connect. collaborate. outperform. - putmanmedia.com · chief digital officer at abb. for example,...

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Connect. Collaborate. Outperform.Highlights from ABB Customer World 2017 March 13-16 in HoustonA Special Report by the Editors of Control

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TABLE OF CONTENTSEmbrace the fourth industrial revolution 3

Select I/O streamlines project execution 5

ABB Ability gives users tools to write digital future 6

How BASF advocates for cybersecurity 8

Choose the robot service offerings you need 10

Compliance just a gateway app for the FDA-regulated 11

Take operational excellence to the next level 14

Microsoft and ABB partnership creates cloud synergy 16

Turn CAD files into product in fewer steps 18

Alcoa Canada eliminates the middleman 20

A digital foundation for the chemical, oil and gas industry 22

Condition monitoring takes flight with wireless sensors 24

Regs, renewables and consumers reshaping electrical landscape 25

Operational excellence depends on digital discontent 27

Diverse industries feel the impact of technology 29

Bright oil and gas future will rely on innovation, efficiency 32

Utility CEO clears leadership path for women 34

Living on the edge: Consumers driving power grid dynamics 36

Connect. Collaborate. Outperform. – Highlights from ABB Customer World 2017

EMBRACE THE FOURTH INDUSTRIAL REVOLUTIONABB CEO Ulrich Spiesshofer describes the unbeatable combination of technology with peoplePaul Studebaker

When ABB was founded more than 100 years ago, people would have said it’s impossible for an airplane to fly around the world with-

out using a single drop of fuel. Last year, it was done by Solar Impulse 2, an inspiration for efforts to run the world without consuming the planet.

In 2005, who could imagine there would be 7 billion devices in industry connected to the industrial internet? And more than 25 billion by 2020. Today, a sensor on a motor can monitor its health and performance, prevent-ing downtime and lost production, enabling better up-time, higher speed and better output; increasing motor life by 40% and reducing energy consumption by 10%. Do that across 300 million motors, and the energy sav-ings equal the total output of 100 of the world’s largest power plants.

In 2016, Google artificial intelligence (AI) beat South Korean champion Lee Se-dol in four out of five matches for the world’s championship in Go. The same AI is expand-ing the roles of robots by giving them the ability to learn.

“These are technologies ABB stands for and applies in utilities, industry, transportation and infrastructure,” said ABB CEO Ulrich Spiesshofer in his keynote speech at ABB Customer World, this week in Houston. ABB is transforming, and is now globally number one or num-ber two in its four areas: number one in process control, motion control, power transmission and distribution, and number two in electrification and robotics, Spiess-hofer said. “We want to be your partner of choice, and

we will not rest our efforts to bring you new technology to serve you, when you need it, wherever you are.”

Over the past seven years, ABB has invested $10 billion in R&D, organic growth and acquisitions in the U.S. “We now employ 20,000 people and operate 60 manufactur-ing sites in the U.S.,” Spiesshofer added. “Here, ABB is number one for power grids and motion, and we’re the first global company to produce robots in the U.S.”

Energy revolution touches everyoneThe fourth Industrial Revolution affects everyone,

inside and outside industry. So does the revolution in energy. “Renewables are kicking into the grid, hand-in-hand with oil and gas,” Spiesshofer said. On the sup-ply side, utilities must cope with more feed-in points, longer distances, volatility and unpredictability. On the

“Digitalization can bring a quantum leap in utilization, where a few percent can make you a hero. If you stand still and say, ‘This is not for me,’ your competitiveness will be significantly deteriorated.” CEO Ulrich Spiesshofer deliver the opening keynote address at ABB Customer World 2017.


demand side, electric vehicle charging is growing, and data center power consumption is rising, he said. “Elec-trons must arrive safely, reliably and predictably at the point of consumption.”

The grid used to be simple, flowing predictably in one direction. Now a house might be an energy producer in the morning, a consumer in the evening, and overnight with an electric vehicle, a storage device, all depending on the time of day.

Power must travel long distances. The 40-year-old, 800-mile-long Pacific Intertie is being upgraded to 4 GW capacity, and is one of 220 such systems around the world. ABB is involved in half of them, using its high-voltage di-rect current (HVDC) technology for efficiency.

On the local level, after a Con Ed substation in Lower Manhattan was damaged by Hurricane Sandy, ABB up-graded it and eliminated 80% of its cabling by replac-ing copper networks with fiberoptics. Its footprint is now 30% smaller, and it has remote monitoring capabilities to streamline maintenance and improve reliability.

This industrial revolution is specialThe first three industrial revolutions—steam, the assem-bly line, and automation—replaced muscle power with machines. “The fourth replaces brain power with AI and computer processing capability,” Spiesshofer said. “It ex-tends outside the factory floor to every enterprise, so it has a much larger size and scope.”

Factories are familiar with automation, “offices not so much,” Spiesshofer said. Job changes used to occur between generations—a parent might be a farmer, their child a factory worker. “Now workers often must change careers within a generation,” he said. “We must seize this opportunity, but we must also take people with us despite the unprecedented speed of change.

“We need to avoid creating anxiety about work. His-torically, jobs may change, but the amount of work goes up. New jobs appear for solution developers, application engineers, software specialists, etc. We must invest in education, to be sure people prosper.”

ABB supports this transition with knowledge centers such as its Collaborative Control Center for Oil & Gas in Houston, and its System 800xA, which combines dis-

tributed process control, electrical control and safety sys-tems with collaboration.

In discrete industries, robotization is an opportu-nity to drive prosperity. “Combining robots and people safeguards competitiveness by increasing productivity,” Spiesshofer said. ABB has started up the first global ro-bot manufacturing plant in the U.S., in Auburn Hills, Mich. “Engineers are working with U.S. customers to do they want,” he said. “Demand is so high, we have al-ready announced an expansion of the plant.”

The future is up to youDigitalization is providing opportunities for all kinds of industries. Telecom, media and finance are well along, but factories, plants and utilities lag. “Industry still has great potential for improvement, which is an opportu-nity for you and for us,” Spiesshofer said. Plants need to seize this opportunity to drive maintenance, operations and control to new levels.

“ABB has been a ‘hidden’ digital champion, connect-ing 70 million smart devices in 70,000 control systems, but not known for it,” Spiesshofer said. “Now we’re add-ing an overarching digital architecture to combine them with human expertise: ABB Ability.”

Under this banner, AI, control and connectivity will drive digital differentiation, Spiesshofer said. “ABB Abil-ity combines the ‘digital Lego box’—the cloud, networks and devices—with domain expertise and process know-how to enable you to serve your customers better.”

“ABB Ability helps us assess, to know more about pro-cesses and situations, to predict what will happen, to make manufacturers able to produce more by avoiding downtime, improving processes, and running them in a smarter way to achieve OEE better than anyone in the world,” Spiesshofer said. “ABB Ability is ABB offering to work with you and bring it together. We are listening to you, so we can create the value that you want.

“Digitization can bring you a quantum leap in utili-zation, where a few percent can make you a hero. If you stand still and say, ‘This is not for me,’ your competitive-ness will be significantly deteriorated.”

“It’s a tremendous opportunity for prosperity, wealth and employment. Let’s write the future together, ABB and you.”


“Select I/O makes it possible to execute projects more efficiently by decoupling tasks and becoming more resilient to late changes and delivering projects faster and more cost effectively.” ABB’s Dan Overly on how single-channel I/O allows the company’s customers to reduce project cost and schedule risks.

ABB took a significant step forward to further streamline the execution of its customers’ au-tomation projects with the release of Select I/O

at ABB Customer World this week in Houston. Select I/O is a redundant, Ethernet-based single channel input/output (I/O) system that supports ABB’s next generation project execution model. Called “Intelligent Projects,” the new methodology streamlines execution while de-creasing complexity, project delays and cost overruns.

“The cornerstones of ABB’s Intelligent Projects execu-tion model are efficient cloud engineering, digital marshal-ling, standardization and automated data management,” said ABB’s Dan Overly, head of product management - oil, gas and chemicals. “With the release of Select I/O, all of the data points that make up a project, whether hardwired to the control system or part of an integrated electrical sub-station, are now able to be digitally marshalled into the Sys-tem 800xA architecture. This makes it possible to execute projects more efficiently by decoupling tasks and becom-ing more resilient to late changes and delivering projects faster and more cost effectively.”

Available for process automation and safety applica-tions, this extension to the System 800xA family of Flex-ible I/O Solutions allows for each I/O channel to be individually characterized using a plug-in signal condi-tioning module (SCM). This approach streamlines proj-ect execution in a number of ways.

First, Select I/O allows users to install standardized cab-inets with the bases for field wiring early during a proj-

ect, then select the type of I/O much later. Because the base hardware for every type of signal is the same, auto-mation system designers need only know an approximate I/O count at the design-freeze milestone of an automation project. Designers can then order standard—not custom—I/O module bases and enclosures, knowing that they have full flexibility to alter the mix of I/O types at any point in the project. Further, since control system hardware com-ponents are now standard issue, the factory acceptance test (FAT) of control system hardware is a thing of the past.

Second, because each channel can take on any signal type and be digitally marshalled to any controller, the need for physical marshalling—and all those cabinets

SELECT I/O STREAMLINES PROJECT EXECUTIONSingle-channel input/output system severs hardware and software design dependenciesKeith Larson


and terminations, too—disappears completely. In addi-tion to lowering costs and speeding execution, this has the added benefit of significantly reducing overall sys-tem footprint, which can be critically important in an application such as an off-shore oil rig where floor-space and even allowable weight are at a premium. Instrument installation techs save time, too, because they can simply land their wire pairs on the most convenient pair of I/O terminations and move on to the next.

The Select I/O solution’s network is connected via an Ethernet Fieldbus Communication Interface (FCI) with embedded redundant switches. In addition to being field ready with temperature ratings of -40 to 70 degrees C, each channel is galvanically isolated, current limited and has a unique “field disconnect” mode for added pro-tection and flexibility.

“With this extension of the ABB Ability System 800xA offering our customers get many new cost saving oppor-tunities for their automation projects,” said Ilpo Ruoho-nen, managing director of ABB’s Control Technologies business unit. “The flexibility that Select I/O brings with it will certainly change the way of executing projects.”

In the end, single-channel, configurable I/O does much to sever the serial design dependencies that plague the execution of automation projects. Hardware and software aspects of automation system design can proceed in parallel, compressing schedules and reduc-ing risk. The Select I/O offering complements a range of ABB software tools and new execution workflows to ensure that these streamlined, parallel engineering pro-cesses meet up in a fully tested, fully functional automa-tion solution.

What’s better than vast, deep and longtime experience? Almost nothing—except if that experience is organized, digitalized and

contextualized, so users can make better, faster deci-sions that improve performance, optimize applications, reduce downtime and increase profits.

This is the reasoning behind ABB’s launch this week of its ABB Ability platform, solutions, products and ser-vices. In short, ABB Ability encompasses the secure, digital deployment of the company’s decades of proven know-how in automation, electrification and many other technical disciplines to unlock efficiency and productiv-ity in each user’s applications and facilities, according to Guido Jouret, chief digital officer (CDO) at ABB.

ABB Ability was developed in conjunction with Mi-crosoft, which provides common technologies for en-abling device, edge and cloud application delivery. The

platform provides solutions in ABB’s three primary ap-plication areas: utilities, industry, transportation and in-frastructure. It also delivers secure, digital solutions on premises with fog computing from devices to the edge, in the cloud that goes up from the edge, and now in a projected “intercloud” strategy. Indeed, it’s among vari-ous cloud platforms where meaningful integration can be performed most easily, Jouret said.

“We’re at the beginning of a new age,” Jouret con-tinued. “There’s risk, of course, but there’s also great opportunity for capturing performance and value. ABB has delivered that value by connecting sensors to devices, and creating insight with analysis and as-sessment. These assessments are increasing, but this is where our competitors stop. ABB, however, makes the extra effort to harvest data, take control, and enable us-ers to do more.”

ABB ABILITY GIVES USERS TOOLS TO WRITE DIGITAL FUTUREExpertise, digitally deployed, will unlock efficiency and productivity in each user’s applications and facilitiesJim Montague


“We’re at the beginning of a new age. There’s risk, of course, but there’s also great opportunity for capturing performance and value with ABB Ability,” Guido Jouret, chief digital officer at ABB.

For example, ABB’s System 800xA distributed control system has long been able to sense, analyze and allow us-ers to take actions to drive efficiency. But Jouret reported that ABB Ability System 800xA and its new Select I/O pro-grammable input/output solutions will enable users to do even more.

“ABB Ability 800xA will do everything it already does, but now we’re adding self-learning so it can perform even better,” added Jouret. “We’re looking at integrating supply chains, and integrating with upstream and down-stream users.”

Know-how fuels digital in industryWhat qualifies ABB to play and lead in the emerging digital revolution? Jouret answered his own question by reporting that, “ABB has a $400-billion installed base and 150 years of domain expertise, so we have the con-text to know, for example, Tuesday is the day when a particular operator shuts down motors for maintenance,” explained Jouret.

“This is why the IT side typically struggles in indus-try because they don’t have this kind of experience. We have this expertise in mechanical and other systems be-cause we’ve been in these industries for decades, and have institutional knowledge from our users, and that knowledge is increasingly codified.”

Jouret report that ABB Ability is presently deployed in more than 180 applications, either existing ones that have been extended or new ones that are being built. Some of these applications and the results they are delivering:

Utilities have reduced installations times by 40%, maintenance costs by 50% and outage times by 50%. These applications include asset performance manage-ment, distributed energy resource management, main-tenance workflow management, energy market trading systems, automated digital substations, standard IP com-munications and microgrids.

Industry has improved productivity by 200%, reduced

energy by 30% and increased product life by 30%. These applications include connected robots, manufacturing executions systems, energy assessments, cybersecurity as-sessments, digital simulation for robot deployment, power quality monitoring and demand-response, distributed control systems, remote monitoring and optimization.

The transportation and infrastructure sector improved proactive detection of faults by 90%, reduced maintenance costs by 20% and reduced energy cost by 5%. These appli-cations include remote monitoring for ship electrical sys-tems, building automation, vehicle-to-grid demand/supply coordination, navigation optimization for fleets, EV charg-ing with cloud management, flash-charging for electric buses, and energy management for mega-datacenters.

“We’re coordinating demand and supply of power, such as saving ship fuel by 5% by analyzing local weather,” added Jouret. “The cloud can also help man-age power for datacenters, which can use up to 1 giga-watt of power. All together, ABB Ability has thousands of customers, such as PG&E, Dong Energy, American Electric Power, Shell, BMW, Cargill, BASF, Vale, Tata Steel, Microsoft, Royal Caribbean, Volvo and others.

“This is because ABB enables their uptime, speed, yield, reliability and safety. And it’s also why we’re excited to help them use ABB Ability to write and create new futures.”


HOW BASF ADVOCATES FOR CYBERSECURITYWhile the need for continuously monitored and updated cybersecurity is increasingly urgent, convincing some organizations to pay for it can still be difficultJim Montague

To help other end users show their managers, ac-countants and corporate leaders about the value of cybersecurity, Keith Dicharry, director of process

control and automation for BASF in North America, pre-sented “Making the Case for Cybersecurity Investment” this week at ABB Customer World 2017 in Houston.

“Our worldwide automation strategy at BASF begins with a pyramid of doing the basics before adding new functions and new technologies,” began Dicharry. “The fundamental tasks at the base of that pyramid include safety and security. The first devices that did machine-to-machine communications were pneumatics, and the strategies used by today’s controls aren’t a lot different. The change now is that digital devices can be hacked into, and there are people trying to get in.”

Unfortunately, instead of dealing with cyber probes, in-trusions and attacks in a logical way, Dicharry reported that many process industry users are suffering from “shiny things disorder” (STD). This is the desire to get smart phones, tablet PCs and other new technologies into the hands of staffers, and attract new employees, without first considering whether those new technologies will justify investment in them and if they can be applied securely.

“A lot of STD things are making their way to smart de-vices at BASF, so we try to slow them down some, and first find out if they’re really going to add value,” explained Dicharry. “There’s an attitude of ‘if you build it they will come,’ but I think that’s the reverse of what should be hap-pening. We’d started implementing mobility devices at

one of our sites, but we haven’t seen a lot of value in them yet. Our BASF4.0 team was established looking at these new smart devices, and they’re looking at applications that will bring value moving forward. We will need to address the challenges and obstacles to implement, but there is value in the technology.”

Data context neededDicharry added that BASF and other process industry players are suffering from an “everything, everywhere

“If we do a good business case and risk assessment for cybersecurity, we’re usually able to get funding,” Keith Dicharry, director of process control and automation for BASF in North America.


syndrome,” which seeks to make all data available at all levels, and do it everywhere, all of the time. “We’ve been collecting data for years, and we have huge volumes of it. It’s great to get it to the right hands, but I don’t think my COO is going to want all of it, or would even know what to do with all of it,” said Dicharry. “Each user needs data that relates their role. We also struggle with contextual-izing data, vetting information, and getting it in front of the right person at the right level for the best decisions.”

Because of industry’s misplaced focus on STDs and ev-erything/everywhere, Dicharry worries that some users may be making the foundations of their own automation pyramids less solid. “If we look at our distributed control system now, it’s apparent that we’re not fully utilizing what we already have,” explained Dicharry. “Yet we want more data, and we want to pay less for it. We’ve got plenty of data already, but it isn’t in context—it’s not valid for the guys in the trenches or for upper management.”

Seek smart securityDicharry reported that it’s important to beware of the two words “it’s secure” because most static security mea-sures will only be effective for a short time. “If they’re not set up correctly, smart devices are very accessible, vulnerable and hackable,” he said. “Most vulnerability testing firms are very successful at breaking into process industry companies and applications, which are also af-fected by human factors, too.” Often as not, these in-clude physical security breaches as well as purely cyber intrusions, he said.

From a big picture perspective, cybersecurity at BASF is handled much like it is at other process industry com-panies: by IT at Layers 3 and 4 of the Purdue Control Hierarchy Reference Model, which include manufac-turing execution systems (MES) and enterprise resource planning (ERP) systems. Layers 1 and 2 are outside of IT’s scope, and are typically handled by proprietary sys-tems. “Layer 3 is a gray area, so we want some kind of cy-bersecurity middle ground from there on down. There are very diverse solutions below Layer 3, but we can use some IT methods,” explained Dicharry.

“We wanted a better plan, so we set up our Automa-

tion Security Team and a Global Technical Engineer-ing Automation Security (GTEAS) team. We also got our IT security side involved to see what they could add to the process side. We found there were a lot of holes in that approach at first, so we also developed a com-bined operations technology (OT)/information technol-ogy (IT) Security Operations Center, which is up and running and meets monthly.

“We’ve also been developing a cybersecurity solutions catalog, so when we find vulnerabilities happening, we can pull a solution from the catalog that includes input from other sites, or we can develop a new solution with help from partners like ABB.”

Business case for protectionDicharry reported that one way he and his BASF col-leagues get their company to pay closer attention to cy-bersecurity is by getting them to understand that it’s very similar to process safety. “If people can understand that there’s a problem, it’s easier to justify funding for it,” he said. “There’s just no magic bullet. We can’t show return on investment on preventing cyber attacks, but if we do a good business case and risk assessment for cybersecurity, we’re usually able to get funding. We’ve even been able to add cybersecurity to BASF’s overall automation road-map, and we’re benchmarking where BASF is on cyber-security compared to how other companies are doing.”

“Once a cybersecurity risk assessment is done, it goes to the Automation Security Team, and then to senior management for funding. In our process, we don’t try to use scare tactics. We’ve had to deal with some issues but have been able to keep them from impacting production thus far.”

Dicharry added there were some early disputes within BASF over cybersecurity policy. “For example, we wanted to allow ABB to have remote access to some equipment to assist troubleshooting, but ran into a brick wall with cybersecurity experts. “Now, they’re getting more OK with managed remote access,” he said. “My advice is be realistic, not pessimistic. We want to make chemicals and profits, and we have to use technology that’s secure to do it.”


“We’re increasing uptime, reliability and efficiency throughout the lifecycle.” ABB’s David Quevedo explained the company’s a la carte offerings for robotic service at ABB Customer World in Houston.

Services are more valuable when they’re digitalized and connected. That’s the philosophy behind the ABB portfolio of offerings for robotic reliability

and optimization. “Connected Services is an improved way to manage and monitor your ABB robots,” said David Quevedo, technical support manager, discrete automa-tion and motion division, in ABB’s robotics business unit. “We have a 24/7/365 operation, so we’re always there.”

Quevedo explained how market trends have pushed the evolution of robotic services during his presentation at ABB Customer World this week in Houston.

“We are moving from cost-based to value-based ser-vice enabled by digitalization,” he said. “We used to be cost-focused, time-based and reactive. We’ve moved to value creation, where we want to tell you how every-thing’s working and be able to predict failures with re-mote monitoring that’s condition-based and predictive.”

With new tools and service offerings, ABB’s next direc-tive is to help customers to get to increased productivity, in-creased mean time between failure (MTBF) and reduced mean time to repair (MTTR). Digitalization is but a means to providing its customers with better peace of mind.

“Digitalization enhances our capabilities to support and add value,” explained Quevedo. “We are moving into the digitalization market. We’re increasing up-time, reliability and efficiency throughout the lifecycle. In 2007, we were already a pioneer in robot remote ser-vices, with optional hardware allowing for reduced time to fix. Today, we are Connected Services, the HTML5 customer interface and the Internet of Things, Services and People. We’re looking to move into the application-monitoring service, and we want to move into the cloud

with ABB Ability Cloud Services.”

Five service optionsABB Connected Services, formerly known as remote services, is broken down into five different solutions be-cause not everyone needs the same things. The services are offered cafeteria-style with separate costs per solu-tion. The five solution offerings include condition moni-toring & diagnostics, backup management, fleet assess-ment, asset optimization, and remote access.

Condition monitoring & diagnostics features access to the robot user interface, which includes an alarm and diagnostics dashboard with statistics. It’s free during the factory warranty period, if the customer connects, and then $250/robot/year after that.

“Even when the robot is working fine, we are doing diag-nostics,” said Quevedo. “Connected Services scans the con-troller and the arm, so we can trend the data. When there’s an alarm, we can tell you what’s happened and how to pre-vent it in the future.” Through ABB’s MyRobot interface, alarms and other data can be monitored by the customer.

CHOOSE THE ROBOT SERVICE OFFERINGS YOU NEEDFive Connected Services from ABB leverage digitalizationMike Bacidore


“Every time we run these scans, we take those measure-ments, and we trend them,” explained Quevedo. The My-Robot dashboard includes indicator lights based on the findings of an internal prediction analyzer. “When the indicator changes from green to yellow, we know there’s a problem. It’s not a failure, but there’s something there to look at. We can monitor fans, belts, memory and pro-cessors. We know how they’re supposed to work and can tell when they’re not. Torque, deceleration and speed are monitored on all axes, and we use mechanical condition change to predict failures,” said Quevedo.

Backup management is another offering that costs $150/robot/year. “We have a way to automatically sched-ule backups,” Quevedo explained. “Even if the machine is running, we’re connected to your network.” A cus-tomer can see all of the backups from the MyRobot web-site. It can be restored on the server or from the cloud. “There is not a single day we don’t get a call from a cus-tomer who needs to restore from a backup,” he said.

Fleet assessment is a means to lifecycle management for gearboxes and motors. Released last year, its cost is $100/robot/year. “To be able to find out if your system is working as optimally as it could be and how long it will continue running, we compare the robots at your site to all of the robots we have connected,” explained Quevedo. “We com-pare how much the robot is working, how much torque.

We look at the deviation of estimated lifetime for compact gearboxes. This allows us to identify issues with the way the robot is integrated. Also, if you have key robots, it allows you to monitor the normal average usage, so it predicts how long the motor or the gearbox will last if you continue to run the robot the way you’re running it. The algorithm we have for torque, deceleration and speed is used.”

For $250/robot/year, asset optimization can help to make the most efficient use of your robots. “Our team in India monitors every single event, including alarms, failures and the way the robot is working,” Quevedo said. “You get a report once a quarter.”

Finally, remote access is available. “It’s a way for us to have full access to the robot even when we are remote,” explained Quevedo. “We can connect to the robot re-motely and help you to do things like load software. The remote access gateway box includes a physical switch that the user must switch on to allow access.” The ser-vice costs $600 for units in which the gateway is already installed and $2,000 if the gateway box is necessary.

“When a new robot is sold today, it comes with em-bedded Connected Services,” concluded Quevedo. “The old solution was a 3G box that talked to the Inter-net. Now, with our embedded solution, all of the soft-ware for Connected Services comes with the robot. If you are connected, we can see.”

Steam power brought us the first industrial rev-olution in 1712, the assembly line the second around 1870, and automation the third with the

PLC in 1969. Today and tomorrow, we’re experiencing the fourth industrial revolution, Industrie 4.0, with pro-liferation of information technology and the ability to visualize the interactions of people, things and services.

“Today, we’ve connected 6.4 billion things, by 2020 it will be 20 billion. Increased connectivity offers huge potential for improvements in many areas,” said Mat-thias H. Erhardt, segment manager, Food & Beverage, ABB, to attendees of his session, “Data use and com-pliance in FDA-regulated food and beverage environ-ments” at ABB Customer World this week in Houston.

COMPLIANCE JUST A GATEWAY APP FOR THE FDA-REGULATEDFood & beverage companies that digitize data stand to gain much more than easier compliance with FDA regulationsPaul Studebaker


“As data is passed up, its integrity must be retained, and you want to take care of all the data, not just the legal requirement, to gain the advantages.” ABB’s Matthias Erhardt discussed the importance of data and compliance in the context of FDA-regulated food and beverage environments.

The food and beverage industries as a group are “fairly far behind from a digitalization perspective,” but growth is accelerating, Erhardt said. Today, the industry is moving from paper-based systems to the cloud “extremely quickly, with the number of applica-tions expected to triple in five years.”

Driven by complianceThe food and beverage industries look simple on the outside, but a typical facility includes a labyrinth of machines, process equipment and conveyor belts en-abling a flow of materials from receiving through the plant to the stores and consumers, with plenty of op-portunities to make a mistake. “We want to be sure we don’t get sick,” Erhardt says. At the same time, new business models call for flexible marketing and production, for example, Coke in seasonal bottles for Christmas and Easter. “They have to be done on time, and it takes a lot to do it.”

Data digitalization helps ensure compliance, flex-ibility and more. Industrie 4.0 is being made possible by available IT infrastructure including the cloud, big data, cybersecurity, sensors and software. “Auto-mation is enhanced with software simulation and ro-botics, so we can now simulate and optimize a pro-duction cell in a virtual environment,” Erhardt said. “The opportunity exists to improve asset utilization, labor productivity, safety, inventories and quality, as well as balancing supply with demand, raising energy efficiency and improving waste management.”

Data delivers moreThe average product recall costs $10 million, but can cost much more. In recent years, for example, a spin-ach recall cost $350 million, and a peanut butter re-

call $1 billion. Food poisoning causes 5,000 deaths per year and sends 300,000 people to the hospital ev-ery year, Erhardt said. “And it does lasting damage to companies, because 83% of consumers remember the brands involved in recalls, and 55-57% temporarily or permanently discontinue buying them.”

Traceability with digital records can significantly reduce those losses, yet paper-based recordkeeping persists because it’s legal, you can put a signature on it, and it’s easy. The same approach can be used to document batches, standard operating procedures (SOPs), production orders, shift records, etc. But it’s hard to search or analyze, hard to make reports or provide traceability. And you need enough climate-controlled storage space for seven years of records (10 years for adverse information).

FDA Title 21 CFR Part 11 has allowed electronic records since 1997. “It’s not a rule, but a guideline, and it’s today’s guiding principle for other standards,” Erhardt said, “and it’s only as good as the quality of the data.”

Quality data, everywhereDigitalization is a straightforward, though sometimes complex, process that starts with rationalizing processes and defining your needs. “First, align processes and trans-late operational objectives into measurable success indi-cators,” Erhardt said. “Align operational levels and pro-cesses, and standardize workflows between work centers.”


Then go digital. A fully digitally-integrated plant will acquire data starting at raw materials and at every production step. Data from sources such as materials warehouses, automated guided vehicles (AGVs) and silos will be provided to the manufacturing execution system (MES). Data from plant-area sources such as bar code scanners, scales, control systems, picking, packaging lines and palletizing will be collected by the production system. All data is passed up to the enterprise system to use for eliminating waste, maxi-mizing flow, empowering operators, improving ergo-nomics, speeding changeovers, minimizing inventory and making sure each step is done right the first time.

Ensure data integrity and security through storage, routing and processing. Define digital workflows and processes and role-based access control, and allow for digital signatures. Assign access to the data for audit trails, alarm management, historian and reporting functions, batch control, recipe management, shift information and maintenance.

Consider the potential for real-time reporting of electronic batch records, quality reports, overall equipment effectiveness (OEE) and utilization, en-ergy management, production benchmarking and alarms.

“As data is passed up from plant-floor systems, its in-tegrity must be retained,” Erhardt said, “And you want to take care of all the data, not just the legal require-ment, to gain the advantages.”

Start at the networkErhardt recommends food and beverage plants con-sider starting their digitalization initiative at the net-work level with a data management system such as ABB zenon. “Start with one machine, and expand machine-by-machine by bringing each one up to the network,” he said. Then add additional equipment

and areas.ABB zenon offers scalability and the necessary ca-

pabilities to ensure data integrity. It has hardware drivers, fieldbus and other connectivity to bring in di-verse equipment, and communicates up to SAP, Mi-crosoft Dynamics, process gateways, SQL, OPC-UA and more. Security features are integrated, and it can be used across the plant utilities and building systems as well as production, packaging and warehouse ap-plications.

“Once you have the data, you can do a lot with it,” Erhardt said. Complete visibility and control gives you the opportunity to improve the process, empower intelligent decisions in real time, and optimize pro-duction efficiency and performance.

“Today, regulatory food safety compliance is too of-ten documented through manual and heterogeneous processes,” Erhardt said. Costly, time-consuming and error-prone reporting may cause confusion, and ac-cess to archives and data storage is difficult. As a re-sult, it’s often seen as an impediment to profitability. “It’s a manual process—you don’t know where you are on productivity, and you don’t where you are on qual-ity,” he added.

“Instead, we want regulations to support standard-ized quality measures for production processes,” Er-hardt said. Digitalized processes generate data that can be used to report KPIs in real time, with ubiq-uitous access to information. This allows transpar-ency, which is the base for better business decisions, lower cost of poor quality [CoPQ] and performance f lexibility.

“ABB provides all the software required to imple-ment a digitalized production strategy, as well as the ability to collaborate on it,” Erhardt concluded. “Let’s make your today’s weaknesses your tomorrow’s strengths, together.”


“Wireless systems and training are required to take advantage of new ways of doing things.” UNACEM’s Ricardo Rizo Patron on the innovative cement-maker’s willingness to embrace new technologies.

For years, high and rising oil and commodity prices spurred plant construction, expansion and modernization without much regard to cost.

Then prices fell, bringing many projects to a screeching halt. The ensuing hiatus has given owner/operators and engineering/procurement/construction (EPC) compa-nies several years to reconsider their options for how they go about their businesses.

Now, prices have started to rise and there is new inter-est in projects to boost capacity and improve productiv-ity. But rather than simply return to the “boom time” methodologies of the past, companies have the oppor-tunity to evaluate their methods in light of recent rapid advances in engineering methods, automation and the connectivity provided by commercial information tech-nology and the Industrial Internet of Things (IIoT).

The Wednesday morning keynote panel discussion at ABB Customer World this week in Houston, titled “Next level operational excellence,” roamed over a wide range of topics related to improving project costs, uptime, pro-ductivity and efficiency.

Today’s projects can cost lessToday, most companies need higher capital efficiency—to make good use of expenditures and get better returns. This is true not only in oil and gas, but in the public sec-tor due to public deficits. They’re concerned about fund-ing and deploying their resources in a cost-effective way.

“We have to change the way we are looking at and ex-ecuting projects—not just squeezing prices, but new ways

of looking at things,” said Jose Bustamante, executive vice president, business development and strategy, Fluor Corp. “We must collaborate more, to discuss the standards, spec-ifications and practices we have taken for granted. How can we change them to make them more cost-effective?”

Clients come to Fluor with their latest designs, and those might save 10-15%. “We want to start from scratch—some call it ‘zero-based’—and ask, what are their goals? What’s the minimum kit?” Bustamante said. Then together, Fluor and the client can add HSE, safety systems, redundancy, etc. where it’s actually needed, he said. “With this ap-

TAKE OPERATIONAL EXCELLENCE TO THE NEXT LEVELPanelists propose a range of possibilities for improving productivity and cutting costs in new and existing plantsPaul Studebaker


proach, we can save 30%—with better delivery.”Capital projects need better control of schedule and

risk. When commodity prices rose, there was a strong incentive to do projects the same way as ever, but re-search shows global project costs rose and schedules still ran late, with 64% of projects overrunning on cost and 73% on schedule.

“Now oil and commodity process have come down, and we need a reset,” said Peter Terwiesch, president, indus-trial automation division, ABB. “Shaving 5-10% won’t do it when prices are half, so there’s been less project activ-ity. Now we are seeing some new, big projects where we’ve been able to apply our latest methods, with examples show-ing 25% and even more than 50% cost reductions.”

Some of that is due to reductions in bulk material and labor costs, Terwiesch said, “But a lot is not, and we’re seeking to make those savings structural in our methods.

“Project cost reductions are putting pressure on auto-mation costs, so we are seeing more cloud engineering, digital marshalling, and automated data management for pulling together the tags. These can result in 30% savings in CapEx.”

To shorten the project timeline and improve build quality, Bustamante said, “We’ve moved more of the construction work into fabrication shops, where it can be done under controlled conditions, in parallel with other activities to shorten the project.”

For higher on-site personnel efficiency and safety, Fluor uses virtual reality and personnel tracking systems. “We’ve been using virtual reality for 15 years now,” Bustamante said. Fluor’s system for tracking badges can monitor 15,000-20,000 workers. “We can know where they are in case of evacuation. We know where the hazards are, and when people approach them,” he said. “We can track individu-als, such as visitors and new employees who are at most risk of injury. We can make sure they stay where they belong.”

Smoother operationsWhether under construction or running for decades, plant owner/operators and engineers are eyeing the op-erational benefits of connectivity and the IIoT.

“Our Peru plant has 220 MW, 20 MW and 25 MW hydroelectric plants, and seven natural gas-fueled en-

gine generators providing 42 MW. We have our own engineering department, so we are both supervisor and owner for engineering, construction and startup,” said Ricardo Rizo Patron, chairman, UNACEM Corp., a Peru-based global supplier of concrete and ready-mix with operations in Peru, Ecuador and the U.S.

UNACEM is centralizing production management for all its plants, with control loop optimization, expert systems and energy efficiency management done over the cloud, so it can manage its energy and peaking re-quirements.

“In OpEx, we see advances in safety, productivity and efficiency,” Terwiesch said. “People can stay out of harm’s way through remote operation, which can also enable continuous operation to optimize the use of plants and equipment.”

UNACEM is testing robots in trials for packaging ce-ment in sacks, which is how it’s commonly delivered in Peru and Ecuador. “We’re testing drones for surveying our quarries and inventories, and we want to use autonomous vehicles in the quarries to prevent accidents,” Patron said.

The company sees potential applications in logistics (so it can know where its trucks are), in online transactions (so customers can order on the web), and in distribution, where artificial intelligence could guide its trucks more efficiently through the heavy traffic in Lima.

“For power generation, we are looking at more renew-ables—solar, biomass—and at optimizing distribution on both the supply and demand sides,” Patron added. “We want energy storage to store hydroelectric power from afternoon rains for use at other times.

“For engineering, we need ways to manage drawings for electrical, mechanical and civil engineering so they are co-ordinated and don’t fight with each other. This is very im-portant for both greenfield and brownfield applications.”

Declining downtimeResearch has shown that unplanned downtime costs $20 billion per year in the oil and gas industry, and 80% of that is avoidable. “We can help keep operators alert 24/7 with ergonomic control rooms, digitalize the plant floor for new levels of productivity and add sensors to motors, pumps and compressors to assess health, predict main-


tenance and extend service intervals. And we can avoid power interruptions,” Terwiesch said. “Together these are worth 30% in operational savings. We see a wealth of opportunities opening up.”

As a foundation of data analysis for condition mon-itoring, “We’ve been capturing information from maintenance, operations and asset management for 40-50 years,” said Bustamante. “Fluor has informa-tion on how to prevent failures, and we can design in

the measurements from the beginning.“On the capital side, we do close to 1,000 projects an-

nually, and have a lot of information on how to design and build for cost and reliability. And we have a system to leverage this.”

UNACEM has installed wireless sensors for motor monitoring and predictive maintenance, Patron said. “Wireless systems and training are required to take ad-vantage of new ways of doing things.”

MICROSOFT AND ABB PARTNERSHIP CREATES CLOUD SYNERGYMuch of the digital future hinges on these corporate giants’ directionsMike Bacidore

The Industrial Internet of Things (IIoT) and dig-italization are driving innovation. As industry segments increasingly go digital, connecting

them and their data via the cloud has quickly become a priority with benefits.

Disruptive changes are more likely to affect industries that have yet to be digitalized. Using lessons from seg-ments ahead of the digital-implementation S-curve, Avi-jit Sinha, Microsoft’s director of business development for intelligent cloud and IoT, and Guido Jouret, chief digital officer for ABB, sat together for a lunchtime panel discussion, moderated by ABB president of the Ameri-cas region, Greg Scheu, at ABB Customer World this week in Houston. They discussed how the two compa-nies’ partnership in developing the ABB Ability platform has benefited end users, as well as what the digital future has in store.

“When we look at the Industrial Internet of Things, it ties back to the mission of our company, which is to empower every person,” said Sinha. “We strive toward a higher cause. We look at hard-to-do science problems,

and this space,” he said, casting about the room, “is go-ing to have a big impact on society. The people in this room are using the technology that feeds into that—ma-chine learning, cloud learning. We’re excited about part-nering with ABB on the Ability platform.”

2% of a trillionABB’s Jouret sees tremendous upside in the amount of value that can be created, based on the 15 primary in-dustries that ABB covers. “These industries can create a trillion dollars of value,” he explained. And because many of ABB’s customers are still on the knee of the im-plementation S-curve, Jouret believes his company can capture 2% of that value, which translates to $20 billion in revenue. The only uncertainty is how quickly things will happen.

Adoption of new technology tends to be on the slow side, but the IIoT could be an exception, explained Sinha. “In substance, we view the speed as being different,” he said. “There’s an appetite for risk, but, in the Industrial IoT, the risk of failure and error can be manifold.”


Technologies in the consumer space—drones, virtual reality, augmented reality, for example—are crossing over into industrial applications much faster than they were before. “These technologies haven’t really taken off in the consumer area,” added Jouret, who cited augmented-real-ity glasses being applied in industrial applications.

One big difference between the consumer space and industrial, however, is security. Consumers see security as black and white, all or nothing. But industry takes a more nuanced view, according to Jouret. “On the indus-trial side, we’ll see more cloud-connectivity, but not ev-erything will go to the cloud,” he explained. “And there won’t be a single worldwide system or standard. Custom-ers will have local systems that connect to the cloud, and they’ll leverage connections between clouds, too.”

Intelligent thinkingWhile artificial intelligence (AI) and its related body of knowledge has been around for decades, the confluence of three factors is allowing for AI to be applied in an eco-nomical manner to real-world problems, including cy-bersecurity. “You see the number of devices taking off—billions and billions of devices,” Sinha said. “You need a system that’s capable of ingesting all of these signals. Security has been based on signatures and on protect-ing against viruses. Looking forward, you need a more dynamic system—one that looks at the threat landscape and uses AI capabilities.”

“As we embark on our journey to get software to the cloud, the security principles of protecting, detecting and reacting don’t change,” said Sinha. “The things you protect—identity, devices, applications, data—aren’t any different. It’s the scale, speed and sophistication of the attacks that change, that require a different set of rules.

At Microsoft, we have an Intelligent Security Graph in the cloud that constantly monitors 38 regions of data centers. We spend about a billion dollars a year keeping that up to date.”

Microsoft takes data security and privacy very seri-ously. “We always believe the customer owns the data and decides who they share it with,” said Sinha. “We will secure the data for them. We will always be in com-pliance in terms of our capabilities. Our cloud has the highest number of certifications in the world. We are very transparent about what we do with data.”

New frontiersIn response to a texted question from the audience, Sinha and Jouret also touched on what it takes to get an established company to new markets. When he worked at Nokia, Jouret was part of a group that consisted of both company veterans and new recruits. “We took half from outside and half from inside the company,” he ex-plained. “That’s how you get to new markets.”

“Starting something is easy,” Jouret added. “The prob-lem is the medium term, three to four years out: that’s when the doubt sets in. If you’re an established company and you disappoint established customers, that’s a deli-cate balance. Azure is a great example of something very new that came from an established company.”

Culture eats strategy, Sinha reminded. “Without cul-ture, a transformation won’t happen,” he said. “At Micro-soft, we’ve changed the sizes of teams and gutted entire buildings. Once you get that going, the strategy kicks

“The things you protect—identity, devices, applications, data—aren’t any different in the cloud. It’s the scale, speed and sophistication of the attacks that change, that require a different set of rules.” Together with ABB’s Guido Jouret, Microsoft’s Avijit Sinha discussed the company’s investment in its Azure platform and how its partnership with ABB will advance the two companies mutual customers’ interests.


in because of the cultural movement. The core identity that we’ve never lost sight of is empowering people and organizations to achieve more. We’ve embraced diver-sity. We don’t just get rid of the old. We maintain both and let people decide.”

Azure has become a huge part of Microsoft, which ex-pects to generate $20 billion in cloud revenue by 2018. “We’re transforming as a company and intend to be the best cloud company,” assured Sinha. Azure is powering all of it, as Microsoft continues to invest in manpower and data centers.

“We want to leverage all of the Microsoft innova-tions that we can,” said Jouret. “Providers like Micro-

soft are coming with tools, not just the cloud as a re-pository. We’re leveraging the platform as a service. For an increasing number of systems, they’ll be avail-able on premise and with a cloud connection, built on Azure.”

Piloting new applications based on Azure is an essen-tial part of ABB’s growth. But piloting requires customer participation. “It does us no good to sit in a lab and think deep thoughts,” admitted Jouret. “The customer that’s willing to pilot something is a gift. It’s the chance to shape the future and be at the leading edge. Plus, you’ll be able to take advantage of those capabilities before your competitors.”

Additive manufacturing is a relatively new way to make components lighter, stronger and sometimes less expensively. It also provides the

capability to reduce component stock holdings and over-heads, as well as the ability to produce unfinished com-ponents that are closer to their desired shape (near net shape), thus reducing subsequent machining using tra-ditional methods. And with ABB’s simulation and off-line programming software, RobotStudio, the number of manufacturing sequence steps can be reduced, com-pressing manufacturing lead times.

The American Society for Testing and Materials (ASTM) F42 group formulated a set of standards (Stan-dard Terminology for Additive Manufacturing Tech-nologies, 2012) that classify the range of additive-man-

ufacturing processes. 3D printing—a synonym for all additive manufacturing processes—can be broken down into seven categories, which include material extrusion, powder bed fusion, material jetting, binder jetting, vat photopolymerisation, sheet lamination and direct en-ergy deposition. The processes vary in their methods of layer manufacturing, and individual processes differ de-pending on the material and machine technology used.

While similar in appearance to welding, one of the processes—direct energy deposition (DED)—is actually additive manufacturing. “The word ‘welding’ as defined by the American Welding Society conveys the joining of two or more pieces of metal,” explained Mark Ox-lade, ABB’s market development manager—joining & cutting, who presented the latest information on DED

TURN CAD FILES INTO PRODUCT IN FEWER STEPSIt may look like welding, but additive manufacturing reduces manufacturing sequence steps and compresses manufacturing lead timesMike Bacidore


“With plasma, you can do 12 wires at the same time, which isn’t typical.” ABB’s Mark Oxlade on the advantages of additive manufacturing using direct energy deposition with arc plasma.

and similar additive processes at ABB Customer World this week in Houston. “Welding is joining two parts to-gether through fusion. DED is an additive-manufactur-ing process in which focused thermal energy is used to fuse materials by melting as they are being deposited.” Energy sources for DED machines include lasers, elec-tron beams and arc plasma.

Direct energy deposition also differs from cladding, which is applying a uniform buildup of material on a surface. “Although DED systems can be used to apply a surface cladding, such use does not fit the current defi-nition of additive manufacturing,” explained Oxlade. “Additive manufacturing is when a computer-aided de-sign (CAD) file of the build features is converted into section cuts, representing each layer of material to be deposited. The DED machine then builds up material, layer by layer, so material is only applied where required to produce a part, add a feature or make a repair. Addi-tive manufacturing is a new way of making things, so we have to design in a new way.”

It all adds upThe reasons for choosing an additive-manufacturing so-lution are many, but reducing the numbers of steps to near net shape is among the most important, Oxlade said. “If you can reduce the number of steps, then ad-ditive manufacturing is a good way to go.” said Oxlade, who shared some examples from maritime, airline, med-ical and automotive industries.

“Everyone has spare parts,” explained Oxlade. “They cost money. Every time an aircraft carrier goes to sea, it carries 7,000 tons of consumables and spares. But what if you can print your own replacement parts while at sea?” A 1% reduction in spares is the equivalent of two fully loaded planes. Meanwhile, the FDA has approved 3D printing of metal implants such as a custom chest plate for a cancer patient. And in automotive components,

there’s 3D printing of metal car cylinder heads.Project completion can be turbocharged with ABB’s

RobotStudio, Oxlade continued. “Machining PowerPac is an add-on that makes it possible to create complex paths in just seconds. You start with a CAD file, then slice the 3D model and export G-code, which is im-ported into a CAM converter to create RAPID language. Then you can start printing with the robot. “RobotStu-dio is the real controller, not a simulation,” said Oxlade.

“For good CAD, we have path-following characteris-tics,” explained Oxlade. “It looks at things like friction and gravity. Our standard robots can be made 10 times more accurate by tuning. We know how to make a robot motion very accurate.”

Make mine plasmaArc plasma is Oxlade’s preferred energy source for DED. “Plasma is a little more stable process,” said Ox-lade, “which means higher quality assurance for additive manufacturing with robotic motion control.”

While ABB focuses on the software side, with Robot-icStudio, its partners are making the welding heads. In a traditional electron-beam process, up to two wires can be in use simultaneously. “With plasma, you can do 12 wires at the same time, which isn’t typical,” explained Oxlade. “Plasma gives you a very clean weld. Spatter goes away. Also, most welding processes hate oil. With plasma, it burns off the oil before you get to it.”


“Project delivery was not perfect, but we delivered because we worked jointly as a team. We estimate we saved $1-2 million.” Alcoa’s Patrice Dubé on the company’s recent lump-sum, turnkey (LSTK) project with ABB.

Faced with high project costs, some end user compa-nies are taking the engineering/procurement con-tractor (EPC) out of the equation and engaging di-

rectly with their software, equipment and service suppliers.When the Alcoa plant in Baie-Comeau, Quebec,

needed to add a rectifier system to increase potline cur-rent and provide additional redundancy, it asked ABB to take full lump-sum, turnkey (LSTK) system respon-sibility for conceptual design, scope definition, costing, detailed system design, equipment engineering, proj-ect management, procurement, civil works, installation and commissioning. Alcoa provided project monitoring, technical review, subcontractor approval and compli-ance with internal processes.

The project was presented in the session, “Lump-sum, turnkey project partnering approach to reduce over-all project cost” at ABB Customer World this week in Houston.

Alcoa Baie-Comeau’s TR49 project to add a 50 kA, 1120 VDC transformer began in April 2015 and was completed in August 2016. Equipment and ABB services were part of a LSTK project, with installation and civil work on a “cost plus” basis. Alcoa and ABB worked di-rectly together, with ABB assuming most of the respon-sibilities traditionally expected of the EPC.

Along with saving money, eliminating the EPC en-sured that resources stayed focused on project deliver-ables, not on preparing RFQs, evaluating bids or sitting in meetings.

But it was not all wine and roses.

Phase by phaseLike most projects, this one proceeded in three stages. Phase 1 was the definition stage, before funding or ap-proval, where ABB and Alcoa openly discussed needs and what Alcoa was trying to achieve. “The big change here was that there was no EPC between Alcoa and ABB,” said Gilles Schami, Eng., operations manager, aluminum electrification, ABB.

“ABB was part of the very first stage,” said Pa-trice Dubé, Eng., project director, Alcoa Canada Co. “There’s a risk in not getting competitive bids, but we knew we would be getting the right technical package. We have plants around the world and we know the price of a transformer. Instead of competitive bids, we used our experience to evaluate costs.”

ALCOA CANADA ELIMINATES THE MIDDLEMANA lump-sum, turnkey partnering approach for an aluminum smelter power expansion project saved an estimated 6%Paul Studebaker


In phase 1, “All the different experts pulled together, and all the different aspects were considered,” said Schami. “At this point, we were not selecting a trans-former, just defining the needs.” They looked at the engineering to tie into the existing plant, the civil en-gineering, mechanical engineering and electrical engi-neering. They evaluated the harmonics and the impact on power quality.

Phase 2 covered negotiations between Alcoa and ABB, adjustments to the solution, and final approval. “Here we saw discussion within Alcoa, and iterative processes to get agreement,” Schami said. Discussions defined the solution, scope, who would do what, and assumptions such as currency exchange rates. “We hedged on cur-rencies, with most of the risk taken on by ABB,” he said.

The second stage also included provision of drawings, schedules and other deliverables, the same as would typ-ically be done by an EPC. Alcoa paid ABB at this point for the deliverables, but the payment was part of the agreed-upon total cost, not a separate charge as it would typically be with an EPC.

“It was a very transparent process,” said Dubé, and Alcoa engineers were much involved. “We were buy-ing performance, but we still reviewed all the specs and drawings, playing some of the role of the EPC. We would have had to do this even with an EPC, but we were pretty lean, with only five people on the Alcoa team, so this was a noticeable amount of work.”

Phase 3 was project execution. “All aspects were the same as any turnkey project, all the way to final accep-tance,” said Schami. For civil and other contracted work, “ABB would recommend contractors, and Alcoa would make the selection,” he said. “Then we managed the contractors.”

Since the project specifications were performance-based, Alcoa didn’t have to worry as much as they oth-erwise would have about meeting individual speci-fications. “We guaranteed performance, not just the specifications,” said Schami.

The transformer was part of a larger project that had high visibility at Alcoa. ABB was responsible for the transformer, but Alcoa was responsible for the overall project. “ABB covered their scope, but we needed to

get certain information from them to know we were on track,” said Dubé. At first, this led to some culture clash and friction. “We had to align and develop that,” he said.

Alcoa’s involvement during execution was mainly su-pervisory. It kept full control of the process, schedule and budget, with weekly progress reports from ABB. “We had access to all the field acceptance tests (FAT) as they were done, wherever they took place,” said Dubé. “We had one site manager because the work was being done on our site, and one EHS manager to satisfy regu-latory requirements.”

At the end, the availability of 50 kA was measured at the bus bars, and the measured power quality met speci-fications.

Not for every projectA partnering approach is not for all projects: under-stand the factors that need to be considered before pursuing such an approach, Dubé recommended. “There is less perceived control without the EPC. You have to learn about that and accept it. You have to know your partner.”

There will be issues and when they arise, a collabor-ative, open-minded team environment with both sides sharing risk and working together is needed for success. “Even though it’s lump-sum and turnkey, we had to be able to see enough to manage it,” Dubé said. “Some-times we were too close, with weekly schedule monitor-ing, but these projects had very high visibility within Al-coa due to the level of spending.”

Both teams focus on project delivery—on results—and level of involvement is mutually higher given the ac-countability of both parties. “The beauty of it is, they’re as stuck as we are for on-time delivery,” said Dubé.

The project was delivered within schedule, within the cost estimate, and within the quality standard, with no EHS incident. “Project delivery was not perfect, but we delivered because we worked jointly as a team,” said Dubé. “On a $25 million project, you could expect to save a minimum of $1 million. We estimate we saved $1-2 million.

“We’re engaged with ABB now in a second project on the site, and it’s smooth sailing.”


“Cybersecurity is on everyone’s mind because more connections means more opening for possible threats.” Microsoft’s Dania Kodeih explained at ABB Customer World in Houston how the partnership between her company and ABB will create a stronger defense against hackers.

What’s so great about transforming perfectly good, real-world, analog process values for pressure, temperature and flow into digi-

talized ones and zeros? Much easier data accessibility, flexibility, analysis and communications for more opti-mal and profitable operations, that’s what.

“Operational expenditures (OpEx) in the worldwide chemical industries is about $1.6 trillion per year, and OpEx in the oil and gas industries is about $600 billion per year, so making any little improvement in them is an opportunity worth billions of dollars,” said Rami-Johan Jokela, head of digitalization, ABB.

At the same time, “research by McKinsey finds that 69% of oil, gas, chemical and other process industry projects have been running about 20% over budget in recent years; 79% of these projects have been missing their schedules, often by months; and 30% of their con-trol loops are broken,” added Havard Devold, group vice president and digital lead for oil, gas and chemi-cals, ABB.

These were some of the challenges explored by a three-person panel of experts from Microsoft and ABB, who also described how their partnership is benefiting process control users in the chemical, oil and gas indus-tries at ABB Customer World in Houston. The panel in-cluded Jokela, Devold and Dania Kodeih, enterprise and solutions architect for oil and gas, Microsoft.

How the digital house is built“Of course, Microsoft’s definition of ‘architecture’ started with information technology, but the digital revolution is now bringing in more demands for efficiency from the operational technology side,” said Kodeih. “And, be-cause Microsoft’s mission is to help every individual do more, we’re developing strategies and digital architec-tures for oil and gas, chemicals and other industries.”

Kodeih added that digital transformation in the pro-cess industries rests on three pillars: personal comput-ing, handheld devices and new interfaces; intelligent cloud platforms; and reinventing productivity and busi-ness processes to give everyone access to the data they need to optimize their operations.

“ABB has been driving toward digitalization for 20 years in oil, gas and chemical applications, but these en-

A DIGITAL FOUNDATION FOR THE CHEMICAL, OIL AND GAS INDUSTRYDigital architecture builds on a foundation that is pillared and secureBy Jim Montague

http://new.abb.com/

https://www.microsoft.com/en-us/


ergy industries are now being transformed and diversi-fied by shale oil and gas and renewable and alternative energy sources, even as they join with Industrial Inter-net of Things (IIoT) and Industry 4.0 technologies,” said ABB’s Devold. “These are all new opportunities, and we need them. This is especially true because low oil and gas prices mean we have to become more efficient and develop smarter approaches and solutions. Even if prices were high, if we can save on maintenance and increase productivity, why shouldn’t we?”

Kodeih explained that many industrial digitalization efforts will rely on intelligent cloud computing plat-forms. “These aren’t random collections of software ob-jects, but are instead organized environments with dif-ferent components and functions like managing data and analytics, machine learning and artificial intelli-gence (AI) that can provide answers to difficult prob-lems,” said Kodeih. “We’re taking a lot of information that was originally from human interactions and add-ing it to intelligent systems, extracting content and then working with ABB to bring that intelligence to the edge and the field. This has been done by technical special-ties in many other fields, and now it’s coming to oil, gas and chemicals.”

Powerful partnershipABB’s Jokela reported that the two companies have sev-eral major tasks they’re carrying out to make their part-nership useful to end users. “ABB comes from the indus-trial systems side, and so digitalization meant we needed partners and platform tools,” he said. “ABB runs below the cloud, so we partnered with Microsoft, which runs above the cloud, so we wouldn’t have to worry about maintenance.”

Devold said, “With so many projects running over budget and late, we have proof that our traditional ex-ecution model is often broken. We now have plants with hundreds of thousands of data points. Digitalization technology is the only way to handle this.”

Beyond aiding process applications directly, Micro-soft’s Kodeih reported, “Digitalization can help with personal safety by improving training with immersive, in-environment simulations; help technicians follow

and track procedures and check off completed tasks; measure vital signs and fatigue with wearable devices; and help monitor, track and provide alerts about invis-ible hazards like natural gas leaks.”

Security for digitalizationOf course, whenever digitalization or cloud computing is mentioned, the next question is about cybersecurity. Fortunately, ABB and Microsoft reported this base is covered, as well.

“Cybersecurity is on everyone’s mind because more connections means more opening for possible threats. Microsoft begins by assuming that systems are compro-mised, looking for breaches and taking a holistic view of security,” said Kodeih. “We look at every device and pro-cess, and we establish security with trust, compliance, reliability and response. We’re also bringing machine-learning techniques to cybersecurity because there’s more and more telemetry to gather.”

And ABB follows up with endpoint cybersecurity at the lower levels, added Jokela.

“Microsoft probably gets the most hacking at-tempts of anyone, and so we’ve learned that you have to expect, prevent and address them as they happen,” added Kodeih. “Systems must be layered, so if there’s a breach, it can be minimized. It’s said that the cloud services aren’t secure, but they really make cybersecu-rity tasks more transparent, and so they can respond more effectively.”

The panelists agreed that digitalization of process ap-plications and ABB and Microsoft’s partnership are re-ally all about simplifying tasks that would otherwise be a lot more complex. “Digitalization is going to be in-creasingly easy despite all the different elements users are handling,” added Jokela. “Platforms will give way to cloud computing as a service. This is all about creating value, and that’s what we’ve been doing all along.”

For some added digitalization know-how, the panel also recommended ABB’s recent whitepaper, “Next level oil, gas and chemical: harnessing the power of digitalization to thrive in the new normal of low oil prices,” which is available on the front page at www.abb.com/oil-and-gas.


“We look at our smart phones and smart wristwatches and look at our rusty plants and processes and ask, ‘Why can’t they use these consumer technologies, too?’” Diego Pareschi, global product manager at ABB, shared advancements in wireless sensors at ABB Customer World this week in Houston.

A large part of success in politics and other en-deavors is simply showing up, but sensors that could improve condition monitoring in process

applications often can’t show up because wiring is too costly or it’s physically impossible to locate them where they’re needed. To solve this problem by getting sensors where they need to go and bringing back information for better condition monitoring, ABB has developed com-pact, rugged sensors that can be deployed on motors, pumps, fans and other equipment, can measure vibra-tion and other variables and can send details back to a central location for analysis and improved decisions.

“The oil and gas world is changing a lot due to the ex-treme effects of low prices, and so it’s hard for many users to stay profitable,” said Diego Pareschi, global product man-ager for rotating machines, oil, gas and chemicals, Process Automation Division, ABB, in a presentation this week to attendees of ABB Customer World in Houston. “So, we’ve been talking about using wireless sensors for condition mon-itoring and gaining more visibility into oil, gas and chemical (OGC) processes, especially rotating equipment, as they’re the most common cause of downtime in OGC plants.”

Pareschi reported that the most important assets in OGC plants are pumps, compressors and other equip-ment. “These devices are their heartbeat,” he added. “So, we looked at present maintenance practices and found they mostly use break-and-fix processes. But then we look at our smart phones and smart wristwatches and look at our rusty plants and processes and ask, ‘Why can’t they use these consumer technologies, too?’”

Sense locally, send wirelesslyTo make the leap to wireless condition monitoring, Pare-schi explained the initial impulse is to spread sensors everywhere and try to use them for predictive mainte-nance. “Sensors have been monitoring the big assets for a long time, and many companies do it,” he said. “It’s trickier to monitor smaller pumps and equipment, so the chemical industries have been looking at what condition monitoring technologies they can borrow from other in-dustries, and wireless sensors were suggested for rotating machine analytics and distributed sensing.”

ABB’s two wireless sensing solutions include its WiMon wireless monitor—a bearing-mounted, screw-on, battery-powered vibration sensor—and its upcoming Smart Sen-sor for low-voltage electric motors on compressors, pumps and fans. WiMon has been available for several years,

CONDITION MONITORING TAKES FLIGHT WITH WIRELESS SENSORSTwo sensors without wires keep tabs on the health of rotating equipmentJim Montague

http://new.abb.com/


uses WirelessHART protocol for communications and or-ganizes its network as a mesh grid. It performs 1-second measurements and can take measurements continuously or at up to 8-hour intervals. WiMon’s range is 40-50 me-ters, unless it’s elevated, in which case its range can be up to several hundred meters.

“Rotating equipment typically fails every three years, but these failures are at random, and so monitoring bear-ings for vibrations can be very helpful,” said Pareschi.

Moving data on upPareschi explained that once WiMon and other ABB sensors gather values and signals from rotating equip-ment and field processes—and assess equipment status with ABB Fingerprint audits—they relay it to a locally oriented cloud infrastructure. Here, it’s elaborated on to provide more advanced services to the site, and opti-mize short- and medium-term operations and field ser-vices. Much of this information also can be delivered to intranets and the Internet via ABB’s ServicePort fleet-monitoring dashboard, which can take in data from the

DCS; from wireless sources through Ethernet; or from sensors through OPC and Modbus networking.

“ServicePort can connect multiple sites, aggregate in-put from many machines and then divide that data by function, such as process application, mechanical, elec-trical or control,” said Pareschi. “The data can then be analyzed and turned into reports with details on bearing wear occurring at the bottom. This can really make for-merly dumb sensors smart. No raw data is transferred, just key performance indicators (KPIs).”

ABB also offers a remote cloud service, in which data from different sites is also aggregated in remote service centers and used by subject-matter experts to provide other advanced services, consultancy and collaboration with third-party service providers such as OEMs. “This enables us to benchmark, compare performance at dif-ferent sites and see which is doing better,” added Pares-chi. “Also, if a customer has a problem with a pump in the fleet, it can also get help from an ABB service en-gineer more easily. We’re also proposing a subscription service that we periodically review.”

The public gets what the public wants. Consumer demand is a consistent driver of production and supply, and that is a powerful incentive in the

energy industry.“Under the Trump administration, there’s a stated de-

sire for more infrastructure investment. We’re support-ive of that,” said Maureen Borkowski, chairman and president of Ameren Transmission, an energy carrier in the midwestern United States. “One of the concerns

from the administration has been about EPA overreach. It’s my belief that with or without a clean power plan, you’re still going to see cleaner energy portfolios because it’s what our customers want. You’ll see more coal-plant retirements and more renewable energy. The trend is go-ing to continue because customers want it and investors are interested in that. That impetus is going to continue with or without changes by the Trump administration.”

Borkowski and Claudio Facchin, president, power

REGS, RENEWABLES AND CONSUMERS RESHAPING ELECTRICAL LANDSCAPEThe future of electrical power lies in the hands and demands of its consumersMike Bacidore

https://www.ameren.com/transmission


grids division, ABB, shared their thoughts on the fu-ture of energy during a keynote panel discussion at this week’s ABB Customer World in Houston.

“Everyone wants a balance,” said Borkowski. “None of us wants everything to be profit-driven. We focus on safety, reliability, environmental impact and sustainabil-ity of the energy we provide. How do you deliver a clean portfolio at a price customers can afford?”

The whole renewables aspect—the impact, the trends and the speed with which it has come in—is a key el-ement, explained Facchin. “Renewables add volatility and complexity to managing the grid,” he said. “It goes all the way up to the backbone of the transmission sys-tem. Electricity is an increasingly key form of energy, and estimates predict a 70% increase in usage between now and 2040.”

Continental grid theoryThe transmission grid is one of the key enablers of mak-ing this transformation happen. “Whether it will be one global connected grid or separate continental grids, we have the technology to transport energy long distances,” said Facchin. “A lot of things are driven by innovation. Utilities are still seen as a very conservative industry. But I see a lot of utilities pushing technology through to take the grid to the next level. Many utilities adopted digi-tal technology 10-15 years ago. And when you look at high-voltage, direct-current (HVDC) technology, the challenge is how to manage, control and monitor power flow. We’ve been a leader in implementing HDVC tech-nology, and we’re taking it to the next level.”

ABB is building a 12-gigawatt HVDC link in China, which wants to bring solar and wind energy from the ru-ral northwest to the urban centers in the east, said Fac-chin. “Now, they’re looking at linking Russia, China, Ja-pan and Korea to share power. In Europe, there are a lot of projects going on to link the countries, such as substa-

tion links between Norway and Germany.”In the United States, there’s an opportunity to lever-

age the HVDC link to share electricity, but U.S. reg-ulatory bodies work differently than they do on other continents. “In the United States, most policy is done at the state level,” explained Borkowski. “To have all of the states benefit from an HVDC link is a challenge. All of the siting and routing is done at the state level. That’s an interesting difference. You have policy impediments in the United States.”

About five years ago, Ameren developed a strategic initiative to make an investment in its transmission sys-tem. “We’ve invested about $3 billion—$800 million last year alone—to enhance the reliability of the system and the ability to bring on renewable energy sources,” said Borkowski. “Technology, along with changes in policy, makes an impact on the marketplace. Customer expec-tations have an even bigger impact. We at Ameren are putting information at our customers’ fingertips.”

Data, anyone?Ameren also sees growing teams of data scientists cre-ating applications that deliver value from all the data that’s being collected. “As we collect more information, we can slice and dice that and discover what kinds of

“We focus on safety, reliability, environmental impact and sustainability of the energy we provide.” Ameren’s Maureen Borkowski traded thoughts on the future of energy with ABB’s Claudio Facchin at ABB Customer World this week in Houston.

http://new.abb.com/


data platforms and mobile communications we need to create,” Borkowski said.

“There’s no point in collecting that data and not us-ing it properly,” added Facchin. “For example, the grid needs to be adjusted and optimized to accommodate re-newables in a safe and reliable manner. It’s more about demand response and power quality—managing volt-age, frequency and power factor. Energy storage is a key consideration for the grid of the future, and its relevance will continue to increase. The growth curve on energy storage will be very similar to what we have seen recently with photovoltaic solar.”

Borkowski sees the technology transformation as evo-lutionary, but with some disruptive aspects. “We’re get-ting smarter in an incremental sense,” she explained. “There’s this huge group of folks who will be retiring. We’ve been bringing in young talent. We need to build the talent pipeline in elementary and middle school.

STEM programs get kids excited, but we need to focus on having them view themselves as STEM-capable. We have to inspire these kids. Millennials and the gener-ation behind them want to transform the world. What better way to do that than by being an engineer?”

Facchin sees different futures emerging on different continents, especially when it comes to engineering skill sets of younger generations. “In Asia, there has been a fo-cus in the electrical engineering space,” he said. “China and India have a huge number of electrical engineers coming out of those universities at a very high level. In the United States, we see more of a gap.”

Part of the solution to making STEM careers—and the power industry—more appealing to millennials is a more explicit linkage between engineering and renew-able energy, Facchin believes. Because millennials tend to identify with environmental responsibility, it provides an avenue that might attract them to STEM pursuits.

From equipment productivity, reliability and energy efficiency to project engineering, sourcing and dis-tribution, operational excellence offers myriad op-

portunities for improvements. Attendees of the panel dis-cussion, “Next level operational excellence: Benefits of digitalization” at ABB Customer World this week in Hous-ton learned that these opportunities come in many forms, but only by opening your mind to the possibilities.

“For us, digital is leveraging data and technology to develop new business models,” said Narinder Pal

Singh, vice president of engineering at OLAM Inter-national, a seed-to-shell agribusiness operating 200 fa-cilities in more than 70 countries with 16,000 employ-ees. “Digital has a role to play from farming through processing and distribution, through the entire chain. With every click we are generating data and the poten-tial for bottom-line improvements.

“We can improve our machine efficiency (OEE), ma-terial efficiency (less waste), manpower efficiency (re-duce labor and do more with the people we have), and

OPERATIONAL EXCELLENCE DEPENDS ON DIGITAL DISCONTENTTo discover opportunities for improvement, be dissatisfied with the status quoPaul Studebaker


How to use digitalization to improve operations was the topic of a panel discussion by (left to right) Greg Scheu, Americas region president, ABB; Sandy Vasser, leader (retired), ExxonMobil; Narinder Pal Singh, vice president, engineering, OLAM International; and Sami Atiya, president, Robotics and Motion, ABB.

energy efficiency (when and where we do what) by col-lecting data and pulling it together.”

Do things differently“Doing things differently is essential for us,” said

Sandy Vasser, leader (retired), ExxonMobil. “Our proj-ects became extremely costly do deliver. We already needed to lower the costs and shorten schedules, then the price of oil dropped.”

After the project is completed, “We have to maintain them for 30 to 40 years,” Vasser said. “We need to operate at minimum cost, and maximize uptime and throughput.”

People and facilities are at different points on the digi-talization adoption curve. “Some customers are at about 2.2—how can we get them to Industrie 4.0?” said Sami Atiya, president, Robotics and Motion, ABB. “Others are pushing the envelope on digital, with advanced robot-ics, but when you’re making a car a minute, you can’t let the plant shut down. At night, when the workers are gone, you can shut it down. So we monitor through the day, anticipate maintenance requirements, and perform them when the plant is off.”

Get up the curve“Manufacturing executives see digital as critical, but only 10% rate themselves highly on their capability,” said Greg Scheu, Americas Region president, ABB, and panel moderator. “How can we improve this?”

At ExxonMobil, “We had to overcome the burden, bias and baggage of doing things the same way they’ve always been done,” said Vasser. They tried incremental improvements, but still had the same problems. No mat-ter which contractors or what project, the result was the same, he said. “The common denominator was us.”

“So we had to almost forget how we’ve been doing things for decades. Instead, we identified all the things

we needed to do—to shorten schedules, lower costs. We found the core issue was that we were doing things the same way we always had, even though today’s problems and technologies are different. People realized this and saw the need to change.”

At OLAM International, the emerging availability of new devices signals possible opportunities. “We have shortlisted the areas of digital inventory management, smart plants and energy efficiency, and we are trying a lot of pilots,” said Singh. One example is remote monitoring. Tomato processing plants run 80 days a year. During that time, they will process 500 semi truckloads a day of toma-toes. “By using sensors and remote monitoring 24/7, we’ve reduced downtime by 30%,” he said. “That’s something we can’t do ourselves—we’re partnering with ABB.”

Take people with you“In 2030, 70% of the workforce will be millennials. How do you work with them—how do you collabo-rate?” asked Scheu.

Digitalization has led to a generational challenge, where one generation is distinctly different from the next in its abilities and inclinations, but applications bridge the gap. “There are multiple ways to enter the digital world—it de-pends on where you are,” said Atiya. “In production plan-ning, we see virtualization bringing tools that help experi-enced engineers design more efficient cells and facilities. In operations, sensors can be used to monitor machines for improved reliability. We give a customer three wireless mo-tor sensors to try out, and they ask for more.”

OLAM includes people in its adoption process. “We bring digitalization on in three steps,” said Singh. “First, we are always asking what digital information can do for


us, how it can affect our business, and what its disrup-tions could do to affect our business.”

“Second, when we have something, we bring our managers in and bring them up to speed. Third, we part-ner to implement.”

Be wary of disruption“Uber and Airbnb didn’t check in with the taxi and hotel businesses before they disrupted them,” said Scheu. “What do you do to deal with similar potentials in your industry?”

Singh sees similarities in food and beverage. “Where food safety and sustainability used to be competitive ad-vantages, they are now base requirements,” he said. “The supply chain is flattening, with more companies sourcing directly from the farm and shipping direct to consumers. If you want to stay in the game, you need technology.”

At ExxonMobil, it’s about the supply of technology. “There are many opportunities in the supply chain. Every participant needs to work to make transformational change, as success depends on the weakest link,” said Vasser.

For example, ordering based on internal standards and specifications “results in massive inquiry packages with inconsistencies and errors that vendors must work to understand,” Vasser said. “Then there are debates about specification deviations, custom designs, approv-als and manufacturing. Then a factory acceptance test [FAT] before we arrive, then it’s done all over again. The cycle takes six to 18 months.”

“Most of that could be eliminated if we would just buy a standard product. If we don’t customize it, we don’t have to FAT it. Instead, key suppliers make standard so-lutions and maintain the specifications. We order it, we buy it, we use it.”

(Round of applause)“True transformational change will only come

through partnerships with different perspectives and ar-eas of expertise,” Vasser said. “We need to work with sup-pliers to come up with the best solutions.””

“It’s been a journey, one step at a time. Instead of how you do it, examine what you are trying to do.”

Technology is an instrument of change. It can be disruptive, enabling, subtle or timely, but recent technological leaps have affected not just re-

search and development (R&D), but the way companies think about R&D in industries as diverse as power, min-ing, automation and oil & gas.

In a roundtable discussion at ABB Customer World in Houston this week, several technology officers shared their fears and their triumphs in the face of the continu-ing waves of technology advances.

“In the utility sector, we’re facing some huge changes

with how we’re producing and using energy as a so-ciety,” said Terry Oliver, chief technology innova-tion officer at Bonneville Power Administation (BPA). “Electricity used to flow one way in the system. Now customers have photovoltaic systems, and we’re seeing two-way flows on systems that were designed for one-way flows.” To monitor the quality of these new power flows, BPA is using a technology developed in the 19th century to look at the grid 60 times a second—a signifi-cant adjustment to a technology that was used once ev-ery two seconds when first introduced.

DIVERSE INDUSTRIES FEEL THE IMPACT OF TECHNOLOGYPanel of CTOs discusses how they steer automation and innovation initiatives, and keep from driving their organizations right off the roadMike Bacidore

http://www.bpa.gov


“When we develop something today, it comes out of the factory with a digital twin.” BP’s Ahmed Hashmi explained how technology has changed the oil and gas business at ABB Customer World this week in Houston.

Luiz Mello is technology innovation director at Vale, a $26 billion global mining company. Vale is a large pro-ducer in iron ore and nickel, with the bulk of its mining operations in South America and the largest segment of its product destination being Southeast Asia. “I was brought to Vale to bring a new perspective to structure its corporate R&D function,” explained Mello. “De-spite being a global company in more than 30 countries, there’s a lot of focus on Brazil, where the educational level is similar to the United States’ in 1910. We try to foster connections with academia. We created ambitious programs in Brazil and Mozambique, as we need to hire people in these areas.”

Vale’s primary investment focus has been on creating an autonomous mine. “Mining has a geographical con-straint, by nature of where the ore body sits, which is usually in remote countries where the education level is not very high. Getting a job at the mine requires a skillset that the people there do not have, so they must be trained.”

Although Ahmed Hashmi’s job title at BP is head of upstream technology, he thinks of himself as a busi-ness leader responsible for driving change. “I’ve been with BP 30 years on,” he said. “Oil prices dropped in half in 2014, and we are still not making money at to-day’s prices, but things have improved a lot. There’s a desire within the industry to reset itself, whether you’re talking about extraction, refining, logistics or labor costs.” Everything in oil & gas is being reset, he emphasized.

“People talk a lot about change through digitali-zation,” added Hashmi. “Digitalization is not some-thing new. But software development is still too slow. If we can automate software development, then we’d have something.” Still, digitalization has compressed development time. When gas was recently discovered in Egypt’s Nile Delta, it took only two years for BP to

be up and running. “It used to take seven to 10 years for that,” said Hashmi.

“The time from concept to introducing a product is getting shorter: fail fast and fail cheap,” agreed Bazmi Husain, CTO, ABB. “In the 36 years I’ve had with the company, I can’t recall another time when business im-pact, energy efficiency and technology have changed more quickly than today. Last year, there was more re-newable energy coming on line than there was conven-tional energy coming on line. The ecosystem of how we do things is changing.”

All that stays the sameIn the electric power industry, the change in consumer behavior is causing utility executives to shake with fear, said BPA’s Oliver. “If you don’t need capital infrastruc-ture and your loads are changing, you have to change your business model,” he explained. “Our tradition has been to think of least cost as the way of keeping things going. But now we need to look at what we’re doing in terms of a value proposition.”

A lot of improvements in products used to be in hard-ware, explained ABB’s Husain. “Going forward the dif-ferentiator is going to be more in the software aspects,” he said. “Your motor will be more reliable because you’re

http://www.vale.com/en/Pages/Landing.aspx

http://www.bp.com

http://new.abb.com/


measuring its operating conditions, and you’ll be able to predict whether it can take a higher load or be able to predict failure before it even shows physical signs. The connectivity and digitalization are already there, and the sensing will continue to advance.”

The differentiation between hardware and soft-ware will become more outcome-based, predicted BP’s Hashmi. “It’s not hardware versus software. It’s based more on the outcome. In the past, the biggest problem with changing software was there were new forms that you couldn’t connect to the logic. Now you don’t have to program all the way down to your data structure. You have cloud platforms and new data structures.”

What shall we build today?Vale’s recently completed Brazilian mine was a huge capital project, costing $14.5 billion, and digitalization played a huge role. “All of the processing units were built and then brought to the site afterward,” said Mello. “It’s a huge LEGO project, and you need to make sure ev-erything will fit. Visualization was critical on that, and it brought up some faults in the design, which were fixed before construction. Drones with sensors can collect data on the facades, and we combined that with geologi-cal data for a much better plan.”

The oil and gas industry has seen multiple waves of technology, and the digital twin has risen to the sur-face. “Automation isn’t necessarily nirvana,” warned BP’s Hashmi. “Insight matters more than automation, and that leads to better decisions sooner. Artificial intel-ligence and machine learning have been around for a long time. We have a lot of stuff that has been created in a different era. But, when we develop something today, it comes out of the factory with a digital twin. Before you do anything to an asset, you do it to the digital form.”

How to get it doneDigitalization’s benefits are documented, but the chal-lenge often is in navigating the culture change. For BPA, it was all in the framework. “We asked, ‘What do we want to be when we grow up?’” said Oliver. “We asked managers and middle executives, and then we found out what was in the way. That helped us to focus our re-

search investment on stuff that matters to BPA. You can get carried away with engineering curiosity.”

There’s often a disconnect between corporate and op-erations, explained Vale’s Mello. “Diminishing that dis-connect was critical for us,” he said. In the first year of an innovation initiative, Vale employees generated 7,000 new ideas. “And some of them had patent possibilities,” said Mello. A slightly overzealous management team was so pleased that it pressed harder the following year and received 22,000 new ideas. “That was just not man-ageable,” explained Mello.

“More things can go wrong than can go right,” BP’s Hashmi. “If I don’t understand the business ahead of technology, then I’m not doing my job. There are things we think we should be doing that will change the busi-ness in the future, but the business isn’t asking for them now. You have to balance the times. Not everything can be long-term. You have to bring results every day, and then you earn the right to do the long-term stuff.”

For Vale, training and educating future employees is half of the battle, but replacing certain tasks with auto-mation is equally effective. “We do not believe people in Brazil and Mozambique are getting the proper train-ing,” said Mello. “But we’re also aiming to get a com-plete fleet of autonomous trucks. We’re partnering with nearby schools to get the people trained. While there is a perspective of jobs lost from a given community, start-ups may emerge and provide software solutions that live together with diminished job opportunities in the mines themselves.”

Mechanized automation has been impacting the la-bor force since the first industrial revolution, added Hashmi. “As you work on lower-level stuff that doesn’t require a basic understanding of the mechanism in place, your job will get automated out at some point,” he said. “That’s true of anything in the world. If you look at unemployment today, it’s almost zero if you have a high level of education. It behooves us to invest in that.”

Husain agreed. “The jobs that robots take today are dirty, dull and dangerous,” he said. “The cage around the robot is not to keep the robot in. It’s to keep the peo-ple out. We might have to get used to going to school several times in our lifetime.”


Greg Leveille, CTO, ConocoPhilips (left) and Trond Unneland, senior upstream advisor, Chevron (right), discussed present trends and the innovation-aided future of the oil and gas industry during their panel discussion at ABB Customer World 2017 in Houston.

A bad headache with no remedy is worse than a super-bad headache with medicine close at hand.

For instance, booms and busts have buffeted the North American and worldwide oil and gas indus-try throughout its history. However, despite recent price-drops and other challenges, ConocoPhilips and Chevron reported in a panel discussion at ABB Customer World 2017 that recent technical inno-vations and accessible raw material resources have them feeling optimistic about their industry’s perfor-mance going forward.

“The two big technical revolutions disrupting oil and gas, and causing players to rethink their business strategies, are unconventional reservoir development of oil and natural gas from shale, and large-scale per-formance improvements aided by data analytics,” said Greg Leveille, CTO, ConocoPhilips. “The U.S. was the world’s largest oil producer for much of the 20th century, began a 35-year decline starting in the mid-1970s, and regained the title due to unconven-tional oil.”

Leveille reported that the U.S. has daily production of 25 million barrels of oil equivalents, compared to Russia’s 20 million barrels and Saudi Arabia’s 15 mil-lion barrels. However, the U.S. would only produce 12 million barrels of oil equivalents per day without un-conventional production, which combines horizontal

drilling with hydraulic fracturing. “This combination lets us access oil and gas we

could never reach before,” added Leveille. “As for data analytics, where it used to take us 20 days to drill a well, we can now do it in just 13 days. In addition, data analytics can be used anywhere, which makes it most powerful when combined with unconventional oil production. This is why we expect to achieve even more in the future.”

Leveille, Trond Unneland, senior upstream advisor, Chevron, and Chuck McConnell, executive direc-tor, Energy Environment Initiative, Rice University, teamed up for the panel, “Designing business trans-formation and the future of energy production,” at ABB Customer World this week in Houston.

BRIGHT OIL AND GAS FUTURE WILL RELY ON INNOVATION, EFFICIENCYPanelists from ConocoPhillips, Chevron and Rice University chart past and present forces enabling their industry’s future.Jim Montague


Innovate—cautiouslyDespite the positive influences of fracking and data analytics, Unneland cautioned that a steady stream of innovations is no guarantee that end users will em-ploy them.

“Energy companies produce and consume lots of high-tech solutions and must constantly improve, but they’re also slow to test and adopt them compared to mainstream consumers or the companies we’ve worked with in Silicon Valley,” said Unneland. “Con-sumers and IT-based firms know the early bird gets the worm, but oil and gas players would rather be the second mouse that gets the cheese. This is because it’s more costly to be the first to adopt new oil and gas in-novations, so they stick with what’s tested and reliable. Even when innovations are adopted, there’s usually a step back period before benefits begin to arrive.”

Unneland added the game-changing innovations in oil and gas in the past few decades include deepwater/subsea applications, real-time reservoir management, 4D seismic technology, horizontal drilling and frac-turing, and data analytics. He added that emerging technologies in oil and gas include mobile comput-ing, data science, cloud computing, cognitive com-puting and the Industrial Internet of Things.

“Our multi-department energy initiative focuses on three things: accessibility to secure energy sources, affordability of those sources, and environmental re-sponsibility,” added McConnell. “Then we look at what talents the industry needs, so they can develop dynamic workforces.”

Implement—consistentlyLeveille added that more powerful, capable and por-table computing resources are greatly aiding Con-ocoPhilips projects. These tools perform high-end machine learning, visualization, site simulation and

other functions. “Five or 10 years ago, our major facility and well

projects were mostly custom-designed, one-offs that a team would assemble and execute,” he explained. “Now, we’re developing capital expenditure projects with similar designs that are more repetitively ex-ecuted, including well pads, oil sands processes and other rapid, low-cost experiments. This consistency gives us more leverage, and it’s very liberating. We’re going to do many more wells and other projects like this in the next 15 years.”

Unneland added, “Upstream processes can now put sensors everywhere like downstream applications al-ready do, and that’s enabling a lot of improvements for us. However, where we used to hire data scientists to work with our geoligists, what we need now are hy-brid, “petro-techs” that know both earth science and computers. We’re doing some of this training at our Center for Interactive Field Technology at the Univer-sity of Southern California.”

Leveille added that ConocoPhilips is also provid-ing more training in collaboration. “Our applications need to know more about how different measure-ments are interacting, and so we’re coordinating our facilities and operations engineering people to do it,” he added. “This is letting us look more closely at data for individual rigs, and even take a computer game ap-proach, so operators can begin to compete with each other on improving performance. This whole thing becomes self-perpetuating, and it’s enabled by this at-mosphere of innovation.”

Unneland added that even little data innovations can be a big help. “We recently had an issue about how to dispose of water from unconventional oil sites,” he added. “So someone developed a smartphone app that shows site position, amount of water to be dis-posed and other details, and it’s been a big help.”


“The fewer answers they have for you, the more it allows you to design your own success.” Paula Gold-Williams, president and CEO, CPS Energy, advises women in industry to say yes to opportunity, even when the path ahead is less than clear.

Paula Gold-Williams, CEO of CPS Energy Co. in San Antonio, Texas, started as an accountant when she joined the utility power industry about

30 years ago. Over the years, she served in almost every supervisory, managing and leadership role on her way to the C-suite.

“Back then accounting was as fraternal as it could be,” said Gold-Williams, who is also African American. “I’ve told my daughters how it was, and they’re just aghast. The industry has changed a lot since then, but not enough.”

Gold-Williams kicked off the Women in Industry: Empowering Women to Leadership program this week at ABB Customer World with the keynote address, “Past, present and future.” The program was sponsored by ABB and energy conference organizer EUCI.

Gold-Williams acknowledged that gradual evolution has enabled more opportunities for women in energy and other industries, but she stressed that women must also be willing to make a habit of seizing them. “Thanks to ABB and EUCI for launching this awesome partner-ship, which looks like it will get bigger each year,” she said. “This event is a good chance to network, but we must also know how to make changes every day, and the way to do it is by not boxing ourselves in.”

Powerful profile CPS Energy Co. is a 157-year-old, municipally owned util-ity in San Antonio, Tex., which started out producing nat-ural gas, and then added electricity production originally based on coal, nuclear, and more recently on hydropower,

wind and solar. It serves eight counties, and its present pro-file includes 41% natural gas, 27% coal, 13% nuclear, 12% wind and landfill gas, and 2% solar. The utility has $2.6 bil-lion in revenue and $11 billion in assets.

“A lot of energy companies in Texas must pick a lane—generation, transmission or customer-facing—if they’re not municipally owned,” explained Gold-Williams. “In our case, because we’ve been owned by the city of San Antonio since 1942, and must answer to the city council and mayor, we have a fully integrated and diverse energy portfolio, including gas, coal, an investment in nuclear, 1,000 megawatts (MW) of wind, and 500 MW of solar, including a 5-MV photovoltaic facility. In the next 20 years, we are expecting that mix to change.”

UTILITY CEO CLEARS LEADERSHIP PATH FOR WOMENCPS Energy CEO advises fellow women in industry to say ‘yes’ first, and ask questions laterJim Montague

http://www.cpsenergy.com

http://www.euci.com


Gold-Williams added that CPS Energy is also seeing a technological shift towards everything from smarter components to smart phones. “Utilities have been slow to adopt many of these more intelligent devices and soft-ware, but I believe we’ll speed up soon,” she said.

Best career practicesBased on her decades of experience, Gold-Williams’ pri-mary advice to younger colleagues, women and students is to say yes to almost every opportunity, and then to ask more questions. “You also have to expect that you may not always get a lot of answers,” she explained. “And the fewer answers they have for you, the more it allows you to design your own success.”

Gold-Williams has read Sheryl Sandberg’s book Lean In, and knows professional women who think they must always know what’s going on and what is the plan. “But there’s a limit to that,” she added. “You also have to allow yourself to be less than a perfect fit, and let yourself be free to be creative. Thinking that all the details have to be perfect matters less as you move up in leadership. At those levels, there are fewer details, and it’s more about using an organization’s power, moving from point A to point B, and solving problems and issues.”

After forming a women’s network support group at CPS Energy, Gold-Williams added that she and her colleagues invited their senior leaders to sit in. “You have to network because that’s how you find the ways to power,” she ex-plained. “You can do that investigation yourself, find the right executives, attach yourself, and learn from them.”

Service sparks leadershipTo handle these technical transitions and keep providing power to San Antonio’s residents, Gold-Williams reported that CPS Energy focuses on addressing issues and inter-acting with the city’s resident and communities more than ever—and this inevitably leads to improved leadership.

“I’m an accountant, but I love engineers because they solve problems.” said Gold Williams. “I believe the CEO of an organization is on the bottom of an inverted pyra-mid, and supports the other leaders, executives, manag-ers, employees, customers and communities above. We don’t want them to have to worry.”

Gold-Williams added that CPS Energy recently up-dated its website with more customer-focused services. “We know we’re behind on technology, and we’re try-ing to catch up, but in many ways, we’re even further behind in the way we think,” she explained. “For exam-ple, we previously supplied power just up to the meter, and didn’t worry about what happened in the homes. Now that meters are smarter, we’re beginning to gather volume data, and learning to add value both in front and behind the meter. All kinds of new technologies are being added in homes, and we need to be on that solution set.”

Gold-Williams added that solar is enabling customers to send power back to the grid, but this is often causing more electrical frequency and power-quality issue that CPS Energy must address with help from newer optimi-zation technologies. She reported that the utility is already 68% done with its present grid-modernization project that includes smarter street lights and other components.

“We want to be a partner, not just a provider,” added Gold-Williams. “But to make it happen, we must have good people who can add value. This means the lead-ers must know the focus and anchor of each individual.”

She reported these attributes were especially helpful when CPS Energy helped its customers and communities recover from storms and tornadoes in February that turned one of its transmission towers into a horseshoe, destroyed 100 homes, and cut power to 85,000 residents. “We coop-erated with local government, connected with customer on social media, stayed on the phones 24/7, and thanked everyone when it was over,” said Gold-Williams. “I know that I run an analytical engineering firm, but sometimes we have to manage emergency recoveries, too.”

“As a result, I don’t really focus on the fact that I’m a woman or an African-American. All of that’s true, but so what? That’s why I talk more about being an accountant and solving problems. You have to be careful not to cre-ate doubt when there is none. I’ve learned that I don’t have to be extra gregarious or worry that I’m ‘acting like a man.’ You just have to be yourself, say yes, and jump in and solve problems. You also can’t be afraid to fail, be-cause you’ll learn a lot more from failures than you ever will from success.”


“Technology is going to do more than we realize, and faster, but this will not happen for everybody. There will remain a mismatch of customers.” Rob Caldwell, president, Renewables and Distributed Energy Technology, Duke Energy.

Innovation at the edge of the grid is changing the rela-tionship between utilities and their customers. Renew-ables and electric vehicles (EV) are only the beginning.

“Solar always rises faster than we anticipate. And the energy storage price curve is amazing—soon it will be commonplace,” said Rob Caldwell, president, Renew-ables and Distributed Energy Technology, Duke En-ergy. “More new homes will be net-zero homes because the cost is becoming much lower, so it will be built in at the front end. Technology is going to do more than we realize, and faster, but this will not happen for every-body. There will remain a mismatch of customers.”

Caldwell joined Tom Rowland-Rees, lead analyst, En-ergy Smart Technologies, Bloomberg and Tarak Mehta, president, Electrification Products Division, ABB in a panel discussion moderated by Greg Scheu, Americas Region president, ABB, at ABB Customer World this week in Houston.

“When we first started looking at this space in 2004, there was 20 GW of wind and solar combined in our portfolio. That rose to 147 GW in 2015, representing an investment of $349 billion,” said Tom Rowland-Rees, lead analyst, Energy Smart Technologies, Bloomberg. “Renewables are growing at a phenomenal rate, and they’re moving away from utility-scale generation with the rise of distributed solar. We expected rooftop solar to grow depending on the region. And that growth is al-ways exceeding our forecasts.”

Duke Energy’s territory in the southeast U.S. now has 3,000 MW of solar power and 13,000 customers who are

solar generators. In North Carolina, more generators want to connect more renewables in remote locations. “They don’t realize the affect on the grid. That’s a farm field, there’s not a big wire there,” Caldwell said. “But our cus-tomers are at the edge of the grid and we have to meet them there. We have more clean energy, more distributed energy, and we need to give customers what they want, which is convenience, choice, control and cost. We need to manage the grid to deliver that, with power quality.”

Demand forecast: Flat, with ripples“Overall, we still see flat growth in demand, despite electric vehicles,” said Rowland-Rees. “Everywhere, we see digital infrastructure and smart grid technology go-

LIVING ON THE EDGE: CONSUMERS DRIVING POWER GRID DYNAMICSEdge-of-grid technologies present problems, solutions and almost certainly, surprises.Paul Studebaker


ing in, as well as higher efficiency and things like Nest thermostats that reduce demand. Electric vehicles are just offsetting falling demand.”

EV charging brings a different form of power demand in terms of when, where and how much. “It’s a big load for a short time,” said Mehta. “ABB has quite a few solutions for those problems, but the issue is the speed of change. For example, this month we’re see three times as many bus charger orders as we did three months ago in December.”

Rowland-Rees predicts that EV costs will be competitive by 2025, and “customer uptake is going to happen fast.”

In San Diego, EV density is already affecting power delivery and reliability at the edge. Those kinds of prob-lems will spread across the country. “We can’t tell cus-tomers they can’t have what they want,” Caldwell said. “We have to take them with us, to explain the cost and how to share and recover it.”

Customers take power reliability for granted, but main-taining it with a stressed grid is a challenge. “We have to figure out how to do it,” said Caldwell. “The engineering solutions are there, but we have to focus on bringing our customers’ needs to the attention of the regulators. We have to go and educate policy-makers and regulators.”

Technology calls for new regulations“Technology just keeps getting cheaper and cheaper, presenting new opportunities,” said Rowland-Rees.

While technology is enabling an ever-increasing variety of grid situations, it’s also ready to provide solutions, if we let it. “Hybrid farms with wind and solar, battery storage—how will these work together?” asked Mehta. “A house may have rooftop solar, a home automation system controlling consumption, and a battery in the basement. Who controls it, the owner or the grid? How will they communicate? It must be done in a way that makes sense.”

Storage promises to be part of the solution. “That will change the balance,” Mehta said. “Without it, renew-ables can become a big problem.”

The panel agreed that regulations are key. “Our grid is optimized for the needs of the past 50 years, and our regulators think that way,” said Rowland-Rees. “Custom-ers see something new and shiny, and they want it. The regulators have to keep up, or we’ll have consequences

like poor customers subsidizing wealthy customers, or electric companies going bust.”

Standards have to work together, so components can plug and play on the system. Today, the grid has a myr-iad of different technologies by different vendors. “It all has to work, and plug and play nice together, to keep power quality where it needs to be,” said Caldwell. “It’s going to take investment, and time.”

Disruptions ahead?“Five years ago, we didn’t foresee oil prices falling, or the dis-covery of enough U.S. shale gas reserves to last 300 years,” said Scheu. “What’s the next five years going to bring?”

At Bloomberg, “We always get carried away by new technology, then we look at what could disrupt it,” said Rowland-Rees. For example, “Lithium-ion batteries can explode, and it only takes one. How might safety con-cerns shake that market?”

“For as long as I remember, building energy manage-ment has always been the next big thing. Now we’re start-ing to see some movement. In Austin, all new homes must have energy-saving thermostats, and 25% of homes have signed up for demand response.”

At ABB, “We look for disruptive change at tipping points,” said Mehta. For example, when capital and op-erating expenses converge, facilities are idled. “Are there a lot of assets not generating value? Bringing them on can change the world.”

Caldwell said, at Duke Energy, “To avoid disruption, we need to be data-driven, but we also need to share in-formation with strategic partners to get away from not-invented-here syndrome. Utilities are geographically different, but we have a lot in common with other indus-tries. It takes a village.”

Especially in Europe, utilities often invest in down-stream energy companies with interesting capabilities, “a sort of venture capitalism,” said Mehta. They get to learn about the technologies, the companies and their business model. “When the future is not clear, you want to learn as much as possible.

“The picture at the edge of the grid is fuzzy. It’s going to be an interesting year in this space—we see the tech-nology need, what will be the business results?”

connect. collaborate. outperform. - putmanmedia.com · chief digital officer at abb. for example,...

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