Real-Time Performance Measurement Improves ….docx

Real-Time Performance MeasurementImproves Operations of Sasol PlantsSasol (originally called the South African Coal, Oil & Gas Corporation or the Suid Afrikaanse Steenkool, Olie en Gas Korporasie) is a South African company involved in mining, energy, chemicals and synthetic fuels. The company is best known for producing petroleum and diesel fuel from coal and natural gas using Fischer-Tropsch synthesis. Chemical products produced by the firm include polymers, solvents, olefins, surfactants, waxes, phenolics, and nitrogenous products. The company also produces crude oil off the coast of Gabon, refines imported crude into liquid fuels and retails liquid fuels and lubricants. Sasol's Infrachem Utilities and Syngas division produces electricity, demineralized water, and steam used in production processes for both internal and external customers.The Invensys Business Performance Services consulting team worked with personnel from the Sasol One Site in Sasolburg, South Africa, to develop real-time performance measurements at its Steam Plants 1 and 2. Dynamic performance measures (DPMs) were developed to provide underlying realtime performance measures of each production unit in the steam plants. Real-time financial metrics were also created to calculate cost and profit for each process unit and area. Management and operator dashboards were created which utilize DPMs and real-time financial data to provide business management with critical business information in real-time to enable better, more informed business decisions.Early results indicate that the plant is exceeding the projected bottom line benefit results of $400,000 (US) dollars per year in savings from just these two relatively small plants. The team from Sasol, Invensys, and EOH are currently in the process of rolling out the real-time performance measures to five other plants in the same division.Figure 1 provides an overview of the value stream in this division. The water used in the process is drawn from the Vaal River, treated in the Demin plant, mixed with A&B grade condensate recovered from the plants, and used to produce steam in Steam Station 1, Steam Station 2, and the automatic thermal reformer (ATR) area. This steam is supplied to approximately 20 internal and external customers.BOVSSMSReal Time Business ImdlbgeBcexMII£atri>H$e Initfrati*4 Real-Trn® Variable CostingReal-Time Financial Product Reviews Real-Time Vigw of Qpratonai Porformanc© Real-Time Market Condition Response Real-Time Enterprise Business Intel igence- Real-Time Maintenance ManagementECS ME$ECS ME$ImMsIM ME5ReulIlMe A£t»«JUiKCbvtaDr4 MESEP- Errterpnse Portal Xl-E»change Inlerface 8«T/=BuEino£s Waroho uso Ft=financial& COConliolhig (Cosinfll PP=Fioduciion FlatMng PM=Pi?rt ftilewioe »MipM3nufactijthg InlograiiQft and IMallgoncsFigure 4: Real-time Financial Information Flows through to SAP.Real-time financial data plus allocated costs tracked by the ValuMax activity based costing system provide a real-time picture of product costs across the portfolio. The same real-time financial data can also be eventually integrated into SAP's Financial (FI) and CO models as the fidelity and applicability of these data is better understood. The figure below provides a general overview of the real-time business intelligence/finance system for Steam Stations 1 and 2. DPMs and real-time finance (RTA) models were developed and process in the existing automation system.infrac b=tnF$C<0«9(i.e. cost)Qusrt&s Managam/Business Systems9yn Gas and UliliDGS41Humanj Finance ''ResourcesAAGes / Demn | Gas、 StesmReform/ vVater J DisinbutioiX enerationyA A 公Production Margei'Plafrt网(HP)AiesmelRTF Med*HmBBi:1 3"»<_»1 SteamSteamStaticn 2UniHevelRTF Modete8PCFigure 5: Real-time Business Intelligence/Financial System.Developing a BaselineOnce the metrics were installed, they were historicized to provide a performance profile of each unit, station, etc. under various operating conditions. These baselines enable economic comparison of boilers under various conditions. Improvement initiatives and projects and operational improvements through improved procedures and training can be financially tracked and validated. Baselining also enables development of data for financial and accounting validation.One of the key opportunities for improved results lies in training the operators to think and act strategically. Dashboards provide operators clear and simple feedback as to individual impact on Sasol's business performance. Integrating this way of thinking is helping to improve Sasol's business and build the knowledge and skill base of its operators. Providing operators with a tool that provides feedback as to which boiler produces the least expensive incremental steam enhances performance of each steam station.For example, operators can make spare and spinning steam decisions based on economic information. Spinning is the available spare steam capacity when the feed rate on an idle mill is increased. Spare steam is the amount of potential steam available by starting the third mill of a boiler running on just two mills. Operators increase steam output on an instantaneous or immediate basis based on demand changes.Future Improvements PlannedThe various stakeholders provide such widely varied needs that the current infrastructure needs to be expanded to meet the changing and sometimes irregular nature of these needs. Standards such as the ISA-95 plant-to- enterprise standard formalize the concepts and interfaces for integrating business systems with production systems. The DPMs and RTF/BI dashboards can be scaled to cover more aspects of the business and custom business applications can be developed more easily within a standards-based environment. The most notable players in this arena are SAP's xApp for Manufacturing Integration and Intelligence (xMIII) and Invensys ArchestrA plant-level SOA (services oriented architecture). These systems will in the future enable Sasol to map and model its plant information to intelligent plant and business models that not only integrate well with SAP but can meet the varying demands from different levels in the organization.Divisional management currently has approved expansion in to other plants in the location. The DPMs, real-time financials, and dashboards have only been in place a short time but they have already had a significant impact. Feedback from managers, engineers and operators is that substantial improvements have been achieved. Operators can see the impact of their actions almost immediately so they are making decisions that make things run better and smoother. For example, a substantial reduction has already been seen in the air flow variability in the burners. Reducing airflow variability reduces coal consumption since too much airflow remove heat from the boiler out the stack and too little airflow results in incomplete combustion. The dashboards also enable engineers to quickly determine the impact of a new control strategy or equipment change.BenefitsThis project provided numerous benefits for Sasol. As the division looks to continue to improve its business and drive business value for the company, it looks to bring in new product technologies and process technologies that can help them achieve this. Sasol Infrachem management views development of its people as one of the company's most critical tasks. The importance of skills and knowledge development is underscored by government regulations and key personnel nearing retirement.The DPM methodology, by the nature of the process, brings together different functional areas such as accounting, engineering, management, operations, and maintenance to discuss the overall business. This type of interaction creates understanding across business functions, enables proper strategic performance measures to be developed across functions, and helps create new and valuable business processes aimed at improving the bottom line.The benefits of this project are clearly positive for Sasol. First month results indicate a 6% savings on energy feedstocks and 4% savings on electricity costs for making steam in Steam Stations 1 and 2 and progressively improved throughout the second and third months. These savings are due to more consistent operation from a business perspective in regards to fuel oil usage and overall tuning of the boilers to run more cost effectively. This equates to approximately $230k savings in the first month. Annualized direct benefits of this project is expected to be about 2% reduction in variable costs associated with energy feedstocks and electricity costs. Some of the next steps include bringing the new business information together with process data to identify other areas of improvement through advanced multivariate statistical analysis, continuous improvement programs such as Six Sigma, and other business value-adding activities.Steam Stations 1 and 2The initial focus of the real-time measurement project has been Steam Station 1 and 2. These stations had been operating well below capacity due to a reduction in steam demand from its customer base. In 2004, Sasol began importing significant quantities of natural gas from Mozambique, which replaced coal that had previously been used in synthetic fuel production and in turn reduced the need for steam used in coal reformation. The reduction in steam demand changed the focus of production strategy at these units from maximizing production to minimizing cost.Figure 1: Flow Diagram of Steam Station 1.Steam Stations 1 and 2 consist of multiple boilers serving a single header. The demand from Infrachem,s customer base is provided by ATR steam as the base load and swing demand is made up by Steam Stations 1 and 2. Steam is sold to internal and external customers at a market price which is based on an internal algorithm that approximates a fair market price at current conditions. The steam stations are also contractually obligated to run with a 160 tons per hour amount of spare steam. This is approximately equal to the steam output from one boiler. If the plants cannot meet demand, the electrical generation customers are first reduced because they can buy electricity off the grid instead of generating. However, excessive power usage from the grid can create huge costs.Steam Station 1 supplies steam at 425-430 at 41-42 bar while attempting to maintain a constant steam delivery. Steam Station 2 supplies steam at 450 at 40.2-40.2 bar and acts as the swing plant to handle load variances.The variance is manually controlled. A boiler can be run with either two or three mills feeding coal into it. When two mills are feeding coal, steam capacity is between 80 and 110 tons per hour and when the boiler is fed with three mills the steam capacity is between 110 and 145 tons per hour. The coal feed rates are controlled to maintain the desired steam delivery levels.Boiler efficiency is defined as the heat transferred to steam divided by the heating value of the fuel. Generally, boiler efficiency is a function of the heat transfer efficiency, which is associated with stack temperature, and the combustion efficiency, which is associated with excess air, as well as other factors. Other variable cost factors include demineralized water and electricity. Since many of the boiler operations are manual, helping operators better understand the overall boiler economics as they relate to operations and strategy has the potential to improve business performance.Automation and IT SystemsSasol has made a significant investment in its automation and IT infrastructure. Each of the two steam stations has a dedicated Distributed Control System (DCS) for control, historization and graphical interface. At the start of the project, neither DCS was heavily loaded. This excess computing capacity in each DCS provided an opportunity to host applications beyond basic process control; in this case, as model implementation and execution host for real-time performance measurements and business intelligence feedback.The historian server collects critical data for each DCS as well as other production layer systems. Most connections between the DCS and IT layer are through bi-directional communications. Process data moves from the DCS to the historian server and manipulated data moves back from the historian server to the DCS to be displayed.Intrachem utilizes SAP R/3 as the main backbone for measuring business performance. The SAP Sales and Distribution (SD), Materials Management (MM), and Production Planning (PP) modules are used to coordinate sales and distribution, maintenance management and production planning. These SAP components then provide inputs to the production costing system and monthly management reporting systems. Production volumes are taken from SAP and used to derive variable costs from the SAP Plant Maintenance (PM) module. Allocated costs contained in the SAP Controlling (CO) module arc also used in the overall costing pictures for each product.Monthly reporting of financial data provides an overall picture of the steam generation business and the entire Infrachem Syngas, steam and utilities businesses. Reports are generated using Hyperion Financial Management (HFM) reporting capabilities utilizing key financial data from various spreadsheet sources. Managerial, operations and maintenance reporting utilizes inputs from the ODS system, SAP and other manually entered sources to provide custom reports to meet current requirements. Production supervisors use reports on a daily basis to review the previous day's production performance.Real-time Performance Measurement at SasolSasol Intrachem management first became interested in real-time performance measurement after attending a presentation by Business Performance Services consultants from Invensys. The steam plant was facing cost pressures due to reduced demand in a commodity-based business and was interested in opportunities to reduce costs by introducing new technologies. Sasol's Information Management Group is charged with investigating and bringing in new technologies that can drive business value for the company.Invensys has developed a methodology that has yielded measurable economic performance improvements for customers. This methodology is a structured and repeatable process that involves the deployment of a business performance service team to work with the customer's plant personnel. The key deliverable is a real-time performance measurement system aligned with the manufacturing strategy and accounting system. It provides consistent and accurate real time measurements of plant performance that drive maximum economic business value from plant assets. Steam Plants 1 and 2 were chosen as pilot sites for the project because they faced enormous cost pressures and they provided a ma