Presenting ARC's Fifteenth Annual Orlando Forum
ARC World Industry Forum: Driving Innovation, Sustainability, and Performance
February 7-10, 2011 - Orlando, Florida
Speakers Stress Need for Transformative Innovation
ARC’s 15th Annual World Industry Forum was held in a beautiful new venue, the Renaissance SeaWorld Marriott Hotel. This year's event attracted more than 650 participants, representing 250 different organizations from 20 different countries. This included more than 100 speakers, 45 media representatives, and a record number of end users from the manufacturing and infrastructure sectors. Many participants commented that this Forum was possibly the best they had ever attended.
This year's forum began with a series of well-attended and highly interactive workshops and several important supplier press announcements on Monday; followed by general and topical sessions on Tuesday, Wednesday, and Thursday in the five different tracks. However, all was not work: Opto 22 and ARC co-hosted a pre-Forum Super Bowl Party Sunday evening, ARC hosted a welcome reception Monday night, AT&T hosted a luncheon on Tuesday, AVEVA and Mitsubishi both hosted receptions Tuesday evening, and Siemens hosted a reception at SeaWorld Wednesday evening.
Driving Innovation, Sustainability, and Performance through Collaborative Value Networks
In his opening remarks, Andy Chatha, ARC's Founder and President, introduced ARC's new Collaborative Value Networks concept, commenting that while the business drivers haven't changed significantly since last year, the intensity continues to increase.
According to Andy, recent events in the Middle East increased the level of uncertainty. Security — both physical and cyber — is becoming a bigger challenge for all companies. The BRIC countries are becoming stronger and more competitive every year. More "Facebook-generation" younger people are joining the workforce every year, bringing many new ideas and working styles. Government regulations increase by the day. We have started to upgrade the electric grid, with the Smart Grid having the potential to become as powerful and intelligent as the Internet. And the IT revolution continues, bringing with it, what Andy calls "easy IT" solutions. "With all these changes going on, we need to become highly flexible and agile," said Andy.
Andy added that any company that wants to reduce costs by 20-30 percent to compete effectively must innovate and look for new ways to do things using new solutions that enable new business models. This provided an excellent segue to his next topic for discussion; Collaborative Value Networks.
To put this in context, Andy first discussed ARC's Collaborative Manufacturing Management (CMM) model, which ARC introduced back in 2000. While the CMM concept provides a meaningful way to visualize and analyze the plant as a node in a supply chain network, it doesn't go far enough. Today's companies realize that they must become more design- or innovation-centric and supply chain networks don't incorporate design and engineering departments, which are managed separately by a different department. To become more innovation-centric, companies need to integrate their design, make, and deliver processes from end to end. Collaborative Value Networks extend CMM to the enterprise.
Oil & Gas Industry Trends and Challenges
The first keynote speaker at Tuesday morning's opening general session, David Ritter, President of the Haymarket Group, provided a high-level overview of the trends and challenges facing the global oil & gas industry today and its importance within the global economy.
According to David, "The oil & gas industry facilitates global economies. The global oil & gas industry will invest 1.5 trillion dollars a year from 2010 through 2030." According to David, "Population and economic growth are the biggest growth drivers for energy — particularly in Asia — and the global energy demand will double by 2050. Conventional supplies will struggle to keep up with this demand, and alternative sources will not initially be able to close the gap." As a result, "Oil and gas will provide more than 50 percent of the world's energy requirements for the next 20 years and this continued dependence on oil and gas will trigger regulatory intervention; transforming carbon dioxide into a resource, rather than a hindrance.”
In conclusion, David commented, "Innovation, creativity, and performance excellence are essential to meeting the future challenges of responsible energy production."
The Power of One, the Power to Lead
The next keynote speaker, Don Taylor, Vice President of Manufacturing and Engineering at Dow Chemical's Advanced Materials Division, gave a well-received presentation on the company's global transformation strategy. Don prefaced his presentation by saying that many of the challenges summarized in David's oil & gas industry overview also apply to the global chemical industry. To set the tone for his presentation, Don cited a quote widely attributed to manufacturing guru, W. Edwards Deming: "Change is not mandatory. Survival is optional."
According to Don, Dow Chemical initiated its transformation strategy five years ago. The objective was not only to change the products the company made, but also how it made the products and how its people operated. The changing manufacturing and engineering landscape leads to diversification of manufacturing activities and operations. More products require manufacturing flexibility (discrete, complex batch, simple batch, and continuous), plus the need to integrate different organizations, and to do so in a difficult economy.
The company's Integrated Management System combines work processes and engineering competencies, providing a culture of empowerment with individuals "empowered to deliver." The company also initiated an Integrated Performance System to track performance on a daily (rather than monthly) basis, with teams evaluating performance in daily meetings and implementing changes and improvements.
According to Don, the transformation at Dow Chemical has had some significant results. With a "safety-first" focus, process safety incidents have been reduced by 50 percent; loss of primary containment incidents have been reduced by 50 percent (with related spill quantity reduced by 70 percent); and the number and severity of injuries has been reduced by 50 percent or more at many sites. Other results attributed to the transformation include accelerated implementation, plus improved synergies, reliability, energy efficiency, production capacity, and more.
Asset Information Management Strategies
At the Wednesday morning's general session, Bechtel Group Senior Vice President, Geir Ramleth, gave a presentation on the need for suppliers, EPCs (such as Bechtel), and owner-operators to develop and implement standards for managing asset-related information. He prefaced his presentation with, "We [Forum participants], as a collection of industries, need to mature by developing some basic standards [for asset information management]." Geir then gave some examples of common standards that make life and business easier. These included calendars, standard gauge railways, boxcars for shipping, standard couplers for fire hydrants, and credit cards, which can be used anywhere around the world.
Geir went on to describe the owner/operator challenge of poor information. These include the time it takes to achieve design capacity at new facilities, increased regulatory requirements, the aging workforce, low "wrench time" due to poor access to accurate information, and a move toward centralized operations. Geir said, "We, the builders, should help owner/operators deal with their information challenges.
Geir commented that he agrees with ARC's new model for the asset information process, which allows for a smooth, rather than disjointed flow of relevant information for stakeholders over the asset lifecycle.
Geir concluded, "To deliver the full potential of asset information management, we need everyone — suppliers, EPCs, software providers, and owner/operators — to work together, support standards, and deliver solutions. Most people don't disagree that standards are needed, but not many are doing much about it."
Both the general sessions summarized above, and the more topical program sessions at this year's World Industry Forum (including sessions on operational excellence, anti-counterfeiting and brand protection, project performance management, enterprise mobility solutions, sustainability and production management, and energy management) shared a number of common themes. These include the need for companies to adopt common standards and processes, the need for real-time decision support through digitization, the need for easy IT, and the need to innovate in how companies manage and leverage data, collaborate across value chains, leverage new technologies, incorporate standard approaches and technologies, and adopt new business models.