HARNESSING

THE POWER
OF PREDICTIVE
INTELLIGENCE
TO ACHIEVE
TOP QUARTILE
PERFORMANCE

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HOW MANUFACTURERS CAN ACHIEVE THE 4% FACTOR LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR RESOURCES
TOP QUARTILE PERFORMANCE INTERNET OF THINGS TECHNOLOGY INVESTMENT
 HOW MANUFACTURERS
CAN ACHIEVE TOP
device commodities—are treated as part
o f a b ro a d e r, m o re s t ra t e g i c d e c i s i o n , t h e
result can be a tremendous improvement
schedules than fourth quartile performers.
Th a t m e a n s t h e y c a n c o m p l e t e t w i c e a s
many projects for the same investment as

QUARTILE PERFORMANCE in operational performance. A strategic

approach to operations technology deci-
sion-making can help companies achieve
SPONSORED BY EMERSON To p Q u a r t i l e p e r f o r m a n c e , u l t i m a t e l y
increasing shareholder value.
Instead of being satisfied with old tech-
n o l o g i e s a n d o l d ways o f d o i n g t h i n g s t h a t
bring only incremental improvements,
m a n u f a c t u r e r s s e e k i n g To p Q u a r t i l e p e r -
formance need to look at their projects and
plant performance with dramatically higher
expectations.
I n m a n y i n s t a n c e s , b y r e p l a c i n g o l d e r,
accepted work practices and outmoded
te c h n o l o g i e s , i n d u s t r i a l m a n u fa c t u re rs a re
able to achieve significant gains. Companies
c a n a t t a i n To p Q u a r t i l e p e r f o r m a n c e i n a
variety of ways:
• Project Certainty:
Traditional approaches
to project management
can introduce proj-
ect risk, extra cost and
their lower performing peers. Top Quartile
performers in capital projects not only
achieve schedule and cost goals, but also
derive faster ROI, which improves share-
holder value.
A p ro v e n a p p ro a c h t o a c h i e v i n g t h e s e
performance goals is to move strategic
e n g i n e e r i n g d e c i s i o n s i n t o e a r l i e s t p ro j -
e c t s t a ge s . H i s t o r i c a l l y, m a ny i m p o r t a n t
decisions are allowed to move to later
s t a ge s , w h e n t h e re i s t h e l e a s t f l e x i b i l i -
t y t o m a ke c h a n g e s . A s a c o n s e q u e n c e ,
c h a n ge o rd e rs re s u l t i n s c h e d u l e d i s r u p-
t i o n a n d i n c r e a s e d c o s t . To p Q u a r t i l e
project teams typically engage an indus-
try expert in project design and execution
that not only has a track record of global
co n s i s t e n c y o f d e l i ve r y, b u t a l s o fo l l ows
a m e t h o d o l o g y t h a t e n s u re s p ro j e c t s a re
completed on time and within budget.
Once a project is complete and the
fa c i l i ty i s o p e ra t i n g , t h e re a re e n o r m o u s
opportunities here…many of which return
va l u e e a c h ye a r. I n fa c t , a n e s t i m a te d $ 1

I
Industrial organizations
to d ay a re u n d e r t re m e n d o u s
pressure to not only stay com-
petitive, but to establish themselves
as industry leaders. For many companies, the
challenge to achieve Top Quartile operation-
al performance—as well as complete capital
extended startup time.
I n d u s t r i a l c o m p a n i e s a re a b l e t o re d u c e
projects on time and on budget—often appears t h i s c a p i t a l p ro j e c t r i s k a s we l l a s e l i m -
difficult, if not unattainable. inate cost and time overruns, achieving
To o o f t e n , i n d u s t r i a l f i r m s o v e r l o o k t h e a savings of 20 to 30 percent on their
t ra n s f o r m a t i ve p owe r a n d g a m e - c h a n g i n g investment.
performance of new methodologies and According to industry benchmarking
technologies. When automation technolo- d a t a , To p Q u a r t i l e p e r f o r m e r s h a v e 5 4
gies—commonly viewed as component or percent lower cost and 49 percent shorter
Trillion is lost annually due to poor oper-
ating performance. Emerson is working
with customers to tackle these issues
through a program called “Operational
Certainty”, which identifies how technolo-
g i e s a n d n e w e n g i n e e r i n g p ra c t i c e s c a n
h e l p c o m p a n i e s re c o v e r l o s t v a l u e f ro m
their existing assets.
These losses occur in a number of areas:

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HOW MANUFACTURERS CAN ACHIEVE THE 4% FACTOR LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR RESOURCES
TOP QUARTILE PERFORMANCE INTERNET OF THINGS TECHNOLOGY INVESTMENT
 • R e l i a b i l i t y : Unplanned i s o n e o f t h e b i g g e s t o p e ra t i n g c o s t s i n there is a wide disparity of performance.
downtime costs indus- the manufacturing—as much as 40% in C o m p a n i e s i n t h e To p Q u a r t i l e h a v e 3
trial manufacturers an i n d u s t r i e s l i ke r e f i n i n g . A c c o r d i n g t o a times fewer personal safety incidents than
estimated $50 billion US Depar tment of Energy study, as much their average performing peers. They also
annually. Equipment as 37% of energy brought into Industrial slash the number of production safety
failure is the cause of p l a n t s i s w a s t e d a n n u a l l y, a n d 1 5 % o r eve n t s by 6 6 % . Th ey a cco m p l i s h t h i s by by 60 percent. Through better train-
42 percent of this unplanned down- more of steam generated is lost. re d u c i n g p e r s o n n e l e x p o s u re t o h a z a rd - ing of personnel and modern automation
time. Unplanned outages result in Inadequate monitoring of furnaces and o u s a re a s , t h ro u g h t h e u s e o f a d v a n c e d t e c h n o l o g i e s , e m p l oye e s h a ve i m p rove d
e x c e s s i v e m a i n t e n a n c e , r e p a i r, a n d gas-fired heaters can cause excessive fuel technologies and increasing equipment insight into process and equipment condi-
e q u i p m e n t re p l a ce m e n t . I n fa c t , ave ra ge consumption, increased emissions and reliability which helps them avoid equip- t i o n s a n d a s a re s u l t , a re e m p owe re d t o
industry performers lose at least 2 weeks added maintenance cost. Energy also is m e n t fa i l u re s t h a t c a n re s u l t i n a s a f e t y make better informed business decisions
of production annually as compared to wasted as the result of leaks and process incident. on the plant floor.
t h e i r i n d u s t r y - l e a d i n g p e e r s . S i m i l a r l y, va r i a b i l i ty d u e to i n a d e q u a te m o n i to r i n g I n d u s t r y l e a d e rs ty p i c a l l y o p e ra te w i t h
o u td a te d m a i n te n a n ce p ro ce d u re s wa s te of processes. • Production: Companies the leanest staff, exhibiting limited labor
resources and may expose staff to greater B y d e l i v e r i n g s t a b l e , r e l i a b l e p o w e r, o p e r a t i n g i n t h e To p waste and the fewest safety incidents. In
s a f e t y r i s k . I n f a c t , a c c o rd i n g t o a 2 0 1 3 energy companies can reduce fuel Quartile of produc- t h e p u l p a n d p a p e r i n d u s t r y, f o r e x a m -
Solomon RAM study, average performers consumption, waste, emissions, and main- tion optimization can ple, companies that have implemented
spend twice as much on maintenance cost tenance costs. In fact, studies show that achieve a 20% reduc- preventive maintenance and other labor-
as Top Quartile companies. an effective energy management informa- tion in overall production saving automation technologies have
B y c o n t ra s t , To p Q u a r t i l e m a n u fa c t u r- t i o n sys te m c a n re s u l t i n e n e rg y s av i n g s costs and improve asset utilization by experienced a productivity gain among
ers leverage the power of predictive of 30 percent—tens or even hundreds as much as 10% according to a 2016 IHS maintenance staff of up to 66 percent,
i n t e l l i ge n ce b u i l t i n t o n ew t e c h n o l o g i e s . o f m i l l i o n s o f d o l l a rs s ave d a n n u a l l y. b e n c h m a r k i n g s t u d y. Th e s e b e n e f i t s c a n a n d p ro ce ss e f f i c i e n c y ga i n s o f 2 0 to 3 0
Companies that are able to all but elimi- To p Q u a r t i l e m a n u fa c t u re rs h ave e n e rg y be achieved through advanced control, percent
n a te t h e s e co s t l y u n p l a n n e d o u t a ge s s e t costs among the lowest in their industry, improved feed stock management, great-
the benchmark for operational perfor- despite maximum utilization of production er production flexibility to respond to As these examples demonstrate, redefining
m a n ce . D e s i g n i n g a p l a n t to a c h i eve To p facilities. Additionally, Top Quartile ener- c h a n g i n g m a r ke t co n d i t i o n s a n d re d u ce d performance expectations and taking a stra-
Quartile reliability yields huge payoffs gy performers have 30% fewer emissions, production process variability resulting in tegic approach to automation technologies
over the life of the project. helping their companies achieve increas - off-spec product and rework. can materially change the economic outcome
ingly important sustainability goals. o f a co m p a ny ’s p l a n t o p e ra t i o n s o r c a p i t a l
• Energy & Emissions: • People Productivity: projects. Manufacturers that measure their
Outmoded technolo- • Safety: This key perfor- S t a n d a rd m a i n te n a n ce industrial projects and plant operations against
gies and inadequate m a n ce i n d i c a t o r ( K P I ) practices are labor these new thresholds of performance typically
m o n i t o r i n g o f p ro ce s s is routinely cited as intensive and ineffi- expect no on-time or on-budget slippage on
energy consumption the most important cient. Industrial firms their greenfield projects or plant upgrades, nor
result in unnecessary area of consideration are able to safely improve any unscheduled plant or production equip-
cost and waste of resources. Energy f o r m a n u f a c t u r e r s . Ye t wo r k fo rce p e r fo r m a n ce a n d p ro d u c t i v i ty ment failures. l

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HOW MANUFACTURERS CAN ACHIEVE THE 4% FACTOR LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR RESOURCES
TOP QUARTILE PERFORMANCE INTERNET OF THINGS TECHNOLOGY INVESTMENT
 THE 4% FACTOR: B
By weight, a person’s central nervous system accounts for a fractional
percentage of body weight. And yet, without it we couldn’t live, much less
function effectively.
For industrial process manufacturing facilities, the same can be said of
How to Bring Capital Construction Projects in On-Time, On-Budget automation. Typically accounting for roughly 4 percent of the project cost
for new construction, automation is rarely considered early enough in the proj-
BY BILL BRADY • TOP QUARTILE
ect strategy. This might be why 65 percent of all projects over $1 billion and
35% of all projects under $500 million are significantly late or over budget,
according to a study in Project Management Magazine.
While not all projects should be considered failures, the difference between
Top Quartile project performance and other quartiles is staggering. According
to the Project Management Institute, companies lose $109 million for every $1
billion spent on projects due to the decrease in recoverable budget when the
project fails.
One of the greatest challenges, complexity, is an enormous obstacle and
comes in many forms:
• The size and scale of today’s new oil and gas, petrochemical, refining and
other process manufacturing facilities are unprecedented.
• Facilities are bigger, more technically complicated and often built in remote
locations with limited infrastructure.
• The workforce in these locations often doesn’t have experience operating
technical facilities of this magnitude.
• The sheer number of suppliers and contractors working on these proj -
ects—often dozens—makes a difference. While each of these suppliers and
contractors has a defined work scope that is uniquely theirs, there are inher-
ent dependencies between suppliers which can create frustration at best and
schedule-busting delays at worst.

A third and endemic

i s s u e i s t h e u s e o f o u t-
dated methodologies
in project execution,
combined with missed
opportunities to uti-
lize new technologies
to reduce and eliminate

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HOW MANUFACTURERS CAN ACHIEVE THE 4% FACTOR LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR RESOURCES
TOP QUARTILE PERFORMANCE INTERNET OF THINGS TECHNOLOGY INVESTMENT
 work. These inefficiencies and missed value-
engineering opportunities add up to significant
wasted expense in terms of engineering hours
and materials, as well. Tens, if not hundreds,
of millions of dollars could be saved on every
project.
So what is a C-suite to do—stop investing?
Not viable for any company wishing to remain
competitive and drive growth.
“Top Quartile companies investing in new
infrastructure need the certainty of projects
delivered on-time, on-budget with lower cost
and lower risk,” said Jim Nyquist, president of
Systems and Solutions at Emerson Automation
Solutions.
Eliminating cost is simply about engineer-
ing better value from every dollar spent. It
comes in several forms: Three requirements
for successful projects going forward are: Cost
Elimination, Complexity Reduction and the
ability to Accommodate Change.
• Elimination of redundant or unnecessary
work
• Automating steps in the process to reduce
engineering hours
• Utilization of standardized technologies to
reduce customization, excess materials and
manpower
For example, for every $1 billion of capital
investment in a new facility, a Top Quartile
project team invests $22 million less in spare
parts than its lower-quartile peers. That Top
Quartile project team also follows a control-
system engineering and design strategy that
saves 70-80 percent on hardware space
9 10
HOW MANUFACTURERS CAN ACHIEVE
TOP QUARTILE PERFORMANCE
requirements, and finds ways to reduce its
investment in expensive piping by 30-50
percent in segments around the plant. Once
u n d e r o p e r a t i o n , t h a t s a m e To p Q u a r t i l e
facility spends a staggering $40 million less
annually on maintenance than its third-quartile
counterparts.
Reducing complexity is another critical fac-
tor in Top Quartile project performance. For
example, shared amongst dozens of suppliers
and contractors are hundreds of thousands
of documents and millions of pieces of data.
The information is not simply the blueprint of
the plant, but complex operating requirements
and technical specifications which impact the
work of many companies. Because each com-
pany maintains their own system of record for
documents and data, the likelihood of version
incompatibility or data entry errors can have
staggering impact on project schedules.
To prevent project information getting out
of sync while providing for a nimble team of
suppliers, Top Quartile project teams utilize a
single source of truth on documents and data.
Emerson’s Project Data Ring, by example, man-
ages all project documentation in one place,
interfaced among all suppliers—regardless of
their independent document and data man-
agement sources. It also stores all technical
specifications in one database, providing each
supplier with just the information they need to
complete their respective scope of work.
Accommodating change, especially in late
s t a g e s o f a p ro j e c t , a d d re s s e s o n e o f t h e
most vexing problems project teams and their
investors have: startup delays. A project that
THE 4% FACTOR
“TOP QUARTILE
COMPANIES
INVESTING IN NEW
INFRASTRUCTURE NEED
THE CERTAINTY OF
PROJECTS DELIVERED
ON-TIME, ON-BUDGET
WITH LOWER COST
AND LOWER RISK.”
— Jim Nyquist, president of Systems and
Solutions, Emerson Automation Solutions
has been on paper for five years or more and
i n co n s t r u c t i o n fo r 2- 3 ye a rs i s s c h e d u l e d
to go into full production on a specific date.
Contracts with suppliers and customers of that
site are developed based on that projected
“go live.” When the date is missed—often by
months—the consequences can be staggering.
Lost revenue, delayed return-on-investment,
customer goodwill are all sacrificed. But why?
The root cause is technical, yet simple at
the same time. Early in a project cycle, engi-
neering and technology decisions are required
in order for suppliers to schedule their deliv-
erables. However, the actual manufacturing
process design isn’t yet finalized. Fast-forward
two years to construction and routinely, those
early automation design decisions prove
restrictive to late design modifications. As a
consequence, costly and time-consuming
change orders wreak havoc on the schedule.
What if the project could simply absorb those
late-state change orders without affecting the
schedule?
LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR
INTERNET OF THINGS TECHNOLOGY INVESTMENT
One game-changing
technology Emerson intro-
duced recently, called
“Electronic Marshalling
w i t h C H A R M s ,” d o e s
precisely that. This unprec-
edented system interface
platform helps project
teams eliminate miles of
wiring and thousands of
h o u rs o f e n g i n e e r i n g t ra-
ditionally required for
connecting tens of thou-
sands of instruments and valves. It gives them
t h e f l ex i b i l i ty to a cco m m o d a te l a te d e s i g n
changes nimbly and adjust the deployment
of automation technologies with little-to-no
impact. Most importantly, it helps ensure on-
time startup, which leads to faster return on
investment.
To p Q u a r t i l e p r o j e c t t e a m s u t i l i z i n g
Electronic Marshalling with CHARMs tech-
nology have saved months on their project
schedule. This has also translated into cost
savings measured in millions of dollars.
As capital markets have tightened in reac-
tion to uncertain business conditions,
the demand for greater project certainty
w i l l i n c re a s e t o e n s u re b e t t e r i n v e s t m e n t
performance.
“ To re a c h t h e s e d e m a n d s , p ro j e c t t e a m s
and their sponsors will need greater capital
efficiency, information integrity and schedule
a g i l i ty,” N yq u i s t s a i d . “ Wi t h b e t te r p e r fo r-
mance in these areas, you will be on the path
to Top Quartile project performance.” l
RESOURCES
 LEVERAGING
THE INDUSTRIAL
INTERNET OF THINGS
TO TRANSFORM PLANT PERFORMANCE
A
Although some
larger industrial
firms have made sig -
n i f i c a n t p ro g re s s e n a b l i n g
business decision makers to fully
access operational data to improve perfor-
mance, many midsize and smaller companies
have yet to take advantage of the promise of
the “industrial internet of things” (IIoT). In
a recent interview with IndustryWeek, Peter
Zornio, Emerson Automation Solutions Chief
S t ra t e g i c O f f i ce r, a n d B o b K a rs c h n i a , Vi ce
President of Wireless for Emerson Automation
Solutions, discuss the benefits and challenges
involved in leveraging process applications uti-
lizing an IIoT platform.
IW: What is the Industrial Internet of Things
and why is it important?
Zornio: The Industrial Internet of Things is
an architecture or platform of technologies
11
HOW MANUFACTURERS CAN ACHIEVE
TOP QUARTILE PERFORMANCE
that enable data-driven applications,
with an emphasis on the Internet’s
ability to provide physical decoupling
of sensing, interpretation and visualization.
It’s about getting the right actionable data to
the right experts anywhere at the right time.
It’s important because it can yield tremendous
benefits in reliability, energy management,
safety, and other areas in manufacturing.
Karschnia: The applications are targeted at
h e l p i n g co m p a n i e s d e r i ve va l u e f ro m t h e i r
i n ve s t m e n t i n t h e t e c h n o l o g y. Th e i m p o r -
t a n c e o f I I o T i s n o t t h e t e c h n o l o g y, b u t
rather the applications it can drive. The appli-
cations deliver the value and the benefits to
the industry.
IW: How can process companies and manu-
facturers benefit from an IIoT platform and
applications?
THE 4% FACTOR
Karschnia: Emerson helps customers
boost their performance in terms of uptime,
improve health/safety/environmental, reduce
energy consumption and increase reliability.
This starts with a foundational data acquisi-
tion layer we call Pervasive Sensing. With the
increased deployment of real-time sensors
through a facility, customers gain insights
they never had before which helps improve
decision quality and response time. They can
reduce costs while reducing risks.
In the environmental area, for instance, the
EPA has new regulations for monitoring pres-
sure relief devices. Our customers are able
to avoid fines, increase performance, and
run their plants more effectively using our
Pervasive Sensing solution for pressure relief
device monitoring.
“NO ONE LIKES IT WHEN
Zornio: In many cases, the biggest bene- THE ‘CHECK ENGINE’ LIGHT
fits come in troubleshooting and reliability IN THEIR CAR GOES ON
of specific physical equipment. For example, — INSTEAD, YOU WANT
knowing in advance when a packaging
SPECIFIC ACTIONABLE
machine is about to fail, a flow in a process
INFORMATION. YOU WANT
is slowing due to fouling equipment, or the
TO KNOW THE CORRECT
steam system has some failed components—
e a c h o f t h e s e c a n p a y o f f b i g i n g re a t e r
ACTION YOU SHOULD TAKE.”
—Peter Zornio, Emerson Automation Solutions Chief
uptime or in less energy consumed. Often
Strategic Officer
the payback can be measured in weeks or
months. It’s also opening a new business
relationship model between suppliers and
customers through remote monitoring, which
gives the customer piece of mind knowing
their plant assets are being continually moni-
tored by experts.
12
LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR RESOURCES
INTERNET OF THINGS TECHNOLOGY INVESTMENT

IW: How can industrial firms turn realtime
datafrom sensors in production devices into
actionable information?
Zornio: The goal is always actionable infor-
mation. No one likes it when the “check
engine” light in their car goes on-- instead,
you want specific actionable information. You
want to know the correct action you should
take. We help our customers to use realtime
data such as pressures, temperatures, levels,
vibration, and flows in various processes to
d e t e r m i n e e q u i p m e n t h e a l t h , a s s e s s e n e r-
gy production and utilization, and measure
health and safety issues with application
13
HOW MANUFACTURERS CAN ACHIEVE
TOP QUARTILE PERFORMANCE
I W: A re t h e re s e c u r i t y i s s u e s t h a t c o u l d
“WE CAN RETROFIT YOUR arise as a result of making process data
Internet-accessible?
ENTIRE PLANT, OR WE CAN
DO ONE APPLICATION AT
Karschnia: Companies need to think about
A TIME. WE CAN START
security holistically. We’ve built security into
WITH ONE APPLICATION OR our system from the ground up using the same
ONE PROCESS, AND THEN approach as some leading high tech compa-
EXPAND IT ALL THE WAY UP nies toward preventing attacks—development
INTO A BROADER VISION was with security as a fundamental concern.
ENCOMPASSING A FULL Nonetheless, security is a constant process,
PLANT-WIDE SOLUTION. and you need to make sure you stay on top of it
THE RETURN IS FASTER as things change.
IF WE DO THE WHOLE
OPERATION.” Zornio: There also are privacy concerns. For
—Bob Karschnia, Vice President of Wireless at Emerson e x a m p l e , we m a y h a ve a c u s t o m e r t h a t i s
Automation Solutions concerned that proprietary information on par-
ticular process conditions or products could
fa l l i n t o c o m p e t i t i ve h a n d s . E m e r s o n h a s
developed a multi-layered set of security pro-
tocols and technologies to provide confidence
specific software and expertise. We do all this at every level. We call it the Secure First Mile,
with the goal of enabling smarter decisions referring to all data inside the plant and its
and actions. selective connection to the outside world.
We will help the customer install new sen-
s o r te c h n o l o g y a l o n g w i t h t h e i n te r p re t i ve I W: A l t h o u g h t h e I I o T v i s i o n i s a l re a d y a
capability that will tell them what will happen reality for some manufacturers and industri-
if they don’t do something, and exactly what al firms, why aren’t more companies taking
they should do. advantage of it?
Karschnia: I n m a ny c a s e s , t h ey n ow h ave Karschnia: Pro ce s s co m p a n i e s t e n d t o b e
information they simply never had before. We more conservative, taking the attitude, ‘If it’s
actually show companies, ‘Here is how much not broken, don’t fix it.’ There are concerns
the current problem or situation is costing about taking on something new.
you, here is how you can fix it, and here is how Also there is the misconception that people
much you will save for the year as a result.’ have that making sensor data available over
THE 4% FACTOR LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR
INTERNET OF THINGS TECHNOLOGY INVESTMENT
the Internet, that implies it’s going out all over
the Internet. Of course that’s one model, but
the data could be made available only inside a
company’s intranet environment.
Zornio: Going out over the Internet to 3rd
parties with process or equipment data is a
business model change for many compa-
nies, and not all think it’s the right thing to
do. This requires some careful business
s t ra t e g y co n s i d e ra t i o n s a n d f ra n k l y, m a ny
companies simply are just beginning to think
about it. Sometimes they don’t have the in-
house expertise but don’t simply want to be
sold a bunch of products. They need a col-
laborative approach. Lastly, the absence of a
clear business case to quanitify the value of
investing has stymied lots of companies. It’s
where Emerson’s program called Operational
Certainty comes in.
IW: Does a company that wants to leverage
an IIoT platform need to replace all of its leg-
acy infrastructure? Or can it be adopted one
unit or one facility at a time?
Karschnia: We can do a comprehensive retrofit
of an outdated plant, or we can do one applica-
tion at a time. We can start with one application
or one process, and then expand it all the way
up into a broader vision encompassing a full
plant-wide solution. The return is faster if we
do the whole operation. Usually companies start
small because of capital constraints, or they
may have a specific pain point in their opera-
tions that they’ve asked us to address.
14
RESOURCES

Zornio: Scalability is one of the most com-
mon things on customers minds today. We’ve
all been burned by large scale enterprise IT
projects that took longer than expected and
required substantially more capital than fore-
cast. As a result, customers are looking for
flexible, scalable ways to invest and gain mea-
surable impact. From there, they want the
ability to scale their investments based on the
value derived. It’s why Emerson’s Plantweb
digital ecosystem was designed to start small,
but scale to a very complete architecture. We
even offer subscription based models in which
customers have no capital outlay but gain the
benefit of new technologies and services.
IW: Traditionally, many industrial companies
viewed plant-based controls simply as auto-
mation. Why does a more strategic approach
to an IIoT investment deliver greater value to
the enterprise?
15
HOW MANUFACTURERS CAN ACHIEVE
TOP QUARTILE PERFORMANCE
P
Zornio: Historically people have instrumented
the plant solely for controlling operations. By
contrast, using our Pervasive Sensing Solution,
we take the view that with our sensing technol-
ogies, we can help companies drive a whole new
host of applications that vastly improve their
energy management, equipment reliability, and
environmental compliance-- all while delivering
cost savings. This is the transformation we see
taking place in the process industries.
Karschnia: Pervasive Sensing is the foundation to
Emerson’s IIoT strategy we call Plantweb. We’ve
implemented it successfully in a host of industries,
including refining, chemicals, power generation,
upstream oil and gas, metals and mining, pulp and
THE BUSINESS CASE
paper and others. Our vision delivers significant
process improvements and savings not only in the
short term, but it also promises to transform the
process industries over the long term. That makes
Emerson unique. l FOR TECHNOLOGY
INVESTMENT
P
P ro f i t a b l e i n d u s t r i a l c o m p a n i e s e x t ra c t t h e g re a t e s t v a l u e
from their assets with maximum uptime, the near elimination of
recordable safety incidents, dramatically lower energy use, and
cost-efficient production operation. Sounds obvious, right?
Unfortunately, not all industrial firms have achieved high levels of
uptime and cost efficiency with the lowest possible safety incidents. In
fact, manufacturers around the world have performance issues that cost an
estimated $1 trillion in operational losses.
A highly common operational challenge is the lost production and
exce ss i ve m a i n te n a n ce co s t s d u e to u n s c h e d u l e d e q u i p m e n t d ow n-
time or outages. Often this is due to limited visibility into actual
16
THE 4% FACTOR LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR RESOURCES
INTERNET OF THINGS TECHNOLOGY INVESTMENT
 equipment health, combined
with outmoded maintenance
practices. Production equip-
ment failures cost industrial
manufacturers an estimat-
ed $50 billion annually. In
addition, unnecessary and
expensive energy losses
contribute significantly to
industrial inefficiency.
During boom times, when
profits are up, these losses
can be masked by a favorable market simply as
a cost of doing business. But as Warren Buffett
once put it, “You don’t know who’s swimming
naked until the tide goes out.” Nonetheless,
this strategic oversight is a problem the savvy
executive or sharp CFO should not only be
aware of, but also determined to fix.
WHEN TRADITION BLOCKS PROGRESS
One big challenge is the inability to quantify
the impact of technology investment. Most
often, technology evaluation and selection is
based on performance criteria, corporate tech-
nology standards, supplier relationships and of
course, cost. But sometimes, the biggest con-
sideration of all is missed: How will this impact
my bottom line?
“In some cases, it’s a company’s cultural
norms and legacy that hold them back,” says
Mike Train, Executive President of Emerson
Automation Solutions. “They have been com-
mitted to company standards and operational
excellence programs for years, trying to eke
out efficiencies wherever possible. But you
17
HOW MANUFACTURERS CAN ACHIEVE
TOP QUARTILE PERFORMANCE
can’t ‘efficiency’ your way to top-tier perfor-
mance, especially when you are optimizing
decades-old technology infrastructure and
work processes. As a consequence, there’s
a t r i l l i o n d o l l a r s o f u n l o c ke d va l u e d u e t o
unplanned maintenance.”
Overcoming outdated cultural norms in orga-
nizations starts at the top. It requires a sense
of permission extended by senior management,
backed by clear management commitment to
change. In its absence, even the most dedi-
cated change agent will be consumed by
traditional mindset and resistance.
MAKING THE BUSINESS CASE
While there are no guarantees, there are
dependable strategies for achieving measur-
able returns on investment. Obviously, you
n e e d to b e g i n w i t h a go o d b a s e l i n e u n d e r-
standing of current performance. In whatever
area you measure-- output, yield, cost of pro-
duction, downtime, energy consumption-- you
need a clear sense of current performance
THE 4% FACTOR
levels, along with some historical trending.
I t ’s e q u a l l y i m p o r t a n t t o h ave a n u n d e r-
standing of disruptions to operations, such
as equipment failure and maintenance inter-
vals. Of ten production downtime is caused
by unforeseen issues with equipment which,
in many instances, could have been detected
prior to failure by having the right automation
technologies.
U n f o r t u n a t e l y, m a n y e x e c u t i v e s r e m a i n
unaware of the financial impact that equip-
ment reliability-- or lack thereof-- can have
on operations. Whether you are making ten-
nis shoes, kilowatts, or refined oil products,
operational reliability means your operating
assets are available to produce product when
the market demands that it be available. But
a failure to properly maintain plant and equip-
ment in top physical shape and health can lead
to higher maintenance costs, unplanned down-
time, and late shipment of products.
For example, at most companies, 40% to
50% of their maintenance cost is reactive,
the result of equipment failure. By contrast, at
companies that have proactively maintained
their plants, 90% of their maintenance cost
goes to planned service work. In other words,
maintaining and upgrading operating assets
e n s u re s t h a t m a i n te n a n ce co s t s a re l owe r,
energy usage goes down, and plants operate
efficiently with fewer accidents.
THE HUMAN FACTOR
Complicating matters from a plant operations
perspective, many industries today are con-
fronting a pair of additional problems: a lack
LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR
INTERNET OF THINGS TECHNOLOGY INVESTMENT
of preparation to deal with knowledge trans-
fe r, a n d a s h o r t a ge o f s k i l l e d m a i n te n a n ce
engineers. Baby Boomers are retiring in large
numbers, taking with them their knowledge
and experience of how plant equipment and
processes function, and how they can be
fixed with minimal disruption. When these
experienced maintenance people retire, their
knowledge often isn’t captured anywhere.
I n a d d i t i o n , o u r n a t i o n i s n ’ t m i n t i n g n ew
industrial engineers the way it once did.
Apprenticeship programs are disappear-
i n g . A l t h o u g h t h e re i s a b i g p u s h t o d ay t o
expand Science, Technology, Engineering and
Math (STEM) careers, it’s clear that indus-
trial companies will need a strong operations
performance program to help cope with the
shortage of trained operators and technicians.
The industry also must make a deeper com-
mitment to education-- to future-proofing the
careers of its workers by helping them adapt
to changing technologies. The nature of work
is changing as data and technologies play an
increasingly critical role. Nonetheless, work-
e rs of ten a re l e f t b eh i nd . Accord in g to th e
U.S. Bureau of Labor Statistics, an estimated
350,000 manufacturing jobs go unfilled each
month due to a skills gap.
So what’s the solution? What strategic steps
can industrial companies take to make their
operations run more efficiently? How can they
recover much of the cost that otherwise goes
up in steam, unscheduled downtime, and lost
productivity due to industrial accidents?
For one thing, industrial companies need
to shed the outdated mindset that views
18
RESOURCES
 re l i a b i l i t y a n d m a i n t e n a n c e a s p u re l y t h e
domain of operations. Finance, in particular the
CFO, can play a big role in supporting ongoing
programs that ensure plants are healthy and
well-maintained, and achieve an above-average
return on assets.
A COMMON TECHNOLOGY PLATFORM
O n e wa y t o i m p rove a s s e t e f f i c i e n c y i s t o
apply common technology platforms across all
plants. Most large industrial companies oper-
ate more than one, and often multiple, plants
in various locations. In many cases, each plant
will have operated with a lot of autonomy in
the past, which resulted in a mixed bag of plant
operating systems and a variety of automation
technologies.
Th e s e d i s p a ra t e s y s t e m s t e n d t o i n h i b i t
efforts by companies to instill best practices
throughout their operations and achieve Top
Quar tile performance among their industry
peers.
HOW EMERSON CAN HELP
Emerson’s Operational Certainty program helps
industrial companies achieve Top Quartile oper-
ating performance. This is a technology and
engineering-based program designed to help
industrial companies achieve top performance
in their operations and recover some of the hid-
den losses that many firms unknowingly incur
due to inefficiencies and waste.
Emerson has conducted extensive research
to determine and measure exactly what con-
s t i t u t e s To p Q u a r t i l e a s s e t p e r f o r m a n c e
in key industries. For instance, Top Quartile
19
HOW MANUFACTURERS CAN ACHIEVE
TOP QUARTILE PERFORMANCE
performers had one-third the number of safety
incidents compared to their average industry
peers. Similarly, they spent half as much on
maintenance compared to average performers,
while operating with an additional 15 produc-
tion days per year.
“ We c a n l e v e r a g e d a t a f r o m p r o c e s s e s
and look at their asset performance through
condition-based monitoring,” Train explains.
“There’s no textbook answer on how to achieve
Top Quartile operational performance other
than applying good strategy based on a com-
pany’s particular environment.”
Rather than reacting to the problem of
t h e d a y, E m e r s o n ’s t a c k i s m o r e h o l i s t i c .
Companies are asked to define their business
objectives instead of outlining a list of their
p e rc e i v e d o p e ra t i o n a l p ro b l e m s . Ta k i n g a
s t ra t e g i c v i e w e n a b l e s E m e r s o n ’s t e a m o f
experienced consultants to design solutions
aimed at achieving the company’s objectives in
a more comprehensive manner.
“ O n ce we h ave a l i g n m e n t o n o b j e c t i ve s ,
our subject-matter experts will optimize the
approach,” Train says. “Our job is to guide our
customers on which investment option will
move the needle on financial performance in
their operations.”
Companies are routinely evaluating their
technology infrastructure, considering new
and varied approaches to automation. But their
decision should start with defining the busi-
ness problem they are trying to solve, and then
collaborating with a partner who has solved
those problems already, delivering real and
measurable business improvement. l
THE 4% FACTOR
RESOURCES
ARTICLE: Top Three Sources of Dead Money in Your Operation (And How to Revive Them)
Every company is beset by assets that fail to attain full production potential due to downtime.
For companies to achieve the highest return on investment, the goal is to extract as much
production potential as possible from an asset. This requires identifying the causes of “dead
money” and then taking actions to revive it.
ARTICLE: The 4% Factor: How to Bring Capital Construction Projects in On-Time, On-Budget
Industrial process manufacturing facilities cannot effectively function without automation.
Automation is rarely considered early enough in the project strategy, and early implementation
can drive flexibility to help stay on budget and schedule.
VIDEO: Steve Sonnenberg, Chairman, Automation Solutions, Emerson
Steve Sonnenberg, President, Emerson Process Management talks with Kurt Barrow, VP, Oil
Markets, Midstream & Downstream, IHS Energy.
INFOGRAPHIC: IndustryWeek Survey Shares Insight on Key Issues and Priorities
In a recent survey, 500 IndustryWeek readers from all manufacturing industries weighed in on
issues affecting their operations, capital projects, plant automation, and safety. These are some
key findings from the online poll.
Emerson is a global automation engineering Once an asset is up and running, our clients
and technology leader, propelling the world’s l e ve ra ge E m e rs o n ’s u n p a ra l l e l e d a u t o m a t i o n
premier industrial companies into benchmark t e c h n o l o g y p o r t fo l i o t o a c h i eve To p Q u a r t i l e
setting performance throughout the lifecycle of operational performance through maximum
their investments. At Emerson, we call it Top production availability and throughput, lower energy
Quartile. costs and reduced safety risk. Emerson’s leadership
Fo r d e c a d e s , l e a d e rs i n o i l & g a s , re f i n i n g , extends from pervasive sensing technologies and
p o w e r, c h e m i c a l , m i n i n g a n d o t h e r p r o c e s s the most reliable control elements to the industry’s
industries have turned to Emerson’s expertise and most advanced software platforms for operations
innovations to deliver predictable project success. management and asset health.
Emerson has been called upon to provide services E m e rs o n ’s m o re t h a n 74 ,0 0 0 e m p l oye e s i n
and technologies to the world’s largest and most 150 countries around the world wake up each
complex projects, helping customers eliminate day ready to take on our customers’ toughest
unnecessary capital construction costs, reduce challenges, turning “never been done before” into
project complexity and restore schedule certainty. “consider it solved.”
20
LEVERAGING THE INDUSTRIAL THE BUSINESS CASE FOR RESOURCES
INTERNET OF THINGS TECHNOLOGY INVESTMENT
 Are you ready to hit
the Top Quartile?

Then get ready for

Operational Certainty.
Slash production costs up to 20%*
Cut energy consumption up to 30%*
Reduce safety recordables by 66%*
Recover weeks of lost production, and more

Find out how Emerson can take your company

to the top at Emerson.com/Operations

*Refining and Petrochemical Benchmarks, API, Solomon, OSHA, IHS Markit and Company Reports.