The rapid pace of change has been enough to give the industry whiplash. Geopolitical realities are disrupting operating practices. Increasing complexity threatens already squeezed margins.
There’s relentless pressure to cut costs whilst increasing productivity. Hazardous events have induced rigorous compliance requirements. These factors have made operational excellence critical. The need to reduce risk, increase productivity and cut costs is the new industry baseline.
The advance of digitalisation
Achieving operational excellence requires everyone to consistently make the most effective decision. However, the risk-cost-productivity equation is a delicate balancing act, and increasing productivity without considering the impact on risk is too easy – and dangerous.
Fortunately, digitalisation offers major promise. In its 2016 Global Industry 4.0 Survey, PwC claimed: ‘Industry 4.0 will be a huge boon to companies that fully understand what it means for how they do business. Change of this nature will transcend your company’s boundaries and lead to a complete transformation of your organisation’.
Consultants at Accenture agree: “digital technology brings more than incremental improvements to operations. It has the potential to transform plants, enable operational excellence, and disrupt the competitive landscape in the industry.”
Advancement of technologies like smart sensors, machine learning and AI is breath-taking. They promise greater IT/OT convergence, making the Industrial Internet of Things a reality.
They also promise to unlock further business process integration internally and across the supply chain. For example, by automatically assessing asset health, recognising patterns that lead to failure, delivering alerts and triggering maintenance processes, operators can beat the risk curve, optimising productivity.
Danger ahead?
Digitalisation is being linked to better decision-making, improving safety and productivity, whilst increasing asset uptime and reducing costs.
Viewing digitalisation as a silver bullet is a mistake. It’s a dangerous assumption that we can point analytics at disparate data, apply some machine learning and expect actionable insight. Recognising that the digitalisation hype comes with a potential for disappointment is important.
Back to basics
For those of us on the frontline during the ‘dot.com’ hype, the digitisation excitement feels like déjà vu. To avoid the same mistakes we must ensure technology is used to solve real business problems.To ensure digitalisation delivers, operators must return to the basics of technology planning and implementation. Organisations must define their objectives, then look at the data and insight needed to support them.
Take risk management – an essential business goal. People at the frontline intervene to operate, maintain, inspect and fix equipment on an asset. It’s a changeable and dangerous place to work. But information on the multiple components of risk is managed differently by different parts of the organisation, held in silos and mostly, inaccessible. A holistic, up-to-date view of risk is not automatically available. Instead decision-makers are forced into manual searches for data and using their experience to judge risk.
To gain visibility, control risk and ensure operational continuity across the business, everyone must understand and manage risk against the same criteria — with a practical understanding of how their decisions influence risk.
The dynamic nature of risk makes it difficult to connect the performance of safety systems and processes to the business’ operational reality. Here, operational excellence platforms come to the fore.
