©2003 AspenTech. All Rights Reserved. by Achieving Operational Excellence with Information Technology Lawrence B. Evans Chairman Aspen Technology, Inc. New Orleans Meeting of the AIChE March 31, 2003
©2003 AspenTech. All Rights Reserved.
by
Achieving Operational Excellence with Information Technology
Lawrence B. EvansChairman
Aspen Technology, Inc.
New Orleans Meeting of the AIChEMarch 31, 2003
©2003 AspenTech. All Rights Reserved. 3
Outline
• Process Industries
• Operational Excellence
• Modeling
• Driving Forces for Adoption
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The Process Industries
• Process industries are huge
• Annual turnover exceeds $6 trillion
• Products are commodities
• Manufacturers must continually improve profitability
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Process Manufacturing Is Unique
Manufacturing plants are complex
Processing steps cause chemical transformation
Products are produced in bulk form
Chemicals, Petroleum, Pharmaceuticals, etc.
Process Manufacturing
Manufacturing plants are more straightforward
Manufacturing stepscause mechanical change
Products are shaped and assembled from discrete parts
Automobiles, appliances, computers
Discrete Manufacturing
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ProcessIndustries Bulk
Materials
Polymers
Fuels
Food Products
DiscreteIndustries Finished
Products
Packaged Goods
Appliances
Automobiles
NaturalMaterials
Oil
Natural Gas
Milk
Coffee Beans
NaturalMaterials
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The Spectrum of Manufacturing
Process
Refined Oil
CrudeOil
FinishedPackagedProducts
NaturalMaterials
Discrete
PackagedLubeOil
Lube Oil
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Enormous Economic Potential
True True PotentialPotentialTMTM
Today
$300$300--$500 Billion Annually$500 Billion Annually
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Outline
• Process Industries
• Operational Excellence
• Modeling
• Driving Forces for Adoption
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Corporate Strategy Options
• Product Leadership
• Customer Intimacy
• Operational Excellence
Source: “The Discipline of Market Leaders,” by Michael Treacy and Fred Wiersema
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Outline
• Process Industries
• Operational Excellence
• Modeling
• Driving Forces for Adoption
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Modeling Is the Critical Success Factor
If you can’t model your Process, you don’t understand it. If you don’t understand it, you can’t improve it. And, if you can’t improve it, you won’t be competitive in the 21st century.”
- Jim Trainham, DuPont
“ “
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Models Predict Performance
ModelDecisions Results
Additional Data
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Application of Models
On-Line Measurements from Plant
Adjustments in Manipulated Variable
Empirical Model from Plant Tests
Advanced Process Control
Prices and Availability of Raw Material
Amounts of Product at Each Facility
Linear or Nonlinear Program
Production Planning
Updated Cost Data and Design Constraints
Sizing & Operating Conditions
Engineering Calculation
Process Design
Additional DataDecisionsModelApplication
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Outline
• Process Industries
• Operational Excellence
• Modeling
• Driving Forces for Adoption
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Adoption of Solutions Driven by:
• Growth in Information Technology
• Advances in Science and Technology
• Focus on Business Processes
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Relentless Increase in Computing Power
Computing power per unit cost doubles
every 18 months
- Moore’s Law
Dr. Gordon E. MooreChairman EmeritusIntel Corporation
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Changes in Computing Environment
199019801970 2000
Mainframe Computers
Mini Computers
PCs & Client Server
Internet
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Advances in Science and Technology Base
• Molecular Thermodynamics
• Chemical Kinetics
• Computational Fluid Dynamics
• Theory of Process Measurements and Control
• Neural Nets
• Numerical Algorithms
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Focus on Integrated Business Processes
• Microsoft Office Suite
• SAP Integrated Software
• AspenTech Plantelligence®
• Re-engineering of Business Processes
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Technology Push
ImprovedBusinessPractices Business
ResultsTechnicalDevelopments
ComputingPower
BusinessProblems
Solutions
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Business Requirements Pull
TechnologyAdvances
BusinessRequirementsIT Solutions
ImprovedBusinessPractices
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Future Business Requirements
• Get diverse people to work together
• Collaborate outside the enterprise
• Use models to capture knowledge and make decisions
• Get the right information to the right people at the right time
• Provide real-time visibility into operations and options available
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Future Advances in Science and Technology
• Use the same consistent set of models throughout the life cycle of a Manufacturing Process
• Build technology base for sustainable development
• Modeling of biological systems
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The Future of Information Technology
• Moore’s Law will continue to hold
• Use of the Internet will continue to grow
• Adoption of wireless technology will make applications more portable
• Real-time sensors will be everywhere
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Conclusion
• The past two decades have seen remarkable advances
• We have achieved the “early adoption” phase
• Challenge for the future is to drive adoption throughout the industry