Chemical companies use the latest performance data to improve processes to stay competitive.
Like the rest of the industry, Atofina, a chemical giant, had to stretch itself and run it inefficiently. A few years ago, the $19.3 billion company (formerly Elf Atochem) began implementing a system that collects data from its manufacturing plants for floor staff to analyze.
Today, the system has evolved into a real-time performance management (RTPM) platform that business managers can use to view valve pressures, temperatures, flow rates and other data generated during petrochemical manufacturing.
By expanding access to data outside the factory's congeries, policy makers can quickly identify inefficiencies and address them. Such improvements are crucial for a challenging chemical industry that was struggling even before the recession hit.
"You can learn a lot by analyzing data, especially as you look for ways to improve," says Dwight Stoffel, chief electrical and instrumentation engineer at the Atofina facility in Calvert City, Ky. Stoffel was one of the first employees at Atofina to understand the potential of disseminating real-time performance data across the company.
RTPM systems collect timely data from different parts of devices and facilities and aggregate it into a database. "[RTPM] systems collect, aggregate and place the context around data in order to make better decisions," said Leif Eriksen, principal of consulting firm Industry Insights.
Atofina began its RTPM adventure in 1997 by installing OSI Software's Plant Intelligence application at its Calvert City facility. The initial investment was $100,000 in hardware, software, and installation. The experiment proved very effective. In 2001, the first full year the Plant used real-time Plant Intelligence data, 'we only reduced maintenance costs for parts by $363,000,' Stoffel says.
By last year, Stoffel estimated that Plant Intelligence had saved about $1.8 million in one-time savings, largely because it had the information it needed to make better decisions. And the savings continue. "I've saved more than $100,000 a year just by automating the reports," he says. He points out that it was not possible to do this before.
At the Calvert City facility, Plant Intelligence collects data from 17,500 points on the industrial network and forwards the data to the WAN through the firewall. Since its initial implementation, Atofina has purchased 80 Plant Intelligence servers and is rolling them out to hundreds of plants worldwide. With the system, company managers can analyze data and find ways to improve processes and reduce costs.
For example, in cases where safety and environmental issues are most important, Atofina managers can now go through the data to identify areas where safety issues may occur and take action before any failures occur. Plant Intelligence also allows Atofina's plants to share best practices.
Being able to make better decisions could allow Atofina to thrive in the next few years, while chemical manufacturers that don't adopt real-time technology could suffer or even die.
"Chemical companies are competing with suppliers from all over the world," Erickson said. "It's not going to be any easier. They have to do everything they can to increase productivity."
Most chemical companies do not need persuasion. For an industry that spends only 2% of its revenue on IT each year, Atofina, Dow Corning, Eastman Chemical, Equistar, Nippon Chemical, Quaker Chemical and others choose to invest their precious IT capital in RTPM. In addition to OSI, Aspen Technology and Lighthammer Software Development are the major RTPM players in this market.
RTPM data collection software applications are installed on dedicated servers, typically located in a company's industrial network, that control the manufacturing process. The information is transmitted to the WAN through the firewall. Because industrial networks are at the heart of operations, they must be protected. "Data only flows from the industrial network to the WAN, not vice versa. Complex firewalls separate the two." "Said Michelle Barlow, manager of Atofina Manufacturing Systems in Axis, Ala.
Dow Corning is another $2.6 billion company that uses Lighthammer Illuminator, another issue that adds overhead to the network. The company also plans to distribute Lighthammer servers to its factories around the world to authorize anyone in the supply chain to view and analyze the company's performance data.
But Kirk Royster, IT architecture manager at Corning Corp. in Midland City, Michigan, says the system won't have a major impact on network performance because Lighthammer caches servers. "This will reduce the impact on network bandwidth over the WAN," he said. If the information is not updated, you don't need to query the source database every time."
Fortunately, given that chemical companies are very cautious about IT spending, RTPM systems are not prohibitively expensive. Costs vary widely, but a company with $5 billion to $10 billion in annual revenue and about 50 factories is expected to spend about $5 million to $10 million on RTPM.
"If you don't have real-time technology today, you can get a decent return on investment just by installing a system," Erickson says. It will pay for itself in less than a year." Dow Corning hopes the business results and productivity gains from its first RTPM project will pay for the system throughout the company. Royster declined to give details, but said the cost of the Lighthammer application is only a small fraction of the IT budget.
Companies can further reduce costs by having a vendor such as Industrial Evolution host applications for them. Quaker Chemical, a Chemical producer with $300 million in assets, pays Industrial Evolution $3,000 a month to receive 25 points of real-time data. "It's cost effective, and we don't want to use salaries and people for real-time monitoring," says Joe Berquist, a product manager at Quaker in Consehocken, Pa.
To remain competitive in the chemical industry today, the ability to perform RTPM continuous improvement processes is essential. "If you don't have any sort of real-time infrastructure to monitor and manage their operations, five years from now, there won't be any chemical companies around," Erickson said.
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