Selection and decision-making criteria for a Distributed Control Systems in the process industry

1. Selection and decision-making criteria for a Distributed Control Systems in the process industry Willem D. Hazenberg MBA Researcher Newport International University

2. Inhoud • Intro & Framework • Main objectives – Study and research questions • Research project methodology • Customer Value Proposition • Methodic: Multi attribute utility theory • Main- and Sub sections • Big- Short- Final list • Business reason • Economic Profile (EP) • Migration • More info – next steps

3. At Controls Manufacturing Community List Dear All Can anyone send me a single page comparison or presentation on PLC Vs DCS as on today's date? I shall be thankful for your kind inputs. Thanking you, Regards, (Name removed) Control System Staff Engineer

4. Introduction • To partial fulfillment of the requirements for the degree of Master of Business Administration in Information Management at the Newport Business Academy and Newport International University, I decided to work out a thesis proposal with the title “Selection and decision-making criteria for a Distributed Control Systems” in the process industry.

5. The project framework (1) • For the control of the chemical processes in the process “chemical” industry Distributed Control systems (DCS) are applied. These systems are the heart- and nerve system within these factories. • The choice of DCS for a concern is a matter of strategic importance. • High demands are made to the availability of a DCS and if the concern made a choice, she is committed to it for a lengthy time. Replacing a DCS is a very valuable matter because of the arisen production loss at a reconstruction for example. • The service costs of a DCS could be a multiple amount of the initial investment during the life span.

6. The project framework (2) • The process industry in the world for approximately spends 45.8 billion dollar per year at the top 50 suppliers on process control systems (included DCS).(2004 data) • The expenses of these investments often amount to more than 1 million Euro by per system. • The selection process generally varies from 12 up to 24 months. • At large DCS projects there sometimes are investments of more than 45 millions Euro. • The total expenses, which are involved with the selection of one investment, amount more than 100,000 Euro per system. To earn an order, the marketing/ sale expenses generally are more than 50.000 Euro at a supplier.

7. The project framework (3) • Local employees of the establishments are involved frequently in the choice for a system. Because of the fact that this investment only takes place every 10-15 years, they are lacked from experience and methods to be able to take this kind of decisions. The consequence is that the choice for a certain system is not always univocal at this moment and the relation between a business case, a chosen solution, and the selection process isn’t always there. This study has to contribute that we make the choice of a system in a more univocal way and the decision-making becomes more transparently.

8. Purchasing a DCS system

9. Main objectives The goals of this research is: • The improvement of model-based consideration concerning a selection of a new distributed control system (DCS), by making an analysis of selected criteria within the “chemical” industry to choose a DCS and to establish an investment/ selection model with these insights/ ideas. • So that future investment can be bought faster and the decision-making will be more transparent.

10. Study • Define the core selection criteria and their priorities for the purchase of a Distributed Control system (DCS) in the chemical industry and a design a decision-making model so that the decision-making for new systems more balanced more consequent and faster can be carried out. • Interview employees who are involved in the purchase decision of DCS within large DCS using companies like Alcoa, Akzo Nobel, BP,, Dow, Dupont, Exxon Mobil, DSM, Lyondell, P&G, Sabic, Shell etc. • Also account managers and marketing managers of the chosen DCS have to be involved in this research.

11. The areas of the study (1) • What is the business case of your investment in a new DCS system? • What is the reason for this investment (migration, replacement or a new installation) and what are consequences of the choice of system? • Which DCS supplier knows the person who is concerned in the company purchase of a new system? • What decides whether the DCS supplier comes on the Big List for further evaluation? • What decides whether the DCS supplier comes on the Short List for further evaluation?

12. The areas of the study (2) • Which staff functions are involved in the selection? • At which components do these people pay attention and which priority do they give to the different components? • Is there a difference between the ideas of DCS suppliers and users concerning these criteria?

13. Research project methodologie • Documents review more then 850. • Online research (WWW.DCSSELECT.EU) • 124 respondents: End Users Engineers, Purchasing, line management and DCS vendors VP, Service – Account- marketing managers and Business consultants • Across industries in 31 different countries: EMEA, Australia, America, Far east • Working for organizations ranging from: End Users – SI, Engineers Company’s, DCS vendors • Various industries:

14. Return Received survey documents End users

15. Involved Others

16. Organization relation to DCS Input up to 29 sept. 2007

17. End User industry segment

18. Job Title respondent

19. Reason last DCS project

20. Project size

21. Technology trendsetter?

22. DCS Customer Value Propositions Product Superiority C 12,9% / V = 4.6% C = End user V = DCS vendor Best Product Best Product at Best Time/Cost C 48.6% / V 36.4% High Touch and Best Product C 8.6% / 31.8% Enterprise ResourceTrade-Off Best High Touch Best Time/Cost Customer Intimacy C 1,4% / V = 4.5 Operational Efficiency C 25,7% V 9.1% Best Time/Cost Plus High Touch C 2,9% / V 13.4%

23. AHP-Maut (Analytical Hierarchy Process en Multi attribute utility theory) Methodic • Result = Score * Weights of importance • Global variable 1 • Local variable 1 • Local variable 2 • Sub variable 1 • Sub variable 2 • Local Variable 3 Bron Schmitt D,THE MAUT MACHINE : An Adaptive Recommender System

24. DCS Selection main groups

26. Capable of serving a purpose well

27. Alarmmanagement

29. Most important at biglist Viability Job - function Big list Barriers to exit costs Vision Main Selection item

30. Most important at short list Business case guaranty from DCS vendor Job- function Short list Documentation Training Services User Experion Interoperability Implementation process Functionality Technology Main Selection item

31. Most important at Final list Job - function Final list Initial costs Ongoing cost Main Selection item

32. AVG Score main items DCS Selection

33. Business reason Big list selection Knock – out criteria 46% Knock – out criteria 12.7% Knock – out criteria 12.9% Knock – out criteria 19% Knock – out criteria 14.8% Knock – out criteria 21% Knock – out criteria 8.2% Knock – out criteria 14.8% Knock – out criteria 13.1%

34. Business reason Final selection

35. Business case new system • Big list • 57% improved automation • 43% Business information to the plant floor • 43% Could not maintain old system • Short list • 38% Need for a easy to use system • 30.7% Could not maintain old system • 30.7% create a more cost effective process. • Vele anderen rond de 30% • 23% improved automation • Final List • 42% Automatic start-up and shutdown routines • 29% increased real-time decision making • 29% improved automation Conclusie: De belangrijkste businesscase redenen variëren dus per fase.

36. Business case Migration • Big list • 76% Could not maintain old system; • 65% Replace obsolete system; • 41% Create a more cost-effective process; • 41% Reduction in Equipment maintenance. • Short list • 67% Replace obsolete system; • 60% Use of advanced control algorithms • 46% Improve loop control • final list • 56% Could not maintain old system • 44% Replace obsolete system; • 44% Improve loop control Conclusie: De belangrijkste businesscase redenen is en blijft een obsolete systeem.

37. Cost Priority

38. Zoom in op verschillen > 5 jaar Prio 1 • DCS End users 19/71 = 26.7% • DCS Vendor 4/15 = 28.6% • Account managers Prio 6-8 • Sales en Marketing's dep. Prio 1-2 • Eng Comp. 0/6 = 0 • System Integrators 2/6 = 33.3%

39. Economic Profile (EP) EP = Life Cycle Benefits (LCB) - Life Cycle Cost (LCC) LCB = NPV YEL (Annual Manufacturing Cost savings + Annual Production Increases) LCC = System Price + Initial Eng. Cost + NPV YEL= Annual Eng. Cost + Annual Ops costs + Annual Maint. costs) • Annual Ops. Cost • Software licenties (aanschaf, licentiekosten voor uitbreidingen) • Onderhoudscontract, remote onderhoud • Investeringswaarborgen (lange termijnondersteuning, migratie en softwarebescherming) • Betrouwbaarheid (Hardware, software en configuratie) • Complexiteit (topologie, software, procedures) • Kennis (Training, toepassing, ondersteuning) • Down time (van productie installatie) • ( het niet kunnen produceren doordat systeem niet beschikbaar is) Yel = Years of Expected life

40. Live cycle Cost Source: Ken Keiser en Todd Stauffer levenduur DCS componenten 2007 intech Model Woordward 1997 Op basis onderzoek 1996 (data 1991-1996) Source ISA

41. Migration Yes / No • Difference life cycle components • Best offer Standard migration • Obsolescence equipment • Withdrawn and/or not supported by vendor • Risks assessment • Postponement period • Risk management • Plant integrity

42. Migration Risk versus Benefits

43. End • Contact information for the next study phase • Willem.Hazenberg@dcsselect.eu • Website • WWW.DCSSELECT.EU • 1e results http://www.dcsselect.eu/RES_ENDUSER/_frame.htm