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Why You Should be Running a Smart Factory

We have moved to a new era of smart factories, that will help determine the fate of companies that either invest to keep pace or lag behind and risk losing relevance.

Due to technological advances, many of today’s factories are practically unrecognizable compared with 20, or even 10, years ago. Machines and tools are now equipped with hardware, sensors, microprocessors, robots and monitors and provide data in real time. The oil and gas industry is data-driven, using information to increase the speed at which oil is found, enhance oil production and reduce health and safety risks. Now, data from the oil and gas industry is beginning to explode as a result of information obtained from sensors in real time. We have moved to a new era of smart factories, Big Data and the Internet of Things (IoT) that will help determine the fate of companies that either invest to keep pace with progress and new opportunities or lag behind or risk losing business and relevance.

What do oil and gas companies have to gain?

There are a number of advantages for oil and gas companies utilizing big data and adopting smart factories, but companies should also understand that there are multiple factors that contribute to this success. For instance, the reliability of the data is only as good as the source from which data is obtained. Gathering data is actually quite simple, but the challenge is obtaining meaningful data that will make business more accurate and efficient. 

Currently, the oil and gas industry uses data for preventive maintenance, which should produce a huge return on investment. For example, a well-known fact is that a 1 percent improvement in the performance of all Electrical Submersible Pumps (ESPs) currently in use to pull oil from wells can deliver over half a million additional barrels of oil each day. At $100 per barrel, that translates to more than $50 million a day. Real-time monitoring of data from the ESPs can help prevent downtime and improve asset performance.

Here are some additional benefits to oil and gas using smart factories:

  • Improved compliance with  environmental guidelines, which is a major challenge for industries at the moment
  • Heightened and improved security, reducing loss due to sabotage, pilferage, leakages and human error
  • MES system efficiency boosts from process improvement and reduced down time of equipment realized through real-time alerts and predictive analytics
  • Insights into new product demand from markets, directly driving R&D spends and design programs
  • Reduced cost through better demand forecasting, sourcing, supply chain management and inventory control

One potential issue with smart technology gaining attention is the serious security threat may be posed if a company doesn’t take proper precautions. The increased internet connectedness of everything in an oil and gas system also means that provisions must be in place for strong security and protection against outside threats. Since oil and gas machines or workers are not always in locations that are easy to connect or secure, companies need to ensure they are taking the necessary steps. 

First things first

Before a company can have a smart factory, it needs to identify equipment and processes that generate valuable data. This goes back to the idea that the data obtained is only as good as its source. A company must ask itself vital questions in the beginning to ensure a successful smart factory. Questions like: Where is the tip of your data? What is the format of the data — is it structured, unstructured or semi-structured? Can your network transmit the data coming in from — and being sent to — millions of devices? Can your data management system ingest the growing data? Once the answers to those questions are ‘yes’, oil and gas companies can utilize the data to make their businesses more efficient and achieve any set business goals.

Narendra Ghate is a Senior Manager (Data Platform Engineering practice) at Wipro Analytics.

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