Selection and decision-making criteria for a Distributed Control
Systems in the process industry
Willem D. HazenbergWillem D. HazenbergMBA Researcher Newport International UniversityMBA Researcher Newport International University
InhoudInhoud Intro & Framework Main objectives – Study and research questions Research project methodologyResearch project methodology Customer Value PropositionCustomer Value Proposition Methodic: Multi attribute utility theoryMethodic: Multi attribute utility theory Main- and Sub sectionsMain- and Sub sections Big- Short- Final listBig- Short- Final list Business reasonBusiness reason Economic Profile (EP)Economic Profile (EP) MigrationMigration More info – next stepsMore info – next steps
At Controls Manufacturing At Controls Manufacturing Community List Community List
Dear AllDear All Can anyone send me a single page comparison or Can anyone send me a single page comparison or
presentation on PLC Vs DCS as on today's date?presentation on PLC Vs DCS as on today's date? I shall be thankful for your kind inputs.I shall be thankful for your kind inputs. Thanking you,Thanking you, Regards,Regards,(Name removed) Control System Staff Engineer (Name removed) Control System Staff Engineer
Introduction To partial fulfillment of the requirements for
the degree of Master of Business Administration in Information Management at the Newport Business Academy and Newport International University, I decided to work out a thesis proposal with the title “Selection and decision-making criteria for a Distributed Control Systems” in the process industry.
The project framework (1) For the control of the chemical processes in the process
“chemical” industry Distributed Control systems (DCS) are applied. These systems are the heart- and nerve system within these factories.
The choice of DCS for a concern is a matter of strategic
importance. High demands are made to the availability of a DCS and
if the concern made a choice, she is committed to it for a lengthy time. Replacing a DCS is a very valuable matter because of the arisen production loss at a reconstruction for example.
The service costs of a DCS could be a multiple amount of
the initial investment during the life span.
The project framework (2) The process industry in the world for approximately
spends 45.8 billion dollar per year at the top 50 suppliers
on process control systems (included DCS). (2004 data) The expenses of these investments often amount to more
than 1 million Euro by per system. The selection process generally varies from 12 up to 24
months. At large DCS projects there sometimes are investments of
more than 45 millions Euro. The total expenses, which are involved with the selection
of one investment, amount more than 100,000 Euro per system. To earn an order, the marketing/ sale expenses generally are more than 50.000 Euro at a supplier.
The project framework (3)
Local employees of the establishments are involved frequently in the choice for a system. Because of the fact that this investment only takes place every 10-15 years, they are lacked from experience and methods to be able to take this kind of decisions. The consequence is that the choice for a certain system is not always univocal at this moment and the relation between a business case, a chosen solution, and the selection process isn’t always there. This study has to contribute that we make the choice of a system in a more univocal way and the decision-making becomes more
transparently.
Purchasing a DCS systemPurchasing a DCS system
Main objectives
The goals of this research is:
The improvement of model-based consideration concerning a selection of a new distributed control system (DCS), by making an analysis of selected criteria within the “chemical” industry to choose a DCS and to establish an investment/ selection model with these insights/ ideas.
So that future investment can be bought faster and the decision-making will be more transparent.
Study Define the core selection criteria and their priorities
for the purchase of a Distributed Control system (DCS) in the chemical industry and a design a decision-making model so that the decision-making for new systems more balanced more consequent and faster can be carried out.
Interview employees who are involved in the purchase decision of DCS within large DCS using companies like Alcoa, Akzo Nobel, BP,, Dow, Dupont, Exxon Mobil, DSM, Lyondell, P&G, Sabic, Shell etc.
Also account managers and marketing managers of the chosen DCS have to be involved in this research.
The areas of the study (1)
1. What is the business case of your investment in a new DCS system?
2. What is the reason for this investment (migration, replacement or a new installation) and what are consequences of the choice of system?
3. Which DCS supplier knows the person who is concerned in the company purchase of a new system?
4. What decides whether the DCS supplier comes on the Big List for further evaluation?
5. What decides whether the DCS supplier comes on the Short List for further evaluation?
The areas of the study (2) Which staff functions are involved in the
selection? At which components do these people pay
attention and which priority do they give to the different components?
Is there a difference between the ideas of DCS suppliers and users concerning these criteria?
Research project Research project methodologiemethodologie
•Documents review more then 850. •Online research (WWW.DCSSELECT.EU)• 124 respondents: End Users Engineers, Purchasing, line management and DCS vendors VP, Service – Account- marketing managers and Business consultants • Across industries in 31 different countries: EMEA, Australia,
America, Far east• Working for organizations ranging from: End Users – SI, Engineers Company’s, DCS vendors• Various industries:
Return Received survey documents End users
Involved OthersInvolved Others
Input up to 29 sept. 2007
Organization relation to DCS
End User industry segment
Job Title respondentJob Title respondent
Reason last DCS projectReason last DCS project
Project Project sizesize
Technology trendsetter?Technology trendsetter?
Best Time/Cost
Best Product at Best
Time/Cost C 48.6% / V 36.4%
Best Time/CostPlus High Touch C 2,9% / V 13.4%
Operational Efficiency C 25,7% V 9.1%
CustomerIntimacy C 1,4% / V = 4.5
High Touch and Best
Product C 8.6% / 31.8%
BestProduct
EnterpriseResourceTrade-Off
Product Superiority
C 12,9% / V = 4.6%
BestHigh Touch
DCS Customer Value DCS Customer Value PropositionsPropositions
C = End user
V = DCS vendor
AHP-Maut (Analytical Hierarchy Process AHP-Maut (Analytical Hierarchy Process en Multi attribute utility theory) Methodicen Multi attribute utility theory) Methodic
Bron Schmitt D, THE MAUT MACHINE : An Adaptive Recommender System
Result = Score * Weights of importance
•Global variable 1
•Local variable 1
•Local variable 2
•Sub variable 1
•Sub variable 2
•Local Variable 3
DCS Selection main DCS Selection main groupsgroups
DC
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Most important at biglistMost important at biglistBig listJob - function Viability
Vision
Main Selection item
Barriers to exit costs
Most important at short listMost important at short listShort list
Documentation
Job- function
Training
Main Selection item
User Experion
Implementation process
Business case guaranty from DCS vendor
Functionality
Technology
Services
Interoperability
Most important at Final listMost important at Final list
Final list Initial costsJob - function
Ongoing cost
Main Selection item
AVG Score main items DCS SelectionAVG Score main items DCS Selection
Business reason Big list selectionBusiness reason Big list selectionKnock – out criteria 46%Knock – out criteria 46%
Knock – out criteria 12.7%Knock – out criteria 12.7%
Knock – out criteria 12.9%Knock – out criteria 12.9%
Knock – out criteria 19%Knock – out criteria 19%
Knock – out criteria 14.8%Knock – out criteria 14.8%
Knock – out criteria 21%Knock – out criteria 21%Knock – out criteria 8.2%Knock – out criteria 8.2%
Knock – out criteria 14.8%Knock – out criteria 14.8%
Knock – out criteria 13.1%Knock – out criteria 13.1%
Business reason Final selectionBusiness reason Final selection
Business case new systemBusiness case new system Big listBig list 57% improved automation57% improved automation 43% Business information to the plant floor43% Business information to the plant floor 43% Could not maintain old system43% Could not maintain old system Short listShort list 38% Need for a easy to use system38% Need for a easy to use system 30.7% Could not maintain old system30.7% Could not maintain old system 30.7% create a more cost effective process.30.7% create a more cost effective process. Vele anderen rond de 30%Vele anderen rond de 30% 23% improved automation23% improved automation Final ListFinal List 42% Automatic start-up and shutdown routines42% Automatic start-up and shutdown routines 29% increased real-time decision making29% increased real-time decision making 29% 29% improved automationimproved automation
Conclusie: De belangrijkste businesscase redenen Conclusie: De belangrijkste businesscase redenen variëren dus per fase.variëren dus per fase.
Business case MigrationBusiness case Migration Big listBig list 76% Could not maintain old system;76% Could not maintain old system; 65% Replace obsolete system;65% Replace obsolete system; 41% Create a more cost-effective process;41% Create a more cost-effective process; 41% Reduction in Equipment maintenance.41% Reduction in Equipment maintenance. Short listShort list 67% Replace obsolete system;67% Replace obsolete system; 60% Use of advanced control algorithms60% Use of advanced control algorithms 4646% Improve loop control% Improve loop control final listfinal list 56% Could not maintain56% Could not maintain old system old system 44% Replace obsolete system;44% Replace obsolete system; 44% Improve loop control44% Improve loop control
Conclusie: De belangrijkste businesscase redenen is en Conclusie: De belangrijkste businesscase redenen is en blijft een obsolete systeem.blijft een obsolete systeem.
0
5
10
15
20
25
30
35
40
45
50
Prio1
Prio2
Prio3
Prio4
Prio5
Prio6
Prio7
Prio8
Purchase cost
Initial cost
On going cost
All Cost incl 1 year
All Cost incl 3 years
All Cost incl 5 years
All Cost incl >5 years
Exit Cost
Cost PriorityCost Priority
Zoom in op verschillen > 5 jaar Prio 1Zoom in op verschillen > 5 jaar Prio 1
DCS End users 19/71 = 26.7%DCS End users 19/71 = 26.7% DCS Vendor 4/15DCS Vendor 4/15 = 28.6%= 28.6%
– Account managers Prio 6-8Account managers Prio 6-8– Sales en Marketing's dep. Prio 1-2Sales en Marketing's dep. Prio 1-2
Eng Comp. 0/6Eng Comp. 0/6 = 0= 0 System Integrators 2/6System Integrators 2/6 = =
33.3%33.3%
Economic Profile (EP)Economic Profile (EP)
EP = Life Cycle Benefits (LCB) - Life Cycle Cost EP = Life Cycle Benefits (LCB) - Life Cycle Cost (LCC)(LCC)
LCB = NPV LCB = NPV YEL (Annual (Annual ManufacturingManufacturing Cost savings + Annual Cost savings + Annual Production Increases)Production Increases)
LCC = System Price + Initial Eng. Cost + LCC = System Price + Initial Eng. Cost +
NPV NPV YEL = Annual Eng. Cost + Annual Ops costs + Annual = Annual Eng. Cost + Annual Ops costs + Annual Maint. Maint. costs)costs)
Annual Ops. CostAnnual Ops. Cost• Software licenties (aanschaf, licentiekosten Software licenties (aanschaf, licentiekosten
voor uitbreidingen)voor uitbreidingen)• Onderhoudscontract, remote onderhoudOnderhoudscontract, remote onderhoud• Investeringswaarborgen (lange Investeringswaarborgen (lange
termijnondersteuning, migratie en termijnondersteuning, migratie en softwarebescherming)softwarebescherming)
• Betrouwbaarheid (Hardware, software en Betrouwbaarheid (Hardware, software en configuratie)configuratie)
• Complexiteit (topologie, software, Complexiteit (topologie, software, procedures)procedures)
• Kennis (Training, toepassing, ondersteuning) Kennis (Training, toepassing, ondersteuning) • Down time (van productie installatie)Down time (van productie installatie)• ( het niet kunnen produceren doordat ( het niet kunnen produceren doordat
systeem niet beschikbaar is) systeem niet beschikbaar is) Yel = Years of Expected lifeYel = Years of Expected life
Live cycle CostLive cycle Cost
SysteempriSysteemprijsjs
Initiële Initiële engineerinengineerings- kostengs- kosten
Installatie Installatie kostenkosten
Jaarlijkse Jaarlijkse engineeringsengineerings
kostenkosten
Jaarlijkse Jaarlijkse operationeloperationele kosten e kosten (OPS)(OPS)
Jaarlijkse Jaarlijkse onderhoudsonderhoudskostenkosten
GemiddelGemiddelde de percentagpercentage kosten e kosten eerste eerste
5 jaar5 jaar
23,2%23,2% 28,5%28,5% 16,1%16,1% 9,3%9,3% 7,6%7,6% 15,3%15,3%
Op basis onderzoek 1996 (data 1991-1996) Source ISA
Model Woordward 1997Source: Ken Keiser en Todd Stauffer levenduur DCS componenten 2007 intech
Migration Yes / NoMigration Yes / No
Difference life cycle componentsDifference life cycle components Best offer Standard migrationBest offer Standard migration Obsolescence equipmentObsolescence equipment
– Withdrawn and/or not supported by vendorWithdrawn and/or not supported by vendor Risks assessmentRisks assessment Postponement periodPostponement period Risk managementRisk management Plant integrityPlant integrity
Migration Risk versus Migration Risk versus BenefitsBenefits
EndEnd
Contact information for the next study Contact information for the next study phasephase
[email protected]@dcsselect.eu
WebsiteWebsite WWW.DCSSELECT.EUWWW.DCSSELECT.EU 1e results 1e results
http://www.dcsselect.eu/RES_ENDUSER/_frame.htmhttp://www.dcsselect.eu/RES_ENDUSER/_frame.htm