Smarter Infrastructure For Oil and Gas Seminar Capabilities Offered by the Internet Of Things Prepared for: IBM // Oil & Gas Journal Seminar December 2013 IBM Oil & Gas Seminar December 2013 Technology Forces Are Driving The Connected Economy Hundreds of millions, then billions, of individuals and businesses, with billions of smart, communicating devices…… …….will change the way we work, learn and innovate IBM Oil & Gas Seminar December 2013 The Internet of Things – Vast Potential in Connected Devices 16-Bit 8-Bit 4-Bit 3 Content Driven Systems Real-Time Systems Control Systems Sensor / Actuator / ID Systems Chip / Logic Systems Test / Diagnostics Equipment, Network Switches / Routers Office Equipment, Medical Systems, Small Servers Telematics / Navigation Systems, Digital Cameras Set-Top Box / Audio / Video / Systems AMR / AMI Meters, Machine Controls, HVAC Office Equipment, Security Systems Residential Gateways, Routers & Hubs Auto Power-train / Braking / Safety Smart / Network Appliances Motion Control Meters & Advanced Sensors Smart Cards, Safety Systems Elevators, Auto Subsystems Industrial process Equip Smart Tags, RF-ID Simple Appliance & Machine Controls Wireless inteligent Sensors, Industrial Monitors Hydraulics / Pneumatics Devices Industrial I/O Basic Appliance Controls Toys & Games Less Deterministic 32-Bit Non GUI-Based Systems Processor / Platforms 64-Bit High Level Multiprocessor Servers / Mainframes Application Servers & Workstations Desktop / Laptop / Tablet PCs, ATM’s & POS Systems Smart Phones / PDA / Hand-Held POS More Deterministic GUI-Based Systems n-Bit Power Consumption Becomes Driver The ratio of devices that operate autonomously, versus those that have human interfaces has eclipsed ratios of 10:1 and will move toward 100’s and even 1000’s… IBM Oil & Gas Seminar December 2013 Advent of Smart Systems & Services Smart Services is a concept in which inputs— from machines, people, video streams, maps, newsfeeds, sensors, and more—is digitized and placed onto networks integrating people, devices, processes, and content to enable collective awareness New Application Values Customers & Users Connectivity of Things & People Pervasive Network Integration Managed Services Value Added Services Building Controls Fire, Security & Access People/Vehicles Personal Devices Equip In Facility Facilities IT Energy Nets “fixed” “mobile” HVAC Systems Fixed Networks Managed Services System Applications & Services Home Appliances Healthcare Equip Channels Products Embedded Sensing & Intelligence Software Arch & Tools Products Channels Media Equip Industrial Controls Engineered “Smart” Products & Components Industrial Machinery “movable” “mobile” Mobile Networks Networks & Network Services IT & Network Equip Transport & Vehicles Managed Services Virtually all electronic and electromechanical products are being designed to automatically transmit information about status, performance and usage and can interact with people and other devices in real-time. 4 Broader reach and range of dependable wireless networks will drive significant new applications value from improved reliability, quality and data rates. Customers & Users Availability of new managed services based on data aggregation, management and analytics capabilities. Ability to sense and respond in real time will drive more adaptive capabilities. Significant growth for asset management, location tracking services, security, and supply chain integration based on interactions among devices, mobile workers and systems management. IBM Oil & Gas Seminar December 2013 Factors Driving Smart Systems and IoT Industry Growth Growth Ubiquity Service OEM Adoption Improved quality and data rates Availability of remote diagnostics / upgrades Traditionally, connectivity has been “bolted on” to remote devices Network enhancements to support smart devices Uptime – device control and remote device health/maintenance Technology capabilities and lower costs are driving wide range of OEMs to embed and integrate network-based capabilities Broader availability of wireless networks Growing availability of cloud services & applications support Cost Comms technology rapidly dropping in price – volumes beginning to drive scale Cost and complexity of enablement still requires skilled system implementation activity but getting easier Applications Consumer applications positively impacting B2B and related adoption (e.g. smartphone, tablets/readers, etc.) Broad growth forecast for Asset Management, Security, Energy, Supply Chain & Logistics, and Customer Support 5 Security Highly secure requirements Better defined and improved security standards Newer generation of tools allowing for more device-centric offerings Regulatory Rapidly advancing policy initiatives in Public Safety, Utilities, Healthcare Growing adoption/interest in Resources, Buildings, Transportation, and Medical Carrier Endorsement Carriers are increasingly focusing on M2M opportunity, with dedicated sales teams and appropriate compensation plans Data is providing very meaningful revenue and profit growth for Carriers Traditional telephony becoming saturated ROI Empirical results from real-world programs are promising and expanding interest to new players Economics in general are becoming progressively more attractive IBM Oil & Gas Seminar December 2013 Smart Systems Technology Evolution Smart Services and the development of systems to monitor, manage and control physical systems have evolved from three separate legacy technology histories…. Designing and developing systems focused on building, facility and energy management… FacilityCentric EquipmentCentric (SCADA) Designing and developing systems focused on highly distributed and scalable wireless sensors and devices Mobile/Dispersed Asset-Centric Designing and developing systems focused on mobile and dispersed applications 6 IBM Oil & Gas Seminar December 2013 As The Physical & Virtual Worlds Converge, Connectivity Becomes Universal As networks have invaded the “physical” world, traditionally unique components and interfaces between and among electronic and electro-mechanical elements are becoming more and more standardized… Systems Applications Services & Applications Carrier & Network Services Software Tools, Middleware Tools & Infrastructure Network Infrastructure & Connectivity SmartPhones Systems and Equipment Types Marine Facility Systems & Equipment Terminals Diagnostic Tools Mobile Telephony, IT Terminals & Tools Vehicles Aerospace Mobile Equipment Fixed Equipment Tablets Rail On-Road Off-Road Complex Systemic Equipment Standard Machines & Equipment Facility Systems & Equipment Facility Infrastructure Components & Sub-Systems Electrical Sub-Systems & Components Mechanical Sub-Systems & Components Power & Control Systems Fluid & Pneumatic Sub-Systems & Components Electronic Interconnect Semiconductors & Micro-Electronics 7 Machine/Device Sub-Systems, Assemblies, Modules & Components Embedded Electronics IBM Oil & Gas Seminar December 2013 These Trends Are Just As True Within Traditional Control Environments Across the Enterprise Enterprise Integration Software/UI Supervisory & Data Acquisition & Integration Logic Control Process Control Motion Control Regulatory Automation & Control Sequential Network Network Equipment (Ethernet & Field Bus) Ethernet Ethernet Connectivity Connectors & Interface Components Sensors Sensors & Actuators Interface Technology Presence Position Flow Level Force / Load Light & Other Pressure Temp. & Other Motors Fluid Power Valves Actuators Mechanical Power Transmission Connectors Power Regulators & Other Power Distribution & Electrical Infrastructure* Discrete Process On the Machine Industrial Sectors Technology / Product 8 IBM Oil & Gas Seminar December 2013 Architecture, Standards & Relationships Are Required For Market Growth The Smart Systems opportunity is still relatively young with substantial growth potential – the bulk of the potential is ahead for this arena Complex Connections Compound • Crowd-Sourced Content for Machine Troubleshooting • Brokerage / Auction for Spare Parts or Sub-Contractors • Integrated Automation, Condition Monitoring & Asset Management Systems • Managed Security Services Simple • Equipment Monitoring • Maintenance Dispatch • Alerts & Alarms Time Simple Applications Applications tend to be remote supportdriven applications that involve monitoring/upgrades of installed base of machines in the field – such as motors, instruments, machines, etc. • • • • Tracking Product Support Product Upgrades Diagnostics / Monitoring Industrial Equipment Monitoring 9 Field Force Dispatch Compound Applications Complex Applications Applications that involve multiple collaborating [peer-peer] devices or significant interactions between and among devices, systems and people. Applications that drive interactions between and among devices, device sub-systems and people and can also allow extending/expanding values from third party collaboration and large scale [big] data integration/analytics • • Multi-Party Equipment Support Real-Time Demand Response Maintenance Support & Collaboration IT, Ops & Process Automation Integration Real-Time Demand Response • Multi-Vendor Brokered Services • Integrated Real Time Pricing for Electricity • Multi-vendor Maintenance Collaboration Collaboration & Analytics Sensor Data Fusion / Integration IBM Oil & Gas Seminar December 2013 Smart Systems & Mobility: “Compound” Benefits 100% Finance Support Contracts 80% Labor Costs Parts Replacement 60% Cost of Downtime 40% Energy & Resources Administration Software Updates 20% Machine or Equipment Purchase Price 0% Design Maintenance Life Cycle Cost To Support Equipment Can Range from 5X To As Much As 15X The Purchase Cost of the Equipment or Device Investment case and ROI is very short when life cycle costs rise above 5X the equipment purchase cost Operate Sell Start-Up Mobility technologies particularly when combined with connected assets expands values Build Install • Monitor asset performance in real – time can improve asset productivity by up to ~20% • Monitoring asset performance in real – time can reduce accident frequency by up to ~85% • Integrated real time inventory management can reduce field inventories by up to ~60% IBM Oil & Gas Seminar December 2013 Oil and Gas Perspective Networks Perspective: Extraction & Production Provide real time data from extraction and drilling equipment and related systems, transport systems and refineries to enterprise systems continues to be the critical requirement: FPSO Processing & Transport Refining Land Drill Pipelines • Real time asset information needs to be widely available across the corporate environment ROV Refinery Networks • Real time information also needs to be provided to other applications and interacted with across vendors and service providers • Ownership of the data will be critical dimension in evolution of systems 11 Offshore Tank Farms Challenges • • • • • Systems need to be resilient Standard open communications schemes are relatively new to the industry New ways of working for industry participants, support providers and systems vendors Often need to work in parallel with data feeds to the service company systems Assets such as drilling rigs may not be company owned – security challenges in many locations and practices • Need for robust interactions will tend to conflict with security and ownership challenges IBM Oil & Gas Seminar December 2013 Sensor & Data Intelligence Rapidly Evolving Cloud connections need to be readily accessible and available 3rd Party Devices Smartphone With App 3G/4G Devices with connectivity Wi-Fi 3G/4 enabled Smartphone G PC with App Tablet With App • Deliver new applications via cloud services (SaaS) to drive subscription model Cell Tower The Cloud DMM Wi-Fi enabled Tablet Sensor Data Intelligence Web Server Industrial Equipment Devices need information architecture to freely share and broker data 12 Customer’s Wi-Fi Router/ Access Point Account Management Data Secure Measurement Data Database Server Sensor Data Intelligence Content Server 3rd Party & Content Key Requirements: • Embedded connectivity in devices such that they can talk directly to applications on any supplier’s UI devices • Capabilities for mobile field force management as well as multi-party collaboration capabilities • Capabilities for integration of structured data, unstructured data as well as time series (real-time) data • Peer-to-Peer functionality between sensors, devices, systems and cloud • Application development tools suitable for users as well as third party services provides and integrators IBM Oil & Gas Seminar December 2013 Fragmented Sensor and Data Requirements, But Discernible Patterns… Data Centers Hospitals Building Electronics Transportation Metal Parts Discrete Other Converting Food & Consumer Metals PetroChem Oil & Gas Utilities Measurement & Diagnostic Types & Applications Pulp & Paper Converting Resource/Process Vibration Precision Balancing Thermal/Infrared Oil/Fluid Ultrasonic/ Acoustic Electrical = Significant Use = Critical Tool = Less Critical = Little Use Higher Propensity To Adopt New Tools & More Explicit Strategies In Place Uneven Propensity To Adopt New Tools IBM Oil & Gas Seminar December 2013 Customers Have Rapidly Growing Service & Support Needs Services & Solutions Critical Requirements Increase Availability Customer Needs Asset Status Increased Utilization Reduce Capital Expenditures Customer Needs & Buying Behaviors Are Driven Either By Reduce Costs Asset Configuration Performance Or Increased Safety Costs & Support Increase Performance & Effectiveness Increased Uptime Increased Throughput Improve Utilization Financing Reduce Safety Stock Reduce Maintenance Time Inventory Reconciliation Purchasing Financial Management Materials Costs Fixed Asset Control Reduce Energy Consumption Maintenance Cost Financial Reporting Reduce Incidents Customer/User Satisfaction Environment Compliance Staff Training Customer/User Differentiation Production Staff Time Facility Mgt Asset Utilization Systems Specialization SLA Record Scheduling Capacity Planning Improved Procedures/ Methods IBM Oil & Gas Seminar December 2013 Transition To Fully Distributed Systems Will Drive New Requirements Future Topology Evolving Requirements Open Systems & Interoperability Peer Inter-operability between different vendors processors / microcontrollers & their operating systems will be extremely important – systems need to provide services to each other even when the underlying compute platforms are vastly different Enterprise Level Device Life Cycle & Longevity Always On Never Off Device Accessibility & Update Frequency Security & Mission Criticality Designing systems for very long operational lives – not just physically but also for communications and information architecture will be key Many “always-on” applications will have to deal with live updates, no down-time and still function in very small memory footprints Parameter Monitoring and Warning HMI Industrial Ethernet For Data PC/Switch Firewall Many devices will be physically inaccessible – embedded into products, building and infrastructure and not designed for human interaction and will require infrequent updates Mission critical devices will bring their own unique set of requirements – guaranteed availability, high security and immunity from updates being an attack source Field Bus Units For Signal Transmission Peer Sensors Peer Actuators Drives IBM Oil & Gas Seminar December 2013 While Many New Info Tools Are Being Adopted, Few Address Real Needs… ERP/SCM & Enterprise Applications Product & Process Engineering Systems CAD/CAE Systems ERP / SCM / Planning Sales & Service Management Supply Chain Management Production Planning & Execution Product Data Management Advanced Planning & Scheduling Quality Systems (LIMS, SQC) Manufacturing Execution Systems (WIP Tracking, Process Management, Reporting) Process Planning Tools CMMS Information Maintenance, because of its ad-hoc nature, is one of the last functions to be networked and automated: Flows • Maintenance, while important, has been a “second class citizen” from an investment and skills development standpoint • Virtually all the adjacent technologies that have developed in and around the maintenance function have not provided significant benefits to maintenance personnel In-House Maintenance Functions Supervisory Control & Information Management MMI SCADA DCS Batch CBM & Remote Services Test, Measurement & Analytics Tools • Existing systems are not well integrated and the information they accumulate cannot be easily accessed across differing application systems Industrial Automation, Controls, Sensors & Actuators Sensors & Actuators PLCs Motion / CNC Drives, Motors DCS / OCS Process Systems, Equipment and Shop Floor Devices Third Party Maintenance Services • Customers are better understanding of the value of “remote” services largely due to the growing presence of adjacent technologies such as cloud computing IBM Oil & Gas Seminar December 2013 Current Systems Fall Short of Expectations Underserved Function Planning, Monitoring & Management Tools Remote Services & Ad-Hoc Systems Automation & Control Tools EAM / CMMS Plant Historian Equipment & Maintenance Monitoring & Measurement SCADA / CBM Systems Control Systems Maintenance Planning Troubleshooting, Process Improvement Trouble Shooting & Predictive Maintenance Equipment Monitoring Process Control Installation &/or Usage Type Temporal Fixed Temporary / Ad Hoc Monitoring Fixed Fixed Data Value Medium Medium Medium-High High High Operations Planner Production Personnel Process Developers & Maintenance Manufacturing Engineer Control Systems Engineer Production Engineers High Medium Low High High Plant Maintenance Low Low High Low Low Facilities Staff Low Low Medium N/A N/A OEM Field Support High Medium Low Medium - High Medium Medium Medium - Low High Medium - High Low System Attributes Function System Oversight/ Design System Use 3rd Party Service IBM Oil & Gas Seminar December 2013 Customers Expect Suppliers To Organize Integrated Services Offerings Design / deploy unique motion and drive control solutions to achieve best-in-class optimization of process, support and non-process operational assets. • Exploration • Transportation • Refining Global program / project management services designed to maximize effective implementation of systems, delivering a consistent, quality-based program. • Planning/project management • Contract/risk management • Quality/cost management Monitoring & measurement of specific process, process support and non-process systems variables that improve system performance. • Equipment uptime • Scrap reduction • Energy utilization Asset Analysis Collect and analyze information to identify optimization opportunities for process and systems analyzed independently and together as interdependent systems. • Modeling / simulation of systems • Quality and throughput indices • Modular software development Asset Benchmarking Benchmark key performance data for systems performance. Key areas to assess include process, process-support, and process and equipment assets. • Cost per unit of production • Cost per square footage • Level of technology Safety & Compliance Services Provide solutions that allow customers to manage safety, including integration of new regulations and ongoing testing, certification and verification support. • Safety and performance criteria • Validation assistance • Waste monitoring Predictive Maintenance Provide predictive maintenance and condition-based monitoring for critical assets - current health, warning status, recommended maintenance actions. • Predictive maintenance plans • Equipment health profiles • Benchmark to standards Reliability Centered Maintenance Optimize maintenance strategies for equipment criticality and failure -- preventive, predictive, pro-active approaches -- optimizing cost and uptime. • Right mix of advanced services • Maintenance master plan • Lowest cost reliability Parts & Parts Management Spare parts location, availability, rapid delivery and response time. Additional value added requirements include logistics services, repair & re-manufacturing. • Spare parts • Parts programs • Logistics Field Maintenance & Repair Services Optimize maintenance for repair, upgrades and support, including field engineer and technical support for trouble shooting and services enhancements. • Field service • Warranty services • Maintenance planning Best-In-Class Control Systems Systems Design & Development Services Program Management Measurement & Verification Systems Management & Optimization Services Field Service & Support IBM Oil & Gas Seminar December 2013 Smart Services Value Creation Models “Solo” Business Models Embedded Innovator Model Summary Description “Team” Business Models System Professional Solutionist Largely focused on remote support automation & data value for specific product Leverages services automation to feed diverse needs across product provider delivery chain Builds broad support capabilities across the entire life cycle of target equipment or delivery chain Largely harvests product performance data to understand required features, functions and support needs – realtime “field intelligence” on products & customers Feeds device intelligence from field to support for efficiencies - offers preemptive maintenance & replenishment via remote monitoring & diagnostics of its smart, networked products Offers new business process or application/performance optimization values - sells life cycle and optimization capabilities – leverages partner interactions & value across delivery based on “preferred access” Value Chain Aggregator Collaborator Collects, organizes data with aim to optimize interactions across single provider dominant delivery chain Builds and extends value via collaboration with customers, channels and providers across collective delivery chains Owns product life-cycle and customer relationship. Co-designs, finances, installs, maintains, replenishes & optimizes product usage. Provides access to “qualified” third-parties via shared interactions and activities. Delivery chain players can‘t be cut out of the services loop by competitors or channel partners. Enters the customer’s business as a problem-solving, valuecreating partner who then collaborates to create new or extending values. Uses acquired info-techniques and domain expertise to move into new/ adjacent business process or application values IBM Oil & Gas Seminar December 2013 Success Will Depend On Ability to Leverage Open Models Foster Multi-Vendor, Multi-User Interactions & Cooperative Mgmt Collaborator Manage System/User Experience & Delivery Chain Relationships, Intelligence and Interactions Value Chain Aggregator Builds broad support capabilities across the entire life cycle of target equipment or delivery chain Solutionist Leverages services automation to feed diverse needs across product provider delivery chain System Professional Largely focused on remote support automation & data value for specific product Embedded Innovator 20 ENVIRONMENT Simple Compound Complex IBM Oil & Gas Seminar December 2013 Managed Service Example: Smart Collaborative Maintenance Services Equipment OEMs and services providers will need to enable maintenance collaboration between and across support ecosystem Gadgets Mashups Instant Messaging Blogs RSS Feeds Tag Clouds ! "# 21 IBM Oil & Gas Seminar December 2013 Customer Feedback On Smart Remote Diagnostic Services Security & Reliability Data Management Want multiple options for data management – local (on premise) & remote Analytics Impact See big benefits – want better software tools for diagnostic analytics Deployment Rising Growing number of users are planning programs for remote services Interoperability Critical Data cannot be easily accessed across differing application systems Willingness To Pay Cloud Services Collaboration Rising User Experience 22 Industrial security is “top of list” issue with industrial users Willingness to pay in users with remote services history and experience Sophisticated users see big shift in budgets from capex to opex Users see many opportunities for using new mobile technologies Want better more intuitive software for maintenance workers IBM Oil & Gas Seminar December 2013 Smart Systems and Internet of Things Venue Map Healthcare Hospitals & Healthcare Outpatient Clinics Home • Blood Glucose Monitors • Electro-Cardiac Monitors • Pulse Oximeters • Lifestyle Devices • Fitness Devices Mining, Oil & Gas Utilities & Water • Farming Plant • Irrigation Systems • Soil Preparation • Resource Extraction Equip • Oil, Gas Production Plant & Equipment • Gas Distribution • Water Distribution • Water Production Plant & Equipment • Resource Extraction Equip Commercial & Institutional Government & Institutional Electrical HVAC Lighting Safety Security Transit 23 • • • • • • Airport Systems CCTV ID Systems Intruder Detect Radar & Sonar Surveillance Residential • • • • • • Appliances Electrical HVAC Lighting Safety Security Research Laboratories • Fixed Patient Monitoring • Patient Care • Patient Diagnostic Agriculture • • • • • • Telecom & IT Buildings Resources • Research Equipment • Research Instruments Alternative Power Energy Home Office & Infrastructure • Enterprise IT • Networking • Telecom Equip Demand & Supply Side Power Retail / Commercial Consumer / Professional • • • • • Comm’s Devices Enterprise IT Home IT Infotainment Lifestyle Utilities • Electrical Distribution Equipment & Devices Home Office Mobile • • • • Comm’s Devices Enterprise IT IT Ancilliary Support Aerospace • Civilian Aircraft • Military Aircraft • Co-Generation Equipment • Solar Farms Equipment • Wind Farm Equipment • Electrical Distribution • Electricity Transmission • Generation Plant & Equipment Advertising & Financial Services POS & Vending & Professional Hotels, Venues & Restaurants Supply Chain, Garage & Gas Stn • Commercial Service Equipment • Signage Devices • Commercial Service Equipment • Cleaning Appliances • Cold Storage Appl • Cooking Appliances • Laundry Appliances • Cleaning Appliances • Commercial Service Equipment • Stage, Venue, Hotel Entertainment • Ind / Professional Maintenance • Commercial Service Equipment • Surveillance Sys • • • • Home Office Appliances Infotainment Lifestyle Devices Small Appliances Construction Industrial • Home IT • IT Ancilliary On-Road & OffRoad • Construction Material Handling • Ground Works Plant • Commercial Vehicles • Consumer Vehicles • Military Vehicles • Recreational Vehicles Discrete Manufacturing Electronics Manufacturing • Handling / Processing Sys • Machine Control • Test / Inspection • Silicon Fabrication • Assembly, Test & Inspection Equip Transportation Research Laboratories • Research Instruments Marine & Railways • • • • • Transportation Infrastructure Cargo Ships Fishery Craft Military Ships Recreational Craft Freight & Passenger Trains • Bus, Rail & Highway Infrastructure • Commercial Service Equipment • Surveillance Systems Processing & Converting Supply Chain & Mobile Systems • Process Control Systems • Handling / Processing Sys • Ind /Professional Maintenance Equip IBM Oil & Gas Seminar December 2013 Harbor Research – Strategies For Smart Systems and The Internet of Things Advise Research Discover / Understand Emerging Opportunities • Domains • Technologies • Markets Plan / Build New Businesses Market Discovery • Analysis • Strategy • Planning Discovering And Developing Smart Businesses System Discovery Collaborative Design Convene Design / Develop Platforms and Systems: • Collaborative Design • Interactive Forums • Community Participation and Validation we combine deep domain and technology knowledge, creative processes and facilitation and an extensive network of expertise and relationships as growth catalysts….. IBM Oil & Gas Seminar December 2013