Last week we discussed how the current economic situation has forced the EPC industry to leap towards digitalization. Today, we’ll look at what EPC companies can do to expedite an EPC 4.0 approach.
1. Benefit from your engineering systems
Get the full benefit of your engineering systems and do not produce just some intelligent P&IDs and perform 3D modeling of piping and equipment; rather, use all available engineering tools and model all disciplines in a 3D environment. This way, there are no silos with simple inputs/outputs as everything is integrated, and all the generated data can be reused and checked efficiently.
In addition, it is recommended not to reuse only the data between the disciplines but reuse the design previously created between projects. It’s not likely for two exactly similar EPC projects to exist, but much of the content created in a project can for sure be reused in other projects, saving a lot of time (and money).
You can also perform automated cross-checks between the data generated by the tools, avoiding wasting time verifying every deliverable (list, drawing, report, etc.) before any handover. The data-centric model saves a lot of time on those “final verifications.” It is also recommended not to perform any deliverable adjustments outside the data-centric system, by, for example, using simple CAD tools or MS Excel.
If you are not using the full potential of your EPC tools, you certainly regard them as a burden, bringing in extra cost. In this case, you might start to move back to earlier stages of digital transformation, going to perform the drawings in simple CAD tools, reports in spreadsheets, etc., literally returning 20 years in time.
2. Improve engineering collaboration
As projects are becoming more complex and require global collaboration between EPCs across continents and time zones, improved coordination is needed between offices and across disciplines more than ever before. Do you have tools and processes that can support global engineering? To know the answer, you only need to answer a few questions:
• Do you have the best-streamlined process design possible, or do you keep using xls, txt, cvs, xml files to exchange data, and simple CAD tools to produce deliverables?
• How are you dealing with procurement and construction phases? Do you have a modern design tool but control the procurement in a spreadsheet? And is your documentation still inside that shared folder in the server where everybody has access?
EPCs vary in size and type, from companies only focused on the engineering side to others solely focused on procurement and construction. No matter the size or type, if you don’t have all the necessary steps aligned, both internally and externally, you will be losing efficiency, and, in this specific market with the current scenario, this can make a big difference.
3. Enhance project delivery
Are you still just delivering PDFs to your customers? If so, there is a better way. Most of the owners operators awakened some years ago to the importance of digital transformation and the Industry 4.0 concepts. Especially after the last 2014-2015 crises, interest in a digital twin implementation rose quickly as owners understood that this brings not only efficiency but cost savings.
To perform such a transformation efficiently, OOs are adopting standards such as CFIHOS, which define in detail the data required to be handed over from projects to operations, which is all the necessary procedures for data-centric deliverables. Such alignment by OOs is gaining a lot of momentum, and now, due to the current scenario we face, it will certainly become even more important.
And now, more than ever, owner operators will look for companies aligned with their requirements, putting aside the ones that cannot understand, or work, in their industry 4.0 world.
4. Look for the right balance
Always look for a balance between the people, processes and technologies when considering any system implementation.
That is because it is impossible to have tools/technologies that make all professionals happy and fit in all of the company’s processes. It is possible to develop this in-house, but starting a tech company inside an EPC would seem a waste, as this brings a lot of extra costs not related to the EPC business. Rather than inventing the wheel yourself, you can rely on trust-worthy vendors.
Have you considered how you can make use of your engineering “digital twin” to enhance your offering to your owner operator customers and extend your footprint? Owner operators do not necessarily have the resources or skill sets to maintain the digital twin, so why not offer to do this on their behalf and manage the engineering digital twin into the operations phase? Many engineering companies have started to move down this path to increase revenues and leverage their skills into the operations phase, where there is a more stable revenue flow.
5. Look for different markets
We all know the oil and gas industry will continue to be affected by the COVID-19 situation and lower processes for the immediate future. It is worth noticing that the industry is performing only slightly better than air and travel business, and frankly, nobody can predict how the world economic recovery will be. In this way, it is better to start to be prepared to serve other markets and have the right partners to support you on this.
Extra! The Golden Rule …
Finally, as my golden rule for a successful EPC 4.0 implementation, my recommendation would be: Do not try to go from “zero” to “hero.” EPCs vary on size, specialization and tech maturity level. Start solving first the issues that you have on your stronger side, even if this requires you to detach from the whole EPC offering. Maybe consider focusing only on the engineering design or procurement management or construction or even sub-areas from those main ones. As long as you’re getting stronger (more profitable) in all areas, you will be able to provide the whole portfolio of services again.
As you may have noticed, I did not mention here anything about IoT, disruptive technologies or super-advanced AI to reach EPC 4.0. All ideas suggested here have been around for some time and are still very powerful and feasible to be implemented. I am confident that you can quickly organize all ideas and prepare yourself and your company for this digital journey – and there is no better time than the present to get started.
What are your thoughts on EPC 4.0 and how to get started? Let me know in the comments below, or send a DM. I also welcome you to join our upcoming EPC Coffee Break series to learn more about how EPCs can expedite digitalization.
Waldir Pimentel Junior
With more than 20 years of experience in EPCs, OOs in diverse industries and different technology providers, Waldir now serves as Senior Industry Consultant at Hexagon’s PPM division. He currently helps (and evangelizes) customers through their digital transformation journey in Europe, the Middle East, India & Africa (EMIA) region. He’s based in Amsterdam, The Netherlands. You can reach Waldir at https://www.linkedin.com/in/waldirpjr/.