Vimal Kapur. President, Honeywell Process Solutions Industry Perspective
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2 Vimal Kapur President, Honeywell Process Solutions Industry Perspective
3 Welcome 1,200+ Attendees 302 Companies 47 Industries 40 th 34 Countries
4 Agenda Challenges Solutions Conclusions
5 Since the last recession, industries have been challenged to do more with less CAPEX 2015 Americas CAPEX ($B) Oil & Gas Power Batch MMM Chemicals Refining P3 Water Total $ 760M Source: IHS May 2015 Estimates $280 $160 $100 $90 $60 $40 $20 $15 CAGR CAGR % -28% 2% 3% 1% 0.5% 6% -7% 3% 2% -2% -10% 9% 0% 2% -5% Slower project activity across multiple industries with significant impact on Oil & Gas since Q4 2014
6 as well as do more with less OPEX Change in OPEX Spending vs Prior Year 20.2% 18.9% 0.4% 1.2% -0.4% % -25.7% Source: IHS May 2015 Estimates Bounced back just after recession; very tight spending since then with further declines in 2015
7 Aging assets and workforce are driving a larger skills gap Asset Age Average Asset Age 36.5 years 42% Baby Boomers in the Workforce 22% 9% 10% 16% 12% 11% Millions < 5 5 to to to to 40 > 40 years Source: Deloitte analysis based on data from U.S. Bureau of Labor Statistics 22% of the Baby Boomer Workforce has Retired Since 2006 but the Plants from the Same Generation are Still Operating
8 Obsolescence of open systems are introducing disruption to plant operations Closed Systems Open Systems Benefits Limited 3 rd party influence Standard less expensive hardware (PCs) Integration with other systems Challenges Proprietary Expensive hardware Isolated systems Dependence on 3 rd party Faster HW and SW obsolescence Windows XP Hit End of Support on April 8 th 2014
9 Increasing Threat of Cyber Attacks Millions of Detected Attacks Across All Industries 48% % increase in overall number of detected attacks Power & Utility companies reported a 6-fold increase in number of detected threats from the year before Source: PWC The Global State of Information Security Survey 2015
10 Environmental Regulations Continue to Increase EPA s Clean Power Plan Estimates are that it will cost the power industry up to $480B over the next 15 years to comply. NERA Economic Consulting Tighter Emission Controls for Automobiles Rules are likely to cost Refiners $10B in capital costs and $2.4B/year in compliance expenses. Baker & O Brien Consulting National Emission Standards for Hazardous Air Pollutants Estimated cost to the Oil & Gas industry for compliance will be $170M annually. Environment Protection Agency Boiler MACT The final boiler MACT rule is estimated to cost the Pulp & Paper industry $3B. Pulp & Paperworkers Resource Council
11 Safety Remains the Highest Priority but is Plateauing 3.9 Total Recordable Incidents per 100 Full Time Workers Incident rate continues to drop, however is the goal Source: US Bureau of Labor Statistics, December 2014
12 In summary as operators you are asked to: Do more with less Operate safely and in compliance Leverage technology in order to stay relevant and competitive Manage the skills gap
13 Agenda Challenges Solutions Conclusions
14 DCS Expanding Role DCS DCS Disparate as the systems focal point performing for isolated all your control control of your plant Metering Systems functions Black Box control Single Multiple system user interfaces and user increasing interface complexity leveraging and maintenance costs scarce resources Complex integration required to Single bring data platform together facilitating and lowering the cost of installation and maintenance Alarm Mgmt RTU RTU Alarm Mgmt Safety Systems Turbine Control Systems F&G Systems Power Mgmt Safety Systems Historians F&G Systems Power Mgmt PLC PLC Historians Metering Systems Turbine Control Systems Doing more with less
15 Cloud Engineering is now a standard part of HPS automation projects Cloud Computing Milestones Amazon enters the Cloud Cloud use expands as more vendors enter the market Cloud Project Use at HPS As of April 2015 almost 2,200 projects have been executed in the cloud environment # of Projects # of Virtual Machines on HPS Cloud Open Source Cloud Movement takes hold Cloud computing finds its niche HPS embraces Cloud computing for customer projects 2181 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Leverage Global Resources, Reduce Schedule and Lower Costs
16 We are simplifying FAT process by leveraging the Cloud Securely connect physical hardware to Virtual System Controllers Safety Manager Serial I/O and field devices 3 rd Party Systems Lab systems Test Target Hardware and Applications from Anywhere in the World
17 We are reducing configuration and set up time by up to 60% using our Cloud tools Web Channel Ordering & Download Cloud Based Factory Transmitters ordered to exact engineered requirements Delivered fully configured right out of the box Eliminate ordering errors Minimize paper work Reduce commissioning time
18 We are also increasing training flexibility thanks to the Cloud Honeywell-maintained Training System Virtual OTS in the Cloud Hosted by Honeywell Accessed over a private secure network Very small footprint at customer site Honeywell Support & Engineering groups have instant access Subscription pricing model
19 Comprehensive & Integrated Process Safety Management Detect Prevent Protect Perimeter Monitoring Access Control & Monitoring Operator Training Emergency Shut Down Gas Detection Alarm Management Asset Management Worker Safety
20 Providing innovative solutions to continuously assess your cyber risks in real time Developed specifically for industrial environments Actionable intelligence with advice and decision support Intuitive interface with at-a-glance visibility and understanding with clear KPIs and drill down detail Immediate information for ongoing situational awareness Proactively identifies cyber vulnerabilities and threats and quantifies and prioritizes risks Game-changing, platform delivering real time monitoring and management of cyber security risks
21 Driving the Industrial Internet of Things with OPC UA Benefits Native Security Multi-platform implementation Scalability from embedded smart sensors to mainframes Easy engineering Connectivity with context (value & timestamp) OPC UA is one of the most important modern standards for industrial facilities and many further scenarios in an intelligent and connected world. OPC UA is considered a central building block on the way towards Industrie 4.0. It is the first unified, worldwide recognized industrial protocol for a secure smart factory. Holger Junker, Federal Office for Information Security, (BSI), Head of Division
22 Your investments in applications are not fully leveraged Applications Information between data sources Downtime Monitoring Operations Monitoring RBI Database Excel ERP RCM Strategy Tool Condition Monitoring RTDB Asset Manager Operator Round CMMS Further complicated by number of human interfaces
23 but can be brought together through dashboards and workflows for better decision making Visualization Metrics Management Events & Notification Collaboration & Workflow Complete Solution to Enable SMART Operations
24 Expansion of Mobility Solutions Applications Mobile Enabled HPS Software Mobile Enabled Mobile device used for shift handover Applications available for your iphone/ipad Control Functionality Enabled Alert Enabled HPS Software Mobile Enabled 12.0 Alert Enabled Alarms and alerts visible on your mobile device Process deviations on your mobile device Control Functionality Enabled Safe operating limit dashboards for your mobile device
25 Driving Outcome-based Solutions in Services 2015 marks the rise of the outcome-based solution February 2015, CFO Magazine 2014: Cost-plus, break-fix 2015: Outcome-based, value-priced Customer Revenue / Production Customer Revenue / Production HON Price HON Price +/-10% Contract Performance Swing Expect 50% Adoption of Outcome-based Contracts Over the Next Three Years
26 Everything that we are doing is focused on helping you to Do more with less Operate safely and in compliance Leverage technology in order to stay relevant and competitive Manage the skills gap
27 Agenda Challenges Solutions Conclusions
28 Our objective is to put you, the customer, at the center of everything we do Time to bill Invoice accuracy Presales On-time proposals Expected quality Access to information Cash 1 Order On-time product delivery Product quality Technical support Support 6 5 Customer Touch Points Delivery Order acceptance and confirmation Timeliness of communication Product quality Expected delivery time Expected lead time Delivery On-track with schedule Critical path avoidance Re-work
29 My Priorities Continue to innovate to address your biggest concerns Do more with less Operate safely and in compliance Leverage technology in order to stay relevant and competitive Manage the skills gap Continue to invest in technology differentiation and leading edge automation solutions Build and strengthen our HPS culture to put customer experience at the heart of everything we do
Vimal Kapur. President, Honeywell Process Solutions
Vimal Kapur President, Honeywell Process Solutions Welcome 1,000+ Attendees 409 Customers 207 Channel Partners 27 th 15 Media Outlets Agenda Challenges IIoT Solutions Conclusions Industries are challenged
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