Interview with Duncan Micklem, Executive Vice President at Yokogawa & KBC
The ARC Industry Forum 2020, which took place in Orlando, Florida, focused on “Digital Transformation.” Digital transformation is defined, in simple terms, as the process of integrating digital technologies into business processes, culture, and customer experiences to meet changing business and market requirements.
During the Forum, Harry Forbes, Research Director at ARC Advisory Group, had a conversation with Duncan Micklem, Executive Vice President at Yokogawa and KBC for Strategy and Marketing, on disruptive technologies. This blog focuses on the highlights of the interview. The full interview can be viewed here and/or on YouTube.
Insight into Disruptive Technologies
Mr. Micklem shared his views on disruptive technologies and what Yokogawa and KBC were working on. He said, “There's a plethora of disruptive technology hitting the market. I think, for our customers, it's quite difficult to navigate their way through it. There's a whole bunch of technologies that are hitting the market, but very little that actually makes it into the mainstream.
“But one of the things that we really do see hitting the mainstream and making a really big impact is the digital twin. For us, a digital twin is a virtual digital copy of a device, system, human, or process that mimics actual performance. It's executable and can be manipulated. What's most important is that it allows a better future to be developed.”
What is Yokogawa developing with regards to digital twins, and how is it partnering with its customers?
To this, Mr. Micklem responded, “When people think of a digital twin, they think of a 3D CAD model. It's the first thing that comes to mind. What people don't realize is that this Digital Twin concept extends well beyond just that 3D CAD model. It's a virtual digital copy of the conditions of the fluids running through the pipes.
“It's looking at entire value chains; the performance of individual refinery units, but then scaling that up for a refinery-wide digital twin in terms of the molecules, and how you balance feedstock supply with what's demanded in the market.”
How are customers applying the Digital Twin concept to real business values and value creation?
To answer this question, Mr. Micklem replied, “What's really important, and I think even the theme for this event, the ARC Forum, which is digital transformation in industries and cities, is what our customers are trying to achieve. And that destination, unquestionably, is – no safety incidents, no unplanned outages, and nimble responses to disturbances and changes. It’s a motivated and an informed workforce and a culture of profitability. That's really the value for the customer and what it is that they need to strive to achieve from digital twins and digital transformation.”
Some of the Success Stories with This Kind of Approach
“In North America, we're working with a number of refiners. Yokogawa has a lot of digital twin technologies, but specifically one of the examples is taking a refinery unit and doing a real-time digital twin pulling data from DCS, historian, lab systems for better feed stock selection, and optimization of the unit and then scaling that up to a refinery-wide twin.
“There are different types of digital twins – twins of physical assets, people, processes, and the technologies themselves. So, when you put all that together, what you start to get is the concept of the remote operation center, the integrated production center.
“We are working with a number of customers in the Middle East and Russia to develop remote operation centers that leverage digital twins so that customers start operating their facilities less as individual facilities and more as value chains. When you focus on operations from a molecular level, you drive better safety, reliability, and profitability.”
How are customers approaching the financing of these kinds of developments?
“Depending on where they are in their digital maturity, the more mature customers are looking more for product and off-the-shelf digital twins they can operationalize and implement.
“Others are taking a different approach. Maybe there's more emphasis required in their business for improving their people and their processes. In that case, we are doing, for example, profit improvement programs where we will build the digital twin that helps us identify where those opportunities are and to capture those opportunities, so that the digital twin gets built in the process of a consulting engagement, and then it can then be operationalized with real-time data and handed over to the customer, if that's what they would like. We have an example where we have been doing profit improvement programs that develop and generate a lot of profit for the customer.
“We're looking at tens of millions of dollars and, in some cases, hundreds of millions of dollars. Then, the customer has a ready digital twin, which is handed over to the operations team to sustain those benefits,” Mr. Micklem replied.
In five years, what's going to change to help this technology be deployed more widely?
“I think it's a changing of attitudes. It's a realization that digital transformation is not just a buzzword but a realization that it is just a vehicle for achieving these outcomes, which are not new – the outcomes of no safety incidents, no unplanned outages, nimble response to changes in disturbances, and motivated and informed workforce in a culture of profitability.
“Anchoring digital transformation to those outcomes and reminding ourselves that that is what we're striving for, I believe, will drive a real uptake in digital twin,” Mr. Micklem replied.