Forecasting and Predicting, Must be a Cornerstone of the Modern Operational System

For the last couple of weeks Stan and I have been working with a number of leading companies in Oil and Gas, Mining, and F & B around their Operational Landscape or experience of the future.

Too often the conversations start off from a technology point, and we spend the initial couple of days trying to swing the conversation to the way in which they need to operate in the future and what their plans are around operations.

It becomes clear very quickly that there is allot of good intent, but real thought into how they need to operate in order to meet production expectations both in products and margin has not been worked through.

Over and over again we see the need for faster decisions, in a changing agile world, and this requires an "understanding of the future" this maybe only 1/2 hour. The time span of future required for decisions depends on role, (same as history) but it is clear that modeling of future is not just something for the planner, it is will become a native part of all operational systems.

This blog from Stan captures some of the necessary concepts.

  

Operations management systems must deliver better orientation than traditional reporting or decision support systems.  One important aspect of operations is the dynamic nature – there will be a journey of changing schedules, changing raw material capabilities, changing product requirements and changing equipment or process capabilities.

It might be helpful to consider desired and undesired conditions, using the analogy of driving a car on a long trip.  The planned route has turns, and it may involve traffic jams, detours, poor visibility due to heavy rain or fog; the driver and the car must stop periodically; and the driver may receive a telephone call to modify the route.  The following diagram is a sketch which displays how an integrated view might appear:

In the above example, the actual performance is at the upper limit for the target, and the scheduled target and constraints will shift upward in the near future.  The constraint is currently much higher than the scheduled target limits, but it is forecast-ed to change so that in some conditions in the future, the constraint will not allow some ranges of targets and limits.  This simple view shows a single operations measure with its associated constraints and target.

• At this stage, we propose a definition of “forecasting”: a future trend which is a series of pairs of information, where the pairs include a value and a time.  The accuracy of the values will be poorer as the time increases, but the direction of the trend (trending down or up, or cycling) and the values in the near future are sufficiently useful.
• In contrast, “predicting” is an estimate that a recognized event will likely happen in the future, but the timing is uncertain.  This is useful for understanding “imminent” failures.

The following diagram shows an example of estimating the probabilities of 5 failure categories, where the first (rotor thermal expansion) is the most likely.

Given these two definitions, it is helpful to consider industrial equipment behaviors.

• Several types of equipment, especially fixed equipment such as heat exchangers, chillers, fired heaters etc. exhibit a gradual reduction in efficiency or capacity, or exhibit varying capability depending upon ambient temperature and the temperature of the heat transfer fluid (e.g. steam, hot oil, chilled water).  While the performance is changing, the equipment hasn’t failed, although its performance might reach a level which justifies an overhaul.  In extreme cases, sudden failures can occur, such as tube rupture or complete blockage.  These benefit from “forecasting”.
• Other types of equipment, such as agitators, pumps, turbines, compressors etc. exhibit sudden failures.  These benefit from “predicting”.

One analogy of incorporating both “forecasting” and “predicting” is that it is like driving a car without looking forward through the windshield/windscreen, such as shown in the following sketch:

In the above sketch, the road behind the car is clear, but ahead, a potential collision will occur.  High-performance operations requires that teams prevent unplanned shutdowns or other events.

Convergence on Wisdom (applied Knowledge), and Industrial Analytics / Operation Intelligence grow in importance!!!

It seems like a while I have been talking about Operational Intelligence/ Industrial Analystics, and then the movment to Wisdom (Applied Knowledge) all as separate threads but I was asked the question last week:

 “how do they relate?” .

They are different, but all related to empowerment of operational workforce to make faster decisions, and take actions. As I pointed out last week one of the big drivers to platforms is to manage varience. We talk Supervisory, MES, Information, Simulation platforms, but as we pointed out must a “People Platform” that covers:

·         Collaboration between people

·         Supports the hosting of “Activities” with their embedded information/ knowledge and their associated actions.

·         Transformation of Information to Situation ally aware for the particular user interested/ interacting.

·         Management of Operational Work between team members

·         Notifications

·         Plus more

This will abstract the turnover of the workforce, abstracting the different skill levels, and experience levels, with embedded “Applied Knowledge (Wisdom),  so the experience is now in the system. A key concept for the this upcoming Operational Transformation.

Industrial Analytics provides the shift from the past through the present and into the future based on high fidelity models(from experience). Providing a new dimension to the workers tools, and thru the decision they are about to make. Combining the “Future”    providing answers to “what will happen!!!” with the recommended actions to take.

Providing the answer to “What should I do Next?” with experience, fore thought, and understanding. Operation Intelligence also aligns with this by providing a screens, presentation of the situation or “ know Questions” with context and awareness.

Operational Intelligence providing the worker an understanding of “Now” , where he is, and what the future holds, simple and clear. Increasingly I am being asked for this type of “Operational window” and view; it is not analysis it practical information around my current situation and immediate future. No configuration just a simple view of task or question provides the view and clear awareness, providing an answer.

Are these different experiences, No, they are all functional value expansions on each other, and should seen as building blocks in the road to providing and Operational Execution knowledge platform, with built in experience. Providing a foundation for absorbing turnover, transition in the workforce while maintaining operational consistency and efficiency.   

Work as we may not know it “Comments on the Future of Work and Employment “

Last week I was in California a number of people commented on my blog in January on 2020, and landscape, and I had to explain points. Is it the    future I believe it is becoming real in many parts of the world today especially the likes of China and South Africa where educated Gen X and Baby Boomers are in shortage, so Gen Y is stepping up into more prominent roles in the workforce. On the way across on the plane I was reviewing Morris Miselowski’s blogs, his specialty is future –vision since 1981. He had a good blog which would expand on many of these workforce

This is an extract from this Morris Miselowski’s Future of Work and Employment

“The good news is that there will be employment way into the future, there has to be. Things will always need to be done, built, sold, fixed, transported and accounted for and always will.

The other wonderful, or perhaps disconcerting news, depending on whether you’re a half full or half empty kind of person, is that we’re not going to need furriers, blacksmiths or elevator operators much anymore.

Now I know that’s kind of obvious, but these professions were great honorable and inspiring jobs in their day, using cutting edge technology and machinery to fulfill a society’s dreams and demands.

Tomorrow’s employment space, made up of a dwindling baby boomer cohort and increasing X,Y,Z and A generations will have 6 careers and 14 jobs. They will work towards the completion of tasks and project, not time allocation; in industries we cannot yet name, nor fathom, using skills that today are unimaginable.

By 2025, 60% of us will be working digitally and remotely, not tethered to a fixed workspace, but rather in a time and place that best suits the work and the people involved.

Some of us will work as intraprenuers, inspiring our host company’s internally. Others will work as solopreneurs shaping their own destiny and pioneering new paths forward.

Many of us will be working collaboratively co-creating locally, nationally and globally in virtual tribes, connected by a trillion digital things that bestow on us constant contact with, insight to and manipulation of, our physical and digital worlds.

Global unemployment will remain high as over the next three decades we add two billion people to our planet.

Despite this it will remain difficult for employers to find talented employees, as we move through a tectonic shift of inventing and reskilling ourselves to reshape and repurpose existing businesses and professions, as well as forging new horizon industries, practices, business paradigms, ethics and professions.

Education and training will remain a constant to grease this transformation of knowledge, the internet will continue to help to spread this information, but with the overwhelming mountains of data we’re drowning in, businesses and individuals will soon value “wisdom” more highly than gold and oil and professions and industry’s will rise to mine these riches.

Our most prized vocational possession will be our ability to span the duality of working simultaneously in a physical and digital world.

Tomorrow’s work landscape will also see the increasing use of robots, virtualization, telecommuting and 3D printing further blurring the intersection of human and machine and igniting the question of whether human or machine is best-fit for the task at hand and does it matter?

Standing still is no longer a viable option.

Every job, every profession, every human activity is currently being redefined. Those that are destined to succeed are now standing firm-footed on the precipice of change eagerly scanning their horizon searching for tomorrow’s possibilities and necessities.”

Food for thought as we look at the “Industrial Operations “ evolution that is happening, the debate that it could be a revolution, as the time span is much shorted than the traditional transitions in the industrial market.

“The Future is Here, It is just Unevenly Distributed!”

This statement caught my eye when reading and listening to feedback from this year’s ARC Conference 2 weeks ago. It came from a presentation by John Carey, Vice President of the Aviation, Industrial, Marine, and Energy Business at BP Castrol. Who followed up with another statement that got my interest, and is so true in what I am seeing:

"What keeps me awake at night is that everything that has made my organization successful today will block our success tomorrow."

What a true statement! I just wonder how many people understand it. At a dinner conversation this week I was in a debate on the changing world, and it was clear to all of us that this is not just a technology changing time, but there are three factors all playing at one:

·    Technology is evolving in leaps and bounds, but the role of the internet has had some impact on the industrial world, but nothing compared to what it will have in the next 10 years, where it will change the whole nature of industrial architectures. This is not due to the internet, it is actually due to increased bandwidth of infrastructure and high availability that enables the internet to now leveraged as natural member of the industrial architecture, instead of traditionally for an offline access for information, and basic email, notification capability. The whole ability to share, reliably put systems in the “cloud” and depend on them will enable the designs to accommodate the changing behaviors in the modern business. Mobility plays into this, with the explosion in devices and access, we can now naturally work and act while in a roaming world.

·    Globalization of Business ( “Flat World”): You may say that is old, yes it has been a concept around for a few years, but it is still taking hold but is accelerating at a rapid rate. Chaning the behavior in searching for products, how we buy, how we live our lives, we no longer restrained buy county of regional boundaries, we travel at whim, we communicate, and buy across the world. We all behave in business in a global virtual world. There is not a day goes by when I would not be on at least one meeting where we minimum of 3 continents in the meeting virtually, this is why we don’t work a 9 to 5 day anymore. If businesses are to stay competitive the “holistic” global approach to value supply chain and making it flexible and agile is key, and this drives core behavioral changes.

·    Cultural Shift to Digital Native: enables culture and thinking, driving shorter times in roles, average of 6 careers in a working life, (not counting jobs). The ability multi task, search and filter collaborate with people in more active community vs the traditional day in the life of workers 10 to 15 years ago. This is not a technology change it is a fundamental behavioral/ approach and cultural change form the “baby boomer and 1^st half Gen x” to those who were born past 1970 who execute a day totally differently.

Not often in history do you get 3 significant currents of change happen at once with each of the three effecting and enabling the successful passage of change in the other, which will complete the significant transformation in the way operate in the business and industrial worlds by 2020 and 2025.

Mr. Carey discussed both current megatrends and specific technology trends that are already shaping the future of manufacturing. Megatrends include:

• Changing demographics and lifestyles

• Emerging networks of trust

• Hyper-personalization

• Digital everywhere

• Sustainability

According to Mr. Carey, today's technology trends in communications, transport, processes, energy, and materials are increasing both in terms of their globalization and complexity. “To succeed in this type of environment, manufacturers must innovate, but rather than actually being innovative in everything we do, we often talk about innovation as a separate department. Manufacturers also tend to manage their businesses from the inside out. The real issues are the discontinuities. How can you get your hands around them if you focus internally? Suppliers and customers must work together in strategic relationships. This requires deep trust."  "Today, the customer is king,” said Carey. "This disrupts everything: manufacturing, distribution, and supply chain." In the 20th Century, manufacturers simply designed, manufactured, and marketed their products using the “fire hose” approach. In the 21st Century, however, product design, manufacture, and distribution is increasingly being driven by the customer and his/her individual preferences and requirements.”

 

Stepping back this is not a shock we have seen this in the car manufacturing, but of interest is the rapid transition from managing the process to manufacture goods to “managing the product and that intern manages the processes”. By focusing on the product and value to the customer including quality, satisfaction and timely deliver of value to customer, the competitive position grows. So is born the requirement of “Flexible Operations”.  This is not a “nice to have” it will be a requirement to be competitive in this global market. This can be achieved through an aligned business from business strategy, through operations to process control. Aligned operational teams that span the value chain that enable realtime decisions.

A comment in the ARC conference in Orlando in Feb 2013 was:

"To meet 21st Century demands for mass customization, factories will have to become more intelligent and flexible. "In China, they are not just building more efficient factories, they're building flexible factories," Carey warned." For many leading executives, they feel they have reasonable control over their fixed capital assets not surprising as this mature, but what keeps them awake is the “operational team” the human asset alignment, combined with the agility required surviving in a global “flat “world.

In the mega trends, Carey talked about “sustainability” this is about sustaining the planet, with discussion at ARC conference supported the impact and importance of this moral trend. Yes, a moral trend that driven by customers and market beyond government regulation that consumer (which is the primary focus) has a growing desire to choose a service or product based upon capability and the one that is doing the most on the moral issue of sustainability. This means zero waste and zero emissions both in the manufacturing process and across the total lifecycle of finished products.

As we have discussed a lot in the last year and will no doubt continue, this is not just a technology evolution, it more of a behavioral, cultural evolution that will force a significant change in the way design operational and industrial systems.

Looking out at the industrial landscape, the future has arrived in some parts of the world relative to generation Y and rotating worker (e.g.| China, South Africa, India etc), for some industries many technologies are already here in techniques and materials etc, but not in their industry, yes people have a look outside their industry to see how to achieve the future. Example is the transport industry which leads the dynamic operational centers vs the mining industry that is just starting on that journey. Also in many cases the global business landscape of the future is here and is accelerating in adoption.  

Many companies are well down this evolutionary path changing the operational systems to align with the new business and cultural behavior, but others are approaching the challengers in the traditional automation thinking. It was encouraging to see these topics come to the surface at the ARC Conference in Orlando and be debated, it shows what I am seeing the growing recognition by executives of the extend of the wave change we going to have ride, over the next 10 years.

Dynamic Simulation needs to become a Natural Feature of the Industrial Operational Landscape

To empower operational teams, workforce, each role must understand the context of the future, as well as current state and history. In the traditional industrial solutions, the worker is provided with tools for understanding history and NOW. This is the same as driving a car by only looking at the dashboard of the car, and rear vision mirror. Can you drive the car without looking out 100 meters or longer into the future the answer is NO, you would miss judging the next corner?

So why do we think we can run plants in this same manner?

The leading companies are defining the operational experience of empowering the different roles in the plant operations with the ability to “understand the future”. This will then empower the user with:

·         Understanding of the NOW situation

·         Understand the History

·         An expectation of the future based on NOW situation

·         Access to Experience

The concept or words used to describe this capability is “What If” capability. The ability to have at the finger tips of the worker the ability to ask “what if” question and the system will provide the best estimate based upon the current state of the process/ plant, and history. This provides maybe a “times 10” in time look forward so that it provides another reference point for the worker to base their decision on.

An example of how the general day to day market has come to accept using simulation models as day to day is in the weather. I do a lot of ocean sailing; today a natural tool I use on the boat is weather simulation. On my Ipad,  I have two applications, which connect to a cloud application that will allow me to select a location, and run a number of weather simulation models, based upon the current condition. There are a few models with different characteristics that I use to 2 to 3 models and compare feedback, combine this with reading the weather maps, and do a “gut validation”. It is this future, plus my experience from the weather map reading plus applying local conditions such as mountains that allows me to gather enough information to make decisions on what to do. This effects safety, comfort etc, there were examples of friends on other boats that just listened to general weather broadcast especially in remote places, and they made decisions based on this, but these forecasts were over 1000s of miles and extremely general, and open for interpretation as they were line item. In the same situation,  I ran the models; play off scenarios “what if” based upon local navigation, mountains, and my boat. On at least 3 occasions,  these friends left and where caught with young families in life threatening situations. This is decidedly different to when I was a teenager sailing the Australian coast, where we only had the weather maps, and a number of peoples opinions, we got caught a couple of times in particularly severe weather especially 5 hours out. Today I am able to use the models to look 7 days into the future for a trend, and greater accuracy at 12 and 24 hours. Today these models are a natural part of my navigation tools, having on board capability to download the results of the model, and then tools to ask questions based upon routes I want to go, easy to interpret graphic experiences to see results. (As seen below the weather is overlayed on the charts and uses colors to show intensity, I can work through time forward 5 days by hour).

It is easy to receive model results even at sea by sending an email of current locations, areas I am interested by a text email and the results come back in a data file that I load into my local system with my boat parameters, navigation charts, and I can now easily see graphically the results layered on the navigation charts and ask questions, because of this simplicity to use I now use this many times a day to make and validate decisions.

So why, not on the plant? No matter the role, it could be maintenance, performance engineer, safety, operations, where decisions are having to be made, and experience varies, the ability to get these reference points is key.

This must use high fidelity simulation models to predict the future, but the capability of adding this to a solution must be small. Traditionally simulation systems have been offline, and large after thoughts, especially outside of the oil and gas industry. “Why cannot we just add this future capability similar to adding alarm or historic capability to a device supervisory control?”. The answer should be yes. This will require smaller foot print simulation, dynamic and libraries of simulation models for different devices/ processes etc. Again in the oil and gas world this has been done for years, and companies such as Exxon and others have built libraries of optimization, and simulation capability. All industries require this no matter the complexity, but to achieve reality it must be easy (a natural act) and rich this library of simulation models must be rich, and easy to apply, plus domain experts must be able to develop these models easily, these could be device / process vendors, domain experts, and companies. With the models naturally able to be applied to the automation/ operational platform as just another function.

Yes, dynamic simulation is one of fastest growing aspects of Industrial Operational Systems, as we design systems we must assume that this capability should be included.