General User Needs for CAPE

P. Banksl; K. Irons; M.R. Woodman; B.J. Stenhouse

2.1.1 OVERALL OBJECTIVE

CAPE has great potential to provide business benefits, but, in reality, only a portion of these benefits is currently being delivered. We look at some of the issues that cause this shortfall and establish the unsatisfied user needs implied by each issue. We will be concentrating on industrial users, since they are generally the most demanding, and we will highlight their needs, rather than suggest specific solutions.

The diagram below summarises the scope of the chapter:

It shows the activities involved in the lifecycle of a plant and indicates the full benefits that are available in each, if a way can be found through the advanced simulation technology layer in between. We assume that users are already receiving benefits from applying standard simulation techniques in each activity sector, so we will focus on the user needs that arise in seeking to move to the new benefits promised by advanced techniques.

The chapter begins by reviewing the environment in which modern CAPE professionals operate. It then considers the potential benefits available from the application of advanced simulation techniques in the different activity sectors and the issues involved in actually realising these benefits. Finally, it looks at some of the implications of the adoption of these techniques for the individuals and organisations involved.

2.1.2 BUSINESS ENVIRONMENT ISSUES

The modern corporation has changed significantly, and continues to change rapidly, from the common model of the 1980s and before. With this everincreasing rate of change in the corporate environment, the ability to adapt quickly is paramount. Arie DeGeus, formerly head of planning at Royal Dutch Shell, has said ”The ability to learn faster than your competitors is your organization’s only sustainable competitive advantage.” Not quality, not service, not technology, not price, not marketing, not patents, but the ability to adapt more quickly than the competition. This is true across all industry categories. It does not imply that speed is more important than other factors (quality, cost, ease of use, safety, environment, etc.), but rather that any competitive advantage can be copied by others in time. The rate at which an organisation can implement its next competitive leap will determine how long it can sustain its advantage. The key role of CAPE is in allowing the organisation to develop and implement improvements in the design and operation of its manufacturing plants as quickly as possible.

2.1.2.1 The Need for Speed

Mergers & acquisitions have resulted in a major change in the mix of organisations participating in the bulk chemical, speciality chemical, petroleum, petrochemical, pharmaceutical and agricultural chemical sectors. Many companies that were major players only a few years ago have either merged with others, split into separate entities, undergone major divestitures, totally changed focus, or disappeared completely. New companies have been formed, alliances and joint ventures abound, and new business models are being tested.

The result of all this has been a rapidly changing mix of competitors, intense competition and rapidly changing business priorities. With all of the shifts in the structure of firms in a given market sector, companies find themselves constantly facing new challenges from organisations that didn’t exist a short time ago. Many companies focus on market leadership as their strategic intent, which requires them to compete on a number of levels: price, quality, service, technology, product functionality, etc. Companies cannot only react to this competition, they must determine how to remain a step ahead in at least some of the elements. As each organisation looks for ways to gain competitive advantage, many paths are pursued. The ability of a firm to act quickly can make the difference between market leadership and failure. This reaction speed must be supported in all activities of the organisation, including CAPE.

CAPE practitioners have generally been seen as highly skilled technical specialists, having built expertise over time and multiple project experiences. However, with the factors noted above, there are increasing pressures on this group of professionals. With mergers, acquisitions, joint ventures, etc., staff changes more are far more common than was the case. The effect of these changes is often less continuity in the technical community, whether this means people moving between business units (and therefore between technology areas) or between companies. In addition, technical professionals are frequently asked to participate in diverse activities that are not core to their CAPE role. While this results in a welcome broadening of perspective for each individual, it also means that they become less-frequent users of CAPE tools, resulting in a reduction of their specific CAPE expertise.

With increasing focus on business level objectives, CAPE technical staff can find themselves with less focus on a single company agenda. At the least, there can be difficulties in simultaneously meeting business unit objectives (e.g. minimum capital investment for the next new plant or plant expansion) and corporate goals (e.g. minimum energy consumption, site integration, emission reductions, etc.). This issue is complicated further when CAPE activities involve contractors, whether they are contract engineers working with company staff, or when entire projects are contracted. While project objectives are always discussed as part of the negotiation, contracting, and project management process, that is no guarantee that those objectives are translated into desired individual behaviours when the CAPE work is actually done.

The combined effect of rapid change and competitive pressures means an increased emphasis on capital efficiency and pressure to build and operate plants that reflect a shorter lifecycle for the products they manufacture. These plants must also aid the goals of minimised working capital, asset base, lost production and maintenance budgets, as well as maximum on-line time. The goal here is minimum total cost of ownership. At the same time, there is pressure to squeeze the maximum capability from existing assets, which can actually decrease capital efficiency because older assets are used when newer technology could be more efficient. This is often done when a company seeks to avoid capital expenditure in an effort to increase its Return On Net Assets or Return On Investment.

All of these objectives must be met with lean organisations and stretched staff, who are working under all the constraints and external forces noted here. One manifestation of this changing environment is the widespread practice of outsourcing all or part of a firm’s CAPE activities. The outsourcing drivers are to reduce the costs of having a staff of internal experts, to be able to respond to changes in demand for CAPE activities, and to tap into increasingly specialised expertise available from firms who are “full time” CAPE practitioners.

A final set of pressures on the CAPE community comes in the environment, health, & safety arena. Process industry firms are faced with ever more challenging environmental goals, driven by regulatory, corporate policy, societal, and industry pressures. The growth of a litigious society brings another element of pressure on the CAPE professional to deliver process designs that are economic, flexible, capable of producing the required product mix, and socially responsible. It also adds the need to be able to provide evidence that due diligence was, in fact, practiced.

In this environment, it is clear that CAPE professionals will place heavy demands on computing and CAPE software capabilities, as they strive to deliver the speed of response being asked of them. We will look at these demands, later in this chapter.

2.1.2.2 Business Environment Needs

CAPE activities need to be integrated with the larger business enterprise. Easy incorporation of costing modules that are directly linked to the process simulation will allow rapid convergence to business-optimal solutions, not just engineering-optimal solutions. Such cost estimators need to be able to access both general cost data sets as well as company or technology specific cost information.

Along with cost estimation capability, the larger arena of project economics must be readily integrated with process modelling. Changes in the process design can have significant impact on overall project economics, and the ability to see that impact quickly will result in more flexible and cost effective plants. To be able to run multiple project economic scenarios with different plant design bases quickly, process simulators must easily and intuitively share data with project economics packages. Standard interfaces between process and economic models will give firms the ability to fully understand their options, quickly achieving optimum solutions.

Long-term cost of ownership for any given process design can be heavily influenced by maintenance costs. Maintenance cost data bases must be readily available to process and project economic estimators, and so allow the process design optimisation CAPE effort to truly identify lowest cost solutions. For the same reasons, reliability modelling capability must be linked to the overall project economic model, again using standard interface specifications.

Business leadership needs to design company work...