Good Rresources for Tracking Quarterly Health of Manufacturing Economy

These are all good links that I use to measure the quarterly health of the manufacturing economy:

Canada Statistics Monthly

http://www.statcan.gc.ca/start-debut-eng.html

US bureau of labor and statistics

http://www.bls.gov/

Fed reserve reports on industrial production and capacity utilization

http://www.federalreserve.gov/releases/g17/current/default.htm

ISM Manufacturing Report on Business:

http://www.ism.ws/ismreport/mfgrob.cfm

JP Morgan Global PMI

http://www.ism.ws/ISMReport/content.cfm?ItemNumber=13133&navItemNumber=12954

Cambridge Energy Research Associates

http://www.cera.com/aspx/cda/public1/home/home.aspx

Markit Economics Does a Series of Reports on the PMIs of Various Countries

http://www.markit.com/en/products/research-and-reports/pmis/pmi.page

Eurostat does a quarterly panorama of European Business Statistics

http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home

UK HSE Advice on Control Room Design

http://www.hse.gov.uk/comah/sragtech/techmeascontrol.htm

Control room design can have a significant impact on operator performance and increased safety.  The UK's Health and Safety Executive (HSE) has a great web site on control room design. 

Google SketchUp Delivers Amazing Free 3-D Design

Maybe I am late to the game but I just found out about Google SketchUp, which is a kick-butt 3-D design package that is downloadable for free. 

Google SketchUp

Operator Workstations and Control Room Furniture Improve Operator Effectiveness

CGM has an alliance with ABB in which they sell their highly sophisticated operator workstations and desks -- really advanced furniture and diplays for control rooms using the latest research in ergonomics.  If you think that investing in the control room furniture and displays is just a cost and adds no value, consider the impact on your operators.  They recently did a study on tired drivers versus drunk drivers and found out that driving while tired is pretty much the same as driving while drunk.  If you apply that logic to your control system operators then you start to get the picture.  The right furniture can improve operator effectiveness and increase operator alertness. 

Here is a link to the CGM web site

US Manufacturing Adds 49,000 Jobs In January

According to the most recent data from the BLS, we added 49,000 manufacturing jobs in January!  Good news!  I have been saying for a long time that "globalization" and the global factory are extremely dependent on cheap fuel prices to ship those goods from where they are made to where they are consumed.   We'll see how the latest price spikes combined with rising Middle East tensions will affect my hypothesis. 

http://www.bls.gov/news.release/empsit.nr0.htm

Another Obstacle to ISA 100 and WirelessHART Convergence

Seems like the convergence of WirelessHART and ISA 100 has hit another snag.  This time due to channel hopping issues?  You can read Walt Boyes' post from ControlGlobal here: http://bit.ly/hGHzEE. 

In my opinion successful convergence is necessary to create a single standard.

Good Story in World Oil about Migrating Safety Systems

January 2011 - A practical live migration strategy for upgrading safety systems

This is specific to the oil and gas industry, but addresses many of the issues related to migrating your existing safety system to meet new standards and business requirements.

Rockwell Automation Announces Major Leadership Changes

Rockwell Automation announced some major changes in leadership today. Click on the header for the link to the story.  Of note: Blake Moret is moving from the services business to assume the role of Senior Vice President of Control Products and Solutions.  Frank Kulaszewicz is being promoted to senior vice president of the Architecture and Software (A&S) segment.

The Ultimate Heads Up Display Geek Goggles

Recon Instruments offers a pair of ski goggles with built in heads up display and GPS.  The HUD data includes speed, time, altitude, temperature, and a lot of other stuff.  Tell me you couldn't adapt these to an industrial environment with a roving operator or maintenance technician. 

http://www.reconinstruments.com/

BP To Sell Texas City Refinery

One of the iconic refineries in America is to be sold.  Here is a link to the story in the Galveston Daily News. 

http://galvestondailynews.com/story.lasso?ewcd=e1da7df15449d254

According to the article, this was a complete shock to most of the employees there.  The refinery contributes an estimated $22 billion to the Texas economy and is the third largest in the country.  BP also announced the sale of the Carson, CA refinery. 

Shell Safety Strategy

Shell is an extremely safe company, and there are reasons for this. Here is a link to an 8 page document that neatly sums up Shell's approach to safety and, more importantly, its safety culture.

 

http://www-static.shell.com/static/environment_society/downloads/safety/process_safety_in_shell_lr.pdf

CSB Says Natural Gas Blows Inherently Unsafe

It may sound strange, but it is currently common practice power plant construction to clean pipes through natural gas blows, which essentially means blasting natural gas through a pipe to remove any obstructions. It certainly may be convenient to purge lines with your readily available supply of natural gas, but this gas can be vented into unsafe areas and find an ignition source. This was revealed to be the primary cause of the explosion at Kleen Energy in Connecticut earlier this year. According to this article in EHS Today, the State of Connecticut has now banned this practice. CSB is also making recommendations to the National Fire Protection Association (NFPA) and American Society of Mechanical Engineers (ASME) to revise their existing codes to stop the practice of gas blows in favor of safer alternatives. CSB has more commentary on natural gas blows and the inherent risk thereof in its series of YouTube videos here.

ISA CAP Testing is Coming in September

And I am totally not prepared, but don't let that stop you from taking the test to get this important certification.

More information from ISA:

Upcoming CAP Exam Application Deadline

The application deadline for taking your CAP Exam in the final Testing Window for 2010 is 15 September. Testing Window 3 allows you to take your exam any time between 1 November and 31 December. Here is the link to apply

OSHA Testifies on Worker Safety in Process Industries

OSHA deputy assistant secretary testifies before Senate Subcommittee on Employment and Workplace Safety on worker safety in energy production industries

This is some powerful testimony from OSHA on the state of safety in our country's refineries and chemical plants. Definitely worth a read.

http://www.dol.gov/opa/media/press/osha/OSHA20100819.htm

"Not only are we finding a significant lack of compliance during our inspections, but time and again, our inspectors are finding the same violations in multiple refineries, including those with common ownership, and sometimes even in different units in the same refinery. This is a clear indication that essential safety lessons are not being communicated within the industry and often not even within a single corporation or facility. The old adage that those who do not learn from the past are doomed to repeat it is as true in the refinery industry as it is elsewhere. So we are particularly disturbed to find even refineries that have already suffered serious incidents or received major OSHA citations making the same mistakes again."

IHS CERA Report Shows Continued Increase in Refinery Construction Costs

http://press.ihs.com/article_display.cfm?article_id=4265

HIS CERA does a very good report on capital project costs for process industries, and refining is chief among these. According to their latest report, "The costs for designing and constructing downstream refining and petrochemical projects rose 1.5 percent from Q3 2009 to Q1 2010, according to the latest edition of the IHS
CERA Downstream Capital Costs Index (DCCI). It was the second straight increase for the index since prices bottomed out at 9 percent below peak 2008 levels– costs are now just 6.5 percent below peak 2008 levels." Check out the link for the full press release.

A Guide to the Automation Body of Knowledge

I just got my hands on a copy of the Automation Body of Knowledge, edited by Vernon Trevathan. It's a great compendium of all the most important aspects of automation in today's plants and facilities. The second edition is updated to include information on continuous emissions monitoring systems and other topics. I highly recommend it. It's published by ISA and you can purchase it at the link:

http://www.isa.org/Template.cfm?Section=Books3&template=/Ecommerce/ProductDisplay.cfm&ProductID=8800

Dept. of Interior Issues Directive on Stronger Offshore Safety

http://www.doi.gov/news/pressreleases/Interior-Issues-Directive-to-Guide-Implementation-of-Stronger-Safety-Requirements-for-Offshore-Drilling.cfm

From US Department of the Interior. The moratorium on drilling in waters over 500 feet deep continues, but shallow water drilling is still go. Department of Interior has released a new set of safety guidelines that drillers must comply with if they want to continue drilling. You can read it all at the above link.

ABB Automation & Power World Brings Record Attendance

In the second year since merging the company's automation- and power- related user group meetings, ABB Automation and Power World managed to draw a record crowd of over 4,000 people – a 30 percent increase over last year's numbers. This is a clear indicator that the manufacturing economy and automation marketplace are back on track. Automation and Power World is perhaps the only user group meeting that brings the process and discrete automation domains (including robotics) together with power products spanning from switchgear to high voltage transmission and distribution equipment. This is fortuitous for ABB, since the worlds of automation and electrification are becoming increasingly entwined due to the substantial potential for energy savings, increased reliability and uptime, and reduced maintenance costs.

ARC also attended Automation and Power World in record numbers, as several ARC analysts and ARC President, Andy Chatha, gave presentations and moderated several sessions. Topics covered included a chat with ABB executives, integration of automation and electrification, smart grid, asset management, and control system migration.

A Record Turnout and Positive Momentum

As ABB CEO, Joe Hogan, stated in the keynote session, "Size can be a killer at times. The bigger you get, the further away you can get from your customers." This certainly was not the case at Automation and Power World. Even with record attendance, there was a lot of face-to-face customer contact and ABB personnel, from executive management to regional salespeople, were highly approachable and willing to talk and answer questions. There are not too many user group meetings where the company CEO presides over the proceedings, but automation and power are at the core of ABB's overall business and the company's obvious strategic commitment to these markets showed at the conference.

Hogan also commented on the overall positive momentum in the global economy and acknowledged that ABB was in a recovery mode. This is largely because the developing economies in China, India, and other parts of the world recovered most quickly from the recession and represent a huge part of ABB's overall business. Hogan has pointed out several times in the past couple of years that economic growth closely parallels population. (For example, China had the world's largest economy in the seventeenth century). The G-20 are expected to surpass the G-7 in terms of GDP by 2013. The US economy is back in positive territory with 3 percent GDP growth, but this may slow a bit when the effects of the stimulus are removed. Commodity prices have also bounced back, with copper at almost pre-recession levels, and world energy demand continues to grow at the rate of almost 30 percent through 2030. Carbon dioxide emissions, however, are also growing concurrently. Three-quarters of all emissions reductions in this period will come from energy efficiency measures and use of renewables.

Well Positioned for the Energy Efficiency Revolution

Industry, one of the largest consumers of energy, is ripe for innovation when it comes to energy efficiency. Sixty-three percent of electrical energy is used to run motors in industrial applications. ARC believes that Industrial energy consumption can be cut by almost 10 percent. ABB's strong position in both drives and in many of the world's most energy-intensive process industries, place it in a good position to take advantage of the energy efficiency revolution. The company's recent acquisition of Ventyx for over $1 billion (over four times revenues), enables ABB to provide a suite of software that, according to President & CEO of ABB Inc. USA, Enrique Santacana, "Provides the glue that allows ABB to track the flow of electrons from the point of generation to the point of use."

Reorganization Capitalizes on Strengths

Hogan also pointed out that ABB designed its recent reorganization to align the company more closely with its customers' business. ABB regrouped the Automation Products and Robotics divisions into two new divisions – Discrete Automation and Motion and Low Voltage Products. The Process Automation division remained unchanged except for the addition of the instrumentation business from the Automation Products division. The company has also made some other major organizational changes and acquisitions that have greatly expanded its capabilities. Re-cent acquisitions include the Jokab machine safety business and Sinai Engineering in Canada (a systems integrator).

ABB moved its process automation business headquarters to Houston, where it is building a large demo center. The company expanded its industrial park in Mexico, and located its Corporate R&D and Smart Grid Center in Raleigh, North Carolina. ABB also recently made an offer to increase its stake in its Indian subsidiary to 75 percent.

Peter Terweisch Shares Key Development Activities

In a special session for the media, Chief Technology Officer, Peter Terweisch, shared some recent and impending technology developments, many related to energy and the electrical side of the business. The world needs more power with lower emissions, and the share of electricity in the energy mix is increasing. ABB is applying this basic premise to its business strategy. ABB entered the solar inverter market, for example, based on its strength in drives technology.

Energy storage is often an issue with renewable energy resources such as wind power. ABB developed SVC (Static Var Compensator) Light Energy Storage capabilities to address this issue. Terweisch also announced that ABB would be building a new HVDC light cable factory in the US.

ABB excels in integrating automation and electrical assets through the IEC 61850 protocol. The company now has over 20 projects under way for integrated power and automation, and the approach continues to gain traction. In the process automation systems space, the 5.1 release of the 800xA system, happening soon, will (among other things) feature node virtualization.

WirelessHART Adapter and New Wireless Sensor Technology

ABB has launched a considerable wireless initiative, beginning with an alliance with Pepperl+Fuchs to offer a wireless gateway. The company showed its new loop-powered WirelessHART adapter that should be commercially available in the third quarter. Providing a reliable power source for wireless devices has been a persistent problem, even with increased battery life. ABB introduced a prototype autonomous temperature transmitter that utilizes new temperature differential-based technology for power. This only needs a 30-degree C. temperature difference, easily attainable using the low ambient air temperatures and high process temperatures in a typical plant.

Town Hall Meeting and Chat with Executives

The Town Hall Meeting was one of several meetings with ABB executives the company hosted during the week. ARC also hosted a Chat with ABB Executives, moderated by ARC President, Andy Chatha, as part of the "ARC Inside" forum within Automation and Power World. These sessions featured several members of the ABB executive committee. According to Gary Steele, Executive Committee member responsible for human resources, ABB was one of the first companies to feel the recession and it is one of the first coming out of it, particularly in businesses such as Discrete Automation and Motion. Now, the company has to balance the dilemma of cost and growth.

Veli-Matti Reinikkala, Head of Process Automation Division, commented on the affects various stimulus packages have had on regional economies. In China, for example, the stimulus package is winding down, but in ABB's view, many of the projects spurred by the stimulus were already on the table, but reallocated due to the stimulus. So, in China at least, the removal of the stimulus should not result in a slowdown of growth for the automation marketplace. As evidence, Reinikkala pointed to the growth in China's automotive sector. Sinopec, the Chinese petroleum company, plans to build 30,000 fast charging stations for electric vehicles, an opportunity for which ABB is well positioned to take advantage.

At the ABB Chat with the Executives, Andy Chatha asked each panel member to provide examples of how ABB provides superior value to its customers. Rick Hepperla, Region Division Manager for Discrete Automation and Motion in North America, pointed out ABB's structural changes and cost reductions, as well as the huge energy efficiency opportunities for customers. The recession hit process automation customers hard and Reinikkala pointed out that ABB has focused on services to help customers get more out of their plants, facilities, and assets without the need for large capital outlays.

Of Oil Spills and Volcanic Ash

No one was surprised to hear a question directed at the executives regarding the Gulf of Mexico oil spill and what ABB can do to help in this crisis. While ABB does not specialize in oil spill mitigation or in selling blowout preventers, the executives acknowledged that the company would play a much larger role in process safety and overall safety culture in the years to come. ABB is already a major player in process safety and the company has considerable capabilities in remote operations management and remote monitoring. Minimizing the number of people required to man offshore oil rigs and reducing the space needed for things like power supplies and control systems are two areas where ABB will make significant contributions in the future.

Volcanic ash, while not as immediate a concern as the oil spill, caused a major disruption in the ABB supply chain recently with the shutdown of air traffic in Europe. ABB executives recognized that the company must further globalize its supply chain and distribution footprint, balancing issues of cost and risk.

A more agile supply chain is just part of ABB's efforts to become a more customer-friendly business. Part of this effort is the development of a new "Net Promoter Score" metric, where customers are asked if they are ABB promoters or detractors within their organizations. Determining who the promoters and detractors are (and why), provides a good basis for improving ABB's business. The company also reorganized its global account management and strategic accounts process and transitioned from 19 different ERP systems to a single system. This helped flatten the company's business unit infrastructure.

There were far too many tracks and presentations at Automation and Power World to mention here, but the overall content and quality of presentations was very high. ARC also hosted several sessions as part of the ARC Inside Forum at the event, covering topics such as energy management, control system migration, benchmarking, and integrated control and electrification. Automation and Power World continues to be the largest end user group meeting in the world of process automation, and the only one that integrates the worlds of power and automation into a single format.

How the Gulf Oil Spill Affects Process Automation, Safety, and Asset Management

ARC is not in a position to pass judgment on or assign blame for the tragic loss of life and environmental disaster unfolding in the Gulf of Mexico. From our perspective, the primary questions that need to be answered now are, "What can we learn from this mishap?" and "How can the industry prevent a reoccurrence of this type of event?" We believe that the answers to both questions involve improved process safety procedures and the intelligent application of automation, asset management, and improved testing, operations and maintenance practices. The regulatory backlash already begun in the wake of this disaster will bring these and other issues to the forefront in the coming months.

The Regulatory Environment Has Already Changed

The regulatory environment has already changed in the wake of the oil spill. President Obama suspended deepwater oil drilling permits for at least the next six months and has ordered a halt to drilling off the Alaska coast. Leases issued to companies exploring for oil in the Gulf of Mexico and the coast of Virginia have been halted. The Minerals Management Service is already being overhauled, and the director, Liz Birnbaum, forced to resign after less than a year on the job. US Secretary of the Interior, Ken Salazar, has already stated that wells not covered under the moratorium, "…will require certification of all blowout preventers, stronger procedures for keeping wells under control, a tougher inspection process, and expanded safety and training requirements for rig workers."

Offshore Exploration and Production Will Not Cease

The reality is that, our society is still highly dependent on hydrocarbons. As much as some would like to break this "oil habit," there seems to be no ready alternative. Hence, for the immediate future at least, we must continue exploring for and producing oil in increasingly remote and challenging environments to meet the world's huge appetite for energy.

Increased Adoption of Process Safety

Unfortunately, the Deepwater Horizon disaster is just one of many incidents in recent years in process plants and other industrial facilities that have cost many lives and have left environmental damage in their wake. Many of these incidents might have been prevented by appropriate application of a modern process safety system incorporating both safety instrumented system (SIS) technology and intelligent devices with remote diagnostics capabilities. The technology exists today to provide advanced, online diagnostics for everything from control valves to pressure transmitters, machinery, and even blowout preventers.

Market growth for process safety systems already exceeds growth in basic process control systems (BPCSs). On top of the many other highly publicized incidents in the process industries, the Deepwater Horizon incident could result in even more broad, sweeping regulatory pressures that could affect all process industries, not just offshore oil & gas.

The Role of Procedural Automation

Major plant incidents are usually the result of a confluence of factors, all converging at the same time to create an environment outside of the normal pre-operations testing environment. Most recent incidents in the process industries have some sort of procedural element associated with them. Either proper procedures were not followed, or no standard operating procedure was defined for the operator or maintenance person to follow. Many procedures in the process industries tend to be manual or guided procedures. While there is a place for these, the process industries can benefit greatly from a drive to automate many critical procedures, such as startup and shutdown.

The need for a procedural automation standard increases as the workforce continues to lose the highly experienced personnel who under-stand these procedures and there is no meaningful way to capture that knowledge to guide future operator/maintenance actions properly to prevent incidents. With strong support from the process automation end user community, the ISA 106 standards committee was recently formed to address this issue.

Improved Maintenance Practices

Just as there are procedural elements to most process incidents, poor maintenance practices also typically play a part. Increasingly, better adherence to maintenance practices and higher standards for maintenance will be required. Plant asset management (PAM) systems, combined with intelligent field devices, can help facilitate a proactive maintenance strategy and can even reduce maintenance costs, while helping to improve safety by identifying problems before they become unmanageable or by avoiding unnecessary trips to the field. Maintenance work practices, however, must be modified to take maximum advantage of all that PAM has to offer and this change can be challenging to institute.

Safety Culture

None of these measures are sufficient, however, without implementing a good safety culture. Regulations can be imposed and technologies adopted, but without a high regard for safety in all facets of day-to-day operations and the mindset to make intelligent decisions, bad decisions will still be made, corners will still be cut, and accidents will continue to happen. As we've stated many times, a good safety culture must be disseminated from the highest levels of executive management on down. It requires constant vigilance and a certain set of corporate values that must be continuously monitored and maintained.