• United States

Real-time survival

Sep 08, 20036 mins
Enterprise Applications

Chemical manufacturers tap up-to-the-minute performance data to improve processes in a bid to stay competitive.

Like every other company in its industry, chemical giant Atofina needs to wring every last dollar and whiff of inefficiency out of its operations. A few years ago, the $19.3 billion company, previously known as Elf Atochem, began to implement a system that collected data from its manufacturing plants for analysis by plant-floor personnel.

Today, that system has evolved into a real-time performance management  (RTPM) platform that lets business managers view valve pressures, temperatures, flows and other data generated from the petrochemical-manufacture process.

By broadening access to this data beyond the plant floor, decision-makers can quickly spot inefficiencies and fix them. Such enhancements are critical in the challenged chemical industry, which was struggling even before the recession hit.

“You can learn a whole lot by analyzing data, especially when you’re looking for ways to make improvements, says Dwight Stoffel, principal plant electrical instrumentation engineer for Atofina’s plant in Calvert City, Ky. Stoffel was one of the first people at Atofina to see the potential to propagate real-time performance data throughout the company.

RTPM systems collect timely data from equipment and different parts of a facility and bring it together in one database. “[RTPM] systems collect, aggregate and put context around the data to enable better decision-making,” says Leif Eriksen, principal at consulting firm Industry Insights.

Atofina began its RTPM odyssey in 1997 by installing the Plant Intelligence application from OSI Software  at its Calvert City plant. This initial investment cost $100,000 for hardware, software and installation. The experiment proved fruitful. In 2001, the first full year that the plant used real-time Plant Intelligence data, “we cut our maintenance costs just for parts by $363,000,” Stoffel says.

By last year, Stoffel estimated Plant Intelligence garnered about $1.8 million in one-time savings, mainly by having the information necessary to make better decisions. And the savings continue. “I’m saving over $100,000 per year just from automating the reports,” he says, noting this was not possible before.

At the Calvert City plant, Plant Intelligence collects data from 17,500 points on the industrial network and forwards that data through a firewall to the WAN . Since the initial implementation, Atofina has purchased 80 Plant Intelligence servers and is rolling them out at hundreds of plants worldwide. Thanks to the system, company managers can analyze the data and figure out ways to improve processes and reduce costs.

For example, with safety and environmental issues being paramount, Atofina managers now pore over the data to identify areas where safety problems might crop up, to take action before any breakdowns occur. Plant Intelligence also lets Atofina’s plants share best practices.

Over the next few years, being able to make better decisions like these just might let Atofina thrive where chemical manufacturers that do not employ real-time technology might stumble – or even die.

“Chemical companies are competing with suppliers from every corner of the globe,” Eriksen says. “It won’t get any easier. They have to do everything they possibly can to increase productivity.”

Most chemical companies don’t need convincing. For an industry that spends only 2% of revenue on IT annually, firms such as Atofina, Dow Corning, Eastman Chemical, Equistar, Nippon Chemical, Quaker Chemical and others have elected to spend their precious IT dollars on RTPM. In addition to OSI, Aspen Technology and Lighthammer Software Development  are major RTPM players in this market.

The RTPM data-collection software application is installed on a dedicated server that usually resides on the company’s industrial network, which controls the manufacturing process. Information is transferred through a firewall to the WAN. Because the industrial network is the heart of the operations, it must be protected. “The data flows only from the industrial network out to the WAN, not vice versa. A complex firewall separates the two sides,” says Michelle Barlow, manufacturing systems manager for Atofina, in Axis, Ala.

Increased network overhead is another concern for Dow Corning, a $2.6 billion company that uses Lighthammer Illuminator. The company also plans to distribute Lighthammer servers to its plants around the world to empower anyone involved in the supply chain to view and analyze the company’s performance data.

However, Kirk Royster, IT architecture manager for Dow Corning in Midland, Mich., says the system will not have a significant effect on network performance because Lighthammer can cache servers. “This will reduce the impact on network bandwidth over the WAN. There’s no need to query the source database every time if the information has not been updated,” he says.

Given that chemical companies are so careful with IT spending, it is fortunate that RTPM systems are not ruinously expensive. Costs vary widely, but a company with $5 billion to $10 billion in revenue and approximately 50 plants can expect to spend about $5 million to $10 million on RTPM, Eriksen says.

“If you have no real-time technology in place today, just putting in a system will result in substantial ROI. It will pay for itself in less than a year,” Eriksen says. Dow Corning expects business results and productivity gains from its first RTPM project to pay for the system for the whole company. Royster declined to give details, but says costs for the Lighthammer application represent a fraction of the IT budget.

Companies can further reduce costs by having a vendor such as Industrial Evolution host the application for them. Quaker Chemical, a $300 million chemical producer, pays Industrial Evolution about $3,000 per month to receive real-time data from 25 points. “It’s cost-effective, and we don’t want to devote salaries and people to real-time monitoring,” says Joe Berquist, product manager for Quaker in Conshohocken, Pa.

Remaining competitive in the chemical industry today requires the ability to make the continual process improvements afforded by RTPM. “No chemical company will continue to exist five years from now if they don’t have some form of real-time infrastructure to monitor and manage their operations,” Eriksen says.


Overall investment: In 2002, chemical companies spent $9.45 billion on IT, down from $9.67 billion in 2001, according to the American Chemistry Council.

IT spending: The chemical industry spends an average of 2% of annual revenues on IT, according to AMR Research. This year and next, chemical firms will earmark an average of 19% of their IT budgets for software applications such as RTPM.

U.S. revenue: The American Chemistry Council estimates that U.S. chemical companies will total $450 billion in revenue this year.

Innovation: The chemical industry has helped develop more than 70,000 products. Chemical industry scientists and researchers account for one in seven patents filed in the U.S. every year, according to the American Chemistry Council.