This is Nick Denbow’s report on the Emerson Press Event held in Switzerland in mid-June 2013. It appeared in the July 2013 issue of his publication Industrial Automation and Process Control Insider.
See our own report Emerson raises the bar at Baar.
Headquarters staff at Emerson Process Management in Europe moved into a new purpose-built office block in Baar, Switzerland, last month – and the very next week hosted around 24 European editors for a press conference and review of their latest business activity. This also enabled them to show off the new conference suite and training / demonstration facilities: a notable achievement when they were only just settling in.
The Press Kit was entitled as another in the Emerson “Conquering Complexity” series, starting in Brussels in November 2011 with their Smart Energy Initiative (INSIDER December 2011, page 1). This 2013 event, subtitled “Smart Connections”, was introduced by Roel van Doren, president for Emerson Process in Europe, who explained that the Emerson strategy is to bridge the gaps that create the major challenges to the process industry currently, where there is a lack of in-house expertise and resource to link the performance demands – and geographic business expansion plans – with the operational complexity of a modern plant. Emerson say they can offer their people and expertise to supply resources and knowledge, to link the plant operations with these requirements, satisfying demand, uptime and performance criteria.
Newly defined business area
Emerson have introduced the idea of this new business area as a “Solve and Support” function, on top of their three base business pillars. The main pillar is ‘measure and analyze’ (Rosemount, Micro Motion, Daniel, Analytical etc), 50% of the European business in 2012; ‘final control and regulate’ (Fisher), 22% of the business; ‘operate and manage’ (DeltaV and software 28% of the business. So literally in the middle of this pie (since the above three already adds up to 100%) there is another 15% of the business which has evolved over the years, and is now to be labelled as ‘Solve and Support’.
The total European business of Emerson Process had sales of $1.6Bn in 2012, which includes between $300- 400m of exports out of the area, interestingly quoted as from Italy, France and the UK (with no mention of Germany). So this newly defined solve and support business in Europe is worth $240m.
“Solve and Support” Business Definition
What is it? The short answer for “Solve” is that the business provides people who are knowledgeable and able to apply the capabilities of the product and system innovations that Emerson have created. They are the best people to get the most out of these specialist innovations, a fact recognized by the customers and the EPCs. While it might look like Emerson is taking the rôle of an EPC, which would be competing with its own customers, van Doren explained that they partner with EPCs, and have strong relationships with them, but do not wish to take on the full rôle. This is explained further, below.
The next half of the business definition covers “Support”, and is the provision of people to provide lifecycle services throughout the many years of operation of the plants, in terms of providing asset monitoring, predictive maintenance, improved plant uptime, and faster turnarounds or upgrades. Erik Lapré, vp for lifecycle service in Europe – a rôle he has held since 2007, charged with driving the service growth programme – explained that globally Emerson has added 4000 service personnel since 2005, doubling the size of this sector. Many of their service centres – and there are 97 spread across Europe – are either close to customer concentrations, or within customer’s plants, with staff dedicated to servicing the one site. Others are based around the Emerson factory locations that are defined as centres of excellence: in Europe these are for flow at Ede in The Netherlands, valves at Cernay in France (as well as the Quick-ship centre in Hungary for valve and actuator parts), Ovation at Chelyabinsk and St Petersburg in Russia, and Warsaw in Poland. Support for the Syncade Suite operations management software users in Europe is from the training centre in Herlev, Denmark.
A change of emphasis
The real message is not that Emerson are starting to do these things, it has been happening for over 10 years: the message is that they are more actively promoting these activities and pouring resources into these areas. The press releases give an interesting mixture of policy and data: relevant to “Solve” we have – “Emerson has expanded plans to expand its project engineering staff to meet the demands of major project activity”. “Emerson has added over 2500 engineers to project execution staff since 2005. In 2012 staffing levels….topped 4600”. “The number of mega-projects (over $5m) has tripled in less than two years”. “Emerson managed one multi-project programme [ie multiple projects for one customer] that started in 2001 [probably with the Danish Novo Nordisk modular pharma plant] – and is currently managing thirteen”.
Rolf Hemminga, sales director of process systems and solutions in Europe, presented several examples of their recent projects, such as Clair Ridge and Visund in the North Sea, and was supported by customers from INA, MOL and Vopak, who were present to explain their projects further.
Jim Nyquist, president of the PlantWeb solutions group was quoted as saying “We’re not just adding staff, we’re making them more efficient and effective. We’ve invested for years in standard practices and tools for project engineering, and taking advantage of global telecommunications technology”. Hemminga illustrated this quoting a current pharma project, led from Switzerland but designed by teams in the US and Europe, to be configured and skid built in the USA, UK, France and Germany to comply with FDA requirements, and to be erected in Singapore – the site only chosen two years after the project start.
Similarly customers choose Emerson for North Sea platform upgrades, where shutdown time is critical, and they look for the experience and knowledge brought by Emerson, because their own engineering staff and knowledge has been run down, or it is a new owner. Significant project work on DeltaV SIS safety and control systems also has been undertaken by this Solve business, and Hemminga suggested that as a result of this involvement Emerson now had more certified safety engineers on staff than any of the other five top DCS vendors in the World.
So what about Support?
To quote the press kit: Steve Sonnenberg, president of Emerson Process Management, said “The number of large automation projects for which we’ve been chosen – increasingly as Main Automation Contractor – has dramatically increased in the past two years”… “Once these projects are up and running they need prompt, dependable support services to stay at peak efficiency”… “Emerson can help them bridge the gap [in technology awareness] by providing contract personnel to do initial set-up of new technology approaches and assist with on-going support programmes”…. “It’s our goal to address the gaps in our customer’s in-house capabilities with our quality services. The aggressive investment programme we’ve put in place will help us meet those needs”.
Lapré used the example of the recent upgrade of the INA refinery in Croatia to illustrate the Support service function within the continuing operations. New process units had been added to meet EU fuel specifications: operators were trained on these new process units using DeltaV dynamic simulators, illustrating the plant control system. On-going support is provided by an Emerson resident site engineer, who also handles spare parts management and calls up service engineers as needed, based on analysis of predictive diagnostics within the AMS system. In this the on-site engineer is helped by remote services interrogating the plant systems to identify areas that need attention – such services are also used to remotely monitor installations on offshore platforms, and to identify the expertise needed, or assist the local operations personnel in sorting the problem. These remote services can also be extended into process optimization and loop tuning.
While this type of on-site engineer service has been available from Emerson for many years – one of the first examples was in the Ineos Chlor plant in the UK over 10 years ago – the retirement of engineering expertise, the continuing lack of new entrants to this industry (partly caused by the reduction of on plant staffing levels) and the complexity of modern systems is fuelling a significant growth in demand for such services, primarily in Europe and the USA.
Developments in the rôle of the MAC
Roel van Doren led the recent press presentation, and helpfully provides this clarification about the current relationship between Emerson, when operating as a Main Automation Contractor (MAC) and an Engineering Procurement and Construction (EPC) contractor. Roel writes: “The rôle of the MAC is very much to coordinate the automation aspects of the project, whilst the role of the EPC contractor is to oversee the construction, mechanical and process parts of the project. This includes overseeing the automation element, but this is typically less than 5% of their scope.
“Emerson is not looking to fulfil the EPC rôle in projects. We are very much focused on providing automation solutions to our customers. Indeed, we have vast experience of being the MAC on very large and complex projects globally, including many multiple and mega-size projects. Because of our expanded services capability we will be able to provide even greater support as a MAC to both existing and new customers.
“This is important because process automation touches every part of the process, making it a critical component of a successful project. So much so that major end users now tend to choose the automation supplier as early as possible. By doing so, customers are moving away from the traditional EPC model and moving towards a “PEpC” approach, where:
P= Procure critical packages and frontend loading services
p= Procure the balance (non-critical items)
“Emerson supports the PEpC approach, in which procurement of critical packages and front end loading services (FEL) occurs much earlier in the project lifecycle, prior to project sanction. PEpC also utilises a MAC. This greatly influences key project design philosophies, which affect plant operation and maintenance. It also ensures that the MAC is brought into a `circle of influence’ with the plant owner and the EPC. PEpC is supported by the Construction Industry Institute and studies have shown that it creates an average opportunity for a 10% saving in cost and time.
“For very large projects or train of plants that may have multiple EPCs, such as the one quoted at our press conference, at the INA Refinery, consistency is provided by the MAC, especially when they have the ability to provide more than 90% of the scope from within their own portfolio, as we can at Emerson.
“Emerson is working directly with many end users to provide them with automation technology and services. If required we do sometimes also take responsibility for other scope to support the projects.”