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The Power of IIoTin the Utilities IndustryJuly 2015
THE POWER OF IIOT IN THE UTILITIES INDUSTRY 2
ABOUT CHAIONE
ChaiOne is an Enterprise Mobility Agency that helps companies transform their business leveraging mobility at scale.
We utilize user research, design and development expertise to empower Fortune 500 companies and target their business objectives by adopting leading edge technology.
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AUTHOR
NATALIE CHENGNatalie Cheng is the Social Media & PR Coordinator at ChaiOne. She
is responsible for creating and editing content for the ChaiOne
blog, website, social media accounts, decks, eBooks, and other
presentation materials. Before ChaiOne, Natalie was a community
manager and writer for a large technology publication.
CO-AUTHOR
RACHEL NITSCHKERachel Nitschke is the Content
Marketing Specialist at ChaiOne. After graduating with a degree in
journalism, she worked in nonprofit communications before landing at ChaiOne to focus on demand
generation and content marketing.
05 Introduction
08 Preventing Failures and Outages
12 Increasing Operational Efficiencies
17 Improving Maintenance Strategies
23 Changing the User Experience
27 Conclusion34
The Power of IIoT in the Utilities Industry
01Introduction
06THE POWER OF IIOT IN THE UTILITIES INDUSTRY
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INTRODUCTIONImagine having to boil water for 37 hours. More than 550,000 residents of Tampa and surrounding areas were forced to do just that in February 2013. The cause was an unlikely culprit: a squirrel. The small animal chewed through one of two power lines servicing a major water treatment facility at 5:30 a.m. Sagging power lines caused a spark, which took down the other line at 1:30 p.m. The switchgear burned out, delaying the response of the emergency generators. By the time they did get online an hour later, the damage was already done.
Utility providers may have little power to prevent squirrels from chewing lines, but the response time and communication between systems could be improved with the Industrial Internet of Things (IIoT) and an integration with mobile that helps alert employees. According to the Industrial Internet Consortium, the Industrial Internet is “an internet of things, machines, computers, and people…enabling intelligent industrial operations…using advanced data analytics for transformational business outcomes.”
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Why does this matter to the utilities industry? The Industrial Internet of Things is already changing how companies work and it continues to grow. According to Cisco Systems, by 2020, the amount of Internet-connected things will reach 50 billion, with $19 trillion in profits and cost savings coming from IoT over the next decade. Furthermore, GE estimates that convergence of machines, data, and analytics will become a $200 billion global industry over the next three years. For the utilities industry, integrating IIoT and mobile into their systems will bring changes and advancements in how they address failures and outages, analyze data and improve operational efficiencies, maintain assets, and shift toward a better user experience.
02Preventing Failures and Outages
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PREVENTING FAILURES AND OUTAGESUnlike other industries, for utilities plants, the consequences of product failures are often larger than revenue lost; power outages and flooded waterways threaten public safety. Digitally transforming utility plants can help prevent catastrophic failures by collecting and analyzing data on the real-time context in which plant assets and end users are operating. The environment, from random flooding events to a spike in air conditioning use on a hot day, all affect the demand and performance of utility services.
For electricity providers, the Internet of Things and mobile apps help them respond to and address the main causes of blackouts and brownouts: weather and spikes in demand. It has become clear that today’s aging electric grid is poorly equipped to handle the power generation customers need. Many plants today
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do not know when a service interruption has occurred until customers start calling. By integrating granular data on weather forecasts, cloud cover, soil levels, and more, digitally transformed plants can receive minute-by-minute updates on when substations and power lines are in danger, and then quickly dispatch nearby crews to resolve the issue with minimal interruptions. Temporary disruptions caused by interference with assets out in the field from wild animals are also able to be resolved more quickly because the sensors on particular assets will be able to alert repair teams via mobile about the situation.
The other major factor causing blackouts and brownouts is unexpected spikes in demand. Load demand forecasts are highly informed hypotheses, but ones that could dramatically improve with real-time data. Digital plant operators have a real-time picture of the load demand. Forecasts become minute-by-minute, significantly decreasing the impact of an increase in demand. The ability to forecast demand and integrate weather forecasts even goes a step further in providing benefit to operators by making the incorporation of renewable energy
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sources more feasible. Even minor disruptions in cloud cover can affect the energy output of solar; gaining a clear picture of that output and the current load demand minimizes the risk and variability of tapping that energy source. The same logic applies to wind turbines.
The Internet of Things also better equips water treatment plants to handle disasters. If a flooding event overwhelms sewage systems, which does happen, sewage will make it into the waterway. Water treatment plants typically handle this by building large drainage tanks and storage systems. A digital plant can make that process much safer and more efficient by integrating weather forecasts into its processes; if a flooding event appears possible, it can drain tanks beforehand to make sure the system can handle the excess rainfall.
03Increasing Operational Efficiencies
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With aging grids and workforce assets, utilities companies need to manage assets more efficiently. The Industrial Internet of Things can have a huge impact on operational efficiency and productivity gains for the utilities industry. According to a report by Accenture, investing in the IIoT in areas such as automation and more flexible production techniques in manufacturing can boost productivity by 30%. Being able to connect the data from sensors on machines out in the field such as meters to programs back in an office is huge. Workers will be able to analyze data coming from these machines remotely, saving them time that would have normally been wasted from driving out to different sites.
INCREASING OPERATIONAL EFFICIENCIES
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100 B
90 B
80 B
70 B
60 B
50 B
40 B
30 B
20 B
10 B
0 B
OIL & GAS$90 B
$66 B $63 B
$30 B $27 B
POWERHEALTH CARE
AVIATIONRAIL
Credit: GE Estimates/Postmedia
INDUSTRIAL INTERNET: THE POWER OF 1%Efficiency gains as small as 1% could have sizable benefits over 15 years when scaled up across the economic system.
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With a vast amount of commercial, industrial, and residential customers all demanding power, there is a growing need to monitor the distribution grid to ensure reliability. Consumers are increasingly adopting smart meters and according to Ericsson, “as smart meters are deployed in mass volume, the number of connections to the Meter Management Platform and the volume of data to be collected will multiply at least 100 times over.” The Edison Foundation estimates that utility providers have deployed 50 million smart meters already. However, the full capabilities of the roughly one billion data points the smart meters have are not being fully realized. Utilities struggle to develop solutions to analyze the data and enable information to be shared between different systems. By partnering with a technology company, utilities companies will be able to create a solution that will fully utilize this data. All this data can be used to improve the time it takes
to identify and respond to issues in the grid. Field workers can easily get updates on a mobile app of when an outage has occurred and take steps to fix the issue. Furthermore, since grid operators are usually organized in silos, having all these different data points will improve communications between the different divisions.
Without a doubt, improving efficiency is great, but it’s easier said than done. Companies in the utilities industry need to make sure that they invest in IIoT technology and mobile applications that will actually help them meet their goals. What’s the point of implementing sensors or developing a new mobile application if it won’t help workers perform their tasks better in the long run? Companies might as well shred millions of dollars if they are going to waste money on new technology without any regard to whether or not it will actually be beneficial.
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Often, company leaders think that they know how to improve the efficiency of processes. However, there are many components that go into these tasks so companies should come up with a hypothesis of what will increase efficiency before designing any kind of solution. This can only come by studying the nature of the work and identifying opportunities that can increase efficiency. For example, one utilities company thought that by fixing file sharing by management, efficiency would improve. However, when we conducted research and observed the workers in their actual environment, we found that the real bottleneck to efficiency was with work-scoping. This wouldn’t
have been discovered without user research.In the context of user experience design, efficiency is the speed in which users can complete key tasks when interacting with a product or application. The interface needs to be intuitive and should decrease the number of steps to perform tasks. By decreasing the number of clicks, screens, or taps, utilities companies can react faster to outages and customer complaints. This can be a crucial differentiator for a utility company. When approaching the IIoT and new technologies, keep this in mind: efficiency gains can’t happen without creating a technology strategy that is designed to meet goals and improve ROI.
“Efficiency gains can’t happen without creating a technology
strategy that is designed to meet goals and improve ROI.”
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04Improving Maintenance Strategies
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IMPROVING MAINTENANCESTRATEGIESBy digitally transforming their plants, utility companies gain a critical advantage over competitors in the area of maintenance, which typically represents 5 to 15 percent of expenditures. Connecting plant assets and enabling them to communicate powers a streamlined, data-driven maintenance strategy that goes beyond a sensor sounding an alarm every time an asset fails. Digital plants are able to pull historical and real-time data from sources across the system to decipher why an asset is failing regularly and provide possible solutions-- all without an analyst stepping foot into a plant. This root cause analysis is just one part of the
transformation the IoT provides; sophisticated digital plants can also customize a maintenance approach for each asset and system. Diagnosing the issue is the first part of the process. It falls on the company to decipher the most efficient route of communication-- the information reaches the right person at the right time in a way that makes immediate action feasible. For example, companies may set up push notifications from a mobile app to communicate when action is needed or an asset needs monitoring. The result: A reduction in labor costs, asset downtime and catastrophic failures, ultimately increasing the efficiency and ROI of plant assets and reducing failure sources.
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INDUSTRY SEGMENT ESTIMATEDVALUE
LABOR-HOURSPER YEAR
AVIATION
HEALTH CARE
RAIL
POWER STEAM & GASTURBINES
AIRCRAFTENGINES
FREIGHT
CT + MRISCANNERS
52 M $7 B
$10 B
$3 B
$250 M
205 M
52 M
4 M
The graph below shows the labor cost for current maintenance, broken out by industry sector, and the potential economic value derived from the Industrial Internet for each:
Credit: GE - The Industrial Internet @ Work
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This advancement is crucial to the next evolution in maintenance, which involves combining and balancing each of the predominant strategies by drawing upon the strengths of each to fit the needs and function of the asset to maximize reliable production capacity.
Reactive
Preventative
Companies employing a reactive maintenance strategy follow a “fix it when it fails” approach. According to a report by OFWAT, this covers 90 percent of maintenance work. This is best utilized for only non-critical assets and leads to costly, unplanned downtime of assets, increased labor costs from overtime pay, safety hazards, and increased inventory costs to expedite delivery.
A preventative, or time-based, maintenance plan uses a rigid time schedule to replace parts. Although this philosophy does work for the 18 percent of assets that have a known failure pattern, it is cost-prohibitive. Parts are replaced prematurely and a larger inventory is needed for regular replacements, as well as causing increased labor costs for regular replacements.
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Most modern plants use some predictive maintenance, which involves attaching sensors to monitor performance variables and alerting the appropriate team when the data trend indicates possible failure. This can save companies up to 12 percent over scheduled repairs and reduce overall maintenance costs by up to 30 percent. Assets within simple systems requiring single variant math to determine failure are the best application of this strategy.
This strategy takes Predictive Maintenance a step farther by optimizing systems to perform root cause analyses and eliminate failure sources. This is ideal for complex, multivariate systems and requires advanced analytics and diagnostic modeling.
Predictive
Proactive
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IoT plays a role in each of the above approaches, but most critically in the Proactive system and most strategically in the decision of which approach to use. Connecting your assets and components and powering them with a sophisticated analytics mechanism can help to decide how to minimize maintenance expenditures by customizing the maintenance strategy to the asset. A non-critical asset experiencing random failures may be optimal for
a reactive approach; a critical asset with a two-year warranty will need an inspection one month before the warranty expires.
When implementing digital plant technology, remember that the increases in ROI only happen when the IoT is implemented correctly with enough resources, which includes setting up an efficient, mobile communications system with maintenance technicians.
By digitally transforming their plants, utility companies gain a
critical advantage over competitors in the area of maintenance
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Changing the User Experience05
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CHANGING THE USER EXPERIENCERecent deregulations and pressure on price in the utility sector have made it more competitive than it’s ever been to attract and retain customers. A way for utilities companies to differentiate themselves from the competition is to create a great experience for both employees and customers. The best products and applications have exceptional user experiences. It’s strange though that consumer apps have such great user experiences and yet, business applications have such clunky experiences. Even though the utilities industry isn’t known for the most intuitive and simple interfaces with great UX, it doesn’t have to be this way.
With the Industrial Internet of Things and mobile applications that go along with it, it’s even more important that companies keep the user experience at the forefront of their strategy. The more data that is collected, the more crucial it is
that all of this information is organized in places that workers can find easily. In addition, this data has to be displayed well and easily digestible on various devices so that workers can take necessary action. Currently, utilities companies have to face an expensive challenge: siloed information. Most companies are still using legacy systems that were built 10 to 15 years ago with data that is separated into departmental or functional views. This pattern has continued on through the years because most companies choose to just upgrade the system when it gets old instead of redesigning a new solution. Just upgrading an old system can be costly and not worth it in the long run if the design and user experience is terrible. Workers won’t want to use the system or will find workarounds to do tasks that might take longer than they should. This can cause frustration for workers and for customers because it will take longer to resolve issues such as overcharges on utilities bills.
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See below for an example of a redesigned interface.
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Choosing to redesign on top of a legacy system will help companies effectively leverage data and processes from the legacy system while optimizing the operation and the customer relationship. For example, by reducing time on task, a customer care system that ChaiOne redesigned was able to decrease the number of steps to manage a deferred payment from 53 to 12 steps. In addition, the new design was able to reduce the number of systems from 4 to 1, where one system encompassed all the information that you needed. In order to create a new and optimal design, we had to revisit how people were working and understand the time on each task. The system was redesigned based on the key metrics laid out in order to optimize time on task by 20%. Ultimately, the new design enabled users to achieve an 80% reduction of time on task, which is four times more efficient. From a customer standpoint, it means much faster service while providing a direct impact in lowering operational costs.
Choosing to redesign the system with the user in mind is an effective way to make your processes better without having to redo it all later. So why do it? A 10% increase in customer retention levels will result in a 30% increase in the value of your company.
A 10% increase in customer
retention levels will result in
a 30% increase in the value
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Conclusion06
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The plant and the competitive landscape are about to be transformed by the Industrial Internet of Things and mobile applications. If implemented correctly, the IIoT along with mobile apps will bring new opportunities, increased efficiencies, and transform the way people do work. Is your company ready to implement IoT technologies and mobile apps with its machines and processes? Any utilities company that wants to gain a competitive edge and prepare itself for the future will want to seriously invest some time into researching and implementing a strategy for the Industrial Internet of Things and mobile.
CONCLUSION
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