Jim Stuart, SVP Digital at Lloyd’s Register, outlines current and future challenges for asset owners and operators in the energy and marine industries across Asia-Pacific (APAC) and how technology will change the way knowledge is captured, stored and used across organizations for the better.
It’s often said that knowledge is power. But in high-risk sectors such as oil and gas, knowledge is fundamental to something much more important: safety and reliability. Hard-won through long experience, knowledge is the difference between profitable operations and unreliable equipment at risk of failure from factors such as corrosion, human error, and fluctuating operating conditions.
The problem is that with an aging workforce and increased merger and acquisition (M&A) activity, it’s becoming more difficult than ever for APAC operators to obtain and retain sufficient critical knowledge and experience within their organizational memory.
The process of population aging is already well advanced in Europe and North America, with many operators facing significant skills gaps. Yet, with the number of over 60s in APAC expected to increase two-fold between now and 2050, it is not a moment too soon for operators to futureproof their workforce requirements.
If that challenge wasn’t enough, 2018 saw the fastest growth in global energy demand of the past decade, spurred by Asia’s fast-growing economies, led by India and China. With rising living standards, and a rapidly growing population, outlooks indicate the need for ‘more energy’ - increasing pressure on oil and gas operators to deliver across APAC.
At the same time, new technologies promise to change working practices and therefore the nature of skills and knowledge that tomorrow’s operators will need. This leaves asset operators with a delicate balancing act: retaining/capturing invaluable knowledge of the past; making it usable and useful so that future works can build on this knowledge to more rapidly improve productivity.
Technology – specifically Asset Performance Management (APM) solutions, especially those with a focus on risk, reliability and optimization tools and mitigation strategies, will be central to owner/operators in APAC as they enter a new era of organizational memory.
Retain and maintain
In the energy sector, the looming ‘great crew change’ is a considerable source of anxiety. An aging workforce, coupled with a spate of early retirements during the downturn, leaves the industry reliant on fewer and fewer seasoned experts for their years of knowledge and experience. Even if a huge influx of young workers were to come into the sector tomorrow, comprehensive knowledge-transfer before it was lost to retirement would be impossible.
At the same time, the gradual upturn in the oil and gas sector has led to a matching uptick in M&A activity in the APAC region with over $6.8 billion worth of upstream assets changing hands in 2018. While it’s heartening to see renewed activity levels, M&A deals often lead to workforce changes and there’s a very real risk that experienced workers view the event as a good time to retire or seek opportunity elsewhere.
As such, owner/operators are faced with two seemingly opposite trends – one born of the downturn, the other of the upturn – both of which put pressure on organizational memory.
When it comes to APM, these are the skills, experience and know-how that can keep assets running optimally. If too much of that knowledge is lost, there is an increased risk of major equipment failure that can impact human/environmental safety and the reliability and profitability of high value equipment.
APM solutions can go some way to mitigating this. Traditionally, these solutions have excelled with quantitative, easily digitised data that could be used to aid asset owner/operators decision-making processes. However, the new generation of APM solutions have been designed with the aging workforce in mind and have developed to better capture the more qualitative, more human element of knowledge, experience and best practice that might otherwise be lost; and rapidly deploy this knowledge to augment newly developed insights or expertise.
Capturing this knowledge goes hand-in-hand with the need to deliver assurance and confidence to plant managers and operators alike. Digitizing expert knowledge and best practices is a key component of what Lloyd’s Register (LR) terms this asset performance assurance and it lies at the heart of its AllAssets platform. It enables engineers to map their understanding of failure mechanisms and failure causes and then sense-check their model against a rich library of information. This can then be codified and added to the solution, enabling a systematic approach to capturing human knowledge and best practices, all in one place and accessible across the organization.
In most organizations, the executive team relies on operations and maintenance staff to assure them with high confidence that risk of an unplanned shutdown is minimized - so production forecasts are met, plant performance is continually improved, and preventative maintenance work is scheduled at the least disruptive/most economically beneficial time. Modern APM systems that embody this concept of asset performance assurance, enable teams to deliver exceptional knowledge-based asset performance strategy with a high-level of confidence and assurance.
Building the knowledge base
Indeed, by capturing and codifying workers’ knowledge and experience, APM systems don’t only just retain critical knowledge capital, they can also make it more useful to the company as a whole.
A seasoned engineer intimately acquainted with a particular asset and all the operating conditions and maintenance/inspection activities to keep it running optimally is well-placed to pass on that knowledge to a handful of colleagues. But what if the operator runs similar assets outside of Asia Pacific? A forward-thinking company might look to send the subject matter expert to other sites to provide training, broadening the knowledge base. However, this is still a fundamentally analogue and limited method of knowledge-transfer.
By effectively capturing that experience digitally, workers across the world can gain access to pertinent knowledge through the APM system, as well as augmenting the pre-programmed risk models with their own knowledge and experience. In doing so, organizational memory isn’t just preserved, but enhanced and made more useful.
In fact, such benefits don’t need to be limited to individual companies. At the asset owner/operator’s discretion, the APM provider can capture and anonymize the knowledge to provide benchmarks for similar assets to other owner/operators in the industry. This democratized, collaborative approach can improve best practices across maintenance, inspection engineering and operation. The results are reduced equipment failure, improved productivity and longevity and better business performance across the industry.
Preparing for the future
However, at the same time as trying to maintain critical, existing knowledge in the organization, operators are also faced with the need for new knowledge and skills in light of technological change. Across sectors, economic activity is becoming increasingly automated and digitized.
Tomorrow’s best-in-class APM systems will be those capable of combining promising new technologies with the benefits wrought from hard-earned human experience and skill. In other words, marrying mature and new knowledge to upgrade not just organizational memory, but how it is applied. Those APAC operators which, aided by APM technology, succeed in doing so, can confidently step into a new era of asset performance assurance. Those that don’t may find that the aging workforce outlives their company.
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