The oil and gas refining industry is in the midst of unprecedented change. Demand for green energy is rising. Curbs on carbon emissions are proliferating. Crude oil prices remain volatile. These elements and others make it more important than ever for oil and gas producers to focus on initiatives that can protect their margins and prepare for growth opportunities. One effective strategy is to transform the data from refineries into insights and intelligence that drive better decision-making and business results.
For all kinds of industries – including the energy sector – data is the critical resource for the future. Oil and gas refineries generate enormous quantities of data from every component of the value chain. This data helps them measure, manage and make decisions about operations and production, but a more-centralized, holistic and contemporary approach can generate more insights and lead to better decisions. To achieve this, modern refineries should consider a digital performance measurement solution.
It Starts With a Data Warehouse
The typical refinery has dozens of different data systems in place. This leads to inconsistencies – there is no “single source of truth” – and is expensive to manage and maintain. The first step for a digital performance measurement solution is to transform disparate, siloed data pools into a single data warehouse capable of ingesting all kinds of structured and unstructured data in an easily accessible, cloud-based platform.
A digital performance measurement solution also incorporates Industrial Internet of Things (IIoT) technologies to connect assets throughout the transportation, storage and distribution value chain. With the help of data production, refining and product distribution can be linked to assess the end-to-end performance of the business. This helps in evaluating and improving efficiencies and reduce downtime.
Data gathering is important, but it’s just the first step. Next, the refinery must be more able to put data to work. This means easy access by any business user, not just data or analytics professionals. It also means creating useful key performance measurements (KPIs) and the ability to track KPI variances with automatic notifications.
The Importance of KPIs
KPIs are used at multiple levels to evaluate their success at reaching targets. High-level KPIs like refining margins and energy consumption focus on the overall performance and profitability of the refinery. Low-level KPIs like product yields and maintenance costs focus on the business processes or specific teams. These help senior management monitor KPIs that drive behavior through the refinery, help managers and superintendents view and improve team performance, and help supervisors understand how daily actions can impact or improve refinery performance.
No single set of KPIs will fit all roles, nor will one set fit all refining companies, as they operate in different regions, cater to different markets and must comply with different legislation. Defining the KPIs that really matter to the refinery is one of the critical steps, and it’s often best taken with a partner like Wipro to help understand the refining company’s business processes in detail.
Developing KPIs requires an understanding of how they will be used to generate success, how performance can be measured, and which data is most pertinent to decision-making. For example, if fuel distribution is taken care by the refining company, good KPIs could be fleet utilization or distribution losses. If the refinery’s main product is feed for the petrochemical complex, the cracker unit availability would be an important parameter to measure.
KPIs can be broadly categorized into three different types:
- Benchmarking – These KPI’s will show how the refinery is performing with respect to other refineries across the world. (Specific Energy Consumption, Equipment Time between Failures, etc.)
- Strategic – These KPI’s will indicate how the company is achieving its strategic goals.
- Operational – allocated to departments to give ownership and identity to a KPI that can be addressed at operational level.
All KPIs drive continuous improvement, but the development and implementation of relevant KPIs must consider business success, not just operational excellence.
Visualize Measurement and Embrace ML/AI
A digital refinery performance measurement solution provides integrated dashboards to view KPIs at various levels and by role. Typically, dashboards are web-based and mobile-enabled for anytime, anywhere access. This holds true for refineries as well, though particular care must be taken to integrate IT and operations-technology systems.
Using an integrated data platform also enables the refinery to apply machine learning and artificial intelligence to its measurement, decision-making, and management processes. For example, machine learning algorithms can be used to detect anomalies in equipment, enabling the refinery to keep equipment up and running more effectively.
By utilizing a digital refinery performance-measurement solution, refineries can break the siloed data structures that often exist in the organization and bring all the relevant data onto a single platform. Wipro has helped numerous oil and gas companies implement such a single source of reliable information, enabling refinery management to make more-informed decisions based on data, and empowering them to monitor equipment and refinery performance in real time.
As a result, management teams can run their organization better and faster, resulting in enhanced performance, greater availability, and higher margins. A digital refinery performance-measurement solution has also helped users focus on what is most important to achieving business objectives, allowing them to and unlock real value for their customers and stakeholders.