Improving Profitability through Open Process Automation™ Systems

A White Paper by:

Tom Clary and Members of The Open Group
Open Process Automation™ Forum, Business Working Group

November 2021

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Improving Profitability through Open Process Automation™ Systems

Document No.: W214

Published by The Open Group, November 2021.

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Executive Summary

Digital Transformation is nothing new. Concepts like Industry 4.0, Edge Computing, and Industrial IoT have been part of the conversation for several years now, with fits and starts along the way. It is only natural, then, for industry to be skeptical of another “breakthrough” initiative. So why do open standards and open systems even matter?

This document builds on the concept of data as the “new gold” to explain why flexible process automation systems and their components are important to growing profits – and how Open Process Automation™ standards and systems will address this need.

Introduction

First, industrial manufacturers are always under pressure to lower costs, including the Capital Expenditure (CapEx) and Operating Expenses (OpEx) of their process control systems. That means they need to improve the profitability of the operations these systems control. Many installed control systems are predominantly closed and proprietary, and it has been that way for the last 50 years or more.

Because these systems are proprietary and closed, integrating other best-in-class, third-party components is especially costly; they are equally expensive to upgrade and maintain; and they do not allow easy insertion of new technologies. In addition, retrieving data from them is difficult and still requires considerable human interaction. What’s worse, today’s systems generally lack the intrinsic, built-in cybersecurity needed to protect equipment assets and other capital investments from attack, which increases the risk of downtime, incidents, and even disasters. Even when setting aside cost, ease-of-use, and security considerations, the greater impact on the business is that these systems impede flexibility, agility, speed of innovation, and overall time to value.

In essence, these proprietary systems are viewed mostly as a necessary operating expense – simply another cost of doing business; any business value they add is merely a given. As a result, the equipment and their required upgrades are viewed more as a nuisance, just an additional expense that offers very little Return on Investment (ROI). That is because as end users attempt to bolt on more functionality, the systems become bulkier, more difficult to manage, and more costly to maintain. Unlike what happened in the IT space, where the adoption of open architectures, open interfaces, and open source improved operating capabilities and drove reductions in CapEx and lifecycle costs, end users don’t realize any of those benefits when investing in current systems. All they see are additional challenges.

Open, interoperable, and secured-by-design process automation systems, which is the purpose and vision of the Open Process Automation™ Forum (OPAF), address these issues. Ensuring that future automation systems adopt and reinforce standards that achieve true heterogeneity while providing intrinsic security, multi-vendor interoperability, future-proof innovation, and an easy pathway toward migration will help end users reap far more value and profitability from their operations.

End users will no longer have to expend great effort to translate operating data into usable, actionable information and then execute the correct, best operating decisions. Because of its new levels of openness and interoperability, the system will enable the right people to take the right decisions at the right time. Operators will no longer apply data transactionally; they will use it to drive measurably better, real-time operating and business decisions.

This document builds on that concept of data as the “new gold” to explain why flexible process automation systems and their components are important to growing profits – and how Open Process Automation standards and systems will address this need.

Flexibility to Achieve the New Profitability Frontier

The goal for most end users is to transition from managing business risks to controlling them; i.e., to drive measurable, real-time improvements to the safety, efficiency, reliability, cybersecurity, environmental performance, and, especially, profitability of the operation. Each industrial operation has different characteristics, particularities, challenges, and goals, and as a consequence the control systems running those operations have to be flexible and adaptable enough to enable those goals to be achieved and measured.

For ease-of-use and understanding, pharmaceutical plants, as a broad, general example, are characteristically very agile because, to be profitable, they must focus on multiple projects and multiple grades of product. Simplistically, let us consider a pharmaceutical plant that might make a small batch of a certain type of drug each year, let’s say 200 liters of it. If the owner-operator developed a process that created just that one product, its operations would be dormant most of the time. Instead, pharmaceutical companies need to figure out how they can use the same vessels and the same manufacturing process to make and then bring to market multiple products in multiple ways. They require high levels of flexibility.

On the other hand, because of the continuous demand, oil refineries, as another broad, simple example, are typically designed to maximize throughput; i.e., they need to process as much crude oil as possible, safely, in the shortest amount of time.

An oil refinery processes crude oil by breaking it into its components. In this process, the refinery must deal with changing crude types and continuously manage the specification and quality of the products brought to market. In contrast to the pharmaceutical operation, flexibility in many refineries has a different connotation. Even if refining is driven by volume and uptime, the economic dynamics of the industry have increased the need for flexibility in order to deliver profitability.

So why are companies from these two very different industries, with completely different strategic objectives and investment horizons, such strong advocates for Open Process Automation standards? Let’s begin by looking at what we call the Efficiency Frontier (Figure 1).

Figure 1: The Efficiency Frontier

Represented by the yellow line, the Efficiency Frontier can be found in many different business contexts, particularly within those that need to balance risk and return. In general, the goal isn’t simply to maximize return, because usually that means increasing risks beyond acceptable thresholds. To put it into simple terms, in pharma and refinery operations, the Efficiency Frontier means owner-operators have to balance their risks, maintaining flexibility without losing volume.

For pharmaceutical companies, the decision to invest in new facilities and select new control systems typically occurs later in the product development lifecycle. Most of the product development goes into research, clinical trials, and regulatory approval. Since the production of a new drug batch might be short, these companies prioritize flexibility and agility over long-term volume.

Oil and gas companies, on the other hand, focus on long-term product lifecycles, with the goal of reaching “steady state” and then making incremental changes to optimize for volume based on market dynamics and other risks, such as environmental regulations, cybersecurity threats, natural disasters, and the like. Their ability to manage these risks is dependent on the flexibility they have to manage product quality and throughput, but without interrupting their operations.

That is because any system shutdown – scheduled or unscheduled – takes production offline. And that loss of revenue is extremely expensive. Therefore, downtime is unacceptable. These companies infrequently upgrade their systems, change the process, or change components of the systems, and when they do, the changes usually occur during a scheduled shutdown.

New open, standards-based process automation systems and components are the key to breaking through the Efficiency Frontier, whether the end user prioritizes flexibility or volume. Because the systems are no longer proprietary, users will be able to develop value-creating innovations to optimize their operations for flexibility and volume without the need for large-scale engineering efforts or capital investments. Instead, they will be able to more quickly implement incremental investments and improvements to their operations with fewer risks. Just as important, they will be more easily able to measure the impact these investments and improvements have on the profitability of the operation.

For example, if a company invests $XX in a machine learning algorithm for a particular process and then connects the algorithm to the process automation system, improvements to the efficiency of that process can be measured against the original investment. Companies will be able to measure the ROI of an incremental investment in industrial controls and understand its specific impact on business performance, which is almost the pinnacle of achievement for executives and plant managers. Once executives view these investments not as simply another cost of doing business, but as enhancements that offer traceable, measurable ROI, they are likely to free up additional CapEx investment in automation systems.

Redefining the Future of Process Manufacturing

Industrial manufacturing across all segments – batch, continuous, discrete – is facing similar challenges. Aging Operational Technology (OT) systems, which for the most part are decades-old proprietary process control systems, are stifling productivity and innovation.

Under ever-increasing pressure from shareholders and global competitors, executives are demanding more from their corporate assets. They have seen the gains their IT systems have delivered because of their open architectures, open interfaces, and open source, including improved operating capabilities, better cybersecurity, reductions in CapEx, reductions in lifecycle costs, and sweeping improvements to business efficiencies. These leaders now, and rightfully should, expect the same returns and performance from their OT systems. However, the closed process control systems currently installed are hard to maintain, expensive to upgrade, and do not allow easy insertion of new technologies. In short, their poor flexibility limits the end user’s ability to make gains.

Figure 2: Open Systems Lead to Efficiency AND Profitability

Open Process Automation systems, based on the O-PAS™ Standard, will address these challenges and ultimately change the Efficiency Frontier to a Profitability Frontier (Figure 2).

First, new process automation systems, built on open, extensible architectures that are anchored in well-defined standards, will ensure investments in the operations can be repurposed while enabling continuous improvement across varying product lifecycles and operational models.

Second, these new systems and operating environments will allow owner-operators to better evaluate investments based on a finer understanding of risks and return. Implementing open systems that allow continuous incremental improvements means investment and operating decisions can be made faster, and their impact on profitability can be more easily determined. Because end users will be able to measure how and if their investment and operating decisions have actually reduced their risk and time-to-market, they can drive continuous, measurable improvements to the profitability of the operation.

What is Different about the OPAF?

The OPAF is not just another standards body. It is not creating new standards or even a new set of standards. Its members, which include asset owners, suppliers, system integrators, industry analysts, and academia, are collaborating to produce a “standard of standards” so that all future systems components work together, taking into account the business and technical requirements of the entire industry ecosystem.

While a number of useful and relevant standards are available today, no single standard delivers the required interoperability, portability, and security required to achieve the OPAF vision and objectives. Therefore, the first priority of the OPAF has been to select from existing standards, defining an open, secure, and interoperable process automation architecture that benefits end users, suppliers, and integrators alike. Only when no standard is available or acceptable will an effort be made to develop a new standard.

The standard of standards will enable industry to develop new systems comprised of cohesive, loosely-coupled, and severable functional elements acquired from independent suppliers. It will allow and germinate the development and adoption of best-of-breed components, which will easily integrate with one another. The structured, modular architecture is characterized by the open standard interfaces, which means everyone will benefit.

To see how you can help redefine the future of process automation, please visit the OPAF web page at: www.opengroup.org/forum/open-process-automation-forum.

Acknowledgements

The Open Group gratefully acknowledges the contribution of the author, Tom Clary, and members of the Open Process Automation™ Forum Business Working Group in the development of this document.

About the Author

Tom Clary is the Director of Future Offers for Schneider Electric’s Process Automation business. He has more than 25 years of experience, including more than 10 years of focus on industrial automation and process control, process safety, and cybersecurity in the manufacturing, energy, oil & gas, and building management industries. A recognized senior communications strategist, he has received multiple awards for his work in the fields of crisis and change management, including Schneider Electric’s Global Recognition Award for excellence in cybersecurity incident response and crisis resolution.

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