What did 2015 mean to Operational System?

As we enter the final weeks of 2015, did it live up to what we expected, what trends did it star to cement into Operational System design.

These are just some of observations I have seen:

1/ Shift to significant operational transformation programs, vs just projects, as accelerated in the second half of 2015. Certainly we have seen a lot of projects initially started or investigated as projects in 2014, in 2015 reemerge as multi-site, multiyear transformation programs. With the understanding that these programs are on journey both in technology, but also operational goals/ outcomes, and culture.

Certainly a couple of us have seen a significant amount of time allocated to evolving these opportunities working with the customer to help define their outcomes, the approaches, this has been and is still continuing as educational process for all involved. This is fundamentally changing the engagement models between end user vendors and engineering houses as a partnership, requiring changes on both sides.

2/ Cyber Security/ Application Security: This continues to grow as a huge area of interest, but this year it shifted not only how to secure, but how to maintain successfully, evolve their business and agile operations in a tighter security model. Realization that cost is not just in setting up a secure operational environment, but the cost of evolving and sustaining it while maintaining an agile business requires a strategy on it’s own.

3/ Operational Awareness/ Effectiveness: Understanding, not the “aging workforce” but the transformation in both “workforce culture/ approach” and transformation in “Workspace”  are real. That today's and last ten years of operational systems will not satisfy the agile decisions that required, but also the changing workspace culture and methods. The amount of workshops and strategies sessions I have asked to be involved in 2015 was three times that of 2014, and they were clear strategic discussions around people and how people will operate in the future.

4/ Understanding and reality of Internet of Things: The hype has been here and continues around IOT. But there has been some real sole searching in many industrial companies to understanding what it means to them. Many it dawned as the operational alignment end efficiencies they have in the “walls of the plant” now can extend to the “mobile plant”. In Oil and Gas, and Mining moving to include “extraction” wells, equipment in the operational process in real-time. In many other industries, it moved the mobile receivables plants, distribution trucks and then the distribution centers, etc. to be included in the “end to end” operational control.

5/ Realization that the Operational architecture of the future near and long term will have Internet and “cloud” as a natural part of it, and we must design the security, and systems assuming on premise and off premise architecture.

All of the above does surprise us, based on the trends, but it is good to see the shift from talk to reality. I would expect that 2016 this strategic journey programs to increase. Certainly the scope of operational responsibility is changing include a end to end supply chain, that means move outside the plant walls with the traditional systems, and we will see the alignment of Process operations and utility operations (power) into one operational strategy and control.   

Have a very happy holiday season and may 2016 continue the momentum to deliver operational solutions that will handle the "operational transformation" happening around us.

Help Operators move from “Coping” to beyond “Optimizing”

This is a great blog from Stan DeVries, really opening some of the challenge thinking.

"A recent meeting with a customer discussed the best practices for centralized control rooms and integrated operations centers.  They summarized 4 levels of operator performance:

•         Coping
•          Aligning
•          Optimizing
•          Stretching

While the focus of the meeting was on optimizing, the customer pointed out that we must enable the newer operators who begin by “coping”.  It is worthwhile to consider the differences between these 4 levels:

•         Coping requires high concentration on operations activity and events, where the operator has little flexibility to adapt to teamwork with other operators.  The operator has been qualified to work in a centralized control room or integrated operations center, but they have difficulty to maintain pace.
•   Aligning requires moderate concentration, where the operator can safely and reliably adapt to most of the teamwork activity, but reaching team targets is still difficult, such as value chain efficiency or throughput.
•   Optimizing requires a different type of concentration, where the operator has learned how to cope and how to align, but now the operator focuses on achieving the team targets, and the targets change periodically – in some industries (e.g. power generation and natural gas liquids processing) the targets change every 15 minutes.
•   Stretching is achieved by “error free” operators who have learned how to beat the optimization targets.

The key question is how can operators achieve and sustain best performance?  A quick answer is more training, but too often the training paradigm isn’t adequate.  Best practices have shown that the effective method is treating the targets like a game, and applying newer visualization to support it.  Before we look at any example of a “game” or possible visualization, we need to consider the innovation in the training approach:

•          Training becomes holistic – the students learn about how to perform in team settings
•          Training moves beyond the classroom – classroom training is essential, but structured on-         the-job training becomes very important
•          Operator performance becomes less “private” – team performance is visible and shared.

So what can the new training experience feel like?  Consider an example which has been published in regional industry conferences, where the initial focus was optimizing energy across multiple sites and all operating shifts:

The dark blue diamonds is hourly efficiency performance over a wide range of throughput, across all sites and all shifts.  The magenta squares are the result of one month of teamwork, and the yellow triangles are the results after two months.  Please observe a few key characteristics of this experience:

• Very dynamic operating conditions
• “Blind” presentation – operator names are not shown
• Graphical context – instead of bar or gauge displays, operators see how their performance compares with others.

The operator is given other detailed displays both during training and for normal operation, but the exercise is focused on teamwork.  Consider the significant improvement in the above displays."

Virtual Expert Teams, Provide One answer to “Time to Performance”

We often hear of the aging workforce as a big problem, and certainly it is due to fact that it is not a evolutionary transition to next generation of workers it is leap to new generation of workers missing at least one generation. So from "baby boomers" to Gen Y or Millennials.

As has been stated many times comes with this a change in "Experience levels" of the job, and site, but correspondingly comes a change in the way they native work, engage with others sharing more, asking more, providing the opportunity to bridge this experience transition.

Last week in some discussions around Integrated Operational Centers (IOC) it was clear that IOC is not about bringing what happens field control rooms into a central location, the real transformation happens when experience and operational work transformation happens. Shifting to an operational experience where:

• Experience can be shared across sites, and workers through standard operational interfaces and experiences
• Shift to Exception based experience from monitoring, where the user interacts with the system only when required.
• Where planners, operational control, and subject matter experts can align, and collaborate in real-time, sharing the same view on a situation.

But it was clear that the companies making the big step are going further, and really introducing the "Flexible Operational Team " concept, shifting from an operator to a true operational team. From site workers who now are agents (eyes) to the rest of the team on site, to central control working closely with real-time planning and work order execution, to experts in maintenance, process, safety, and management providing the real-time knowledge and experience across multiple sites, and multiple situations. The diagram below shows this "flexible operational team" and the associated transformation in operational work across the team, due to new work ethic of sharing and asking.

But what we seeing in the market is some innovative approaches to solving this existing experiencing and the transfer, and it is through the use of “Virtual Experts Teams”. So what is this concept?

Key is to have these highly valued knowledge experts which could be across different aspects of the business e.g. asset management, process, planning, optimization, quality being empowered to work across the many enterprise production assets/plants. Today many of these experts are restricted in their contribution to their local plants, but a number of companies have started strategies which say we must leverage these people. These experts must be able to access the state, information of the plants in a consistent manner even though they may have never been there. They must also have the natural ability to collaborate with the local teams.

This means a local team is able to call upon the best experts relative to the situation they are dealing with. The expert is able to go online and access the plant situation in “near real-time” so they can see the situation while collaborating with the site team. They are able to drill in and do analysis, so as to draw upon experience and provide advice in real-time to the local team.

Now is this easy, I would say no, as just accessing the plant data is not effective, as the expert maybe over the other side of the world, never been to the plant and so the data will be in different measures/ context to what he expects. So in order to achieve this virtual team we need to have a “trusted information” system, where the data / information is a consistent context.

But the above concept is real, and is valid with leading companies currently implementing these "virtual communities" with subject matter experts on call across sites and situations. The operational team experience is not a "rip and replace" it is built on the existing automation/ supervisory systems installed in 90s, and 2000s, but now aligned with a validated model, and context. Plus a collaboration user experience where systems notify of "abnormal situations" and the controllers will share and collaborate in real-time, and virtual experts can access their view of the situation in real-time. Note the view of the expert may be different angle on the data relative to their expertise, 

But the system is NOT a one way information system, it is bidirectional, interactive experience with accountability, of action and role, with a built in ability to evolve the knowledge and experience of the system for the future.

Too often I am seeing slices of this Operational Team landscape, being implemented without realizing the whole picture to realize the paradigm shift in value.  

“Operations leaders know they have a problem but aren’t quite sure what the solution is.”

This statement continues to echo around the meetings I attend, the challenge is there are many parts to the dynamic situation we find ourselves and they are all converging at the same time.

The Top 3 operational challenges faced by executives tells us that functional silos of people and systems continue to frustrate them and they need help justifying potential solutions to address these challenges.

It also explains why software categories like Manufacturing Execution Systems has limited awareness outside the plant. Also the growing discussion around platforms to accommodate the variety and provide basis for absorption of differences, while applying consistent changes.

A big discussion last week with 3 different groups, but it all came back to trusted , validate data that decisions can be made on. It was clear that much of the recorded data when actually taken and moved to a basis for business decisions, that people had to stop with grand plans of information and knowledge, they had to go back to getting basics sorted with validate, trusted data.

While the diagram above indicates 48% had issues with collaboration across departments, (very true, just transparency and communication is an issue) but in two sessions it was clear terminology and alignment for these conversations was a basis for significant part of the problem. Between systems/ applications, and people.

What shocked me in the conversations was how people were taking a very pointed (local) approach to solving the issues of terminology and structure, and not looking at how to make it “sustainable innovation”. The models and approaches must not be “band aids” they must structured and sustainable, avoiding anything that is not “managed”.

The process of delivering goods and services better, faster and cheaper sounds simple but can sometimes be unpredictable and lead to shortages or surpluses. Over the past two decades, the supply chain journey has evolved through a number of distinct phases along with a shift in power from suppliers to customers. Over the course of this evolution, operations professionals have expanded their perspective and philosophy from an inventory-centric view in the 1980s to an order-centric view in the ’90s to a product-centric view today. As product lifecycles shrink, innovation has risen to the top of the CEO agenda. But product innovation cannot meet the business objectives of lifecycle profitability without supply chain process considerations.

Future operations professionals need to get involved in the product development process to enable both product and process innovation. The product lifecycle perspective becomes more important as it provides a holistic view across disparate enterprise silos to provide a coordinated response to the end-customer — who is the ultimate driver of demand. Integration of product lifecycle and supply chain management can provide fresh perspectives and critical insights that are often missed due to the extreme fragmentation of functions within the enterprise and across supply chains. This is the new frontier for value creation, an untapped area of opportunity to create competitive differentiation and growth for businesses

Making money is no longer from a transaction. It is from a customer experience for a lifetime.

As companies grapple with their own journey to “Operational Excellence” they must gain control on their information and data, otherwise the alignment and collberation, across teams, for actionable decisions will fail.

More and more of the problems we face today don’t have easy answers. Solving these hard problems require “integrative thinking”, a concept put forward by Roger Martin in his book, The Opposable Mind. Martin defines the term as follows: “The ability to face constructively the tension of opposing ideas and, instead of choosing one at the expense of the other, generate a creative resolution of the tension in the form of a new idea that contains elements of the opposing ideas but is superior to each”. Rather than accepting conventional tradeoffs where you choose either X OR Y, integrative thinking is about pushing the boundaries and searching for creative resolutions which give you X AND Y.