The “Perfect Storm” of operational transformation in industry

Tim Sowell (pictured) is VP Global Software Xportfolio Strategy at Schneider Electric. Following his keynote at Total Plant Management, he explains the most significant disruption in operational strategy thinking is happening in this post GFC (global financial crisis) era, in determining an operational execution environment enabling timely contributions by the operational team to plant execution. The focus is on currently on operational processes, but quickly this will drive a new operational experience to go with a new operational execution plan.

In the last half of 2014 we saw a significant increase in companies interested in analysis of future operations systems and environments. These companies were reflecting on their systems relative to the new operational landscape that will develop over the next ten years, and what systems are required. The leading companies are moving away from starting with technology and thinking about the operational procedures / processes they will be running 2020-25 to run the business the way needed to be competitive. Then the roles and activities these people would do, which will drive the required decisions, actions, and systems, and eventually the architecture.

The Operational Landscape is fundamentally changing due to a “perfect storm” happening with these vectors:

  • Aging workforce: the significant amount of current experienced operations, maintenance, process workers who will retire in the next 5 to 10 years. I have heard some mangers in “oil and gas upstream” talk about 80% of their current team will be gone in 5 years.
  • Operational Agility means Actionable Decision NOW: To be competitive decisions must be made now this has caused a change in thinking that workers need to be empowered to make more decisions, through more information, higher knowledge and access to experience, a transition from “worker” to “knowledge worker”. This also means they have more responsibility. As one customer said last week traditionally they had an operator cover 5 to 10 wells, this was fine when you have 100 wells which lived 20 years, but in the next 5 years he stated “we will have 20000 + wells, we will not have 20000 operators”.
  • The workforce of Gen Y and Millennials will not have the same career or work approach as Baby Boomers. The tenure ship will be less 2.4 years by 2020 in a role, and less if you look role or location. So the new workforce will be a “rotating workforce” means “time to experience” is shorter than ever: With the experienced generation retiring and transitioning to a generation 20 years their junior, and the new factor that people are not staying in their role or location longer than a year. One company stated 10 years ago people were in a role approx. 5 years, now they are seeing 8 months.
  • Transition to digital native worker, with very different expectations, causes challengers with worker retention: The new generation is “digitally native” they expect access to knowledge, they expect “touch experience”, they expect collaboration form anywhere, they expect to learn on the fly.
  • Agility and performance drives shifts to “Information Driven “systems so decisions across the business can be made faster, and ahead of time. Internet of things enables this with a paradigm shift in the amount of data available for devices, and the need for devices/ equipment, people, to work together. This introduces the challenge of being overwhelmed with data, and seeing the proportional growth in knowledge, so now the system has to look for tools like Big Data to provide “predictive analytics”.

One of challenges the sector faces in the new operational landscape is a tendency to think that creating complexity increases value. The traditional approach has been to increase the need for highly skilled workers as the challengers and problems grow in complexity. But this “flys in the face” of a younger, less experienced workforce, we actually need move away from requiring highly skilled people. Shift the knowledge into the system to abstract the complexity, and dramatically improve the “time to performance”.

In order for the industry to stay competitive and grow there is a need to challenge this idea and examine how solutions implemented now can simplify the industry for years to come. A number of different programs been adopted by companies to provide them with a foundation to address these growing complexities within operational transformation. Addressing this issue now will help to guide decisions on investments and technological investment and minimise risk of poor operations in the future.

Facing the challenges of Operational Transformation within the industry

Over the next seven years the industrial operational workforce is predicted to undergo a number of key changes, including a 40 per cent reduction in operational experts. Three key dimensions have aligned to create a major market disruption of the operational workplace and are creating further complexities. These major trends include expertise capacity, a generational change in the now ageing workforce. These factors raise questions about how companies can deal with changing operational landscape and workspace. This is driving some new thinking relative to the operational workspace and systems in 2020-25, different to traditional thinking.

  • “Time to Performance” reduction through self-service learning, initiative operational experiences.
  • The shift from HMI (Human Machine Interfaces to OMI Operational Management Interfaces where large amounts of information is able to be worked by worker through intuitive situational awareness and interaction.
  • The shift to thinking on how people harness the growing data into proportional amounts of Knowledge and Wisdom within their systems so that the new rotating workforce can leverage this naturally from the system. Reducing the dependency on experts.
  • The shift from operators to “flexible Operational Teams” that have different roles, but access to one truth and collaboration is natural. The team will span the world, but through the team decisions and actions will be reduced. Many of the concepts of such social communities as Facebook are being applied.
  • The shift to not just looking at the past, and now in their systems that the “future” must be a natural part, and optimization, knowledge models, and predictive awareness come into play.
  • How the to leverage the world as it becomes “smarter” with the Internet of things, and devices, processes, etc and become “self aware”.


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