Session two:

Digitalization offers new options –

digital solutions for old problems

Håvard Devold

Group VP, Digital Lead Oil, Gas & Chemical

ABB AS

Contents

• The Industrial Internet of Things (IIOT)

- Threats and opportunities of digital technologies

- Upstream to downstream – digital solutions for yield, cost, & safety

- Enabling digitalization with an IoT platform

• Cyber Security in the chemical industry

- ABB’s approach to cyber security

- ABB Ability Cyber Security Vision

• ABB Ability: addressing digital needs for the chemical industry

Improveent potential cases

- Condition based and digital maintenance

- Process performance improvements

A perfect storm

• Inaction is not an option…Revenues -40%, but OPEX only -9%

Aging workforce: 50% retiring in 10 years

Aging infrastructure: 55% US pipelines, > 50 yearsCybercrime

Source: Strategy&, part of the PwC network Source: Ponemon Institute, September 2016

Digital trends affecting the value chain

• Threats and opportunities

Source: Bain & Co, August 2016Significant impact Moderate impact

Digital technologies

Internet of Things

Big Data

Advanced Robotics

Smart plants

Digital engineering

3-D printing

Mobile apps

Omnichannel

Sourcing R&D Production Sales and service Distribution

Digital technologies are driving new innovation

• Media is focused on B2C but the “killer app” is in B2B

Virtual/augmented reality

Time-sensitive networking Big data

Cloud computing Cybersecurity Connectivity Blockchain

Software-defined machines Machine learning

Inexpensive computing

Upstream → Downstream

• Digital opportunities

Connecting the unconnected

• Wireless sensors for valves, motors, and other moving

machineryBenefits

Predictive maintenance

Longer asset life

Improved energy efficiency

Increased production

IT & OT integration

• The undiscovered country…

Data fusion, contextual awareness, alerts, insights

IT OTIoTDCS EAM

Distributed control system

Enterprise asset monitoring

ERP HRMS

Enterprise resource planning

Human resource management

system

Customers asking for Collaborative Operations

Continued access to expertise via digital services

CustomerOperations

Center / HQ

ABBCollaborativeOperationsCenter

Customer assetse.g. rigs, mills, vessels

Analytics and Visualization

Simulation

Analytics

Cyber Security

Cyber and safety

Safety Management

Operations and Technical Support

Alarm Management

Emission Monitoring

Energy Optimization

Performance Optimization

Optimization

Ops support Predictive maintenance

Condition Monitoring

Asset Health

Predictive Maintenance

Control

Control Centers

ABB Cyber Security Approach

• Security at the core of everything we do…

ABB addresses cyber security throughout the entire lifecycle and expects the same from our suppliers

Secure by DesignSecure by DefaultSecure in Deployment

Secure Products

SustainingMaintainingMonitoringManaging

DesignEngineeringFATCommissioningSAT

Secure Projects

Secure Services

Industrial IOT has Specific Challenges

• A Different Set of Requirements

Traditional IT Industrial IOT

What is being Protected Data Physical Process

Impact Area Disclosure of information; Financial Loss Safety, Availability, Financial, Environment

Security Objective Confidentiality, Privacy Availability, Integrity

Operating Systems Windows, Linux, … Windows at HMI, RTOS at field devices

Availability Requirements 99%99.9% - 99.999%(downtime per year: 8.76 hours to 5.26 min)

System Lifetime 3 – 10 Years 5 – 25 Years

Logging and Forensics Standard practice Limited

Patching Standard schedule; can be expeditedNon-standard; could be a long time between updates

Cybersecurity Threats : Old School vs AI

• How we think about Cyber Security

Old-school Approach New-school AI Approach

Malware Signature-based Predictive analytics

DDOS (Distributed Denial of Service) Monitor network-traffic Algorithms Auto detect

IoT & Endpoints Manual security updates Network Level Anomaly detection

Social Engineering Education on social hygieneSocial-biometrics and user based anomaly detection

There are no magic solutions; security maturity takes time

• Must engage and educate people, develop and deploy

processes, and design and deliver protected technology

3 Cyber Pillars:

• People, Process and Technology: each must be leveraged to protect digital systems

• People are critical in preventing and protecting against cyber threats.

• Organizations need competent people to implement and sustain cyber security technology and processes.

• Policies and Procedures are key for an organization’s effective security strategy.

• Processes should adapt to changes as cyber threats evolve.

People Process

• Technology is important in preventing and mitigating cyber risks.

• Technology needs people, process and procedures to mitigate risks.

Technology

There are two loops: Control loop & asset loop

Asset loop actions are often done manually todayRealtime

Cloud

Edge

Device

HybridCloud Analyze

SenseAct

Days/weeks/months

Control

Optimization

On

Pre

mis

e

Analyze

Sense

Act1

Multiple areas where digitalization can help

Improve yield, reduce cost, & enhance safety

Maintenance spend is the most significant area of opportunity

30%

12%

40%

• Amount by which well-executed digitalized maintenance can cut total operational costs

• In typical operations, the total cost of operations is equivalent to half the plant’s EBITDA

• Amount by which well-executed digitalized maintenance can cut maintenance costs

• Range of results observed: 15-40% in actual cost reductions

• Oil and gas industry’s net operational expenses in scheduled and unscheduled maintenance1

• Only 17% and 19% respectively in Norwegian Continental Shelf (NCS) where digital has been

embraced

It’s also one of the most overlooked

x

=

To derive the benefits from digital, maintenance mind-sets must change

Unrealized potential from digital… Due to maintenance habits unsupported by facts1

• Large amounts of data are being collected

• Intelligence to exploit this data has lagged limiting potential to: - Optimize resource use

- Carry out smart maintenance

- Improve operational support

• Majority of failures have a failure distribution unrelated to age and yet we still do maintenance as if the opposite were the case

And a shift to reliability-centered maintenance must be embraced

1. Reliability Centered Maintenance, Nowlan and Heap, 1978

It is also about knowing when best to apply digital solutions

• A fault condition that is detectable (directly or indirecty)

• Sufficient instrumentation to allow parameters to be observed

• Data about fault progression, to assess equipment condition

• Mature maintenance strategy and procedures

Benefits

- Predictive maintenance

- Longer asset life

- Improved energy efficiency

- Increased production

Connecting the unconnected

Prerequisites

1

8 7 6 5

You must also have a structured approach for change

ABB’s eight-step plan for transitioning to digital maintenance: Developed and proven with early adopters

Strategy based on cost versus benefit of system/equipment

FMEA/RCM Analysis Maintenance manuals input Define required sensing

Run to failure

Indicate critical equipment, failure modes and availability

Gather preventive maintenance activities and time intervals

Define sensors/solution to monitor failure mode on critical equipment

Preventive-based (PBM)

Condition-based (CBM)

Risk assessment of maintenance strategy

Prepare excel sheets with all maintenance activities

Implement systems(s) for field data collection

2 3 4

Identify gaps and overlaps

Continuous improvement

Maintenance status + asset integrity

Maintenance procedures

Compare failure modes

Changes in operation profile

System upgrades

Secure competence by training

Spare parts implementation

Use criticality to define whether criticality coveredby monitoring, maintenance activity or combination

Tune and adapt

Maintenance strategy

Establish procedures to sustain & improve Implement CBM/PBM follow-up Improve and refine

Re-calculate inspection intervals for PBM activities

X

Unlocking the production potential

Average performer Top Performer

‒ Plant availability around 99%

‒ Very few alarms; operators are alerted only when

action is required

‒ High degree of autonomy – the plant ”operates

itself”

‒ Monitoring of critical equipment

‒ Operators actively seeking to reach true production

potential

‒ Plant availability between 80 and 90%

‒ Large amounts of process alarms due to

process variations (exceeding EEMUA

recommendations)

‒ Low degree of autonomy with a significant

number of control loops in manual mode

‒ Lacking visibility into equipment conditions

‒ No real-time insight into true production potential

with digital process performance management

Improve production efficiency through different levels of insight

Enterprise

dashboard

How can data visualization help?

Production KPIs

Constraint overview

ServicePort:

Loop monitor

CEO: Full overview of company. «Our efficiency is apparently not on target, wonder what causes this…»

Drills down into a key performance indicators (KPIs) at a plant, process or device level.

Investigates why efficiency target is not reached and drills further down to find out what is constraining the production.

Digging further into this section, we can see that there are many loops in manual mode in the oil train in this specific plant. This appears to currently prevent max production.

November 29, 2017Slide 28

Let’s look deeper at one way you can use your data to guide improved

performance

November 29, 2017Slide 29

Benchmarking operational performance Visualizing for presentation and collaboration

• Key operational performance metrics defined by operational experts

• Automated data gathering and structuring in ABB Ability

• Comparison between multiple sites for one customer or towards fleet averages and best performers

• Analytics tools plugged into data stream for identifying improvement areas and defining solutions

Digitalization is creating an opportunity

• Collaboration will allow forward-thinking companies to reap

enormous benefits from digitalization

• Automation era

• Information era

• Digital era

50% productivity baselineP

rod

uct

ivit

y

+15% by automating (CAPEX investment)

65% productivity baselineP

rod

uct

ivit

y

+15% by centralizing and ERP

(CAPEX investment)

80% productivity baselineP

rod

uct

ivit

y

+15% by connecting experts and data

(OPEX investment)

Where to startAvoid trying to do too much too fast, avoid waiting “till everything is ready”

Be methodical and evidence-based

• You do not have to do it all at once to develop the “perfect, large-scale plan”

• Use well-selected and define pilot projects to fix specific issues and only roll out on a large scale once proven

- Proves / disproves initiatives

- Controls cost and risk

- Carry out smart maintenance

• Consider lines of sight to your data and identify the best way to attack specific problem areas

Define collaborationIdentify opportunities Pilot projects Evolve engagement