When the COVID-19 pandemic combined with the unprecedented fall in oil prices this year, it pressed the world’s fast-forward button, especially when it comes to how EPCs (engineering, procurement & construction companies) will adapt to this new world order.
The current EPC market is forced to rebalance the economic situation by accelerating internal projects, and in consequence, speed up decisions from years to just months. The switch to working from home is a perfect example of these expedited changes.
When we think about the world before COVID-19, the EPC process of industrial plants and other businesses had not changed much in the past years because the plants being built are technically not much different from the ones built many years ago. This made the EPC industry – which until some years ago was ahead on engineering/IT systems implementations – slow in driving innovation, causing this specific industry to lose in the global competition for investments.
It is not unusual for me, when I share ideas with some EPC customers, to hear them say that they do not feel any real productivity increase has been achieved over the past 20 years. To many EPCs, this whole conversation about efficiency improvement is something they have been talking about for quite a while, and still today, there are many struggles just to close their projects with a minimum profit – or in many cases, just barely making ends meet.
The reasons this happens vary a lot depending on the nature of the project and which industry is served as well as in which region of the world you are. Nevertheless, some similarities became evident based on my discussions and observations with clients across the world:
• EPCs are not using the technologies they already have to full capacity. Imagine a company that uses only piping modeling instead of the full capability of the tool to model other disciplines (electrical, steel structures, etc.) of the 3D modeling system.
• Owner operators (OOs) still require old software versions to be used. This does not act as an incentive to EPCs, as they are obligated by contract to use older versions and, consequently, older technologies.
• Technologies don’t deliver what was promised.
• Lack of integration. EPCs are still using the tools in silos, not reusing the data between them, or using external xlsx, csv, cvx, xml files to exchange data in an inefficient, non-streamlined way.
Realistically, EPCs, like many other industries, are now facing more than ever (or at least more than in the last half-century) a real challenge to quickly “adapt or die.” All of a sudden, adoption of EPC 4.0 (Industry 4.0) is not optional anymore and is of immediate importance.
To keep everybody on the same page, let’s define what we mean by EPC 4.0. This means creating an integrated, data-centric system that keeps all E-P-C and even EPC “M” (EPC + Management) information in one place. It supports not only design but information management, change management, data reuse and a proper digital handover to the OOs.
EPC 4.0 includes the entire lifecycle of the plant and is a real change from a kind of hybrid “paper + digital” handover to a full data-centric digital model.
Let’s take a Hexagon example. As a global leader in sensor, software and autonomous solutions, Hexagon has established partnerships with AspenTech and OSIsoft, which, in the near future, will allow Aspen tools to move data automatically from the conceptual and basic engineering to the detailed phase and consequently all the other EPC phases.
During operations, the solutions will remain integrated to ensure potential changes in process simulation are within the constraints of the design model, for example, flow rates defined by the P&ID. In addition, population of the Manufacturing Master Data Model and visualization of advanced predictive and prescriptive analytics puts everything in an easy and organized way in front of the engineers seated in the operation room.
We all know that the EPC industry needs to expedite change in the current scenario so, what can we learn from other industries that have successfully embraced the Industry 4.0 concepts to get there? I’ll talk about it in my next blog … stay tuned!
Also, you can join our Coffee Break series for EPCs to discuss how digitalization helps to mitigate the current market challenges. Take a look at the topics here.
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, where he currently helps (and evangelizes) customers through their digital transformation journey. He works with clients in Europe, the Middle East, India & Africa (EMIA) region. He’s based in Amsterdam, The Netherlands.