute focus on margins have driven end users to shift from traditional reactive asset management models to predictive and preventative asset management models.

These challenges are driving a state of uncertainty in the end-user mindset, as they are often not aware of a solutions roadmap, implementation strategy, and possible outcomes. The market is also shifting from request for quote (RFQ) projects to proactively shaping and creating new market opportunities/demand. This market shift is driving a change in the sales-to-cash cycle for automation solution providers. Typically, automation companies (like Yokogawa) were selling tangible products such as control systems, safety systems, sensors, flow meters, plant management software, and associated services. However, the digital shift signals the need for automation solution providers to educate end users on areas of opportunities and will thereby drive new market development. Automation companies usually use a consultative approach, utilizing a team of consultants to discover and advise on plant operations-related issues and advise customers on the best approaches that can be taken by them.


Yokogawa, one of the few independent automation companies, is primarily focused on the energy value chain (oil and gas—upstream, midstream, and downstream chemicals, petrochemicals, refining, and power generation). Keeping with the market trends, the company is also transforming in order to drive incremental business value to its global customer base. One of the ways that the company has transformed is through strategic acquisitions (e.g., Industrial Evolution, Inc.; KBC Advanced Technologies plc; Soteica Visual Mesa, LLC). Further, Yokogawa is looking to intensify market participation in existing and near-adjacent industry verticals, primarily in areas where it currently has minimal presence (e.g., mining and power transmission).

 

Customer Impact and Business Impact

Customer Ownership Experience  

Because process and hybrid end users (end users include oil and gas, chemicals, refining, food and beverages, and life sciences) are faced with shrinking CAPEX investments, they now have to optimize their lifecycle operations expenditure. Further, a cross section of end users (mentioned above) also face other critical issues such as digitization, security threats, competitive pressures, and margin security. At this point, it is imperative for solution providers to reposition themselves from a product supplier to solutions and service supplier. Automation companies will need to offer value-added services such as human capital management, asset management services, plant design services, simulation, and production analytics. Further, end users are looking for trusted industry solution partners that can continuously diffuse best practices learned from near-adjacent industry verticals and evolve with maturing technology landscapes.


Competition in the process automation market is driving companies to increase solution service capabilities. Several companies are inorganically growing this capability while a few are using an organic model to bolster solution capabilities, initiating a race to become the anchor in the industrial markets. Although there are multiple solutions available in the market to address the customer/end-user challenges, it is important to structure an endto-end solution that comprehensively addresses the value-delivery model from the phases of plant design, engineering, commissioning, asset management, human capital management, and lifecycle operational sustainment.


Yokogawa, one of the few independent automation solution providers, differentiates itself in this market in many different aspects. The company recently made a series of strategic acquisitions to differentiate its breadth and depth of capabilities. The acquisitions were:

  • Industrial Evolution, Inc. (acquired in December 2015): This Company is a pioneer of secure cloud-based data sharing services in energy and chemical industries, since the year 2000. It is one of the most well-known companies in the market and services a number of Fortune 100 companies who leverage its data collection and sharing services. This acquisition helps strengthen and expand Yokogawa’s advanced solutions portfolio for process industries. Yokogawa’s advanced solutions portfolio already includes solutions such as advanced process control, simulation, and process information management system. Further, the acquisition will allow Yokogawa to deliver Data-as-a-Service platform capabilities to its existing installed base. Yokogawa is enhancing its cloud-based advanced solution business based on the technology of Industrial Evolution. In February 2016 Industrial Knowledge was established as a business unit to enhance the cloud-based advanced solutions business based on the technology of Industrial Evolution.
  • KBC Advanced Technologies Limited (acquired in April 2016): This company has been focused on improving operational excellence and profitability in the upstream and downstream segments of oil and gas. The acquisition allows Yokogawa to gain a differentiated blend of advanced software and operational consulting capabilities. This fills a gap in the portfolio, which positions Yokogawa as a comprehensive solution provider from the C-suite office to the plant-level operator. 
  • Soteica Visual Mesa, LLC (SVM) (acquired in October 2016): This acquisition allows Yokogawa to gain energy management capabilities, production accounting, and scheduling for process industries.


Yokogawa’s current solutions and service are technologically unparalleled offerings, and these are further amplified by its acquisition of KBC Advanced Technologies Limited and Industrial Knowledge, as explained above. These strategic acquisitions help Yokogawa drive differentiated customer value by discovering areas of improvement, automating the manufacturing processes, sustaining these benefits, and driving continuous improvement. The primary objective of Yokogawa’s comprehensive solution and service offering is to increase the return on capital employed (ROCE)
while reducing operational performance variability. The adoption of a comprehensive solution, like the one provided by Yokogawa, helps process automation end users drive smarter, faster, more responsive, and more profitable operations.


Best Practices Example: As per Yokogawa’s Transformation 2017 plan, it aims to leverage its best-in-class measurement, control, and information technologies with KBC’s advanced software and Industrial Evolution’s data sharing capability to drive strategic business value and facilitate the realization of potential synergies for its customer base. The customercentric experience created by Yokogawa is already being well received by customers, according to the company.


Customer Service Experience


As of 2017, technology refresh cycles have been halved when compared to the past decade. This trend has forced many large-, mid-, and small-sized companies to tactically look at using outsourced services/managed service offerings. This is driven by the fact that technology investments made by end users are not on par with the market movements. End-user companies look for harmony between operational technology (OT), information technology (IT), and lifecycle management. Because of this, solution providers are expected to demonstrate excellence across these three areas in order to achieve a preferred vendor status with end users. While maturity levels of process automation end users vary, Yokogawa’s ability to understand the industry-specific needs of these customers/end users helps it deliver customized solution offerings.


Best-practice: Yokogawa developed a solution called Process Data Analytics to detect process quality issues early on in the manufacturing process through analysis of process data, material quality data, operations history, and resources used. The solution’s strength is proven by the fact that Yokogawa has over 100 contracts to date and continues to improve on the solution capabilities. The ability to comprehensively analyze the inter-dependencies between man, material, and machines, demonstrates the customer service capability of Yokogawa. The process data analytics solution can be used to monitor and maintain production quality control across industries such as oil and gas, petrochemicals, chemicals, iron, steel, pharmaceuticals, and food and beverages.


Another solution that speaks volumes of Yokogawa’s customer-centricity, innovative capability and technology ingenuity is the industry-leading distributed fiber optic sensing solution. It provides thousands temperature measurement points in minutes which is ideal for well monitoring, pipeline leak detection, fire detection, power cable monitoring, or other large production facilities. Thus improves operational safety, availability and efficiency. This solution currently includes two main products - DTSX200 and DTSX3000. The differentiation is its integrated industrial modular design with longest distance, up to
50 km and highest performance. Such capabilities are beneficial to facilitate reliable measurement in harsh environment which was never realized in the past. Oil and Gas, and other customers continue to adopt these cutting-edge distributed fiber optic sensing solutions in various applications.


Brand Equity


Yokogawa recently celebrated its 100-year anniversary. The company is one of the few independent automation companies primarily focused on the energy and chemical value chain. While the company is aggressively building its presence in the United States, it is one of the top 3 companies in Asia-Pacific, Middle East, and Europe. Yokogawa has successfully created a strong brand in the process automation market that is based around its proven MAC (Main Automation Contractor) capability, project execution and technology prowess, and focus on the customer. This is evident from the fact that several large integrated oil and gas companies like Shell, Gazprom Neft continue to renew longterm contracts. Case in point, Yokogawa recently signed an agreement to start an International Center for Innovation in Russia. This is primarily to drive the development of advanced solutions for Gazprom’s refineries. This particular example showcases end-users perception towards Yokogawa’s technology and brand.


To further amplify its brand awareness, Yokogawa has collaborated with Microsoft Corporation; FogHorn Systems, Inc.; Bayshore Networks, Inc.; and Telit IoT Platforms, LLC to synergize market offerings with combined technology platform offerings. Yokogawa also setup its IIoT architecture development division on the West Coast of the United States to create a robust, next-generation, and flexible architecture. Yokogawa will use this division to collaborate more closely with its partners and subsequently develop innovative solution offerings.


Customer Acquisition and Operational Efficiency


Providing a blend of technology excellence and services is required in current industrial markets. While many competitors have strengths in specific value-chain segments, Yokogawa’s integrated value proposition allows it to effectively serve end users from an end-to-end perspective. For example, KBC Advanced Technologies Limited is able to offer facility simulation, reactor models, pipeline simulations, flow modeling, and fluid modeling in addition to value-added consulting services designed specifically around the end user’s business to improve operational and employee performance. In order to provide more value to customers, KBC has introduced a new solution – KBC Co-Pilot ProgramTM. The solution takes a drivers-seat approach to help plant owners and operators achieve optimum performance. It is a secure cloud-based remote unit performance monitoring and optimization service that constantly measures plant performance against planned KPI’s.

This helps plant operators in identifying and implementing opportunities to improve performance and reduce performance variability. As customers look to scale and connect multiple plants globally, solutions like KBC Co-Pilot ProgramTM will help them benchmark plant performance and drive optimal business performance. The roadmap of the KBC Co-Pilot ProgramTM solution is two-fold. Today, it offers remote monitoring and production optimization. 2018 and beyond, the plan is to offer energy management, supply-chain and operator effectiveness.


Further, local service centers are strategically located in areas throughout Europe, Asia-Pacific, Latin America, and the United States so the company can quickly meet client requirements. Yokogawa has about 4,000 project engineers, 2,000 service engineers, and 1,200 software consultants across 59 countries across the world. It has managed over 44,000 projects worldwide since the start of the company. The global reach of the company, with local delivery capabilities, is a standard requirement within the automation market.


The comprehensive ability to single-handedly drive step changes in operational efficiency parameters by using class-leading technology solutions and service capabilities has given Yokogawa the potential to become an industry standard.


Growth Potential


The Industry Automation (IA) business vision of Yokogawa is to become the most trusted partner and drive sustained operational performance improvements for customers in the energy and chemicals value chain. This vision statement from IA is very timely, because it is poised to deliver solutions to customers who are currently confused by several technology convergences and volatility issues. The customer opportunities are across two specific areas:

 

  • Shift from site-level optimization to enterprise-scale optimization: End users are faced with shrinking workforces and are thereby driven to standardize solution deployment across their enterprises. Leading companies are quickly shifting focus from site-specific pilot implementation to enterprise-scale predictive performance optimization. Frost & Sullivan has observed that several companies (e.g., large integrated oil companies, chemical majors, specialty chemical manufacturers, power generation utilities) are adopting long-term solutions and service agreements with one unified solution provider. This offers a strong growth potential for Yokogawa, as it is positioning itself as a trusted partner that can address all these challenges.

 

  • Open standards use: Many of the energy and chemical end users are drastically changing their operational models due to their frustration with traditional hardlined relationships with solutions and service providers. A leading integrated oil company has embarked on a journey to use standards-based hardware for control systems operations. This has severe implications to the process automation industry, as it has typically used proprietary protocols. However, Yokogawa stands to significantly benefit from this trend because the company’s long-standing focus has been on open standards. This is further resonated by the fact that Yokogawa has already taken its first step towards developing an open-architecture, which allows systems to be interfaced without the need for a Vnet/IP card. Additionally, the Vnet/IP which is a real-time plant network system for process automation based on the 1-Gbps Ethernet communications system is in accordance with IEC 62405 to ensure compliance with security requirements. Yokogawa is also developing open architecture-based solutions to achieve optimization in the process industry. Further, the organization is also actively pursuing the development of comprehensive security management solutions for mission critical control systems by forming strong partnerships with IT companies like Cisco and McAfee. This isfurther strengthened by the development of the SecurePlant initiative. This is a comprehensive security management solution to be deployed in over 50 Shell plants globally.


As the market steers towards change, Yokogawa is well positioned to capitalize on the growth opportunities provided.

Conclusion


Yokogawa’s vision has not wavered for the past 100 years, and that is its focus on customer excellence. This has been further amplified by strategic acquisitions (Industrial Evolution, Inc.; KBC Advanced Technologies plc; Soteica Visual Mesa, LLC), which position the company as a global leader in the advanced solutions market for the process automation industry. As industrial architectures shift from layered/hierarchical to networked/flat architectures, the ability to innovate and reduce performance variability is further enhanced. However, customers will not be able to do it all by themselves due to the aging workforce, limited technical capability, and cost pressures. This is where Yokogawa is able to seamlessly deliver profit-impacting solutions and services while addressing the aspects of operational safety, stability, productivity, and enterprise resilience. With its strong overall performance, Yokogawa Electric Corporation has earned Frost & Sullivan’s 2017 Customer Value Leadership Award for Automation Solutions and Services market.

Übersicht:

1. Executive Summary

The global industrial landscape is progressively changing: we now live in an era driven by the convergence of sensors, controls, data, security, cloud, and algorithms. Technology transformations and convergence are driving disruptive changes to the way process industries have traditionally functioned and operated. Driven by these factors, the near term future will see a plethora of changes and opportunities to improve across key areas such as customer procurement models, operational performance management models, control platforms, industrial software, cybersecurity, workforce dynamics and supply chain responsiveness.


It is a very challenging, complex time, with inflection points in the industry steering us towards a smarter, faster, more open, and leaner operations model. At the same time, we are at an interesting juncture that is poised to be opportunistic for the prepared. This paper is designed to help you explore the evolving market dynamics through a four-part approach: 

  • An examination of the tectonic shifts underway and their implications.
  • A thoughtful assessment of customers’ imperatives and critical issues faced by the industry.
  • An analysis of the transformation journey and Synaptic Business Automation which is our Industrial Automation (IA) business concept to realize our corporate vision - Through ‘Process Co-Innovation,’ Yokogawa creates new value with our clients for a brighter future.
  • A showcase of successful customers which have benefited from the various elements of Synaptic Business Automation

Join us in our journey, which is ‘Synaptic Business Automation’. 

2. Shift Happens: We Now Live in a Different Era

Exhibit 1: Process Industries are Facing Four Major Shifts
 

The process industries globally are in a state of change: swings in commodity prices, volatility in investment cycles, margin pressure, and intense competition are driving factors that are changing the way companies will operate today and in the future. In analyzing the market space, we have observed four major shifts underway across the process industries. These shifts mark the beginning of an interesting and rewarding journey for customers, who are leading the charge in embracing a digitized future.

Shift Happens:We now Live in a Different Era

2.1. Shift #1 – OT/IT Convergence

The domains of operational technology (OT)— controls, sensors, flow meters, and pumps are converging with the domain of information technology (IT)— cloud, algorithms, supply chain, enterprise planning, and applications. This convergence is facilitating a shift from the traditional ISA-95 layered architecture to a pillared/networked architecture. A case in point: today, sensors are being embedded with computation power, so they can analyze data at the edge instead of simply being a conduit for upper level controls. Also, the sensor’s ability to communicate directly with enterprise systems without having to go through control layers helps in reducing latency while maximizing performance. 

2.2. Shift #2 – Blurring of Boundaries in Competition

Driven by Shift #1, OT/IT convergence is blurring the boundaries in the way solution providers are approaching the market. Clearly, OT solution providers have the upper hand, but they have a lot to learn from IT players, which have been providing solutions in the areas of cloud hosting, cybersecurity, algorithms, and customer engagement models for more than 30 years. The single biggest difference between IT and OT lies in its key performance indicators. IT prioritizes confidentiality while OT prefers availability and has multiple stakeholders to manage. Clearly the issues faced by industries cannot be solved by one company today. 

2.3. Shift #3 – Transformation Across Industries

In listening to customers across the oil and gas, chemicals, power generation, and water and wastewater markets, every industry is undergoing digitization at some level. Every industry is developing predictive asset management strategies, while aspiring pioneers are progressively envisioning towards managed service offerings with qualified solution providers. Exhibit 2 shows industry and markets transformations due to digitization: 

Exhibit 2: Industries and Markets Transformation
 

Transformation: Tectonic Shifts Affecting Industries and Markets for Next Decade

Well-known digital transformations include:


Digital Oil Field of the future: The Oil and Gas industry continues to experience the effects of a powerful convergence between the need for increased operating efficiency, higher oil and gas recovery requirements, improved productivity, all at lower costs. From this the vision of the Digital Oil Field of the Future (DOFF) has emerged providing innovative but practical, approaches to improving and potentially transforming reservoir production and facilities management against the background of lower for longer oil prices. Integrated operations tie in all aspects of a disparate oilfield (e.g.,wells,  equipment, systems, sensors, controls) and bring them to an enterprise level for easier monitoring and total management. Integrated operations centers are being implemented by leading operators to elevate visibility of performance deviations and changes in real time. As the crew change and shortage of skilled workers retains industry performance, the DOFF provides  new ways to improve operational agility while best utilizing the available workforce.

Smart power: NERC-CIP (North American Electric Reliability Corporation Critical Infrastructure Protection) security regulations and the integration of different sources of power generation (thermal, nuclear, wind, solar, hydro) with demand response initiatives have driven the power industry to have a deep sensory network and centralization of monitoring. This helps the industry to measure and monitor demand requirements in real time. Further, it has resulted in the emergence of network operations centers and security operations centers that aggregate all data and visualize it for management in real time. 


However, in analyzing the spectrum of process industries, the level of digital maturity varies widely. The imperative to adopt digital technologies is now prevalent, and the motivation to achieve outcomes and do more with less is rapidly picking up across the process industries. As shown in Exhibit 3, we have analyzed three unique customer segments based on their levels of digital maturity. A small slice of less than 10% of the market are enterprise digitizers who have digital initiatives and focus groups running multiple programs across the enterprise. Selective digitizers account for 35 to 40% of the market and as the investment cycle picks up, they will be looking to benchmark best practices and mimic the behavior of enterprise digitizers. 

Exhibit 3: Digital Maturity of Customers in Process Industries
 

Across process industries, digitization is the adoption of digital technologies (e.g., wireless, smart devices, edge, analytics algorithms, controls, software, cybersecurity) to perform actions effectively and efficiently and drive new value creation as compared to traditional work processes. Cases in point: Shift from analog I/O to digital I/O; shift from paper-based records management to paperless/software-based management system. Once customers have fully embraced digitization, organizations need to focus on the next wave of improvement: digitalization. Digitalization deals with business outcomes that can be achieved as a result of digitization, moving from information to knowledge. It is defined as enabling business process transformation and providing new revenue and value-producing opportunities by leveraging the collaborative elements of automation and digitization. In summary, digitization enhances monitoring, performance management, and efficiency; digitalization drives innovation and continuous value creation outcomes.

2.4. Shift #4 – New Business Models

Disruption by digitization and digitalization is driving a creative disruption and transformation of traditional business models. Technology disruptions and changes mark a shift from main automation contractor (MAC) to main automation and information contractor (MAIC). The aspects of selling piecemeal systems and integrated system offerings are rapidly being supplemented by the need to deliver integrated  system performance, managed security, availability, risk management, and reliability with measured outcomes. Solution provider engagement models are also expected to change from project-based milestone engagements to lifecycle/continuous engagement models. The oncoming era will see solution providers evolve in two primary ways: 

  1. Becoming trusted partners and open digital platform providers who have the ability and domain knowledge to solve multifaceted customer challenges.
  2. Delivering outcomes-based services on business-level KPIs. Case in point: We offer KBC Co-Pilot ™ and Consulting Services/OpX ™ Consulting as two lead solution offerings in this space on Yokogawa infrastructures. KBC Co-Pilot is the implementation of online models or so called ‘digital twins’ of the asset continuously monitoring and forecasting unit equipment performance and energy consumption with centrally based experts providing Co-Pilot opinions to the operators. This can be expanded further to a full Operational Excellence (OpX) study of the facility and capture and improvement of best operating practices within the digital twins.

As shown in Exhibit 4, the market has already seen the emergence of MAC. However, the need for information management is a critical component in today’s world due to the increasing volume of data that industry generate. Customers are striving to implement solutions that can help them make good sense of captured data. In industry research, however, Frost & Sullivan found that process industries were utilizing less than 5% of captured data. Hence, there is tremendous potential in implementing analytics on data sets and helping the customer achieve outcomes by co-relating different data types.

Exhibit 4: Shift in Customer Procurement Models
 

Technologies and Platform Convergence Shift Focus From MAC --> MAIC

Understanding, owning and managing process data is key to uniocking outcomes from digitalization

2.5. Critical Issues

Customers are facing a number of  key challenges related to performance including capital availability, asset management, and resourcing. To better balance the trade-off between these, along with shrinking experience, there are two possible solutions which are outcome based services and/or automation of information to optimize performance and cost across the plant’s lifecycle, as shown in Exhibit 5:

Exhibit 5: Solutions for Plant Lifecycle Management
 

Solutions for Integrated Plant Lifecycle Management

MAIC and Outcomes-based services are two key engagements

As these shifts permeate changes across industries, there are several issues that then impact the industry either directry or indirectly from the changes. We have identified a core set of critical issues and possible solutions for our customers, as shown in Exhibit 6.

Exhibit 6: Critical Issues Faced by Global Process Industries and Solutions:
 
 
 

Critical Issue #1: Digitization –  Technological advancements and the widening divide between  workforce and operational complexity are driving the adoption of digitization technologies. Customers are embracing solution approaches such as digital twins to virtually mimic the performance of the asset, while delivering performance optimization in real time. Also, we expect AI technologies to infuse new levels of agility and predictability in performance. While the future looks bright and interesting, not all customers are at the same digital maturity level. The disparity is driven by culture, top management involvement, change management, path to excellence, and service provider. Large operating companies have a digital office that pulls in stakeholders from multiple domains  to nurture cross-pollination of ideas and collaborative decision-making. We have seen large operating companies across industries embrace/embark on the digitization journey. However, we believe that small and midsize companies can  benefit the most due to cost efficiencies and effective performance management approaches.


Critical Issue #2: CAPEX → TOTEX – Volatility and lower oil prices hit CAPEX cycles very hard and signaled a shift in customer strategy from investing in new assets to optimizing performance of the existing installed base. As seen earlier, the OPEX phase can continue for more than 40 years. We are also seeing customers moving towards Total Expenditures (TOTEX). TOTEX is defined as CAPEX + Lifecycle OPEX. As managed service models continue to make inroads, we have seen use cases amidst customers where multi-year service contracts are bundled along with the asset at the CAPEX stage itself. Customers look to outsource non-core activities so they can focus on core activities. This creates the demand for outsourced/managed services and we expect to see more adoption in the near future. In line with this trend, we found more than nine unique business models that are being used across industries today. Two key ones are as follows:

  • Performance-based contracts: These are service-level agreements paid on delivering level of performance based on KPIs. For example: payment, may be based on the level of system availability rather than a lump sum fee at the beginning of the project.
  • Zero upfront payment  business model:  In this case, certain elements of the project (such as sensors) are provided with no upfront payment in return for a multi-year monitoring and performance enhancement engagement.

No matter the business model, we increasingly observes the sharing of challenges, based on trust and collaboration will grow along with an intensified focus on delivering outcomes. This requires a culture change, which is quite challenging for customers as well.


Critical Issue #3: Layered → Networked Architecture – The traditional ISA-95 Level 1 to Level 4 architecture is poised to be replaced by pillared or networked architecture, wherein sensors can communicate directly with enterprise systems. As the layers converge, we see level 1, 2 and 3 converging into one level. Also, controls will become more de-centralized with more computing horsepower being pushed to the edge. Accordingly, cybersecurity is becoming increasingly important for OT/IT convergence as one of the highest level critical issues in customers’ business.


Critical Issue #4: Sustainability – The United Nations has developed a set of 17 key Sustainable Development Goals (SDGs) that are expected to transform the world by 2030. To achieve the SDGs, we must change from current linear economic model of “Take  and Waste” to a circular economic model of “Reduce, Reuse, and Recycle” based on long-lasting design. While the initiatives are diverse, many are connected to industrial end markets: industry innovation, sustainable cities, partnerships, and responsible consumption and production. As customers look to align themselves to these goals as part of corporate responsibility, they look for trusted partners who can help in achieving them. 


Critical Issue #5: Intelligent Operations – In the next 10 to 15 years, process industries will transform into fully integrated value chains delivering end products at consistent quality levels every operational day. Systems and assets will become self-healing, driven by model-based analytics and managed service offerings that will institutionalize a higher level of predictive operations. 


Critical Issue #6: Siloed → Enterprise – As process industries continue to innovate and push the envelope of operating parameters, operating companies are looking to adopt an enterprise visualization strategy. Driven by technology, customers can aggregate different types of data across sites and implement performance optimization using analytics at an enterprise level. One aspect that many automation companies oversee is the ability to optimize the supply chain. A case in point: Chemical companies have incredibly complex and connected supply chains. Quality issues in any part of the value chain can create a ripple effect; hence, maintaining tight control and visibility across the connected value chain is critical to ensuring end-product quality. Yokogawa’s expanding solution portfolio has the capability, today, to address issues within the plant and beyond the four walls into the connected supply chain.


Cutting-edge solutions such as Process Data Analytics (explained in the latter half of the paper) are examples of its all-encompassing value proposition.


These critical issues need to be well-managed within an enterprise to build responsiveness and continuous improvement. To address critical issues, in the next section we will analyze key customer requirements.

3. Customer Requirements

Process organizations are prudent in implementing new technology due to their installed base of assets and systems. It is an investment challenge to replace these older systems and upgrade to cutting-edge technologies. The modernization can also be achieved through a 5 year digitization master plan. Because CAPEX cycles continue to be stressed, customers acutely focus on maximizing returns on existing assets, with minimal additional investments. At the same time, the industry is changing its attitude to implementing digital technologies and adopting newer methods of operations primarily due to profit imperatives.  
Frost & Sullivan conducted a study across global manufacturing customers, and this response was aggregated, as shown in Exhibit 7. It clearly shows that the single biggest driver to adopting transformative technologies is operational efficiency. 

Exhibit 7: Operational Efficiency as the Driver to Adopt Transformative Technologies
 

Operational efficiency as the driver to adopt transformative technologies

Asset-intensive industries such as oil and gas, chemicals, power, water and wastewater, and pulp and paper face multifaceted requirements, as shown in Exhibit 8. 

Exhibit 8: Multidimensional Customer Requirements
 

In consolidating these requirements, we have summarized the customer needs to three specific issues:

  • Capital  Efficiency: The downswings in commodity prices have led to a capital crunch across the process industries. Investment cycles are recovering somewhat, but there is an unswerving focus on preserving profitability while maintaining judicious investments.
  • Asset Efficiency: Based on the   type of management, existing assets can either be cost centers or profit centers. We have observed that customers want to leverage the power of Industry 4.0 and the IIoT to drive maximum performance from assets and utilize them to their full extent. Customers are also leveraging the power of analytics to assess the amount of useful life remaining in assets to make informed decision-making and to avoid emergency and abnormal situations.
  • Resource Efficiency: From a people standpoint, industries are facing challenges from two perspectives: the decline in skilled workforce and the entry of millennials in today’s plant. Past data from various human resource organizations shows that at least 45% of the energy workforce is expected to retire soon. Aging infrastructure and archaic operational models will need to change to attract the new generation of workers, so-called ‘digital natives’ who have ‘ gaming’ like mindsets. Energy consumption management is also expected to become a closely watched area due to the imperative to do more with less.

Implementation of Industry 4.0 and the IIoT across industrial markets will help customers become responsive enterprises of the future. However, as seen in Exhibit 8, process industry requirements are multidimensional yet connected on a common backbone: operational profitability performance management. Today, there is no one solution that can solve all the mentioned challenges, but we have seen the emergence of digital industrial platforms that can enable industry transformations seamlessly.
Simply defined, digital industrial platforms are turnkey solutions that integrate all variable elements/factors associated with a facility (e.g., temperature, pressure, flow, ambient conditions, corrosion data, workforce, customer requirements) while helping customers align and achieve corporate KPIs such as safety, availability, reliability, and profitability. Many digital industrial platforms are available, but most are at a nascent stage of market entry; there have been no wide-scale implementations. It will also be important for leading solution providers to collaborate such as the recent announcement from Yokogawa KBC to combine digital twin Petro-SIM process simulation with BHGE’s machine learning and analytical PREDIX platform.  Customers are implementing  pilots on certain operational areas and are testing the benefits, returns, and impacts on critical KPIs.

4. Solution Provider Landscape Dynamics

What will the industry we are in look like 10 years from now? 
In our opinion, the process industries will transform to a high-tech workplace that is highly automated and information-driven. Ubiquitous connectivity, advanced analytics, asset prognostics, and real-time computing will drive systemic and business transformation. Software-driven changes will force industries to reconsider management paradigms, while most operations become remote, synchronized, and managed in real time. The changes about to happen are significant, but as solution providers, are we prepared to face those massive industry changes? 


Every automation company is transforming in some way from an industrial company to a digital solutions company. Leading automation technology suppliers have been hard at work integrating various solutions, building internal capabilities to fill in gaps, performing bolt-on acquisitions, and boosting software development abilities. The end goal of the companies is nurturing a platform-like solution to help comprehensively with customer challenges turning information into knowledge outcomes. We expect to see a convergence of sensors, controls, algorithms, information, and services. This will drive the need for companies to create full portfolio solution and service offerings that are aligned to overcome specific customer challenges.


Exhibit 9 shows the shift from layered ISA-95 architecture to a networked architecture of systems. This is expected to drive a significant change across process industries as customers will need to transform architectures in order to create a flatter, networked, and smarter ecosystem of synchronous solutions. At the same time, solution providers will need to excel in developing industry-specific approaches and asset-specific applications and leverage domain knowledge to create additional value—not just for an existing customer base but also for new customers.

Exhibit 9: Shift to Full Portfolio Offerings
 

Convergence of Sensors, Controls, Information and Service Platforms Boosts Potential for Full Portfolio Solutions (FPS)

Heterogeneity is bound to exist across process industries due to past practices, acquisitions, and a lack of standardization. As systems converge and customers look to achieve enterprise visibility, we must be able to work seamlessly with other systems (regardless of make, model, and vintage).


Customers seek differentiated offerings based on value- creation and business transformation from automation technology solution providers. While the current focus is driven by adoption of performance management solutions on the installed base; advanced technology implementation, new business models, pricing ingenuity, and trusted partnerships are some of the critical requirements in the next 3-5 years.


As customers transform their operations into digitalized enterprises of the future, in the following section, we will see the digital journey of Yokogawa as one of the few independent process automation solution providers existing today. 

5. Defining Moments in Yokogawa’s Journey—Past, Present, and Future

Yokogawa continues to be one of the few fiercely independent process automation companies that excel in technology development and innovative customer value co-creation. As with any company, Yokogawa has had its fair share of restructuring and functional strategy development. Outlined below is a summary of the organization’s interesting journey:


The Past and Present: Company focused on selling best-in-class products that excelled in cutting-edge technology. VigilantPlant was Yokogawa’s automation concept for safe, reliable, and profitable plant operations, and essentially a path toward operational excellence by leveraging our unique offerings and capabilities. The organization celebrated its 100th anniversary in 2015 and set its sights on delivering sustainable performance in the years to come.

In 2015, Yokogawa embarked on a structural reform called Transformation 2017, a new mid-term business plan for growth.  With Transformation 2017, Yokogawa saw a need to shift focus from an automation system supplier to a more comprehensive solution provider.


This was the creation of a strong foundation to become leaner and more profitable while staying focused on three key aspects:

  • Customer Focus: Expand business with existing customer base
  • New Value Creation: Use ICT to co-create value across industries, develop solutions without boundaries, and help achieve overall optimization.
  • Efficiency Maximization: Retain the unswerving focus on optimizing all functions and operations.

The combination of these focus areas brings about the organization’s vision for excellence: Process Co-innovation. This is a corporate vision that utilizes all of the organization’s measurement, control, and information technologies. Per this vision, process optimization goes beyond production processes to address all material and information flows within and between companies, including both value and supply chains. This helped bring about a streamlined functional structure with a refined focus on automation built on foundation  of change such as the IIoT, value creation, and sustainment. This allows Yokogawa to help customers maximize their profits by offering reliable products and working with its subsidiary, KBC Advanced Technologies, to provide premium solutions and services. 


Future: Co-innovation for customer business processes—Synaptic Business Automation concept. Synaptic Business Automation is Industry Automation (IA) business concept to realize our corporate vision “Through 
‘Process Co-Innovation,’ Yokogawa creates new value with our clients for a brighter future.” This replaces the VigilantPlant concept, by expanding coverage across the value-chain and not just limiting itself to plant performance management. As Yokogawa defines it, Synaptic Business Automation is Yokogawa’s IA business concept to help customers achieve agile and adaptive management, and operational excellence through collaboration and co-innovation. And Synaptic Business Automation expresses an ideal state for a business whereby the synthesis of data, systems, organizations, knowledge, and supply chains adds value and strengthens competitiveness. The linked data from manufacturing processes, plant operations, human resources, and supply chains can be organized, integrated, controlled, broken down, and analyzed to yield insightful decisions at various levels in the organization, from operations in the field to corporate management. Thereby, Yokogawa is shifting focus in four key areas in support of its vision to co-innovate with customers:

  • From products → customers’ business
  • From delivering products → delivering value
  • From implementing solutions → value creation with customers
  • From automation supplier → trusted business partner

Synaptic Business Automation serves as a platform for the company to work with its customers to sustain their creation of corporate value. Synaptic Business Automation is defined as a digital industrial platform that connects everything—people, systems, data, services, and supply chain— while delivering sustainable value and innovation to customers. Simply stated, Synaptic Business Automation is an evolution of the VigilantPlant, going beyond the four walls of the plant.


To explain this concept, we will analyze the following aspects:

  • Define the solution
  • Introduce the tailwinds of growth and timeliness of the solution
  • Provide a detailed overview of the solution’s enablers
  • Discuss its market differentiation

6. Introduction to Synaptic Business Automation

Exhibit 10: Defining Synaptic Business Automation 
 

Breaking it down, Synaptic Business Automation is the combination of two key elements: Synaptic and Business Automation


With Synaptic, Yokogawa displays the combined synergies powered by intelligent, creative people who have deep industry/domain knowledge and a strong ability to consistently stay ahead of the latest technology developments. ‘Synaptic’ is a derivative of ‘synapse’—a structure in the nervous system that plays a role in the transfer of signals to other parts of the human body.


As with the term ‘synaptic,’ Yokogawa helps customers create new value by connecting them with  a  neural like network (much like the human brain) of systems, data, and technology that works seamlessly and expands with their needs. This synaptic network encompasses the customer’s entire business—from technology to operations and from manufacturing to supply chain. It significantly enhances sensing ability, integrates control and information systems, and processes knowledge on demand. The neural network enables a seamless data transfer between the various elements while structuring a performance-driven organization. 


With Business Automation, Yokogawa shows its ability to understand all problems faced by its customers, not just those pertaining to control-level issues. Yokogawa also has built capabilities to work with customers to deliver co-innovation, digitalization, value creation, and efficient solutions.


Through co-innovation, Yokogawa can build long-term, trusted relationships that provide long-lasting benefits for customers. The organization can contribute tangible results in profitability and sustainability by optimizing its customers’ business assets and organization. Conclusively, Yokogawa helps customers achieve operational excellence and sustainable growth.

6.1  A Detailed Overview of the Solution’s Enablers

Synaptic Business Automation aims at delivering performance excellence through co-innovation. Earlier, Yokogawa provided solutions for the implement, operate, sustain, and improve phase of the plant’s lifecycle. However, with recent bold moves, the organization has bolstered its ability to improve and sustain customers’ profitability. In 2016 alone, the organization made three landmark acquisitions as shown in Exhibit 11:

Industrial Evolution (DBA Industrial Knowledge), acquired in January 2016:  A pioneer of cloud-based data sharing as a service (DaaS) in energy, chemicals and power industries. This solution helps in collecting real-time process data from a spectrum of systems and sensors and provides the right data to the right people. The industry-proven cyber-secure systems help in secure sharing of data with authorized end users.


KBC Advanced Technologies, in April 2016: Originally, KBC was founded as an oil & gas consulting and technology company in 1979. As it gained experience and widespread market adoption, it progressively expanded to petrochemicals and chemicals industries. The acquisition of KBC brought not only strategic consulting but also leading process simulation technology to the Yokogawa Group. This acquisition helps in the identify, create, and implement phase.


SOTEICA VISUAL MESA, in October 2016: Founded in 1981, the company’s uniqueness is its utility energy management solution. SOTEICA VISUAL MESA has a solid track record in the energy management solutions field and provides production accounting and scheduling solutions to the refining industry.

Exhibit 11: Our Acquisition and Integration Strategy
 

KBC is all about excellence in the energy and chemical industry and provides leading software and expert services, powered by the cloud, to ensure that process operations achieve their full potential. Industrial Knowledge and SOTEICA VISUAL MESA were integrated with KBC to strengthen the energy management consulting service and drive optimization of plant-wide production processes through cloud services. The combined synergies also facilitate the integration, collaboration, and optimization of customers’ entire value chain. The solution integration led to the creation of a differentiated value proposition: Continuous Value Creation Cycle. This methodology helps customers minimize expenditure and risk and rapidly implement solutions. Another intrinsic part of this cycle is that of process and domain knowledge, which is critical because of the need to understand a plant and its processes to efficiently design and deploy customized solutions.


Exhibit 12 shows the key solutions that enable the continuous value creation cycle, which positions Yokogawa as a reliable and trusted partner for challenges within and beyond the four walls of the plant, including the supply chain network. The key aspect to note here is Yokogawa’s ability to not only provide offerings related to conventional automation and applications, but also deliver comprehensive solutions from sensors to enterprise, to total plant, and advanced deployment models such as cloud and remote solutions.

Exhibit 12: Continuous Value Creation Cycle
 

What follows is a summary of performed activities across each phase and the unique solutions that Yokogawa has brought to the market:

• Identify: Defining potential improvement areas across the customer’s entire business processes and resources. One of the unique solutions in this phase include:


  »OpX ™ Consulting: More than 70% of operating companies, in process industries, need OpX to be further underpinned with sustainable technology in order to realize benefits.  This shows the need for a solution that helps bridge the gap between program objectives and actual performance. One such solution offered by Yokogawa to overcome this challenge is that of operational excellence. It is a continuing strategy to drive sustained improvements in profitability while balancing the focus on safety, security, and compliance. KBC, brings about a systematic application of technology and domain experience to ensure that superior results are sustained.

Link to OpX whitepaper: https://www.kbc.global/hot-topics/opx 

 Create & Implement: Deals with the design and deployment of optimal solutions at a customer’s site, based on the potential improvement areas outlined in the ‘Identify’ phase.


  »Integrated Production Management System(IPMS): Recently Yokogawa has implemented one of the largest OT integration projects for the LNG industry. Our customer has invested in the development of the Integrated Production Management System (IPMS) for full integration of the OT and IT domain. The IPMS, which is a combination of sixteen integrated systems, supports the full business operations of our customer, from maintaining the assets to managing its commercial and scheduling functions of it’s operations. Through an extremely agile implementation approach, the IPMS has been designed and implemented within 14 months, in parallel to the customer building its operational organization for a new LNG plant in the arctic area.

  »Agile project execution: It is an alarming trend that a significant portion of automation projects has faced schedule delays, ineffective change management procedures, and other problems. While automation is a small part of the overall project, it is a significant lever to drive performance excellence with early engagement. Yokogawa’s agile project execution methodology helps in delivering cost-effective execution, effective management of change, at least 10% reduction in engineering hours, and an overall risk reduction in plant start-up.


  »Platform for advanced control and estimation (PACE): Yokogawa has more than 20 years’ experience in Advanced Process Control (APC) and has successfully demonstrated value with top operating companies in the world. PACE is a differentiated offering that ties multivariable control, quality estimation, complex calculation, and user interface on a common platform. This creates a unique application that can deliver reduced deployment time, simplified maintenance, and robust performance. Past implementations of the solution have provided  a ROI of 6 to 12 months.


Operate: This phase deals with either helping the customer or having Yokogawa perform safe and stable operations.


  »Supply Chain Solution: SOTEICA VISUAL MESA provides supply chain scheduling production accounting and loss detection solutions. The combination of these solutions with KBC’s refinery optimization solutions and supply chain consulting services provides a comprehensive optimization platform for the hydrocarbon processing industries.


  »Energy Management Solution: SOTEICA VISUAL MESA also provides energy and energy management solutions. One of its key solutions is the Energy Real-Time Optimizer (ERTO), which helped top operating companies save at least 3% of energy consumption and deliver savings in excess of $1 million per year in areas such as steam and power system optimization. Its online engineering model, optimization capabilities, and robust integration with existing IT systems make it one of the most desirable solutions. Yokogawa has deployed solutions across refining, petrochemicals, sugar, ethanol, pulp and paper, and commercial infrastructure.


Sustain & Improve: This is a very important phase, wherein Yokogawa maintains the solutions, helping the customer drive continuous improvement and sustained performance excellence.


  »KBC Co-Pilot ™ : Like an aircraft co-pilot, KBC Co-Pilot supports remotely the plant’s operational personnel with expertise and insight. The solution’s main objective is to ensure that the plant always achieves its full operational potential. Yokogawa uses a best-in-class simulator and plant-operating model on the cloud to synchronize with actual operation. The ability to extract real-time plant data helps to compare planned value, optimized value, and actual value in real time. Further, with the support of KBC consultants and experts who have diversified knowledge, customers can achieve optimized processes, higher value yields, improved plant reliability, and optimized operating costs. Yokogawa has implemented such solutions in the refining industry and plans to extend them to the petrochemical and chemical industries.

7. Value Proposition of Synaptic Business Automation

Synaptic Business Automation focuses on creating profitable and sustainable growth for customers through co-innovation and collaboration, as shown in Exhibit 13:


Exhibit 13: Value Proposition of Synaptic Business Automation
 

 

Synaptic Business Automation creates value for customers in three ways:

7.1. Resilient Operation

Manage customers’ business risks with improving operational resilience. Yokogawa helps customers adapt more flexibly to changes in areas such as health, safety, security and the environment (HSSE), organizational optimization, and regulatory compliance.

7.2. Optimized Production

Optimize the total expenditure (TOTEX) components of capital expenditure (CAPEX) and operational expenditure (OPEX) over the entire lifecycle of a plant, and improve reliability. Also, directly create value by solving issues and optimizing operations throughout a supply chain, thereby enhancing productivity and profitability.

7.3. Business Innovation

Work with specific customers to create new business models that foster manufacturing excellence by such means as supplying cloud-based services that drive collaboration with their customers and suppliers and to introduce environmentally friendly manufacturing practices that are essential for a sustainable society.

8. Unique Market Positioning of Synaptic Business Automation

The combined synergies of KBC and Yokogawa bring together domain knowledge, industry credentials, technology licensing, and best-in-class technologies that are proven, repeatable, and reliable. Yokogawa has more than 1,200 application experts and industry consultants who have a strong command of various process industry issues and can integrate a solution that drives sustainable value to customers, as shown in Exhibit 14: 

Exhibit 14: Ability to Bring Together Proven Solutions with Domain Knowledge

 Unique differentiations include:

»Platform approach to excellence: Yokogawa’s secure integration of hardware, software, and service offerings cuts across the customer’s operations lifecycle. Together, the Synaptic Business Automation platform aims to improve continuously  the customer’s operations.


»Trusted partner approach: Providing a blend of technology excellence and services is required in current industrial markets. While many incumbent solution providers have strengths in siloed segments, Yokogawa’s integrated value proposition allows it to serve effectively customers with an end-to-end perspective. For example, KBC can offer facility simulation, reactor models, pipeline simulations, flow modeling, and fluid modeling in addition to value-added consulting services designed specifically around the end user’s business to improve operational and employee performance. The one-stop shop approach combined with Yokogawa’s excellent track record in executing critical projects has allowed it to stay focused on its vision of customer excellence.


»Open systems approach: As the IT industry faced disruption by open system, Yokogawa believes that the process automation industry is also on the brink of embracing openness in its system platforms. Yokogawa has been one of the few companies to practice open architectures and its distributed control system (DCS) has been one of the most open systems available in the market. Continuing this vision, Yokogawa has a strong relationship with the Open Group and NAMUR Open Architecture (NOA). Because the components business is poised to be disrupted, Yokogawa is preparing itself for the future scenario. It is also working with customers in implementing open architecture systems. A key area on which Yokogawa is focusing is the possible use of Time Sensitive Networking (TSN) plus OPC UA on control platforms. The TSN + OPC-UA connectivity builds in a highly deterministic, low- latency communication network, which will be preferred for edge computing and critical process applications. Another case in point: Yokogawa is deeply engaged with NAMUR in its Modular Type Package (MTP) – to drive plug-and-play systems across the chemicals and pharmaceuticals industries.


In order to understand the usability and success of Synaptic Business Automation concept, we will look at some customer success stories that Yokogawa has experienced across the industry. This will be mapped back to the continuous value-creation cycle phases.

9. Customer Success Stories

#1 – Comprehensive security management solution, a managed cybersecurity service offering: Maps to Identify, Create & Implement, and Sustain & Improve phases of value creation cycle
Yokogawa has more than 230 service centers across 80 countries. It is truly able to deliver a global reach with local proximity. While it offers many kinds of services, one of its unique offerings is a comprehensive security management solution. Below is a use case of an implementation with one of the leading international oil company (IOC).


Challenge: The IOC had a good security policy, but poor visibility across multiple sites. It preferred unchanneled visibility regarding OS patch, synergy in security policy compliance, anti-virus signature management, and network security. Further, most of the sites had contractors working with poor security protocols in effect. The diversity in compliance and lack of centralized management created an imperative for the organization to find a trusted partner that could centralize the patch management, and authenticate certificates and signatures across all of the sites. 


Solution: Yokogawa along with an IT company assessed the current state of security practices and designed and deployed a centralized security operations center (SOC) for managed security services. In the SOC, nearly 20 engineers provide monitoring and managed services to the IOC. One of the primary reasons that the IOC chose to work with Yokogawa was its proven track record and robust capability across cybersecurity technologies. The customer created a scorecard comparing various vendors, which Yokogawa topped for its capabilities and versatility in handling IT and OT related security issues. As a next step, Yokogawa is progressively working with the customer to implement software-defined networking (SDN) and subsequently intelligent network monitoring services.


Outcomes: Relying on the strength and trusted partner approach of Yokogawa, the IOC signed a multi-year contract. This started in 2014 and is in the 4th year of implementation. As Yokogawa successfully completed several MAC projects for the IOC, it was easier for the operating company to scale our services from site-level to multisite deployments. The IOC could  easily implement supplier-certified patches and virus signature files from a Secure Center to the Secure Site at each plant globally. The ability to deliver proactive monitoring capabilities enabled true real-time monitoring and threat prevention. Yokogawa also provided a customer help desk operated 24/7/365 to manage deviations and associated occurrences. 


#2 - Process Data Analytics, identifying silent change issues across supply chain through analytics: Maps to Sustain & Improve:
Global manufacturers in the process industries source materials from various suppliers and have diverse asset profiles. As technology advances, there is pressure to stabilize the quality of the end product, regardless of its constituents. To improve quality, manufacturers analyze various types of data and correlate them to arrive at interesting outcomes. This is a challenge because data analysis skill sets vary by site. Below is a use case of how a chemicals company leveraged an innovative solution from Yokogawa to reduce variability in end-product quality.

Challenge: The chemicals value chain is highly connected; if an issue occurs in one part, it has a ripple effect. Even though great caution is exercised to ensure precise processing, the company discovered a need to monitor process deviations more closely to reduce variability in the end products. Due to the variability in the supplier-sourcing ecosystem, the company was unable to pinpoint the source of the issue and was unable to achieve its quality related KPIs. 


Solution: Yokogawa began offering a process data analytical service to its customers in 2008. To date, more than 100 contracts for this service have been concluded with companies in Japan’s chemical industry and other industries. The companies have begun to rely on this value-adding service. We leveraged the Mahalanobis-Taguchi System (MTS) to design and develop a multivariate measurement system to accurately measure the level of pattern abnormality and subsequently evaluate the accuracy of predictions. The software solution, packaged as process data analytics, compares the collected data and triggers an alarm based on any process deviations. 


Outcomes: Regardless of the raw material supplier, the customer could achieve uniform end-product quality while proactively managing issues in real time due to early visibility. Further, quality inspection teams could scale this solution across all sites and tighten control procedures.

 
#3 – Plant Modernization through Co-innovation Approaches: Maps to Identify, Create & Implement and Operate phase of the value creation cycle.
The purpose of advance process control is to improve operational efficiency, enhance safety, and drive product quality while reducing operator loads and energy consumption. The aging assets across process industries open an interesting window of opportunity to implement technologies such as APC to drive incremental improvements in plant performance.


Challenge: A chemicals manufacturing company in China was concerned about its aging infrastructure and its inability to mitigate the trade-off between safety, energy consumption, and operational efficiency. It also had a value dis-connect between top-level management and plant-level personnel, most of its control loops were not optimized, and the amount of operator load per shift was high.


Solution: Yokogawa, leveraging its best-in-class experience across the chemicals industry and state-of-the-art APC technology, developed a two-phase project to overcome the challenges of the customer. 

  • Phase 1: Assessing the current state of operational readiness, Yokogawa found that about 50% of the control loops were not running optimally. The high operator load was increasing operational risk.
  • Phase II: Yokogawa implemented an APC solution and data aggregation at a centralized level. Because performance of the plant’s units varied widely, Yokogawa delivered model tuning to optimize and equalize performance.

Outcomes: The customer realized several tangible benefits:

  • Control  loop assessment and tuning led the customer to increase the control loop utilization from 50% to 93%.
  • Reduced energy consumption helped the customer save on steam by about 6,300 tonnes per year.
  • Development of alarm visualization and rationalization helped the customer reduce the number of alarms from 2,400 per hour to 12 per hour.
  • Implementation of the APC solution reduced the operator load. Today, there are only 2 operators per shift instead of the previous 4 per shift. The number of steps involved in the manual operations was also reduced by 50% during start-up and shut-down of the processes.

10. Strategic Conclusion

As process industries undergo tectonic shifts over the next few years, the need to address their current and emerging needs as a trusted partner, integrated solutions and service provider are essential to sustained success in the market. The halving of technology refresh cycles  (Few years back, technology innovation was around 7 years, but the rate of innovation has driven down the cycle to 3.5 years)  now and the emergence of digital industrial platforms are creating a perfect nexus for disruptive and exciting transformation. At the same time, process industries are facing acute pressure due to the decline in the skilled workforce and the growth of digital natives in the workforce. These changes the way technologies will be adopted, consumed, and managed. Further, the industry is progressively shifting from reactive, turnkey contracts to continuous annuity-based lifecycle engagements.


While industries evolve and face multifaceted imperatives, Yokogawa has pursued its vision of being a trusted partner to its customers. It strives to maintain a strong track record of delivering reliable technologies while at the same time continuously evolving to offer digital industrial platforms and applications like Synaptic Business Automation. These solutions create sustainable value for customers by driving resilient operation, optimized production, and nurture sustained business innovation for customers. Yokogawa’s portfolio of differentiated digital solutions helps it to deliver excellence within the four walls of the plant and at the same time optimize the connected value chain. In summary, Yokogawa is all delivering excellence through co-innovation with customers.

 

 

Übersicht:

By Bob Gill‚ ARC Advisory Group

Keywords

Synaptic Business Automation, Co-innovation, Yokogawa

Summary

Industrial manufacturers operate in an increasingly complex and dynamic environment. This environment is characterized by intensified global competition, cost pressures, environmental compliance mandates, widening safety legislation, and ongoing cybersecurity threats. At the same time, the availability of a new set of predominantly IT-based technologies for plant operations creates opportunities for manufacturers to meet these challenges while achieving operational excellence; strengthening supply chain collaboration; and creating new, more profitable business
models.

Against this backdrop, ARC Advisory Group met with senior Yokogawa executives at the recent Yokogawa Users Conference 2018, Asia Pacific, in Bandung, Indonesia, to discuss Synaptic Business Automation, the company’s new guiding concept for its Industrial Automation & Control business. Synaptic Business Automation is the successor to Yokogawa’s well-known VigilantPlant concept.

Due to its importance to the company, Synaptic Business Automation was the official theme of the Users Conference, where Yokogawa president and CEO, Takashi Nishijima, formally introduced the concept. Further presentations provided details on how Synaptic Business Automation supports coinnovation with customers, helps connect organizations and supply chains, and provides expert domain knowledge. With Synaptic Business Automation, Yokogawa is widening its scope from plant process automation to business process automation and, in so doing, aims to create sustainable value for customers.

Synaptic Business Automation is Yokogawa's new concept for its Industrial Automation & Control Business. "Synaptic" (from biological synapses) represents timely and seamless sharing of information, while "Business Automation" represents automation moving beyond the plant process control level to create continuous business value for customers.

From VigilantPlant to Synaptic Business Automation

Unveiled back in 2005, VigilantPlant laid down a path toward operational excellence in the then-current context of Yokogawa's offerings and capabilities. In addition to the company’s well-established control system and field instrumentation, VigilantPlant encompassed new functions, including process safety, alarm management, asset management, production management, and optimization.

The company’s capabilities and the challenges its customers face have both evolved considerably since VigilantPlant was introduced more than a decade ago. This called for the company to formulate a new concept to better represent
Yokogawa’s Industrial Automation & Control business’ approach to understanding and meeting current and future process industry needs and challenges.

Synaptic Business Automation Launch at
Synaptic Business Automation Launch at Yokogawa Users Conference, Asia Pacific, in February

Enter Synaptic Business Automation. To understand this new concept, it’s best to break it down to its constituents. “Synaptic” relates to the biological structure that permits a neuron (nerve cell) to pass an electrical or chemical signal to other neurons. In an industrial context, Synaptic denotes the seamless communication and sharing of data and information between relevant entities such as the manufacturing plant, the supply chain, and the business enterprise to create sustainable value. “Business Automation” denotes Yokogawa’s new focus that extends beyond automating plant processes to considering a customer’s entire business.

Synaptic Business Automation should be viewed in the context of Process Co-innovation, Yokogawa’s corporate vision first announced in 2015 and an integral part of the company’s Transformation 2017 business plan. The company opened its Singapore Co-innovation Centre in 2016 to jointly develop new industry solutions with selected clients and technology partners. This continues to be an important node in the Yokogawa R&D network.

New Trends, New Challenges, New Solutions

For industrial companies, navigating this new terrain requires an understanding of a myriad of new technologies, such as cloud computing, artificial intelligence, and Industrial IoT, as well as drivers like increased global competition and fluctuating energy prices, while meeting critical cybersecurity, plant safety, and sustainability requirements.

Modern Business Pressures Drive Manufacturers to Become Integrated, Real-time Enterprises
Modern Business Pressures Drive Manufacturers to Become Integrated, Real-time Enterprises

For example, the downturn the oil & gas industry experienced in the middle of this decade severely constrained capital expenditures across many process industries, placing new emphasis on improving plant operational efficiency by maximizing the availability and performance of the existing assets.

This led to interest in more sophisticated plant asset management approaches, such as predictive and prescriptive maintenance approaches, often using Industrial IoT technologies.

Connecting plant assets to external parties, such as equipment manufacturers, service providers, and automation suppliers, provides a foundation for new business and service models. Remote pump diagnostics and “compressed-air-as-a-service” are two examples of new business models enabled by Industrial IoT.

We’ve also seen increasing proliferation of information technology (IT) in industrial plants, a trend that was just in its infancy back in 2005. Once considered only for the enterprise level, technologies such as cloud computing, data analytics, mobile devices, web user interfaces, SQL databases, Ethernet, and Wi-Fi networks are now being applied at the shop floor level
along with operational technologies (OT) like sensors, instrumentation, drives, valves, and control systems to increase plant efficiency, productivity, and performance.

Increasing Presence and Influence of IT at the Plant Level
Increasing Presence and Influence of IT at the Plant Level

This OT-IT convergence, as it has come to be known, is increasing the presence of IT companies in the previously closed and esoteric world of the
industrial plant. The automation suppliers that have long dominated this domain now find it beneficial to build new relationships with IT companies to more easily access the relevant technologies and tap into expertise. These relationships have been in forms such as technology licensing, alliances, and equity investments, all the way to outright acquisitions.

Creating Customer Value

With Synaptic Business Automation, Yokogawa aims to create sustainable value for industrial customers and help them realize profitable and sustainable growth. There are three aspects to this:

Resilient Operation – improving clients’ operational resilience against heightened business risks emanating from factors such as increasing cybersecurity threats, regulatory compliance mandates, and more strenuous plant and personnel safety requirements.

Optimized Production – reframing the (lengthy) operational phase of the plant as something much more than an afterthought to the capital construction phase and, accordingly, managing operational expenditures through initiatives such as Industrial IoT connections to critical plant assets.

Business Innovation – leveraging relevant technologies and domain expertise to co-create new business models with customers and partners and introduce environmentally friendly manufacturing practices that are essential for a sustainable society.

While strong customer relationships are an acknowledged enabler of business success, with Synaptic Business Automation, Yokogawa looks to take these relationships to even deeper levels through co-innovation activities.

As Dr. Tsuyoshi (Ted) Abe, vice president and head of Marketing Headquarters,explained to ARC: “Traditionally, technology companies engage with customers to assess their needs and then proceed to develop products. But this is an old model. In today’s world, it is not enough to listen to customers and understand their pain points. Instead, you must develop products and services together with customers and technology partners.”

Extending Capabilities

Yokogawa’s vigorous acquisition activities in 2016 greatly enhanced its ability to execute Synaptic Business Automation. These brought in industrial software technology and consulting expertise in the forms of Industrial Evolution(cloud-based, plant data sharing-as-a-service), KBC AdvancedTechnologies (oil & gas consulting services and process simulation technologies),and Soteica Visual MESA (energy management and optimization solutions).

Both Industrial Evolution (now known as Industrial Knowledge) and SoteicaVisual Mesa have been integrated into KBC Advanced Technologies which,while firmly a part of Yokogawa, continues to operate under the KBC brand.

Significantly, for the Synaptic Business Automation keynote presentation at the Yokogawa Users Conference, KBC’s Oscar Santollani, senior vice president,Visual MESA Software Business, shared the stage with Yokogawa’sShigeyoshi Uehara, vice president and head of IA Products and Service Business.

Recent Acquisitions Increase Yokogawa’s Capabilities to Deliver on thePromise of the Synaptic Business Automation Concept
Recent Acquisitions Increase Yokogawa’s Capabilities to Deliver on the Promise of the Synaptic Business Automation Concept

Mr. Uehara outlined Synaptic Business Automation and framed the concept in the context of Yokogawa’s Enterprise Automation Architecture that convergesOT with IT. He also discussed the company’s domain knowledge,consulting capabilities provided via KBC, cybersecurity services, and unique plant sensing capabilities, such as those provided by the company’s new wireless Sushi Sensor. Mr. Santollani, in turn, discussed how the KBC Co-Pilot approach involving Visual MESA Energy Real-Time Optimizer (VMERTO),the Petro-SIM simulation tool, and expert consulting can help customers meet their sustainability-related challenges to optimize energy use and reduce emissions.

Conclusion

Synaptic Business Automation represents a timely refresh for Yokogawa’sIndustrial Automation & Control Business. The focus on automating customers’business processes, rather than just internal plant processes,acknowledges that inefficiencies often cross organizational boundaries or can even extend out to the supply chain. While Yokogawa has always been a customer-centric company, the co-innovation aspect of Synaptic BusinessAutomation suggests an even deeper level of collaboration with both customers and technology partners. And with KBC Advanced Technologies, Yokogawa has access to proven software solutions and recognized process industry consulting expertise based on deep domain knowledge.

The new focus on co-innovating solutions recognizes today’s reality that no one company has all the necessary technology and/or expertise to solve customer problems, and that collaboration between companies is increasingly required to deliver effective solutions in an increasingly complex process manufacturing environment.

Synaptic Business Automation Combines OT, IT, Services, Collaboration, and Domain Expertise
Synaptic Business Automation Combines OT, IT, Services, Collaboration, and Domain Expertise

Like VigilantPlant, rather than just a slogan, Synaptic Business Automation represents a long-term, strategic approach for the Yokogawa Industrial Automation& Control business. As such, it will be important for the company to ensure that key stakeholders – notably its own staff − are well versed in the intention and ideals of this new concept. That will help enable SynapticBusiness Automation to enter and become part of the industry lexicon in much the same way as VigilantPlant did for well over a decade.

For further information or to provide feedback on this article, please contact your account manager or the author at bgill@arcweb.com. ARC Views are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permission from ARC.

 

For more information about Yokogawa Users Conference, please click here.

Übersicht:

1. Executive Summary

Tectonic shifts are underway across process industries that will change and alter the way customers function in the future. Spurred by the need to balance innovation, costs, profitability, operational performance, customer centricity and safety, organizations are striving to transform their enterprises, while maintaining a competitive edge. One of the strategic leaders embraced by leading companies across the industry spectrum is that of digital transformation. The process industry sees digital transformation as a key organizational strategy to deploy sustainable innovation across value-chains through the judicious use of digital technologies, while structurally altering operational models, culture and best-practices to encompass new ways of working. While organizations see digital transformation as a pivot point to overhaul enterprise operations, there is a lack of congruence on its value, returns and domains it will impact. The largest disconnect for enterprises is the severe lack in quality available data. The data, comes in many forms, but is not consciously or continuously leveraged by most companies to drive sustained value-creation.


In line with this market requirement, Yokogawa announced Synaptic Business AutomationTM in 2017. The value of Synaptic Business Automation is in creating profitable and sustainable growth for customers through coinnovation and collaboration across three potential improvement areas – resilient operation, optimized production and business innovation. Our vision at Yokogawa is to continue to progress and, expand the Synaptic Business Automation's solution portfolio tied to each of the three aforementioned improvement areas.


One of the important portfolio components of optimized production that we will be presenting in this paper is OpreXTM Profit-driven Operation. The growing disconnects on KPI’s between corporate and plant, obsolete operational models are leaving customers myopic in what they can truly achieve. Thus, in order to better help with your digital transformation journey and evaluate high potential application areas, we have assembled this paper to expound on the following four areas:

 

  • Current digital maturity of process industry and value drivers of a OpreX Profit-driven Operation
  • Traditional market approaches and Yokogawa’s differentiation
  • Solution enablers of *OT-IT convergence with Domain Knowledge and Customer success stories
  • Future operational state of the process industries

*OT=Operational Technology

As the industry faces disruption by digital transformation, join us in our ongoing journey to experience OpreX Profit-driven Operation and value extraction based on plant’s small and big data.

 

2. Current Digital Maturity of Process Industry and value Drivers of OpreX Profit-driven Operation

Process industries are facing a disrupt-transform cycle that is fundamentally going to transform the way value chains behave in future. The industry is also looking to manage conflicting priorities like maximizing flexibility, modernizing processes, minimizing product quality variability, enabling a safe, secure operation while effectively driving innovation and customer centricity. Further, the use of legacy technology assets and operational models are not built to help customers solve present-day and emerging challenges. This is steering the industry to embrace digitization, digitalization and ultimately vector towards digital transformation (please see definitions as part of Exhibit 2 below ).


Digital transformation is a journey customers must embrace to stave-off disruption by digital technology enablers. Underlying technologies like advanced process optimization software, analytics (including Artificial intelligence, machine learning, stochastic and mechanistic models), cloud hosting and computing power are poised to drive substantial improvements across the process manufacturing valuechain. Exhibit 1, below, shows some of the salient aspects of digital transformation in process industries:

Exhibit 1: Digital Transformation – Key Data Point

Source: Frost & Sullivan

The convergences of these digital technologies are enabling companies to realize unexpected value and charter previously unseen levels of insights to improve process efficiencies. Based on current implementations and feedback from customers, we have observed that digital technologies help customers improve their competitive edge and ultimately the overall business profitability. However, in order for customers to reach this stage of maturity, there are some preceding steps that are the foundations of the roadmap. Frost & Sullivan's digital transformation roadmap (Exhibit 2), shows how process industries should plan their digital transformation journey:


Exhibit 2: The Journey of Digital Transformation Roadmap

Source: Frost & Sullivan

In order to better benchmark your position in the digital transformation roadmap, we define each of the stages below:

• Stage 1: Digitization – is the adoption of digital technologies (e.g., wireless, smart devices, edge, analytics/algorithms, controls, software and cybersecurity) to drive automation, repeatability and predictability in actions compared to traditional work processes.


• Stage 2: Digitalization – leverages digitized data collected to drive new revenue streams, valuecreation while transforming business, work and operational processes. Additionally, this includes helping customers benchmark their performance against industry best-practices that are constantly reviewed. This is a step-change in processes, as customers are used to comparing performance against historical set point data. New business models, alternate monetization (such as outcomes-based services) will be generated as a result of this stage.


• Stage 3: Digital Transformation – builds on digitization and digitalization to transform enterprise operations. Stage 1 and 2 may be restricted to individual sites/plants, while moving into Stage 3 helps customers to drive performance excellence across the enterprise. This transformation should be done with world leading technical expertise within a structured change management process so that your outcome is you become a world class performer and that performance is sustained. While this is an internal benefit, digital transformation will also help companies interact in new ways with customers and create truly digital offerings. Further, when moving into this stage, Frost & Sullivan expects that organizations will re-discover their fundamental vision and transform into completely re-defined organizations. For example: Many automotive companies were in the business of producing, selling and maintaining cars as their main product. However, today – with digitization, digitalization and digital transformation, car companies are realizing that they are in the ‘mobility platform’ business. Mobility platform business is an emerging market where solution providers offer multiple forms of mobility (car, bike, public transport access, rentals, self-driving cars, etc.) using a mashup of services and partnerships with various independent service providers including finance, shared ownership, maintenance and emergency support. As new personal mobility space evolves, customers need for multi-modal transportation; shifts in car ownership models, self-driving cars and the growth of electric vehicles would ultimately fasten the adoption of this change.

Investments in digitization, digitalization and digital transformation is inevitable and will help organizations achieve incremental and sustainable transformation into the future. While the future looks promising with digital transformation, the fundamental driver required to partake in this journey is data. Process industries have for long tracked and collected plant data (from various field devices such as sensors, equipment, and control systems) but have not fully utilized them in a structured change management process. The industry is at a juncture where there are 'mountains of data', but only 'molehills of insights'. Some of the critical issues faced by customers in leveraging data are as outlined below in Exhibit 3:

 

Exhibit 3: Strategic Importance of Data Quality

Source: Yokogawa, Frost & Sullivan

  • Data is siloed, dark and lacks governance: Frost & Sullivan estimates that process industries utilize less than 5% of the data that is collected. 95% of the data is siloed (used selectively), dark (unused data) and lacks consistency in use.
  • Weak data structures, integrity and reliability: As the industry matures itself over data utilization, there is a growing lack of data structure  or ‘date models’ which restraints scalability and extensibility of its usefulness. Further, the quality of data is dependent upon the assets/devices functionality. For example: A pH sensor that is not calibrated properly will result in data that is not true to its operational performance. Hence, collecting data from these sensors to check its trueness in measurements is very critical. Unlike measurement of the parameters, this further compounds the problem, as the base data is utilized to drive insights and outcomes.
  • Lack of co-relation and integration between different data types: Process industry customers collect various types of data, but these are seldom co-related with each other in an appropriate context. The industry must note that, there are tremendous benefits to realize unexpected value when different data types are co-related with each other. For example: When pressure data is co-related with vibration and flow data, we can reasonably assess the level of corrosion in pipes and assets.
  • Poor data quality severely restraints industry’s ability to extract sustained value: Data is the new elixir of a process industry. Reliable data extraction and management of the data lifecycle will help process industries gain sustained value from the data sets and a competitive edge. Data, unlike other metrics, does not get old and is always extensible across a multitude of applications. In essence – to achieve digital transformation, data quality is important which relies on factors such as accuracy, timeliness, reliability, validity, integrity and consistency is highly important. Poor data quality drives the cost of poor quality as well. For example: if data is extracted from a sensor that is not calibrated, all downstream processes and analytics would be affected. In order to attack at source, it is important for industries to realize the need to maintain, manage and sustain improvements in data quality.

Thus, meaningful, co-related and reliable data is the foundation to digital transformation. While there are many definitions for digital transformation, we believe in what it enables a customer to achieve as core outcomes. As shown in Exhibit 4, it is entirely about leveraging digital technologies to operate and generate revenues across the customer’s value-stream.

Exhibit 4: Definition of Digital Transformation

Source: Yokogawa

While we have discussed the path to digital transformation and some of the present-day challenges resident with data consumption, let’s take a look at some of key benefits of data integration and collusion. Frost & Sullivan states that careful orchestration and utilization of data helps customers drive meaning value-creation across their process manufacturing value-chain. This is what they call as the [Data extraction → new value-creation] sequence. This is substantially important, as meaningful data that is corelated can create unexpected and new value that was never-before experienced by customers. Below, we will look at a few application areas where the [data extraction → new value-creation] sequence can be experienced in Exhibit 5:

Exhibit 5: Data Extraction → New value-creation Sequence

Source: Frost & Sullivan

As you see above, the value of data is fundamentally intrinsic to help a customer in their ability to predict, prevent and prescribe insights for smarter, faster, leaner and profitable operations. This will be made possible as investments in digitization, digitalization and digital transformation is inevitable. However, in today's scenario, process industry customers feel the general sense of incongruity on whether the value created by digital transformation will outweigh the CAPEX outlay. The pioneers (who are in Stage 3, as per Exhibit 2) have already begun to adopt digital technologies and are embracing digital transformation. Let's look at specific use-cases on how Yokogawa has helped customers in their digital journey as shown below in Exhibit 6.

Exhibit 6: Digital Maturity of Pioneering Organizations

Source: Frost & Sullivan

Immaterial of the organization size (large, medium and small) or of the industry type – as seen above, digital transformation has its benefits and will definitely pay back in the long run. However, the challenge for organizations is in identifying critical application areas, collecting meaningful data and performing intelligent analytics to drive decision making focused on profitability.


There is a widening divide in today’s plants due to rising technological complexity and growing depletion of the skilled workforce. Compounding this challenge is the entry of digital natives into process industry operations management. The millennial mindset is driving organizations to re-think the applications, tools, and technology used to modernize the operations landscape in order to make it more user-friendly and intuitive.


In the following chapter, we will uncover the drawbacks of traditional market approaches to structuring OpreX Profit-driven Operation and Yokogawa’s differentiated market positioning in the same.

 

3. Yokogawa's Differentiation and Market Positioning

Beginning two years back, Yokogawa observed the strategic need to expand its portfolio and become more customer-centric in its solutions and service approach. It recognized the need for expertise-as-aservice in the market and acquired KBC Advanced Technologies, Industrial Knowledge and SOTEICA VISUAL MESA. Yokogawa has made a number of strategic acquisitions and organic developments, lead us to create a differentiated value-proposition – Continuous value creation cycle. This methodology helps customers in minimizing expenditures, risk and rapidly implementation solutions. Another intrinsic part of this cycle is that of process and domain knowledge. This is critical because of the need to understand your plant, its processes in order to efficiently design and deploy customized solutions.


Shown below in the Exhibit 7 are the key solutions that enable the continuous value creation cycle. This value creation cycle positions Yokogawa as a reliable and trusted partner for challenges within the four walls of the plant and beyond, including the supply-chain network. The key aspect to note here is Yokogawa’s ability to not only provide offerings related to conventional automation and applications, but also deliver comprehensive solutions from sensors to enterprise, to total plant, and advanced deployment models such as cloud and remote solutions.

Exhibit 7: Continuous Value Creation Cycle with the Key Solutions


Shown below is a summary of performed activities, across each phase, and the unique solutions that Yokogawa has brought to the market:

  • Identify: Defining potential improvement areas across the customer's entire business process and resources. Unique solutions within this phase include:

−KBC OpX ™ Consulting: Over 85% of refining and petrochemicals companies have run some form of Operational Excellence programs (mainly inhouse), but only around 30% say that these programs have met their full expectations. This shows the need for a solution that helps bridge the gap between program objectives and actual performance experienced. One such solution offered by Yokogawa to overcome this challenge is that of Operational Excellence. It is a continuing strategy to drive sustained improvements in profitability, while balancing the focus on safety, security and compliance. KBC, a Yokogawa company, brings about a systematic application of technology and domain experience to ensure that superior results are sustained. Typically, Yokogawa performs a value co-creation workshop to identify key customer pain points, key performance indicators and bridges it with proven consulting methodology along with domain knowledge. Exhibit 8 outline KBC's OpX framework:

Exhibit 8: KBC's OpX framework

Link to OpX whitepaper: https://www.kbc.global/hot-topics/opx

  • Create & Implement: Deals with the design and deployment of optimal solutions at a customer's site, based on the potential areas of improvement outlined in the ‘Identify’ phase.

−Agile project execution: It is an alarming trend that, a significant portion of automation projects have faced schedule delays, scope creep, ineffective change management procedures, etc. While automation is a small part of the overall project, it is a significant lever to drive performance excellence with early engagement. Yokogawa's agile project execution methodology helps in delivering cost-efficient execution, effective management of change, with at least 10% reduction in  engineering hours and an overall risk reduction in plant start-up.

  • Operate: This phase deals with either helping the customer or having Yokogawa perform safe and stable operations across the customer’s facilities.

−Supply-chain solution: SOTEICA VISUAL MESA (A Yokogawa company and a part of KBC) provides supply chain scheduling production accounting and loss detection solutions. A combination of these solutions with KBC's refinery optimization solutions and supply-chain consulting services provides a comprehensive optimization platform for the hydrocarbon processing industries that can be deployed on premise or via the Cloud.

  • Sustain & Improve: This is a very important phase, wherein Yokogawa maintains the solutions, helping the customer to drive continuous improvement and sustained performance excellence.

−KBC Co-PilotTM: Like the Co-Pilot in an aircraft, KBC Co-Pilot is a solution developed to remotely support the plant's operational personnel with expertise and insight. The main objective of the solution is to ensure that the plant always achieves its full operational potential. Yokogawa uses a best-in-class process simulator and plant operating model within the historian, on the cloud, to synchronize with actual operation. The ability to extract real-time plant data helps to compare planned value, optimized value and actual value in real time. Further, with the support of KBC consultants and experts who have diversified knowledge and are powered by the remote connection to the client operations, customers can achieve optimized processes, higher value yields, improved plant reliability and optimized operating costs. Yokogawa have implemented such solutions in the refining industry and plan to extend it to petrochemical and chemical industries.

While these solutions, as part of the continuous value-creation cycle have resonated well with our customers, we felt the need to sustainably improve our solutions approach to resolve your emerging challenges and pain points. This led us to the development of another key solution - OpreX Profit-driven Operation. This solution is very unique as it helps customers leverage us to design performance indicators that are specific to you and helps in close tracking to them.


The OpreX Profit-driven Operation solution is defined as an integrated solution for process industries that delivers seamless alignment with plant management objectives between the C-suite, engineering and operations. The solution is centered around a unique framework of co-related indicators distilled from Yokogawa’s extensive domain knowledge.


However, in order to reach this stage of maturity, there are five prominent critical issues that need to be solved:

Critical issue 1: C-level KPI’s don’t break down into factory floor – There are many KPI dashboard systems that provide other KPIs to the C-level and Managers or that provide same KPIs to all workforce from C-level to shop-floor. This makes it difficult to resolve business transforming KPI issues at the factory floor, and to motivate the factory floor to routine profitable operation.

Critical issue 2: Multiple management objectives create conflicts/profit loss – Previously, achievement of plant safety and the production plan was the main management objectives at the factory floor. Recently, new management objectives such as profitability, energy conservation, and asset reliability are added that causes further complexity or conflict and profit loss in plant operation.

Critical issue 3: Decline of the number of engineers/operators who have the best practice to optimize relational KPI's – Engineers and Operators who started his/her career when the working plant was established and who know much about the commercial operation reach their retirement age. They understand which process variable is related to profitability, energy conservation or asset reliability, and know how to control it optimally within its ideal range based on an experience of trial-and-error. The best operators are disappearing from the industry and their knowledge needs to be captured and automated.

Critical issue 4: Poor practice in leveraging high-quality big data from DCS to drive profit focus - The plant's distributed control system (DCS) interfaces with multiple equipment and systems and is a powerhouse of live big data that has seldom been leveraged by Operators for more profitable operation other than raw safety and system integrity purposes.

Critical issue 5: Timely updating of models/parameters in automation systems – Linear program vectors in linear programming, rigorous models in process simulators, linear dynamic models in multi variable controllers, and PID parameters in PID controllers should be updated timely by Engineers to work to drive profitability. They rarely are updated at all or with relevant consistency. Such systems end up being ignored or switched off by Operators who simply need supplemental information on the DCS screen and in the same format.

Traditional market approaches that help customers optimize profits in operations have been based on first principles approaches. This software-led approach has its drawbacks as it uses pre-built dynamic models to perform process optimization only and not profit optimization. While there are benefits in this approach, it is restrained in its capabilities to leverage best-in-class domain knowledge and industry bestpractices. These approaches do not build in the specific operational KPIs of the asset in question. The domain knowledge is critically important, as organizations look at solution providers to understand process nuances due to depletion of internal capabilities. This is where we differentiate ourselves – our ability to bring best-in-class technologies, domain knowledge and industry expertise to help our clients deliver on outcomes and profits. Yokogawa has more than 1,200 application experts and industry consultants who have a strong command of various process industry issues and can integrate a solution that drives sustainable value to customers.

We leveraged KBC's best practices about hierarchical and role-based performance metrics that covers from C-level to shop-floor, and that motivate all employees to profitable operation for each role. KBC also has best practices around management objective-based performance metrics such as production achievement, profitability, energy conservation, asset reliability, and safety.

The combination of Yokogawa's Operational and Information Technologies and KBC's best practices enable a client to visualize the balance of management objectives on a DCS-based dashboard, to notify abnormal situations, and to provide expert guidance that assists right decision-making and agile action for OpreX Profit-driven Operation. The combined synergies bought about by KBC and Yokogawa led to the creation of our new IA business concept - Synaptic Business Automation. This is structured to drive value across three areas –resilient operation, optimized production and business innovation. Additionally, the uniqueness of our platform is its ability to drive a symbiotic relationship between OT, IT and industry domain knowledge. Ultimately, these three aspects lead organizations to profitable and sustainable growth as shown in Exhibit 9.

Exhibit 9: Value Proposition of Synaptic Business Automation

Synaptic Business Automation is Yokogawa's Industry Automation business strategy that serves as a platform for the company to work with its customers to sustain their creation of corporate value. Synaptic Business Automation creates sustainable value by connecting everything in our customers’ organization. To realize this, Yokogawa integrates its business and domain knowledge with digital automation technologies, and co-innovates with customers to drive their business process transformation. We believe that, digital transformation of an industry can be built on our robust foundational platform of Synaptic Business Automation. It helps customers achieve OT-IT integration, while leveraging core business and domain knowledge. The ability for customers to leverage our domain knowledge helps to nurture a symbiotic relationship between OT and IT and thereby achieve true digital transformation. As shown in Exhibit 10, OT covers operations management and control, while IT encapsulates business systems that help with sustainable value-creation.

Exhibit 10: Realization of Digital Transformation Through Synaptic Business Automation

Our unique integrated performance management solution by integrating OT, IT and business & domain knowledge we have introduced is that of OpreX Profit-driven Operation. This solution is laser focused on sustaining and optimizing a plant’s profit performance.


Our OpreX Profit-driven Operation solution leverages live big data from the DCS and combines it with domain knowledge to create role specific synaptic performance indicators (SPIs). We have identified hundreds of SPIs across the functions of operations, engineering and management. The SPI’s map back to critical performance measures such as production achievement, profitability, energy conservation, asset reliability and safety. While peers have focused more on improving profit in a siloed manner – we have a more balanced approach to help customers achieve OpreX Profit-driven Operation. Since the SPI’s vary by functions it is important to maintain sanctity between them, while at the same time facilitating a synergistic alignment to minimize conflicting SPI’s and waste. Exhibit 11 provides a view of SPIs. Today, we have developed over 800 SPIs for refinery operations and over 120 SPIs for ethylene operations. As we have developed the framework, methodology and own the underlying technology that supports this solution – it is very easy for us to scale and make this extensible across other application areas. The solution has already been optimized for oil refining and petrochemicals, and Yokogawa starts to quickly expand applications to energy and basic chemical plants.

Exhibit 11: OpreX Profit-driven Operation, Synaptic Performance Indicators Across Organizational Functions and Industries in Focus

• As outlined below, each SPI serves a unique purpose but when taken together help a plant manager assess the health of the operation:

a. Production SPIs: This deals with gaps between production plan and actuals, yield and product quality.
b. Energy SPIs: Helps in monitoring energy consumption (hydrogen, steam, electricity, water and fuel)
c. Reliability SPIs: Plant asset reliability, availability, mean time to repair (MTTR), mean time to failure (MTTF), mean time between failures (MTBF), running time and such others.
d. Safety SPIs: It is a very critical part of plant operations as it covers emergency shutdown trigger points, plant shutdowns, total recordable incident rate (TRIR), alarm management.
e. Profit SPIs: This is a composite score of all aforementioned SPIs, but computes measures such as gross margins, costs, process utilization and performance of automation systems.


• Our solution has several unique differentiations, which are outlined below:

1. Smart use of live big data from DCS: The DCS gathers a significant amount of data (like temperature, pressure, level, production, product quality, etc.) at a high frequency rate. The quality, fidelity and integrity of the data is very high. However, customers have traditionally used the DCS data for process monitoring, control and production management and not for optimization because traditional DCS doesn’t have the function of optimization or its assistance; although expert Operators knows that the DCS is a warehouse of valuable information. Most of today's operating models leverage data from plant information management systems (PIMS) to measure performance. For example, operations would look at measure of performances like control performance, process performance, critical alarm, etc., while engineering would look at yield, quality, energy consumption, and management would look at production cost, margin, energy cost, incidents, etc. There is a growing disconnect between the metrics of C-level, engineering and operations personnel. The challenge is in tying these function-specific KPI’s and mapping it back to plant-level KPI's like production, profitability, energy, reliability and safety. Further, we need to understand that – these plant-level KPI's (production, profitability, energy, reliability and safety) are tightly co-related. A negative impact on any one of these indicators may adversely affect the plant's profitability. Hence, the need to have a balanced outlook on plant KPI's is required to understand patterns, root causes for low performance and subsequently perform corrective and preventive actions. 

Yokogawa's OpreX Profit-driven Operation solution helps in structuring a seamless operation between C-level, engineering and operations using a SPI dashboard. Instead of a KPI, Yokogawa has termed its’ measure of performance as synaptic performance indicators, as it uses composite scores and applies domain knowledge on each SPI. The dashboard pulls in live big data from DCS and remaining data from PIMS, and then computes it to a score in order to model good, balanced, cross-functional operational behavior. Even from a visualization standpoint, operators will be able to view one score to assess the health of the operations. As an analogy, Yokogawa's solution is similar to a personal health scorecard. It is just that, while most humans perform a health check-up once a year, Yokogawa's solution helps shift operators to view their performance/health in real-time. Similarly, engineering and management can see their data at the end of every shift/day. The ability to instill confidence and deliver intelligence in a byte-sized format is poised to immensely help shift operators and C-level management. Customers are also able to add/delete SPIs within their dashboards. This would ultimately help operations have an integrated view on the balance of priorities. Subsequently, organizations would be able to mitigate the trade-off between profitable operations, asset performance optimization, energy consumption and safety.


2. Integration of domain knowledge and creation of expert systems: Since our acquisition of KBC, Yokogawa has been distilling the domain knowledge and functional expertise and blending it across our OT portfolio. As a proof point, in the OpreX Profit-driven Operation solution – we have built in the consulting capability of KBC within this solution pack. The KBC's domain knowledge around process variables and ideal operating conditions are being astutely combined with DCS trend data. This has allowed us to position an ideal high range and an ideal low range. This will help shift operators to constantly compare and benchmark their performance against industry best-practices and peers. The integration of domain knowledge makes our solution an expert system, as it constantly trains and models good shift performance behavior. Using alarming and messaging functions in DCS, the dashboard also provides alarm message and expert advice when an SPI goes outside ideal range.


3. KBC Co-Pilot for engineering and management SPIs: While Operator use big data from DCS and visualize the data in their operator work stations, engineering and management-level SPIs are displayed in a cloud through KBC Co-Pilot. KBC Co-Pilot's differentiation is its ability to remotely distribute and support assets with domain expertise and insights supplementing internal capabilities and resources thus ensuring optimal utilization and performance. It is important to note that, engineering and management level SPI's can be hosted on-premise or hosted on Co-Pilot through a cloud infrastructure. The cloud infrastructure allows the functions of engineering and management to access, review and recommend actions anywhere, anytime.


4. Consulting services from KBC Co-Pilot: In order to drive sustained improvements in plant operations, we have leveraged technologies like simulation models, cloud data hosting, and dashboards. Also, using this technical foundation, we offer four types of ser vice options:
a. Reactive services: This assures the trueness of input data and ensures calibration of the model so that outputs are insightful.
b. Monthly proactive services: Our consultants will deliver a monthly report that tracks goals performance and profits delivered. We supplement this data with recommendations and strategies to improve performance.
c. Weekly proactive services: A report is generated every week to assess gaps in production plan achievement, issues and trends requiring maintenance planning.
d. Daily proactive services: This is a full Co-Pilot offering, where our consultants assist operators with actionable recommendations based on live streaming data analytics.


5. Profit Improvement Program (PIP): Focused on maximizing revenues and minimizing costs, KBC's PIP consultants identify sustainable opportunities for profit improvement that require no or minor capital investment. By applying rigor to our analysis through use of accurate and reliable process models, depending on plant size, a typical PIP from KBC can deliver measurable benefits of more than $10-100 million (A typical 200k bpd refinery). Energy savings or carbon reductions of 3-10% can be expected, and where energy systems are constraining process performance, 1-3% increases in throughput or yield can be achieved. Synergy between process and energy leads to benefits far greater than considering these two factors in isolation.


Our OpreX Profit-driven Operation solution uses cutting-edge, secure technologies and leverages application-specific expertise to fool-proof operational performance. Digitizing the data collection elements and digitalizing the business process of plant operations management is a true form of achieving digital transformation. The ability to scale this platform from one site to an enterprise is also easy, while ensuring optimal operational performance and capacity utilization. At a time when process industries are faced with depletion in skilled workforce, solutions such as this would help you to smartly assist operators with intelligent data for improved decision making in real-time. Further our solution helps you shift from obsolete operational models like ‘event-driven operations’ to an insights-based ‘OpreX Profit-driven Operation.’


Exhibit 12 shows an example of a SPI dashboard. Please note that, the chart on the right hand shows a SPI dashboard with expert advice – wherein KBC best-practice recommendations are built in to ensure a balanced plant operation. KBC technologies and domain knowledge helps in creation of an expert system in place. As part of the solution launch, Yokogawa is releasing a new performance dashboard and related services that are integrated into existing CENTUMTM distributed control systems (DCS) to enable plant operators to monitor in real-time how their operation patterns are impacting high-level plant management objectives. When the service is implemented at a plant, optimal setpoint ranges are determined for each SPI, and then if a certain indicator moves outside the ideal range, built-in expert advice is displayed to support prompt action by even inexperienced operators. This expert system will automatically alert/alarm operators if the indicator value is below the threshold parameters. The SPIs and operator performance are automatically accumulated by shift to enable internal and industry benchmarking, root cause analysis, and expert consulting for continuous profitability gains. Further, KBC consultants step in and provide recommendations/insights on how best to bring the process back under normal operational parameters.

Exhibit 12: OpreX Profit-driven Operation, SPI Dashboard (Japanese Karaoke-Type Dashboard for Balanced Scorecard of Plant Management) and Expert Advice

This is a key example of how we drive expertise-as-a-service for our global customers. Due to conflicting priorities and SPI's, it is important for an Operator to always be in the know on what happens if a parameter changes and how it would affect the overall system performance and associates SPI's. To solve this issue – we came up with a Japanese karaoke styled dashboard for balanced scorecard of plant management, which updates in real-time using live big data from DCS.

Exhibit 13: Profit-driven Operation, Karaoke-Type Historian

Karaoke-Type Historian makes it possible to understand the differences in management objectives on the each unit of operational shift, and to analyze their balance.

 

4. Technology Enablers of OT-IT Convergence with Domain Knowledge and Customer Success Stories

In the previous chapter, we looked at the solution value and differentiated approach of our OpreX Profit-driven Operation. In this chapter we will discuss the salient aspects of the solutions’ technology enablers that create sustained value by utilizing plant data with domain knowledge.


We have outlined the key technologies in Exhibit 14, and mapped it back to specific plant domains for easy reference.

Exhibit 14: OT-IT convergence through domain knowledge

A common thread across these technologies areas is that every aforementioned solution has built-in elements of OT, IT and industry best-practices. We firmly believe that digitization and digitalization is not only about system integration but also about technology differentiation. This is one of the reasons why we have structured our technologies to create applications that can scale based on size and requirements. As you see in Exhibit 14 – we can easily scale the technology applications and solutions from sites to an enterprise. This is our continued vision to help our customers seamlessly move from Stage 1 of digitization to Stage 2 of digitalization and onwards to Stage 3 of Enterprise Digital Transformation.


Providing an overview about each of the technologies:

• IIoT Technology → Smart sensing solutions:

−DTSX / Distributed temperature sensing: This is an optical fiber sensor that measures the temperature distribution along a long-distance fiber-optic cable. It measures with high accuracy and unlike traditional measuring technologies – this is not impacted by electromagnetic noise. Our innovative capability and technology ingenuity led to the development of an industry-leading distributed fiber optic sensing solution. It provides thousands temperature measurement points in minutes which is ideal for well monitoring, pipeline leak detection, fire detection, power cable monitoring, or other large production facilities. Thus improves operational safety, availability and efficiency. This solution currently includes two main products - DTSX200 and DTSX3000. The differentiation is its integrated industrial modular design with longest distance, up to 50 km and highest performance. Such capabilities are beneficial to facilitate reliable measurement in harsh environment which was never realized in the past. Oil and Gas, and other customers continue to adopt these cutting-edge distributed fiber optic sensing solutions in various applications.

−Sushi Sensor (to be released outside of Japan shortly): Industrial IoT is driving the growth of wireless sensors being deployed to digitize field data. There is tremendous innovation in this space, driven by technology convergences and advances in miniaturization. As the customer's appetite to remotely monitor assets status has grown – a new market opportunity has opened up. This new opportunity deals with IIoT sensors that are wireless, low in power consumption, covering wide area and connected to the cloud. Yokogawa seized this opportunity and developed our first Sushi Sensor which measures vibration and surface temperature of assets. This IIoT sensor is LoRaWANTM compliant and sends the data to the cloud. Trend monitoring and CBM (Condition Based Maintenance) can be achieved and Analytics (AI, machine learning algorithms) in the cloud is planned that deliver trend analysis, deterioration diagnostics, and lifetime prediction. Exhibit 15 provides an overview of the Sushi Sensor c apabilities:

Exhibit 15: Sushi Sensor* – LoRaWANTM Compliant, Low-powered sensor Offering

*Sushi Sensor is a registered trademark of Yokogawa Electric Corporation

−Smart sensor and soft sensor: The proliferation of sensors to collect data is expected to grow significantly, as the thirst for converting meaningful data → insights is present across process industries. At the same time, these instruments need to be calibrated in order to manage the integrity of data captured. Realizing this need, Yokogawa developed a product called as SENCOM (SENsor with COMmunication). The package includes a pH ORP sensing module tha t interfaces with management software SPS24. The electric circuit placed within the sensor pack allows it to complete the measurement itself and transmit the measured values in form of a digital data. As we introduced newer models (FU24F for pressure fluctuation and SC25F – for under high pressure circumstance measurements for use in chemicals industry), we are looking to minimize the product footprint. As a case in point – the number of components on the sensor chip has been reduced to 1/3rd of the prior model to help with miniaturization and power consumption. This has also helped with the smaller footprint, as the mounting area was reduced to 1/6th of the size. Some of the application areas have been mainly in liquid analysis.


Yokogawa's soft sensors use inferential property estimation to drive more stability and process control. The software, in conjunction with Advance Process Control (APC), uses multivariate analysis and product properties in real-time. The ability to deliver non-linear process improvements will help customers have a clear view of the product quality in real time. Exhibit 16 shows a use-case, wherein our soft sensors work in conjunction with a gas chromatograph and APC software.

Exhibit 16: Use of soft sensor to improve butadiene process control

• Information Technology → Process simulation solutions:

− Like an aircraft Co-Pilot, KBC Co-Pilot supports remotely the plant's operational personnel with expertise and insight. The solution’s main objective is to ensure that the plant always achieves its full operational potential. Yokogawa uses a best-in-class simulator and plant-operating model on the cloud to synchronize with actual operation. The ability to extract real-time plant data helps to compare planned value, optimized value, and actual value in real time. Further, with the support of  KBC consultants and experts who have diversified knowledge, customers can achieve optimized processes, higher value yields, improved plant reliability, and optimized operating costs. Yokogawa has implemented such solutions in the refining industry and plans to extend them to the upstream, petrochemicals and chemicals industries. On an average, Co-Pilot has yielded savings anywhere from $3M to $10M/year. The extensibility of this solution into critical plant applications shows our ability to go deep and wide, while cr eating lasting value for our customers.

− Petro-SIM: This is one of our best-in-class solutions that cuts across the upstream, refinery and petrochemical value-chain. It is a process simulator that can model the entire refinery from crude to final product blending. Also, as its part of KBC – customers have access to a large database of process models (FPSO, LNG terminal Cogen, Combined cycle LNG plant, Ethylene cracker, Furnaces, etc.). Our ability to leverage Petro-SIM in areas such as heat exchanger fouling monitoring and cleaning optimization shows our capabilities to identify critical applications and develop solutions for the same. Frost & Sullivan states that, heat exchanger failures account for nearly 30% of unplanned downtimes across end-users (oil and gas, power, nuclear, refining). Today, most of the inspection on heat exchangers are done during plant shutdowns or are reactive. Our solution helps in digitizing the da ta collection and digitalizing the maintenance process of heat exchangers using asset-specific predictive data models. Further, our solution can also help customers in designing new heat exchangers, by automating geometry designs.


• Business and Domain Knowledge → Intelligent edge computing:

− e-RT3 Plus is an edge controller, supported by an online modeling function aided by machine learning algorithms. Across process industries, we realized the demand for automated anomaly detection technology, due to lack of skilled workforce and drawbacks of traditional methods. In order to achieve true asset performance management, process data (pressure, temperature, type of fluid, flow rate, etc.) and equipment-level data (vibration, stroke travel, temperature of bearings, etc.) needs to be co-related to reliable detect anomalies. Our e-RT3 Plus is a new edge solution we have developed that adds on-line modeling function, using machine learning to the controller in order to detect and notify anomalies. While there are many generic machine learning algorithms, it cannot be universally good for all problems. This is popularly called as no-free lunch theorem. Yokogawa has clearly understood that if you do not use the characteristic suitable for the problem you have to solve, one cannot obtain the optimal solution. As against conventional analysis techniques, it is important to apply domain knowledge when using machine learning. This is where Yokogawa differentiates. Exhibit 17 shows an implementation model of e-RT3 Plus:

Exhibit 17: Automated anomaly detection using e-RT3 Plus

In 2016, we developed a pilot of this solution with our customers in Japan. At the end of the trial, we were able to confirm that it is possible to build an anomaly score from the data captured. Using a machine learning algorithm, the entire process of data capture to anomaly detection was digitized and digitalized. Compared to traditional processes of paper-based monitoring, skill based monitoring, statistical process control analysis and siloed data capturing, this solution should be seen as a first step in leveraging technology to drive predictability in asset operations and management.


e-RT3 Plus is also another good example of our design philosophies. This product incorporates OT, IT and industry best-practices to shape outcomes that are optimal and profitable for plant operations. As we scale on these solutions, we will be able to train our algorithms on other equipment diagnostics and allow it to uncover hidden rules and anomalies almost automatically. While the market has seen the democratization of analytics, very few can seldom be applied on plant data, due to its unique characteristics. Even though plant failure data accounts for only 0.05% of the overall available data – our process knowledge and domain expertise helps us to customize the delivery to our customers. Exhibit 18 shows the ability of a machine learning algorithm to identify anomalies from streaming sensor data.


Exhibit 18: Use of e-RT3 Plus in Conjunction with Machine Learning

• Process optimization and analytics → Analytics/Algorithms: We have strategically created a center of excellence focused on analytics for process industries. We are also part of the AI consortium that has over 100 organizations collaborating to create credible industry solutions. We have many industry-specific algorithms, but showcase two key ones below:


−Process data analytics using Mahalanobis Taguchi (MT) method: This deals with product quality and traceability issues. We have applied this in chemicals industries to help our customers trace back raw material, product genealogy and help deliver consistent product quality immaterial of the raw material composition.

−Data driven Modeling: We are striving to utilize RENKEI (A Japanese co-operative concept to achieve effective use of plant energies) and achieve the best balance between operation cost and product quality. In order to achieve this, significant knowledge around physics, thermodynamics, operation plans, optimization calculations, chemical engineering is required to achieve the optimal balance. Since there is a broad shortage of skills, timing and focus – we developed a data-driven model for optimization (DDMO) that can automatically create equipment models from actual plant operation data. The DDMO technology uses multiple statistical analysis methods to extract not only output characteristics but also relations between the various variables of the equipment. This is converted into mathematical equations and ported into optimization software for further analysis. The DDMO uncovers underlying relations and also estimates the coefficients of characteristics equations. This means that, customers don't have to be statistical experts or mathematicians. Some of the applications where we have applied this are energy savings, cost optimization in pulp and paper processes. Our solution can help you save more than 80% in man hours to build reliable plant and equipment models. Further, DDMO can help with total optimization of processes that comprise several unit-level processes. This is currently being piloted in Japan and will extend its use in environmental/sewage treatment applications.

−DDMOnEX – an operation support service solution: Keeping with market trend on expertise-as-aservice, Yokogawa Solution Service Corporation has created this unique solution service offering to help customers balance cost, quality and efficiency. A recent adoption at a Japanese pulp and paper facility (with a production capacity of 1,820 tons/day of wood pulp) helped it to balance energy use, consumption and product quality. Further, this is an outcome-based agreement – wherein we deliver outcomes and collaborate seamlessly with plant personnel through our GRANDSIGHT value-creation solution. This solution helps us to perform video conferences, share schedules, store data, transfer knowledge, do project management and develop application software based on needs. Yokogawa conducted a simulation using the plant model to search for the operation balance. Yokogawa provides necessary services step by step while quantitatively confirming the effect of optimization operation using the model co-created with our customers.


We are continuing to make progress by striving to solve problems that are beyond human intelligence, using AI/ML. In our opinion, the industry has just started its journey in plant performance optimization using analytics and there is much to be discovered. We are also testing out new business models like profit-sharing contracts, wherein we get monetized based on quality of outputs delivered to you. This is being tested out in our aforementioned DDMOnEX solution.


With our rich expertise and market track record, we have developed algorithms to solve customer issues around precise future forecasts of failure, root cause analysis of problems, early prediction of the final product quality and automated monitoring and analysis of streaming sensor data. In our quest to continuously improve our AI/ML capability – we are also utilizing Deep Learning technology in the field of imaging analysis through detailed application. This is being piloted in certain areas to help customers automate their work processes and ultimately maximize operational efficiency.

Our unique differentiation in analytics is as outlined in four areas below:


• Domain knowledge for AI algorithm development: Our status as one of the largest independent pure-play automation solution providers and laser focus on process industries has allowed us to retain deep domain knowledge. This is a key requirement, as domain knowledge translates into better AI algorithms. Further, it is also required to best interpret the results provided by the algorithm.


• Co-innovation and co-creation culture: Algorithms see only data and provide data. It is ‘humans in the loop’ that bring in the knowledge around physical settings, interactions and such others.


• Capability of one-stop shop realization with AI systems: System integration is the single biggest challenge within process industries. Frost & Sullivan states that, roughly 2/3rd of an enterprises plants are brownfield (More than 25 years in age) and 1/3rd are greenfield plants (that are <15 years of age) across process industries. Thereby, when applying modern technologies on legacy assets, knowledge around best-practices in system integration is critically important. We bring not only system integration capabilities but also best-in-class domain knowledge to help our customers realize value.


• Leverage OT-based data analytics to solve customer issues: Unlike IT solutions which apply analytics from a top-down manner, we use our domain knowledge to convert knowledge into wisdom. We are able to improve reliability by reducing human errors through predictions in operations and publishing alerts in an automated manner. Our analytics capability is also able to analyze data across the whole supply-chain and optimize the relationship across multiple supplychains. In summary, our ground-up view of enhancing operational intelligence is credibly differentiated and built on core domain and industry knowledge.


In order to understand the usability and success of OpreX Profit-driven Operation solution, we will look at a few customer success stories that Yokogawa has experienced across the industry.

Customer Success Stories:

#1 - Process Data Analytics, identifying silent change issues through analytics: Utilizes OT, IT, Business and Domain Knowledge.

Global manufacturers in the process industries source materials from various suppliers and have diverse asset profiles (vintage and make). As technology advances, there is pressure to stabilize the quality of the end-product, immaterial of its constituents. Hence, to improve quality – manufacturers analyze various types of data and co-relate them to arrive at interesting outcomes. This is a challenge, as data analysis skill sets varies by site. Shown below is a use case of how a chemicals company leveraged an innovative solution from Yokogawa to reduce variability in end-product quality:


Challenge: The chemicals value-chain is highly connected. Hence, if an issue occurs in one-part of the value-chain, it has a ripple effect. Even though great caution is exercised to ensure precise processing – the company discovered that there was a need to monitor process deviations more closely to reduce variability in the end-products. Due to the variability in the supplier sourcing ecosystem, the company was unable to pin point the source of the issue and was unable to achieve its quality related KPI’s. 


Solution: Yokogawa began offering a process data analytical service to its customers in 2008. To date, more than 100 contracts for this service have been concluded with companies in Japan's chemical industry and other industry sectors. The companies have begun to rely on this value-adding service. We leveraged the Mahalanobis-Taguchi System (MTS) to design and develop a multivariate measurement system to accurately measure the level of pattern abnormality and subsequently evaluate the accuracy of predictions. The software solution, packaged as process data analytics, compares the collected data and triggers an alarm based on any process deviations.


Outcome: Immaterial of the raw material supplier, the customer could achieve uniform end-product quality while proactively managing issues in real-time due to early visibility. Further, quality inspection teams could scale this solution across all sites and tighten control procedures. By scaling the solution – the customer was able to achieve predictability in profits and optimize their processes.

 

#2 – Improving 1,3-Butadiene process control: Utilizes OT, Business and Domain Knowledge.

Chemical industries face acute issues in leveraging critical process analytical instrument classes to drive predictability in operations and product quality. There are multiple variables that needs to be balanced, while predicting process behavior. The lack of adequate sampling system and heavy non-linear processes further compounds to the problem. This results in out-of-bounds specification limits and varying product quality output.


Challenge: Process variability swings created a divide to achieve maximum product yield at minimum steam consumption levels. The operator target also has to be near-specification levels always. This requires a careful calibration of processes and parameters.


Solution: Yokogawa’s APC solutions astutely used GC8000 (online analyzer measurement) along with lab variables and a smart/soft sensor to drive optimized process control. The soft sensor is unique in its applications, as it monitors non-linear process applications, while providing a clear view of product quality in real-time.


Outcome: Our customer was able to improve process efficiency, decrease material loss and optimize the amount of steam required to run the process. Ultimately, the use of our solutions resulted in a net improvement of 3% yield increase in Butadiene production (or) a $3.5M savings/year.

 

5. Future of Process Industries: Digital, Flexible, Smart and Predictive

The future of process industries is digital, flexible and predictive with zero downtime. The aforementioned principles will usher the various customer segments to think differently and continue to challenge their present-day operational model. As technology refresh cycles has halved, customers are clearly unable to keep up with the pace and often confounded by the rapid pace of change. Many process industry’s CEO’s have created a joint task force around digital transformation in order to maintain a competitive edge and help it drive overall profitability. As the industry downturn is seeing recovery – We have observed a shift in the customer spending behavior. They see Fortune 500 and large operating companies spend money to save money and drive positive shareholder returns. The penchant to do more with less is more pronounced today, but the vision is severely challenged by the decline in skilled workforce and the requirements of radically new skillsets. This brings us to a juncture, wherein industries must react in a sustainable manner to stave-off the forces of disruption.


One of the best-practices resonant with the industry is the recent willingness and openness to co-create solutions to help them solve internal challenges. This is a marked shift in companies, as every activity was predominantly performed in-house. The co-creation trend has seen an emergence of long-term partnerships between process industry customers and automation solution providers. In essence, as customers transform in their journey – we are also continually evolving from being a technology-centric company to a trusted automation solutions and profit-enabling company for our customers. We are revamping our solution portfolio to incorporate OT, IT and domain knowledge in every product. The infusion of intelligence and expert knowledge at a system level is poised to help plant’s run smoothly and in a self-healing manner. As predictability in operations improve continually, there will be a stage wherein plants will experience zero downtime due to remote monitoring and predictive performance optimization. Technologies would instill a new level of confidence and drive digital transformation across a customer’s value-stream. This will also help customers perceive unexpected value and benefits.

 

6. Conclusion


As digital transformation ensues to disrupt, transform and re-shape industries – the imperative to change for process industries is clear and very present. Customers will need to shift their focus from reactive operations to proactive, predictive and profit optimizing operations. In order to achieve this stage of maturity, data and data quality is important and the consistent use of it from the Operating Room to the Board Room. The ability to extract the right data to drive value creation will set companies apart in the future. Customers who leverage data as a critical asset will maintain a competitive advantage. The automation of data → knowledge → insights is an area of focus in the immediate future. In order to get to this stage of maturity, we find that majority of the organizations are significantly unprepared to be datadriven. Often, customers replace existing big data technologies and the culture has not yet transformed to leverage data as a critical digital asset. Some of the other critical issues in transforming an organization to become data-driven include organizational alignment on analytics, overcoming existing master data issues, recruit new talent (data scientists, machine learning experts) and best-in-class data governance practices. In essence, organizations should leverage data as a pathway to drive operational efficiency, growth and sustained operational value improvements.


While there are many solution providers in this market offering piece-meal offerings, customers prefer an integrated solution offering and a trusted partner approach. As data complexity differs for each company, the imperative is to co-create solutions that fit the needs, requirements and budgets of customers. The journey to reach this future state of OpreXTM Profit-driven Operation is not easy and is filled with challenges, but Yokogawa’s solution portfolio and continuous innovation can lead you to become a world class performer and that performance is sustained.


Synaptic Business Automation creates sustainable value by connecting everything in our customers’ organization. To realize this, Yokogawa integrates its business and domain knowledge with digital automation technologies, and co-innovates with customers to drive their business process transformation.

Übersicht:

By Janice Abel, ARC Advisory Group

Keywords

Industrial IoT, Expert Services, Process Simulation, Digital Twin, Yokogawa, Synaptic Business Automation, Digital Transformation

 

Summary 

As global competition increases, operations and manufacturing must improve flexibility and agility while maximizing ROI to ensure sustainable profitability. To do this, businesses must adapt and improve operational efficiencies, asset utilization, and productivity, while ensuring safe, environmentally compliant operations. Increasingly, companies look to digital transformation to accomplish these. Yokogawa is addressing digital transformation for industry through a combination of new services, technologies,solutions, and proven expertise that it refers toas “Synaptic Business Automation.”

At the company’s press conference at the recent ARC Industry Forum in Orlando, Yokogawa presented some details on this interesting new concept, which focuses on leveraging new technologies and proven expertise to support industrial organizations in their respective digital transformations to achieve operational excellence and profit-driven operations.

With its new Synaptic Business Automation concept, Yokogawa is shifting its co-innovation focus:

  • From products to customer business
  • From delivering products to delivering value
  • From implementing solutions to value co-creation with customers
  • From an automation supplier to a trusted business partner

 

Synaptic Business Automation Concept

Synaptic Business Automation Designed to Drive Profitable and Sustainable Growth


At the press conference, Satoru Kurosu, Executive Vice President, Head of Premium Solutions and Service Business Headquarters at Yokogawa outlined
Synaptic Business Automation. He described how it addresses end user’s challenges, including digital transformation; supply chain visibility and optimization; more profitable operations; and the changing business environment, including the need to address both the “circular economy” and the changing workforce by synthesizing and bringing together people, systems, data, services, and supply chains. To this end, Yokogawa’s expanded offering includes both consulting and solution services.


According to Mr. Kurosu, Synaptic Business Automaton connects production to business operations - synchronizing sensors, data, system, people, businesses, and supply chains. Yokogawa is increasing its value add by expanding technologies and solutions horizontally and vertically across the enterprise.


By combining Yokogawa’s expertise in operational technology (OT), plant operations and management, industrial applications, IT, consulting, and services, the Synaptic Business Automation concept aims to enable customers to achieve an ideal business state. Yokogawa defines this as a state in which the synthesis of data, systems, organizations, knowledge, and supply chains add value and strengthens competitiveness. Synaptic Business Automation is designed to enable transformation at all operational levels from manufacturing plant and operations to the management level. The linked data from manufacturing processes, plant operations, human resources, and supply chains can be organized, integrated, controlled, and analyzed to yield insightful decisions at each level, from the field to corporate management.


The solution includes strategic consulting, simulation technology, and automation technology to enable profitable and sustainable growth, which the company estimates to be worth between $10 million and $100 million per year for a typical refinery.

 

Operational Excellence

Simon Rogers, Head of Advanced Solutions Business Division, Premium Solutions and Service Business Headquarters, discussed the operational excellence transformation that can be achieved through collaboration and co-innovation. According to Mr. Rogers, operational excellence involves a multi-year journey that starts with a strategy for operational design. To support this journey, Yokogawa combines its own comprehensive operational and information technologies and services with KBC’s well-proven process solutions and consulting services to provide sustainable value. He explained that the four components for achieving operational excellence are:

  • Supply chain optimization
  • Operational risk management for effective shift team operation
  • Asset operations and optimization
  • Asset management and integrity

 

Supply Chain Optimization

The company uses an integrated optimization model to help ensure high levels of efficiency and productivity. This model encompasses planning, production accounting, production scheduling, supply chain management, and budget and investment planning. Key components of the model are KBC’s Petro-SIM process simulation and domain knowledge. These integrate supply chain optimization with process optimization, asset design and improvement.

 

Operational Risk Management

Key Functionalities in Operational Risk Management

Operations management is about using best practices and digital technologies effectively. KBC’s best practices and domain expertise in this area in combination with Yokogawa’s operations management solutions can help companies empower their operators, supervisors, and managers with datadriven
operational insights. Solutions include work instructions, field mobile tools, advanced operator graphics, alarm management, operator effectiveness benchmarking, shift handover, operations logbooks, and operator training simulators.

By using best practices in operations, companies can reduce unplanned shutdowns by reducing human error, avoid or manage abnormal incidents, and better manage changes with on-time shift reporting that enables shift team effectiveness.

 

Asset Operations and Optimization

By optimizing assets, clients can achieve operational excellence, sustainable growth and profitability. In just one example of this, Yokogawa worked with Shell to develop the next generation of advanced control and optimization technology called PACE (Platform for Advanced Control and Estimation).  Yokogawa combines PACE with KBC’s process consulting domain expertise, Petro-SIM process optimization software, and the VISUAL MESA energy optimizer to help customers optimize their production facilities.

 

Asset Management and Integrity

KBC consultants can provide training to help operations, maintenance, and other plant personnel improve their effectiveness. The consultants also help plant personnel reduce human errors that can cause safety and integrity issues and by developing and implementing best practices and operating procedures. Effective use of best practices can reduce maintenance costs significantly and increase asset availability. Yokogawa offers products and solutions to automate those best practices and procedures. In addition, Yokogawa offers a comprehensive suite of solutions to help improve reliability.

 

Profit-Driven Operations

Synaptic Performance Indicators Unify Vertical Organizations

Often, the C-level executives do not have visibility into how the business is operating because the KPIs are not connected or conflict with each other. Also, a lot of available information is not used. As workers retire and experience and competency decline, companies must adapt their businesses.

Masatoshi Nakahara, Director, Executive Vice President, Head of IA Systems and Service Business HQ,described Yokogawa’s Profit-driven KPIs business. He indicated that these KPIs, which Yokogawa refers to as Synaptic Performance Indicators (SPIs), need to be constructed systematically so that everyone can collaborate using consistent KPIs. “By connecting the data from the DCS, which is often not fully utilized, connecting operations to the business by eliminating conflicting KPIs, and capitalizing on Yokogawa’s consulting expertise; companies can improve profits every year,” he explained. According to Mr. Nakahara, “The profit-driven operation can change work processes and worker knowledge to improve performance by automating business processes for sustainable value.”

KBC’s domain knowledge is embedded into the structured operations, engineering, and management SPIs. These provide knowledge, best practices, and advice to help operations understand what is happening and get the insights needed to know what action to take to make operational and business improvements.

“By connecting the data from the DCS, which is often not fully utilized, connecting operations to the business by eliminating conflicting KPIs, and capitalizing on Yokogawa’s consulting expertise; companies can improve profits every year.”

 

Digital Dashboards Identify Opportunities

Digital Dashboards

According to the company, clear, concise, and easy-tounderstand digital dashboards, along with its expertise, can help customers identify opportunities, balance operational priorities, and motivate operators to improve operations. The Synaptic Business Automation concept includes role-based digital dashboards and synaptic performance indicators, combined with expert advice based on benchmarking, root cause analysis, and consulting for continuous improvement.

 

“Co-Piloting” for Operational Excellence

Yokogawa’s KBC Co-Pilot/OpX Consulting Services are designed to provide users with benefits equivalent to having an expert on site 24/7. This is especially important as knowledgeable workers leave the workforce. In a similar manner to how a co-pilot assists an airplane’s pilot, the KBC Co-Pilot includes implementing online models or “digital twins” of the asset. These continuously monitor and forecast unit equipment performance and energy consumption and share the information with centrally based experts that, in turn, share knowledge with and provide advice to plant staff.

The ability to extract real-time plant data enables operators to compare planned value to actual value and optimize profit in real time. This type of capability is becoming increasingly important due to the retiring knowledge base and demographics of the new workforce.

 

Co-Innovation

Yokogawa is developing and co-innovating these solutions with wellknown, industrial knowledge-based partners such as Shell, Baker Hughes-GE, and Chevron.

For example, Yokogawa and Shell are collaborating on PACE for advanced control and estimation. The platform combines multi-variable control, quality estimation, complex custom calculations, and operator user interface design into one application to reduce deployment time and simplify maintenance. With Chevron and others, Yokogawa is co-innovating a supply chain production planning solution. Yokogawa has also partnered with
Baker Hughes-GE to develop a molecular-enabled digital twin that combines GE analytics with that company’s experience on rotating machinery and jet engines.

 

Conclusion

With the company’s comprehensive Synaptic Business Automation concept, Yokogawa appears to be well-positioned to deliver value-adding consulting, technology, services, and solutions to its customers. These solutions leverage the combined technology and expertise of Yokogawa, KBC, and third parties, with the industry and application knowledge of their customers to help link plant operations to the business. This “synaptic” approach is designed to support effective co-innovation and digital transformation to enable sustainable plant and business performance improvements.

 

For further information or to provide feedback on this article, please contact your account manager or the author at jabel@arcweb.com. ARC Views are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permission from ARC.

Übersicht:

By Bob Gill‚ ARC Advisory Group

Keywords

Synaptic Business Automation, Co-innovation, Yokogawa

Summary

Industrial manufacturers operate in an increasingly complex and dynamic environment. This environment is characterized by intensified global competition, cost pressures, environmental compliance mandates, widening safety legislation, and ongoing cybersecurity threats. At the same time, the availability of a new set of predominantly IT-based technologies for plant operations creates opportunities for manufacturers to meet these challenges while achieving operational excellence; strengthening supply chain collaboration; and creating new, more profitable business
models.

Against this backdrop, ARC Advisory Group met with senior Yokogawa executives at the recent Yokogawa Users Conference 2018, Asia Pacific, in Bandung, Indonesia, to discuss Synaptic Business Automation, the company’s new guiding concept for its Industrial Automation & Control business. Synaptic Business Automation is the successor to Yokogawa’s well-known VigilantPlant concept.

Due to its importance to the company, Synaptic Business Automation was the official theme of the Users Conference, where Yokogawa president and CEO, Takashi Nishijima, formally introduced the concept. Further presentations provided details on how Synaptic Business Automation supports coinnovation with customers, helps connect organizations and supply chains, and provides expert domain knowledge. With Synaptic Business Automation, Yokogawa is widening its scope from plant process automation to business process automation and, in so doing, aims to create sustainable value for customers.

Synaptic Business Automation is Yokogawa's new concept for its Industrial Automation & Control Business. "Synaptic" (from biological synapses) represents timely and seamless sharing of information, while "Business Automation" represents automation moving beyond the plant process control level to create continuous business value for customers.

From VigilantPlant to Synaptic Business Automation

Unveiled back in 2005, VigilantPlant laid down a path toward operational excellence in the then-current context of Yokogawa's offerings and capabilities. In addition to the company’s well-established control system and field instrumentation, VigilantPlant encompassed new functions, including process safety, alarm management, asset management, production management, and optimization.

The company’s capabilities and the challenges its customers face have both evolved considerably since VigilantPlant was introduced more than a decade ago. This called for the company to formulate a new concept to better represent
Yokogawa’s Industrial Automation & Control business’ approach to understanding and meeting current and future process industry needs and challenges.

Synaptic Business Automation Launch at
Synaptic Business Automation Launch at Yokogawa Users Conference, Asia Pacific, in February

Enter Synaptic Business Automation. To understand this new concept, it’s best to break it down to its constituents. “Synaptic” relates to the biological structure that permits a neuron (nerve cell) to pass an electrical or chemical signal to other neurons. In an industrial context, Synaptic denotes the seamless communication and sharing of data and information between relevant entities such as the manufacturing plant, the supply chain, and the business enterprise to create sustainable value. “Business Automation” denotes Yokogawa’s new focus that extends beyond automating plant processes to considering a customer’s entire business.

Synaptic Business Automation should be viewed in the context of Process Co-innovation, Yokogawa’s corporate vision first announced in 2015 and an integral part of the company’s Transformation 2017 business plan. The company opened its Singapore Co-innovation Centre in 2016 to jointly develop new industry solutions with selected clients and technology partners. This continues to be an important node in the Yokogawa R&D network.

New Trends, New Challenges, New Solutions

For industrial companies, navigating this new terrain requires an understanding of a myriad of new technologies, such as cloud computing, artificial intelligence, and Industrial IoT, as well as drivers like increased global competition and fluctuating energy prices, while meeting critical cybersecurity, plant safety, and sustainability requirements.

Modern Business Pressures Drive Manufacturers to Become Integrated, Real-time Enterprises
Modern Business Pressures Drive Manufacturers to Become Integrated, Real-time Enterprises

For example, the downturn the oil & gas industry experienced in the middle of this decade severely constrained capital expenditures across many process industries, placing new emphasis on improving plant operational efficiency by maximizing the availability and performance of the existing assets.

This led to interest in more sophisticated plant asset management approaches, such as predictive and prescriptive maintenance approaches, often using Industrial IoT technologies.

Connecting plant assets to external parties, such as equipment manufacturers, service providers, and automation suppliers, provides a foundation for new business and service models. Remote pump diagnostics and “compressed-air-as-a-service” are two examples of new business models enabled by Industrial IoT.

We’ve also seen increasing proliferation of information technology (IT) in industrial plants, a trend that was just in its infancy back in 2005. Once considered only for the enterprise level, technologies such as cloud computing, data analytics, mobile devices, web user interfaces, SQL databases, Ethernet, and Wi-Fi networks are now being applied at the shop floor level
along with operational technologies (OT) like sensors, instrumentation, drives, valves, and control systems to increase plant efficiency, productivity, and performance.

Increasing Presence and Influence of IT at the Plant Level
Increasing Presence and Influence of IT at the Plant Level

This OT-IT convergence, as it has come to be known, is increasing the presence of IT companies in the previously closed and esoteric world of the
industrial plant. The automation suppliers that have long dominated this domain now find it beneficial to build new relationships with IT companies to more easily access the relevant technologies and tap into expertise. These relationships have been in forms such as technology licensing, alliances, and equity investments, all the way to outright acquisitions.

Creating Customer Value

With Synaptic Business Automation, Yokogawa aims to create sustainable value for industrial customers and help them realize profitable and sustainable growth. There are three aspects to this:

Resilient Operation – improving clients’ operational resilience against heightened business risks emanating from factors such as increasing cybersecurity threats, regulatory compliance mandates, and more strenuous plant and personnel safety requirements.

Optimized Production – reframing the (lengthy) operational phase of the plant as something much more than an afterthought to the capital construction phase and, accordingly, managing operational expenditures through initiatives such as Industrial IoT connections to critical plant assets.

Business Innovation – leveraging relevant technologies and domain expertise to co-create new business models with customers and partners and introduce environmentally friendly manufacturing practices that are essential for a sustainable society.

While strong customer relationships are an acknowledged enabler of business success, with Synaptic Business Automation, Yokogawa looks to take these relationships to even deeper levels through co-innovation activities.

As Dr. Tsuyoshi (Ted) Abe, vice president and head of Marketing Headquarters,explained to ARC: “Traditionally, technology companies engage with customers to assess their needs and then proceed to develop products. But this is an old model. In today’s world, it is not enough to listen to customers and understand their pain points. Instead, you must develop products and services together with customers and technology partners.”

Extending Capabilities

Yokogawa’s vigorous acquisition activities in 2016 greatly enhanced its ability to execute Synaptic Business Automation. These brought in industrial software technology and consulting expertise in the forms of Industrial Evolution(cloud-based, plant data sharing-as-a-service), KBC AdvancedTechnologies (oil & gas consulting services and process simulation technologies),and Soteica Visual MESA (energy management and optimization solutions).

Both Industrial Evolution (now known as Industrial Knowledge) and SoteicaVisual Mesa have been integrated into KBC Advanced Technologies which,while firmly a part of Yokogawa, continues to operate under the KBC brand.

Significantly, for the Synaptic Business Automation keynote presentation at the Yokogawa Users Conference, KBC’s Oscar Santollani, senior vice president,Visual MESA Software Business, shared the stage with Yokogawa’sShigeyoshi Uehara, vice president and head of IA Products and Service Business.

Recent Acquisitions Increase Yokogawa’s Capabilities to Deliver on thePromise of the Synaptic Business Automation Concept
Recent Acquisitions Increase Yokogawa’s Capabilities to Deliver on the Promise of the Synaptic Business Automation Concept

Mr. Uehara outlined Synaptic Business Automation and framed the concept in the context of Yokogawa’s Enterprise Automation Architecture that convergesOT with IT. He also discussed the company’s domain knowledge,consulting capabilities provided via KBC, cybersecurity services, and unique plant sensing capabilities, such as those provided by the company’s new wireless Sushi Sensor. Mr. Santollani, in turn, discussed how the KBC Co-Pilot approach involving Visual MESA Energy Real-Time Optimizer (VMERTO),the Petro-SIM simulation tool, and expert consulting can help customers meet their sustainability-related challenges to optimize energy use and reduce emissions.

Conclusion

Synaptic Business Automation represents a timely refresh for Yokogawa’sIndustrial Automation & Control Business. The focus on automating customers’business processes, rather than just internal plant processes,acknowledges that inefficiencies often cross organizational boundaries or can even extend out to the supply chain. While Yokogawa has always been a customer-centric company, the co-innovation aspect of Synaptic BusinessAutomation suggests an even deeper level of collaboration with both customers and technology partners. And with KBC Advanced Technologies, Yokogawa has access to proven software solutions and recognized process industry consulting expertise based on deep domain knowledge.

The new focus on co-innovating solutions recognizes today’s reality that no one company has all the necessary technology and/or expertise to solve customer problems, and that collaboration between companies is increasingly required to deliver effective solutions in an increasingly complex process manufacturing environment.

Synaptic Business Automation Combines OT, IT, Services, Collaboration, and Domain Expertise
Synaptic Business Automation Combines OT, IT, Services, Collaboration, and Domain Expertise

Like VigilantPlant, rather than just a slogan, Synaptic Business Automation represents a long-term, strategic approach for the Yokogawa Industrial Automation& Control business. As such, it will be important for the company to ensure that key stakeholders – notably its own staff − are well versed in the intention and ideals of this new concept. That will help enable SynapticBusiness Automation to enter and become part of the industry lexicon in much the same way as VigilantPlant did for well over a decade.

For further information or to provide feedback on this article, please contact your account manager or the author at bgill@arcweb.com. ARC Views are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permission from ARC.

 

For more information about Yokogawa Users Conference, please click here.

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