Digital Transformation across EPC Functional Value Chain
A CHEMTECH EPC World 2019 Conference Throwback
By Jayati Mukherjee

While 4th industrial revolution is underway through digital transformation, the manufacturing sector is also aligning with it with the effective implementation of various digital technologies viz. IIoT, digital twin, artificial intelligence, machine learning, augmented reality, virtual reality, and many more. The plants have to be designed, engineered, and built with the required infrastructure in mind to derive the benefits of achieving higher productivity, higher efficiency, lower plant downtime, effective maintenance, and at the end to make more profit for the company. Various stakeholders and partners have to bear in mind that the fruition of digital transformation is only possible, if it can be foreseen and implemented right from the design and engineering stage. With this context, Chemtech Foundation has organized Chemtech EPC World 2019 Conference in Mumbai on 20Th February 2019. The program was themed on digital transformation across functional value chain in EPC industry. The program was chaired by eminent industry icon Mr. B Narayan, Group President (Procurement & Projects), Reliance Industries Ltd & Chairman, Central Advisory Board, Chemtech - EPC World Expo 2019. The program was also star dusted with multitude of industry leaders as keynote speakers, guests of honour, and panelists. This article encapsulates the insights shared in the conference.

(L to R): Mr. Rakesh Verma, Chief Executive Officer, Simon India Limited; Mr. Jason Urso , Vice President - Technology, Honeywell Process Solutions; Mr. B. Narayan, Group President(Procurement & Projects) Reliance Industries Ltd. & Chairman, ChemTECH - EPC World Expo 2019, Central Advisory Board.; Mr. Sanjeev Chopra (IAS) Principal Secretary, Industries Dept., Govt. of Odisha & Chairman, IPICOL; Mr. Maulik Jasubhai, Chairman & Chief Executive, Jasubhai Group & Chemtech Foundation; Mr. Mohamed Takhim, CEO, ECOPHOS; and Mr. Manish Chandra, Managing Director - Accenture Strategy, India @ the Inaugural Session

Why Digitalization for EPC Industry?
The very objective of Digitalization for a company is to achieve higher productivity, higher efficiency, lower plant downtime, effective maintenance , and in final quintessence - to make more profit. For manufacturing industry to reap all these benefits through seamless digital transformation, at the very first place the plants have to be - built in, engineered, and designed accordingly. Traditionally, since long, EPC industry has been working using various manual methods viz. building 3D models, document design, etc. However this manual mode is not going to help anymore towards the digital transformation. This is where digitalization of EPC industry plays a very crucial role. On the path of digitalization, EPC industry intends to leverage a fairly newer concept - totex. To elaborate further, totex is the total life cycle cost of the plant comprising of two important expenditure elements: capex and opex. Traditionally, EPC contractors were more focused on capex as their eyes were on the escaspe from the project site soon after the delivery of the project to the respective customers. However, the project majorly runs for years at site after delivery, thus incurring operations-and-maintenance cost. So EPC industry, ever diligent for the need of continuous improvement, contemplates to leverage digitalization boon to realize greater efficiencies in the deployment of capital as well as the subsequent operations and maintenance throughout the plant life cycle.

Digital Twin - an emerging need:
According to customers or project owners' point of view, the very definition of a successful project is the one which can be safely operated with highest level of efficiency in the productivity. Along with focusing on these parameters, it is also very important to consider how to make the projects less complicated and reliable, and at the same time to offer it at a reasonable price. This requirement can be effectively met through the use of data science which includes data acquisition, data management, and analytics to make an informed decision towards improved plantproductivity and plant -efficiency. In order to achieve this milestone, EPC fraternity should work towards providing the project-owner a dataset in the form of digital twin, not in the form of documents. It will enable plant-owners to tuck the operational data right from the beginning. This collected information can then be fed into the digital twin. Machine learning technology can further be applied in the manufacturing state to improve the plant efficiency & productivity, to manage the assets better, and to make a seamless transition of a deliverable project into a manageable product. For creating a digital twin, it is expected that the EPC stakeholders viz. engineering companies, equipment suppliers, technology providers, licensors, and construction contractors along with the project owners to work in tandem.

Chemtech EPC Conferences: Recent TimeLine

Block-chain technology - another prime attention grabber:
This technology is nothing but the distributed data management to ensure quick and seamless data movement from one entity to another, thus ensuring integrity and security of data at the high speed. Although this block-chain technology has not been applied very extensively so far, it can be implemented very effectively during the course of project implementation. The ultimate aim for this transformation is to enable the project owner to provide a product, which can be used throughout its life cycle more effectively.

Getting the full value of digitalization:
Indian companies are moving towards digitalization, but mostly through disjointed and standalone initiatives. Even though they are good starting points, disjointed initiatives do not ever deliver the full value. To get the full value, starting point should be the platform journey that offers touch-less and lean operation with its user-centric approach. This means the platform serves the users, instead of users using the system. It delivers:
  • Enhanced productivity
  • Superior user experience
  • Embedded process intelligence with intelligent decision support system through analytics and artificial intelligence &
  • Seamless collaboration
In today's age, most of the companies across geographies tend to look at functional optimization. However, for that to happen, seamless collaboration with internal and external ecosystem is of pivotal importance.

B Narayan
Group President (Procurement & Projects), Reliance Industries Limited, and Chairman Central Advisory Board,
Chemtech EPC World Expo 2019.
"4th industrial revolution is underway and the world is in the process of transforming into the digital world. In line with this trend, manufacturing sector is also moving towards digitalization. Traditionally, the EPC industry has been working on the project delivery in the form of documents such as building 3 -D models, document-designing, etc. But is this going to help us achieve the objective of digitization in the manufacturing sector? Probably not; and that is where the digitalization of EPC industry can help us achieve this in the future while implementing the projects"

EPC Industry can leverage digitalization through various value-adding applications viz. BIM (Building Information Modeling), platform journey with open source tools, cloud, mobility, analytics, etc to each individual component of the EPC chain to signify functional productivity enhancement and profitability improvement towards plant lifecycle optimization through the following combination:

a. Driving data in document management
b. Collaboration with internal & external stakeholders
c. Systems & process improvement

Engineering - on its way to digitization: Contextually, these days integrated project management is of prime importance in manufacturing sector as it ensures all the phases are properly sequenced, strung together, and wellcoordinated through apt resource and stakeholder management. It is not only about covering the engineering, procurement, construction, and commissioning phase, but also to bring in the operations and maintenance phase so that the assets can be managed across their lifecycle. In the new digital world, a successfully integrated project management is just not possible without having digitalization enabled EPC 4.0 in place. Today digitalization of a plant is a very big priority for the project-owners. Intelligent information management is on the vogue. To have successfully integrated project management in place, a few very important aspects are to be considered. They are: safety aspects, plant availability, equipment reliability, product quality, schedule adherence, cost management, etc. However when digitalization in integrated project management is deliberated, the real challenge lies on the fact that it is data driven and how data drives value in engineering and operation. Therefore, it is important to get control on all the data sources in order to embark on plant's digitalization journey. Blends of interrelated facilitating parameters towards it are:
  • Integrated digital workflow and engineering solutions through 3D, 4D , 5D systems covering time, cost, and resource dimensions
  • Application of IoT and smart sensors
  • Application of big data analytics and advanced algorithms for knowledge management.

(L to R): Mr. Navtej Garewal, EVP- Head of India, Aveva Information Technoloy Pvt. Ltd. ; Mr. A. Srinagesh , Senior Vice President, Project Procurement, Reliance Industries Ltd.; and Mr. Are Follesdal Tjonn, Senior Vice President - Software, Aker Solutions @ the session on Engineering and Integrated Project Management

(L to R): Mr. Ahmad Abdelrazaq, Executive Vice President, Samsung C & T India Pvt. Ltd.; Mr U. V. Phani Kumar, Chief Executive Officer, Howe Engineering Projects (India) Pvt. Ltd.; Mr. Rakesh Verma, Chief Executive Officer, Simon India Limited; Mr. Suneet Prakash, Head - Group Projects, Aditya Birla Management Corporation Pvt. Ltd .; Mr. S. Anantha Sayana, Chief Digital Officer, Larsen & Toubro @ the session on Digital Transformation for Construction

Mr. Jason Urso
Vice President Technology
Honeywell Process Solutions.
"We are at the beginning of the new era of automation technology that unleashes the power of digitalization and creates a new generation of benefits. The first one is towards project standardization: how we can move from mass customization to mass standardization, eliminating significant amount of risk towards schedule and cost from our projects by taking advantage of knowledge. The second pillar of opportunity we see is: infinite longevity; because with today's technology, automation systems should evolve over time-age-and-place, deliver great new benefits but without losing properties that are built into the systems. The third pillar is: opportunity to harness the power of data, to connect it to knowledge, to make that more uniform, and to apply that across the teams and multiple facilities to deliver maximum performance, thus allowing us to sustain maxim um throughput"

However, to leverage the full potential of this digital journey, the project owners must be very clear on what they want and how they want that. This has direct impact on efficiency and productivity of the operating plant. Not only that, it saves cost overruns and schedule delays as well.

Procurement - revamping through digitalization: Digitalization of procurement is not only about IT; instead it is more of innovation. It is about optimizing the business matrix, as well as supplementing the procurement and contracting through laying a layer on traditional methodologies. To manage the project complexities, the orientation priorities get changed over the period of time from cost driven to schedule driven, to reliability driven, and then finally to operation driven projects. Therefore, managing these complexities is a critical task and digitalization plays a pivotal role in it. To extend furthermore, it is important to consider the business perspective of India as well as across the globe. India carries the third largest import bills for chemicals, which draws an inference towards a huge growth opportunity. With this context, it is important to bring in innovation and reliability into this whole space. Managing the structural cost in spite of having various issues is on the primary focal point. Application of cloud sourcing and big data analytics, supply chain management, vendor management and order tracking, inventory management, real time integrated schedule management with advanced algorithms, and customer engagement are the quotients to be considered along with the procurement challenges being faced by the PSUs and also the existing governmental policies in force.

Construction - future with digital footprint:Construction is one area where probing of digitalization is so far the least happened and the most required. For almost last 100 years nothing has been changed in the construction site. Therefore the question that has been aroused today is: how to implement the digital tools for construction and how to build the complete cycle of information exchange. Phase-wise implementation of digitalization through the application of smart technology to establish the big data, and then to one-step ahead - construction automation are in real consideration. BIM, IIoT, drone utilization, 3-D modelling, mapping, etc to oversee the real time project-progress are the enablers. A special emphasis are being put on the productivity analysis towards digitizing the plant & machinery through application of IoT and data analytics, urbanization of work force (skilled craft data), application of big data analytics, and advanced algorithms for resource productivity.

Conclusive take-away:When a user company procures a digitalized project, their ultimate look out in terms of result boils down to safe operation of the project with highest level of efficiency in productivity. Keeping this in mind, the points to really think through are: can these projects be less complicated, highly reliable, and deliverable at a reasonable price? Today quite a few disjointed standalone initiatives are happening in each compartment of EPC industry i.e. engineering, procurement, and construction. However, if they are not properly sequenced and strung together, they will not be able to deliver the full value. To get the full value through the implementation of digitalization, integration across the value chain is a must. Digitalization is presently at a very nascent stage in the EPC industry. Industry uses digital tools to a great extent in engineering & design stage; and their use is slowly picking up in procurement. However, the domain of construction needs attention. Although the digital tools are majorly confined to the engineering design stage, it needs to be emulated in procurement & construction too. The various aspects to be considered with regard to this are: step-bystep procedural sequence establishment for various manufacturing and service industries, strategic adoption for a business to gain competitive edge, digital maturity with the next-level targets, dovetailing the development work through capability need assessment to embrace digital ecosystem, reskilling the workforce towards it , and the associated arenas for EPC companies.

A recent survey indicates that the potential to improve profitability of EPC companies is majorly through leveraging the entire digital journey. Companies do not even have the option of not doing it, because not going the digital way will result in huge drop in profitability and sustainability. Digitalization will enable the EPC companies to acquire new business model opportunities through enhanced customer experience.