Manufacturing Industry Case Study
/ / Process Services Firm Aims to Significantly Boost Profits for its Customers
Overview
Country or Region:United States
Industry:Manufacturing
Customer Profile
Nalco, based in Naperville, Illinois, is a global provider of process improvement products and services. It has 11,500 employees in 130 countries, and 2008 revenues of U.S.$4.2 billion.
Business Situation
Nalco wanted to replace a manual and time-consuming data collection process at customer sites with an automated, real-time solution that would result in better customer support, satisfaction, and loyalty.
Solution
Nalco is developing a solution that integrates technology from OSIsoft and Microsoft in a software-plus-services approach that sends real-time data over the Internet to Nalco analysis systems.
Benefits
Rise in productivity will free time for more proactive customer support
Each major customer expected to realizehigher annual revenues
Solution expectedto significantly increase revenues andmarket share / “We expect to see the solution support a 5 percent increase in our revenues. Given the more than billion-dollar size of our market, that could be a substantial revenue increase.”
Terry Burleson, Vice President, Downstream Energy Services, Nalco
Changes in the chemicals used in process manufacturing, such as oil refining, can have profound effects on product quality and company revenues. Nalco wanted to overhaul the time-consuming process by which it collected the data needed to provide effective process improvement services to its customers. By integrating the PI enterprise infrastructure from OSIsoft with the Microsoft® Application Platform and its own systems, Nalco is developing a solution that can securely upload customer data over the Internet for detailed analysis and reporting. Nalco expects to boost the productivity of its technicians by freeing them to expand proactive customer support. Nalco also expects the solution to be a “game changer” for oil refineries, enabling them to increase their own revenues and profits by improving reliability and efficiency.
Situation
Any good cook knows that a pinch too much—or too little—of salt can ruin a dish. Managers of processing operations at major chemical plants and oil refineries know that a similarly subtle difference in the industrial recipes that they use can have major consequences for their businesses—with potentially hundreds of millions of dollars at stake.
That’s why process companies—which include plants, mills, mines, and municipalities—turn to Nalco, a global provider of specialty chemicals and services that help prevent corrosion, contamination, and the buildup of harmful deposits in the fluids they treat. The company’s products and services can also enhance process efficiency, save water and energy, extend asset life, improve customers’ end products—even enhance air quality. For a major oil and gas company using Nalco products and services, the difference can mean both lower operational costs and increased revenues.
Like gourmet chefs, Nalco technicians must produce highly sophisticated recipes to satisfy highly demanding customers. At Nalco, those recipes are based on an extraordinary range of data from one or more of a customer’s facilities, including plant, laboratory, and corporate data; data collected by handheld devices; inventory management information; instrumentation data from distributed control systems; and information provided by “process historians”—data repositories for high volume, historical data.
Traditionally, Nalco on-site technicians have had the grueling and time-consuming task of manually compiling the information from many data sources. Then, the technicians would transfer the information to Nalco, where its staff and systems would analyze the information so that Nalco could optimize the chemicals and services it provided to those customers.
Technicians spent a considerable amount of time collecting customer information, which cut into the time they could spend acting on that information and proactively addressing customer needs. When issues arose, it could often take several days of back-and-forth e-mail messages between Nalco and the customer, with spreadsheet attachments of process data, to address those issues. And the monthly analysis reports that came from Nalco provided crucial information to help customers fine-tune their processes, but not on the real-time basis that would maximize the benefit from that information.
Nalco operates in a highly competitive environment, making it vital for the company to continually enhance the services that it provides. Nalco wanted to automate data collection to free its on-site technicians to spend more time providing value-added services to customers. It also wanted to produce its analyses in real time, making its reports more valuable to those customers. And it wanted a solution that would be cost effective to implement in as many of its 70,000 customer locations in 130 countries as possible.
Solution
To achieve these goals, Nalco made two strategic decisions regarding the solution it set out to develop. One was to speed customer adoption of its new solution—and reduce the time and cost of its deployment—by keeping the integrated data collection system already in place at most of its customers’ facilities. The second was to adopt a software-plus-services approach that would allow information from customer sites to be downloaded securely over the Internet by the highly sophisticated Nalco analysis systems at the company’s operations center, rather than having to distribute analysis capabilities to each customer location.
The data collection system crucial to the new solution is the PI System enterprise infrastructure from OSIsoft, a Microsoft® Gold Certified Partner. The PI System is a major presence in the technology infrastructures of process companies for the management of time-series data and events, with more than 14,000 deployments in process industries, such as oil and gas refining, utilities, and water treatment, as well as in manufacturing, life sciences, and data centers. The PI System is easy and costeffective for companies to adopt—as well as being scalable and highly reliable—because it is based on the latest generation of the Microsoft Application Platform, including the Windows Server® 2008 operating system, Microsoft SQL Server® 2008 data management software, and Microsoft Office SharePoint® Server 2007 collaboration technology.
The solution that Nalco is now developing willuse the PI System to collect virtually unlimited data on process conditions—from chemical compositions to temperatures and corrosion levels—at customer sites. Using scalable, highlyavailable PI replication methods, the solution will securely push that data over the Internet to a centralized PI Server at Nalco for analysis by the company’s systems, which are based in part on Microsoft Business Intelligence technologies, including SQL Server 2008 Analysis Services and Reporting Services. The data will be presented to Nalco techniciansthrough intuitive dashboards and scorecards showing key performance indicators (KPIs), which are capabilities enabled by PerformancePoint® Services for SharePoint. Drill-down information behind the summary data will be available through OSIsoft PI DataLink for Excel® Services. Excel Services is another feature of Office SharePoint Server 2007.
The dashboards, scorecards, and Excel Services spreadsheets will be available to Nalco technicians anywhere in the world through an intranet portal based on Microsoft Office SharePoint Server 2007 and OSIsoft RtWebParts, providing dynamic role-based visibility. Nalco will extend the portal as an extranet to enable customers to have the same direct, real-time access to the analyses of their processes and products.
Another component of the Nalco solution will replace the traditional e-mail exchanges between Nalco technicians and customers with unified, real-time communications based on Microsoft Office Communicator 2007 and Microsoft Office Communications Server 2007. Participants will be able to use the presence information available through these technologies to instantly connect from anywhere in the world, and to employ instant messaging or other communications to address sudden issues in process operations identified by the Nalco solution.
Benefits
The integration of Nalco, OSIsoft, and Microsoft technologies will make it possible to increase the proactive support that Nalco delivers to customers, with the goal of increasing revenues or profits for those customers and for Nalco.
Rise in Productivity FacilitatesMore Proactive Customer Support
By replacing the manual collection of on-site data with automated collection through the OSIsoft PI System, the Nalco solution will free up valuable time that technicians now spend at customer locations performing manual tasks, making it possible for them to use that time for additional analysis and proactive customer support. For example, if a processing interruption occurs, the solution’s real-time data capture will enable technicians to quickly analyze the information and collaborate with customers in real time to identify and address the cause.
“The Nalco solution is a ‘win-win’ that gives customers answers to their process issues more quickly, while helping us to gain greater customer loyalty and competitive advantage,” says Terry Burleson, Vice President of Downstream Energy Servicesat Nalco.
In addition, customers will gain consistent, enterprisewide KPIs and analysis of their process operations, which will help them to make more accurate assessments of those operations and more profitable decisions about them—for example, whether and how much to invest in facility maintenance, expansion, and new projects; and whether to close, move, or consolidate certain process operations. The Nalco solution will also help them to implement global troubleshooting and best-practices development.
Each Major Customer Expected to Realize HigherAnnual Revenues
The faster, more accurate, and more thorough analysis information that the Nalco solution will provide will do more than facilitate modest shifts in the operation of process companies. “This solution will be a complete game changer for process companies, enabling them to increase their revenues or profits by perhaps millions of dollars per year,” according to John Schlitt, Marketing Manager for Automation at Nalco.
For example, oil refineries typically process little or none of what is called “opportunity crude oil”—oil with relatively high levels of impurities—since such oil is more expensive to process and contributes to more rapid corrosion of process equipment, and thus, raises costs for maintenance and replacement. But Schlitt says that the Nalco solution will change the economics of working with opportunity crude oil by enabling refineries to make more precise decisions about how to process it, and by boosting the accuracy of the chemicals and services that Nalco provides.
“If a refiner can process 5 percent more opportunity crude because of our solution, itcan generate another 2 to 3 million dollars every day in additional revenue,” saysSchlitt. That is a potential gain of about U.S.$125 million a year per refinery.
Solution Expected to Significantly Increase Revenues and Market Share
Nalco’s customers are not the only ones who are expected to benefit from the new solution; Nalco is likely to benefit significantly as well. “We expect to see the solution support a 5 percent increase in our revenues. Given the more than billion-dollar size of our market, that could be a substantial revenue increase,” says Burleson.
Burleson says that by enhancing its customer service with faster and fuller analyses and by providing customers around-the-clock access to more information, more proactive support, and more effective chemicals and services—and by enabling customers to boost their own revenues—Nalco can expect the solution to contribute to greater customer satisfaction and loyalty.
Those benefits are far from ephemeral. Because customers pay Nalco based on the effectiveness of its chemicals and services, Burleson expects the solution to have a direct impact on the company’s revenues and market share.
Microsoft Solutions for the Manufacturing Industry
Manufacturing enterprises must compete in an increasingly global environment. Success depends on finding ever-greater efficiencies throughout the enterprise, while developing a greater agility to react to local and global market opportunities. These challenges are best answered with technology from Microsoft and its partners. Microsoft-based solutions offer much needed value to manufacturers who are under increasing pressure to generate greater returns on the assets that they have employed. This focus on efficiency scales across all the critical functional areas—from getting products to market faster, to streamlining the supply chain, optimizing the manufacturing operations, and generating new revenue streams.
For more information about Microsoft solutions for the manufacturing industry, go to: