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Dialogue: Shell Pumps It Up

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

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