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3 phases of successful digital transformation strategy

Dec 08, 2019
8 min read
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Author: Adrian Park, Vice President Owner Operator Business Development, Hexagon’s PPM

As we approach 2020 digital transformation is increasingly being seen by the LNG industry as a differentiator and potential vehicle for growth against a backdrop of increasing geopolitical uncertainty, volatile commodity prices and sluggish economic growth. Firms are under pressure to protect – or increase – margins through any means. In almost every case this will require cost reduction and production efficiency improvements.

These gains must be realized relatively quickly too as competitors race to achieve the same outcomes. Improvement programs based on trial-and-error, particularly within a production environment, tend to be costly in time and money.

Mirroring other industries, firms are turning to data to better manage investment in change and improvements. Which is why digital transformation programs are becoming more common; according to the World Economic Forum, the Oil & Gas Industry alone could unlock approximately $1.6 trillion of value for the industry, its customers and wider society[i]. Similar value may be available to any industry vertical through digital transformation.

Applying Digital Transformation to operations

Businesses already collect data to support safe and effective operations, and to prove compliance of processes and product to regulatory authorities.

The goal of digital transformation is to extract actionable insights that can be applied to improve operational efficiency – and safety. As digital technologies mature, the volume of unstructured data being collected and actioned will grow exponentially. Firms will need technology and expertise to balance the increased complexity of their operations with safety critical processes.

But even with the most skilled technical team in the world, most organizations will struggle to deliver the returns expected. The learning curve associated with these new technologies is so steep that you cannot wait for engineers to develop required skills in house; to stay ahead of your competitors will require strategic partnerships that help you make sense of digital technologies and the data being generated.

The overall goal of any digital transformation program is to make all of the right data available at the right time in context with the work undertaken – and to ensure all your employees are working from a single version of the truth. Interoperability across the operations IT landscape will be critical to maintaining data throughout the entire asset lifecycle.

Building a Connected Worker strategy

Digital transformation is about collecting data and applying insights at every part of your business. Analysis and insights are not purely for defining corporate strategy – they need to be applied on the plant floor too.

If you can get information into the hands of your front-line employees, you empower them to make better, safer decisions. But there are some significant barriers to overcome.

First, where is your data stored? How many systems do your employees need to access to find the information they need? The longer workers spend looking for information, the less time they have for their core duties. There is also an increased risk of mistakes being made as information is manually copied between systems.

The second issue is how you provide access to information. For maximum efficiency, they need access to data wherever they are. This allows connected workers to take action quickly – without leaving the production floor.

In order to make information available to everyone everywhere, your digital transformation strategy will need to focus on consolidating data wherever possible and providing interoperability to key systems where appropriate. This may mean re-engineering existing systems and integrating others to provide links and a common portal that reduce the number of places a worker needs to look for information.

To make workers truly connected, these systems also need to be available ‘on the move’. The majority of employees (81 per cent) already own a smartphone[ii]; your firm can tap into employee experience of using mobiles to provide devices and apps that can be put into use with minimal training. 

This approach offers several significant benefits; a reduced learning curve because employees already know how to use mobile devices, increased data accuracy as data is captured in situ, etc.

But most importantly, providing mobile access to key operations data independent of the source system means that workers have access to the information they need quickly and effectively – without leaving their post on the production floor. And don’t forget - a truly connected worker has access to contextually relevant data. Observations and notes can be recorded immediately, eliminating the need to manage cumbersome paper in the field and transcribe details later.

Typically there is a drop in productivity at the beginning and end of every shift. The outgoing manager must complete their notes and records ready for handover – and the longer they are away from their core responsibilities on the production floor, the more productivity is affected.

The same is also true of the incoming shift. Output will be impaired until the shift manager is able to access information relating to observations and priorities from the previous work session. They will also be unable to assign tasks or provide advice about safe working until that discovery is complete. If the manager must leave the production floor to obtain that data, the loss of productivity is extended.

With accurate, real-time data literally in the palm of their hands, connected workers are fully empowered to make smarter decisions - even at the individual level. Improving individual productivity and efficiency will have a large cumulative effect across the whole business.

Realizing increased productivity and output with Shift Excellence

No matter how safe your production line, workers always face an element of risk. Machinery, chemicals and the general operating environment all create potential dangers that need to be recognised and mitigated.

Usually, risks are highlighted during assessments, either before or after work has begun. These risk assessments are further augmented by observations each day in the form of shift logs. The log is an important tool for maintaining compliance and raising standards in day-to-day operations by keeping a record of observations and activities throughout the shift.

Like any record-keeping, shift logs are more accurate - and therefore useful – when completed in real time rather than waiting until the end of the shift. Handwritten logs are often hard to read and cannot be distributed and summarized. Accuracy is vital for achieving true shift excellence and capturing logs digitally at source is the best way to achieve this,

First, accurate records prove that all work complies with corporate guidelines and applicable laws. Increased accuracy also allows you to identify – and rectify – non-compliance or poor practices early.

Second, improving accuracy and quality of logs also simplifies the end-of-shift handover process. The incoming shift manager knows they have all the information available about outstanding issues, and any remedial work already undertaken.

By granting mobile access to shift log information, any authorized employee can read the latest safety briefings. Everything they need to know is available in the palm of their hand – so they can start work safely, immediately.

Employees can also add observations, instructions and warnings, raising safety standards on the current shift. By keeping information flowing within the team and on to the next shift, everyone is better equipped to take decisions that protect them against accidents and incidents.

Using data access to foster a culture of shift excellence will have a significant effect on operations. Over the past 35 years, human procedural error has been directly responsible for 321 fatalities, 1165 injuries and more than $150bn losses in manufacturing. Anything your organization can do to minimize those losses should be welcomed.

Meeting the challenges of the future today

Digital transformation and data are key to addressing the challenges your business faces in both short and long term. Improving working standards on the plant floor will yield immediate savings and efficiencies as well as reducing risk. And restructuring operations behind the scenes will help to create efficiencies and savings that deliver year after year into the future.

It’s just a question of knowing how to invest, and the platforms best suited to help you meet those goals through improved consolidation, integration and availability.

Click here to take the next step of your Digital Transformation journey.

[i] Oil and Gas: on the cusp of a digitally fuelled new era – World Economic Forum - http://reports.weforum.org/digital-transformation/oil-and-gas-on-the-cusp-of-a-digitally-fuelled-new-era/

[ii] Mobile Fact Sheet – Pew Research Center - https://www.pewresearch.org/internet/fact-sheet/mobile/

Writer Bio

Adrian Park is Vice President Owner Operator Business Development for Hexagon’s PPM Division. Hexagon’s PPM division empowers its clients to transform unstructured information into a smart digital asset to visualize, build, and manage structures and facilities of all complexities, ensuring safe and efficient operation throughout the entire lifecycle. www.hexagonppm.com