achieving operational excellence with information … · ©2003 aspentech. all rights reserved. 3...

©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

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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