Posted By Paul Tate, December 30, 2010 at 8:00 AM, in Category: The Innovation Enterprise
Ever since the sons of Marcus Samuel, a London-based antiques dealer and exotic shell importer in the mid-1800s, had the bright idea to build bulk, leak-proof tankers to ship oil back to Europe, the company the family founded has strived to stay one step ahead of its competitors. Now, the €351 billion U.K./Dutch Shell Group employs 104,000 people and operates across 110 countries, including some of the harshest places on the planet. To keep its business at the edge, Shell has adopted a series of high-impact strategies to help develop and apply innovative technologies to improve key processes and drive new ideas for alternative energy.
Jose Bravo is a self-professed champion of technology excellence and a chief scientist at Shell. He tells Manufacturing Executive’s Executive Editor Paul Tate about the major role that technology plays in pumping up Shell’s business.
Q: What is the role of chief scientist at Shell and how does it support the company’s business aims?
A: Shell has always been a technology-enabled company. Technology is a big competitive advantage when you use it properly. Over the years, when oil was low in price, we kind of lost our focus on technology in Shell. There was a need to renew that. A few years back, our CEO [Jeroen van der Veer] asked, “How can we get it more visible? How do we energise technical people in the company? How do we create the differentiator that we need?” He wanted a group of people that would act as the technology conscience of the organisation and make sure that the health of technology was what it needed to be, and that the enthusiasm of the technical people was there. The chief scientist and chief technology officer positions were created as leadership roles in the company to highlight the importance of technology.
My specific area is separations. All the manufacturing processes in the chemical and refining industries involve a great deal of need to separate, purify, refine, extract, and clean up things. A lot of my work has to do with how to operate the technology needed to run these manufacturing facilities in the most efficient, safe, and sustainable manner.
Q: Obviously a big task in such a global corporation?
A: There are days when I feel like a bee trying to steer an aircraft carrier. It’s vast — not only geographically, but also in terms of scope. The selection of what the company can do with limited resources and limited time is really a basic part of our role in the development and implementation of our technology strategy. It’s incredibly rewarding and challenging, and a smorgasbord of opportunities to get involved in.
Q: Have recent innovations in digital technology changed how Shell manages its activities?
A: It’s a very important part — monitoring, sensing, and giving people the information to make decisions. But do you know which technology has made the biggest difference in our business? Imaging. That has a lot to do with our production side, like the imaging of oil fields or reservoirs under 1,000 meters of water and then another 1,000 meters of earth. All that used to be the traditional seismic-type stuff. Now it can be done with sensors. I’ll give you an example: There’s technology now where you can actually sniff the presence of oil on land by just flying over it. You can cover very, very large amounts of ground in your search for reserves at very high speed, and just from a light aircraft.
Q: How do you use visual simulations for manufacturing processes?
A: One of the most fun places in Shell is our 3D room where you put your little colored glasses on. They project in 3D the whole underground view of an oil reservoir, and you can manipulate the image — see it from below, from any side, etc. On the manufacturing side, the same technology can be used, for example, to create a map of a big manufacturing facility, like a refinery of many different vessels. You can work your way through the whole plant, looking for places where you’re losing heat, losing energy, and finding things that you can do to help prevent it. You can create a thermal image of the refinery. You can create a CO2 emission image. You can create corrosion patterns — which pieces are corroding more or faster than others.
Then you can have the proper maintenance and mitigation program in order. All that sensing and all that data handling, messaging, calculations, and simulations can be done and then projected to an operator in a very clear way to tell them, “This pipe is getting a little bit too thin. You really should do something about it.”
The image of this grizzled, very experienced, old operator who knew every pipe and carried all the know-how in his head — all that is changing. Now the people who are running these facilities are all digital and multi-tasking. Knowledge transfer is easier, experience transfer is easier, and record keeping is easier. There are a lot of advantages.
Q: What drives the basic global IT and automation infrastructure at Shell?
A: There’s been a very strong push in the company recently to standardise software, hardware, and core processes so that we can communicate across the world in a very easy manner. Automation for us has always been pretty much automatic. We don’t run a very people-intensive process. We are mostly an asset-intensive business, so automation takes the form of running things by themselves, and it’s a significant period for us in technology.
We have done a lot of work with all the automation companies — Honeywell and folks like that — in process automation. We also work with the simulation companies a lot for model-based automation — companies like AspenTech and Invensys.
Globalisation has been an important factor. For example, we now have the ability to communicate from here in the research center directly with the refinery equipment at plants around the world. It’s called Smart-Connect technology. We get continuous updates so we can monitor assets and performance. We can discuss things with the operators looking at the same screen. Standardisation has been the enabler here. Before standardisation, you couldn’t do it. There were just too many different interfaces.
Q: Has integration changed the dynamic within the organisation?
A: It does tremendously. One of the things that a large company like Shell suffers, from time to time, is silos. The access to information and intelligence is the best way to break silos. It’s very enabling because you can communicate with people at a level that is very direct, very fast, and very pointed. The technology of gathering information has helped us a lot in cross-business issues where we have integrated our manufacturing operation with our supply operation, with our retail operation, etc. The silos get broken down through technology and the rapid transfer of information back and forth.
Q: Has this made Shell more agile as a company?
A: I think agility is key because of the speed of things and also because of the massive amounts of information you have to deal with to make a proper decision. Technology is a tremendous enabler for agility in the journey from data to intelligence. I think that’s true for suppliers, customers, and managing the whole long supply chain quickly. If you can react to market conditions fast enough to affect the beginning of your supply chain in a way that will take advantage of a particular condition, you can make a lot of money being very efficient.
Q: How do you drive technology and process innovation at Shell?
A: There are several factors. One is the environment, the climate in the company. We’ve discovered that’s a fundamental component of driving innovation. You have to have a climate where innovation is really a value, and not only lip service. You have to give people the ability to manage risk-reward type behavior. Innovation always involves risk. If you’re not taking the risk, and if you’re not actually failing to some extent, you’re not really pushing the envelope.
The second thing you need is some sort of process to communicate ideas, capture them, and foster them. You need something where things don’t go into hyperspace and just get lost. We have a very good program called the GameChanger program. It’s basically a forum where people submit ideas. They don’t have to be mature. They don’t have to be proven. They don’t have to be demonstrated. They even don’t have to have good economics when they get submitted.
The GameChanger says, “OK, we’re going to give you the time and the money to pursue this for a little while, and then come back to us and tell us if you’ve been able to put more texture on it. Have you been able to determine whether this is really a good idea or whether it’s going to be profitable?” At the same time, the GameChanger will discard ideas that are fundamentally flawed or scientifically flawed. But the GameChanger becomes kind of a grassroots movement to produce ideas.
We’ve found GameChanger very useful, very practical, very lively.
Some of the best technology at Shell now has come through the GameChanger program. For example, we have some very good ideas around producing heavy oil underground, in situ, as opposed to having to extract it with the traditional well. You can produce it underground and then all the nice oil comes out the top. It looks like a little refinery underground.
Q: You’ve spoken in the past about “i-to-i” — the difficult transition from innovation to implementation. How do you take an idea and turn it into something worthwhile for Shell?
A: There are a lot of ideas that get developed and then we have a hard time making use of them in the most effective manner. How to manage that? One thing is really important. You have to keep the implementation step in the forefront of any development that you do, at any stage. Even from the minute that you start to think about the discovery phase for something, you always have to keep in mind a plan on how you’re going to implement this. When you do that, you end up delivering at least a part that’s implementable.
It’s a mistake that most companies make. The R&D community develops something, and then it gets handed over to operations, commercial, or whoever. That’s the point where most of these things die. So, there shouldn’t be a handover. There should be the true supplier/customer relationship all the way to implementation. Either you do that by giving the developer some clout in the decision to implement or you reward the operations people for taking a risk and implementing something new. The commitment and the permission to manage that transition are very important. When you tell somebody that if you try something new and it fails, we’ll still reward you, as opposed to punish you, you change the equation immediately.
Q: How important are external collaborations to your innovation strategy?
A: We’re importing brainwaves all the time. We are a company that is large and thrives on operational excellence. That’s a very important part of our success. We have to bring in people from outside to foster the innovation. We have to seed it; we have to show it; we have to be intelligent about it. So collaboration with other companies and with universities, and even high schools, becomes a fundamental part of our operation.
We do not see innovation at all as a closed process. It’s an open process. We’re not smart enough by ourselves. We’ve got to work with others, and I think that’s something that Shell will do more and more.
Q: You recently set up a virtual collaboration space in Second Life for remote engineers to work together on innovative ideas. How is this working?
A: Very successfully. It’s this risk thing. How do you innovate in the absence of risk? You can’t do it in a company like Shell because we’re big; we’re exposed; we spend a lot of money; we touch a lot of people; we have a lot of employees. So, the risk profile is pretty heavy. With Second Life, it’s not. You can do transactions, relationships, and development, but the risk is virtual also. It liberates people’s minds to operate in that environment, and that’s really the benefit to the company. There are also relationship aspects of communication through the Web that are really in their infancy. I think we haven’t even touched the very tip of that.
Q: What new manufacturing technologies would you highlight for the future?
A: I think the whole issue of operating remotely is something that we look at a lot. It has very appealing benefits around safety and environmental issues, and also access to very difficult environments, such as operating in the Arctic or deep under water. Remote operation telemetry gives us the ability to do the whole thing from a more central location, as opposed to a platform in the middle of the Gulf of Mexico or the North Sea.
The other technology that I’m very intrigued about is the new world of nanotechnology. It’s really a way of looking at things where you can create minuscule machines. I think there is a lot to look at in the future for manufacturing at that scale. These little tiny things are doing massive pieces of work. Can you create facilities that are nano-facilities to manufacture very large amounts of something? Can you create real products or run processes with very small, very portable, very safe, very easy to maintain, replaceable facilities? That’s way in the future, but is it possible? Maybe.
Q: There are a lot of confused and worried manufacturers in the world right now. How can new approaches to innovation and technology help?
A: I think they’re right to be confused. Things are pretty confusing and if you’re confused, that probably means you have a good sense of reality. When we emerge out of this period, technology will still be a constant. Technology can help you save money and can help keep you alive in difficult times — just as much as it helps you when you grow. So don’t park your thoughts, your creativity, or your emphasis on technology now. You’re going to need it later.
Written by Paul Tate
Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive