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Interview

with Tom Diederich, Vice President and Managing Director Australia/New Zealand, Emerson Process Management

15.04.2011 / Energyboardroom

As a global conglomerate spread across multiple industries, what is the significance of process management for Emerson as a business unit, and subsequently, the importance of Australia as a country for process management?

Emerson has seven strategic business units with Process Management being the largest, comprising approximately 28% of our annual revenue. This year we are anticipating significant growth for the organization.

We have very aggressive and bold plans to grow the Process Management organization on a global basis with a focus on emerging markets. Asia-Pacific is a major recipient of investment for fiscal year 2011 because of major growth prospects particularly in China, India, Australia, and South Korea. Having just surpassed Europe, Asia-Pacific is the second largest region in terms of global turnover, after the U.S.

Our year-to-year growth in Australia exceeds 100%. At the end of FY08 and into FY09 we witnessed sizeable layoffs at the engineering firms across our industry. Fiscal year 2010 hit our market pretty hard with our turnover decreasing 5-7% year-on-year. We attribute this to the lack of large projects being undertaken by our customers. Historically, our growth has been based on medium to large project plus day-to-day maintenance, repair and operations (MRO) business. In FY10, we saw a cautious market with companies spending on only the most necessary, critical projects and minimizing costs at every turn. However, this year we are seeing aggressive expansion plans in a number of companies and industries.

What do you consider to be the main turning points in process management throughout your decades of experience in the industry?

There have been many developments that have fostered change in process automation. But the biggest of these would have to be the introduction of the microprocessor. The microprocessor allowed the advancement from single loop, analog controllers to the development of the first digital process control systems to the distributed process control system (DCS) in the mid 70s to today’s integrated control and safety systems (ICSS).

Similarly, over that same time frame we saw manufacturers of transmitters and valves embed microprocessors into their products, initially for simple calculations like linearizations or temperature compensations. But as time went on, the capabilities of smart instruments and valves advanced to include increasingly sophisticated calculations, diagnostics and control. These new capabilities allowed us to understand not only what is going on in the process; i.e., temperatures, pressures, flows, levels, but also what is going on around the process; i.e., asset information, diagnostics, predictive alerts, etc.

Once these intelligent field devices are integrated into a ‘smart capable / smart ready’ automation system, we begin to reap the significant benefits of truly integrated process control:

• Reduced engineering, installation and commissioning costs
• Reduced process variability
• Improved quality and increased throughput
• Improved safety
• Reduced life cycle costs

And what has been Emerson’s contributing role in bringing forth new technological breakthroughs?

Emerson has a long history of developing new technologies that have benefited the automation industry. We developed and donated the HART protocol to the process industry in the 80s, we were instrumental in the development of Foundation Fieldbus in the mid to late 90s, we introduced the first ‘Built for Busses’ control system, DeltaV, in the mid 90s, we developed and introduced the first fully integrated safety instrumented safety system, DeltaV SIS, in 2005 and just this past April, WirelessHART was unanimously approved by the IEC, making it first international standard for wireless. Our wireless products and solutions allow customers to add measurements and predictive intelligence into areas that were previously out of reach; either physically or economically. And our customers love it; we’ve doubled sales of Emerson wireless products every year for the past 4 years! So we are extremely proud of our technology leadership in this area.

In addition, over the past few years we have been working on two very significant efforts that can be defined simply as conquering complexity:

• Human centered design
• Electronic marshalling

Today’s production facilities are becoming larger and more complex and field devices and control systems are getting more capable, flexible and sophisticated. Couple these changes with a reduced and aging work force and we have what we call a ‘knowledge void’; a cause for serious concern. So we have focused on eliminating unnecessary work, removing complexity and embedding specialized knowledge, the knowledge your most experienced operators have, into the system.

Human centered design acknowledges that operators need real-time access to the right information to solve problems quickly and easily and that precious time can be lost in sifting through mounds of data in search of the right process information.

We founded the Human Centered Design Institute and are key participants in the Center for Operator Performance, an operator-focused, human factors research consortium whose members include academics, engineering and automation suppliers, and process manufacturers.
Based on information uncovered from this research we are designing systems that allow operators to quickly access and understand information and react to it intuitively. The results are easily seen alarms at a glance, faster abnormal situation recognition and intuitive views of loop deviations. In some cases the changes to accomplish this are as simple as changing colors on screens, simplifying information presentation, and reducing the number of options operators have.

From an engineering and maintenance perspective we are driving toward a uniform look and feel across the breadth of the Emerson product line so that engineers and maintenance folks can go from system to transmitter to valve with a uniform appearance at the HMI.

Electronic marshalling addresses one of the biggest challenges out customers face; the complexity, cost and schedule impact associated with connecting the field devices into the control system. Electronic marshalling effectively decouples the process design from the I/O infrastructure design and delivers ‘I/O on demand’; providing I/O where you want, when you want it! In simple terms it provides the ability of a cloud of I/O to talk to a cloud of controllers. This eliminates the need to have a specific I/O point hardwired to a specific controller. With electronic marshalling any I/O point can talk to any controller, so you can land your field terminations on any set of terminals that are available. Jim Pinto, automation industry pundit, says I/O-on demand, on a typical project, cut the number of cabinets by 50% and their footprint by 40%, while eliminating as much as 90% of intra-cabinet wiring!

Just as Emerson has brought forth new technologies to the global market, what has Australia brought forth for Emerson? What are the cutting-edge Emerson technologies that are catered to the intricacies of the local landscape?

One of the hottest growth markets currently in Australia is coal seam gas (CSG) LNG. We have been actively participating in these projects with the biggest players in the business. Typical CSG gas fields can extend over thousands of square kilometers and wellheads can be located on privately owned land. The biggest safety concern for CSG LNG companies is vehicular safety. How do you optimize wellhead performance while minimizing trips to the field, access to private land, environmental impact and assuring employee safety? With our smart field devices and our Asset Management Suite users can remotely diagnostic wellheads to check performance and see if maintenance is actually necessary. And if it is needed they know exactly what the issue is prior to heading out to the well. This can significantly reduce or eliminate maintenance trips to the field. No more trips to the field for routine ‘check-ups’; now trips happen only when the system flags a specific issue! Eliminating just one trip per wellhead per year can deliver huge benefits and savings!

With final investment decision now reached for several major projects, operator focus now shifts to first gas on-time and within budget. Human resources and technical risks, et al, have a large potential to blow out project budgets. What is your take on process management expenditures being compromised in order to make room for costlier outlays?

We understand the need to drive cost and risk out of projects. That is specifically why we developed electronic marshalling, smart field devices, wireless field devices, a ‘built for busses’ control system and integrated them all into a single architecture that we call PlatnWeb. We deliver best cost solutions with least risk. There is a very interesting analogy to this discussion. Your brain is typically only 5% of your bodyweight but it runs all body functions. Similarly, process automation is between 3-5% of a project’s costs and it is the ‘brains’ behind the operation of a process. Simply put, there are much smarter places to cut costs.

While you are speaking very “matter of factly” about the obvious efficiencies of your process management offering, are you finding Emerson having to continuously educate operators about the benefits of its systems?

Yes, but it goes beyond operations to include engineering, maintenance and management. The process industry can sometimes be slow to take up new technologies. Additionally we do not see customers taking advantage of all the capabilities of the technologies they currently have. People are buying process automation equipment for the right reasons but not fully taking advantage of its capabilities. Through our educational services group we can help organizations understand and make use of the full capabilities of a technology. And, of equal importance, we can help change work practices so that the new approach becomes part of the organization’s DNA.

Beyond a seller of automation equipment, how have you established yourself as a partner to the industry?

We understand this business is all about partnership. We have worked very closely with our customers for years understanding the pains they feel. From those discussions and with their specific input and guidance we’ve developed capabilities and technologies that help reduce or eliminate that pain. Earlier we discussed some of the new technologies we’ve developed to help improve the process industry and customers operations. Each of those developments was in direct response to an issue or pain our customers experienced. We continue to be a significant participant and player in standards development and industry forums and continually seek input on how we can be of more and better service to our customers.

Prior to your current role as managing director of Australia/New Zealand you were the global head of life sciences for Emerson. What is the different type of thinking cap required for oil and gas?

It is a ‘night and day’ difference from many perspectives. If the oil and gas industry is conservative, life science is the ultra conservative. There is a saying in life sciences, likely stemming from the significant liabilities of that industry – “last to be first, first to be second.” Life science companies want field proven, time tested solutions. I see oil and gas as more willing to take up new technologies, quicker to change processes and, with the current, huge investments going on, a bit more exciting!

Emerson recently secured major contracts with Gladstone LNG, Queensland Curtis LNG, and Browse LNG – three of the largest scale LNG projects going on in this country. As more projects progress, inevitably with Emerson’s name tied to them, what do you see as being the future of this company over the next 5-7 years?

We have a very bright future ahead of us! And we have very aggressive growth plans for our business. We intend to double our business by 2015 and I, personally, expect us to exceed that. I would not be surprised if we triple our business in the next seven years.
It is wonderful that the LNG industry has brought a focus, that to my knowledge, Australia has never enjoyed before. LNG has put Australia front and center on a lot of people’s radar screen.

What would be your final message to our readers about Emerson Process Management in Australia?

It is an exciting time for us! We are investing heavily in this market, we are adding people, capabilities, and opening new facilities. We see an extremely positive future for us in oil and gas with the number of projects on the drawing board that are still to come. It is going to be a wild ride for the next 10 years!

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