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PhDsoft’s revenue continues to increase in a $1 trillion potential market

“PhDsoft will grow in the current oil crisis because companies are searching for ways to reduce costs without raising risks, and that’s what we do”, predicted in the beginning of the year the CEO and founder of the company, Duperron Marangon. In fact, we know now, PhDsoft’s revenues are going to end 2016 in a 30% increase. Beyond the oil crises, though, there is a potential $1 trillion market to guarantee the company success at least until 2022.

Gartner has just published the report Top Strategic Predictions for 2017 and Beyond: Surviving the Storm Winds of Digital Disruption. “Digital business innovation creates disruptive effects that have a wide-ranging impact on people and technology. However, secondary ripple effects will often prove to be more disruptive than the original disruption. Digital strategists must actively identify secondary effects when planning change”, says the Summary.

One of the Strategic Planning Assumptions of the document is that “by 2022, IoT (Internet of Things) will save consumers and businesses $1 trillion a year in maintenance, services and consumables. The key findings were that: Assets under maintenance globally exceed $240 trillion, with maintenance costs of $27 trillion; Moving to predictive maintenance (with PhDC4D, for example) can often save 10% to 20% over preventive maintenance; IoT, properly deployed, can unlock this $1 trillion savings opportunity (excluding new technology investments).

Near-term flags are: Emerging use cases demonstrating the use of IoT to drive predictive maintenance; Proliferation of digital twin models to optimize predictive maintenance efforts by 2020; Reporting of improved efficiency based on IoT implementations by 2018; Software models of physical assets provided by suppliers by 2020.

The study recommends to: Identify costs associated with scheduled maintenance and consumable expenses; Target a 10% reduction of these costs, based on a shift to a predictive regime; Build a roadmap to implement IoT projects against the portfolio, targeting the fastest returns, initially focusing on larger, more complex and expensive assets — where downtime and waste are expensive — and instrument to deliver “low-hanging fruit” cost savings, starting with POC projects that have short payback periods in order to build momentum for these projects; Continue to prioritize additional IoT instrumentation for additional cost savings until you approach the point of diminishing returns.

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An Expert Interview About Information Technology in the Oil Industry

Concluded in last June 1st, the Energy Perspectives 2016 – Long Term Macro and Market Outlook, from Statoil, begins with the following statement: “Global energy markets are in transition”. In fact, the 2008 crisis is not over yet and new technologies are promising to revolutionize the energy business, which also means lots of opportunities. This is the drive for Duperron Marangon, CEO and founder of PhDsoft: “We will grow in the current oil crisis because companies are searching for ways to reduce costs without raising risks, and that’s what we do”.

Expert in technology management and asset integrity maintenance, Marangon has been in the oil industry for the last three decades and see too many uncertainties regarding the future: “Everybody likes to talk about clean energies. I’m not different. The instant image associated to that is of a better planet. But nobody knows if this is going to be economically sustainable. Statoil Outlook, for instance, asks if cost reductions in extraction could affect the competitiveness of different fuels. There is no answer, as they analyze on the following excerpt”.

The Productivity Puzzle

Total Factor Productivity (TFP), primarily driven by labour productivity, has for several Western countries fallen since the IT boom of 1994-2004. This is unfortunate as its stimulus to economic activity has been slow and productivity gains are a necessity for a robust wage development. It seems legitimate to ask why this weakening has come about. Some of the recent new information products, such as social media, are innovative and improve people’s living standards, but do not seem to increase efficiency in the same way that the advent of PCs or the growth of the Internet did. Since the end of the financial crisis, companies have had easy access to labour and hence expanded the labour force instead of investing in technology to boost output. Furthermore, job creation has to a large extent been within low-skilled jobs in the service industry, where productivity improvement is typically low. It is also possible that companies have become more reluctant to invest in labour productivity due to stricter and more complex government regulations introduced in recent years. These regulatory efforts boost growth over the longer term, but slow the current momentum within industry and trade. Finally one might question if productivity gains are fully measured and captured in the “new economy” of e-commerce and so-called “sharing”, and in the service industry in general.

The world might have to get used to somewhat lower future productivity growth compared to recent decades, with a consequent slightly negative impact on the economic outlook. However, there will be supportive factors for productivity that could push it upwards. Reaping the full effects of the IT boom might come with a delay, as was the case with many earlier inventions, which were so comprehensive that it took years for their full impact to emerge. This – combined with the more recent drop in the cost of 3D printers and sensors, big data management, ongoing automation, and more – has the potential to transform the economy and increase productivity. Today, the world is increasingly connected and progress can spread rapidly. As labour markets in the Western world continue to tighten, putting pressure on wages, companies will have a stronger incentive to invest in training and technology, which will add support to productivity growth. Governments’ policy support, reform, and increased ability to invest in infrastructure will also be decisive for productivity in the decades to come.

“In other words, companies will not be able to keep going without raising investments in technology anymore. This is the only way to improve productivity, reducing re-work, preventing accidents and unplanned shutdowns, and so reducing overall costs. PhDC4D, our main software, has lots of cases, since it promotes more than digitalization of the whole maintenance process, but standardization. It makes everything more simple, effectively reducing costs without raising risks. As a matter of fact, it raises safety. As Statoil notices, all industries are expected to face digital disruptions in the 2020s, and will need to transition to new digital models to optimize their business”, explains Marangon pointing to another excerpt from the research.

Digitalization can improve efficiency and reduce costs, as illustrated by the progress made in the airline industry since the end of the 1990s. Sensors on planes have helped airlines realize fuel efficiency targets, maintenance and route optimization, while digitalization of sales and reservations has reduced errors and led to the “pricing and overbooking business” – where companies use big data to optimize plane occupancy. New ideas are developed as airlines understand their own data better, leading to a continuous learning journey of adapting and testing the operating model.

Brazil Oil & Gas Technology Radar

More focused in new technology and innovation, Lloyd’s Register surveyed Brazil-based oil and gas leaders, from 240 companies, between September 5 and October 3 2016, to produce Brazil Oil & Gas Technology Radar. It asked what the biggest barriers to innovation are today in Brazil, what challenges exist to the deployment of new technologies, and explored the impact of specific policies on the sector, such as the mandatory 1% levy on oil and gas production that is being redirected to local R&D. The survey also asked participants to rank a number of potentially game-changing technologies in terms of their short and longer-term impact on the sector.

Of the 26 technologies listed, respondents believed all would have some impact in the future. Distinctions were made between those that would have a high or medium impact in the short term (before 2020), medium (2020-2025) or long term (2025 or later) time horizon. Until 2020 were all incremental improvements on existing technologies: subsea robotics and other deepwater equipment advances, sensor technology such as wireless monitoring, and high-pressure high-temperature drilling.

“We’ve been investing in developments for the Internet of Things (IoT) for the last years, and our technology is ready to help the oil industry to get through the current challenges”, says the CEO of PhDsoft.

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How Corrosion Management is Making the World (and Insurance Business) Better

“Basic Coverage for Equipment Used in the Production, Drilling and Exploration of Oil and/or Natural Gas in Marine Operations (offshore) and Land (onshore) – Special Conditions (…) Clause 2 – Risks not Covered and downs Indemnified/ 2.1. In addition to the provisions in clause 5 of the General Conditions, are excluded from coverage claims for indemnification for losses, damages, expenses, or other costs resulting directly or indirectly from the following events: (…) j) natural wear for the use (including abrasion, friction, deterioration or encrustation by boiling machinery, plant or equipment as a result of use or daily operation), gradual deterioration, including any effects or weathering, oxidation, rust, flaking, scale, cavitation and corrosion of mechanical, thermal or chemical origin“.

The excerpt of the policy “Oil Risk Insurance”, from Tokio Marine Insurance Company (in a free translation from Portuguese), makes clear a practice of the insurance industry: not to pay for insurance arising from corrosion events. And the “Special Conditions” for pipelines and offshore platforms also list corrosion as a “risk not covered and downs indemnified”. “All risks of incalculable probability over which the insurer has no estimate capacity are not covered by insurance policies”, explained recently the executive of a reinsurance company to PhDsoft CEO, Duperron Marangon.

In fact, nowadays,

corrosion is a predictable phenomenon

In Brazil, where PhDsoft won its first clients, the insurance company Porto Seguro requires hiring a tracker that allows the location of a car in case of robbery or theft to vehicles of value from R$ 200,000 (link in Portuguese). “It’s the same logic that we are seeking to bring to the oil industry. Despite of deep water exploration in Brazil, no accidents that can harm the environment as much as the one with the BP offshore platform, in the Gulf of Mexico, has happened and this is partially due to our software PhDC4D®. We explain it as a comprehensive system resulting from the synergistic integration of a 4D-space-time visualization with a predictive corrosion algorithm, a regulatory code compliance engine and automation of engineering activities and best practices. This consolidates a safer and cost effective maintenance process”, states Marangon.

In fact, nowadays, corrosion is a predictable phenomenon. There are only few corrosion processes that any intelligent solution would have difficulty to deal with. Pitting – a form of extremely localized corrosion that leads to the creation of small holes in the metal – is one. Since PhDC4D allows companies to monitor corrosion conditions and its evolution, insurance policies could start to cover corrosion caused accidents. That is technological disruption uniting two very traditional sectors in a win-win relationship for everybody.

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Where CMMS are Headed in the Next Five Years

Nanotech sensors connected to the internet are dispersed in the painting of hulls and pipes, measuring thickness and corrosion rates in real-time and practically eliminating risks of offshore operations. It’s cool, but it will take a little longer. So far, it’s only science fiction.

But if the painting nano gadget is still a dream, the use of sensors connected to the internet integrated by a software like PhDC4D is headed in the next five years. Until the beginning of the next decade, thickness or and corrosion rates will be measured all the time. Since we are talking about very large structures, human measuring will still be needed, but in a more intelligent way, focused in areas previously selected with the help of sensors.

In fact, any device with an on and off switch to the Internet (and/or to each other) will be connected, in what is called the Internet of Things (IoT). The IoT is a giant network of connected “things”, which also includes people. The relationship will be between people-people, people-things, and things-things. Intel says that by 2020 there will be over 200 billion connected devices. In 2015, there were 15 billion.

Anything that can be connected, will be connected

This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of.  This also applies to components of machines, for example a jet engine of an airplane or the drill of an oil rig. It is not different with Computerized Management Maintenance Systems (CMMS).

If you want to know more, have a look at this Guide to the Internet of Things produced by Intel.

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PhDC4D Will be Available in App Form

PhDC4D is going through its final adjusts to be launched in App form, for Windows Mobile, Android and IOS. The App will allow user to do everything he does in the site, managing inspections and defects in hulls, pipes and other structures. Although PhDsoft expects it to be much more used to register anomalies than to manage inspections.

Besides having all equipment status in the pocket, the user of PhDC4D App will be able to synchronize the anomalies registered as soon as he is back to the office, making data available to every member of the team. And thus, PhDsoft technology keeps evolving to the integration into three systems:

  • Computers – more technical, with its 3D models.
  • Internet – more managerial, where are registered all defects.
  • App – managerial and technical.

Intrinsically safe equipment

Since the App is going to be used in structures like offshore platforms, one alert we must make is that only intrinsically safe tablets or phones are allowed. Any other kind of equipment is forbidden because of the risk of explosions.

In intrinsically safe equipment, produced by companies like Aegex Technologies and Sonim Tehcnologies, the electrical energy available in any spark which can occur in the hazardous area will be non-incentive. This avoids the risk of explosions.

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From a hull maintenance software to an innovation platform

The use of hull life-cycle maintenance software since 1995 on 26 major Brazilian oil company tankers has reduced inaccuracies in the evaluation of ship renewal costs during dry-docking. Due to its success, the software has been redeveloped and extended for the whole floating fleet, including FPSOs and jackups, replacing regular drawings by the 3D models. While jackups’ needs are very similar to ships since they can dry-dock, FPSOs have a totally different approach with attention to corrosion being the primary focus. Past 20 years, PhDC4D has become an innovation platform that can include almost any kind of new features tailor made to companies’ needs.

Today, PhDC4D is already in use for painting and pipes of the FPSOs process plant of a major Japan company. It is also in test for the Internet of Things, both to ROVs and measuring sensors of tube thickness. Soon it will include cranes and pipelines as much as secondary equipment as an FPSO stair. “The software allowed a sophisticated data acquisition process to be applied, capturing and applying large quantities of key information thus enabling risk-based inspection to take place”, explains PhDsoft CEO, Duperron Marangon.

Results achieved

The technology incorporated into the software has been shown to reduce by 50% the cost required to renew steel on a VLCC. By extrapolating old gauging data to achieve a better mapping of the corroded areas, we were able to raise the accuracy of the forecast steel renewal figure. The client was therefore able to predict the budget required ahead of time more accurately.

We subsequently had two cases in which we helped to avoid a tanker’s repairs to continue regular operation. Due to the large amount of steel renewal that would be necessary the hulls were converted to FPSOs instead. Use of the software also allowed a ship owner to anticipate a request for classification societies to use FEM criteria to produce reassessments. This reduced by half the amount of steel renewal required.

PhDC4D allowed users to realize the poor quality of some thickness gauging reports and take actions to improve accuracy. Besides the primary applications for the software such as identifying areas of greater risk or those with higher corrosion rates, the models were also used to aid knowledge management for all structure-related issues. This replaced the existing management systems for this information. The models became the database for risk-based inspection procedures adopted by Petrobras.

The sharing of information through the software between ship and rig owners with classification societies’ consulting branches and gauging companies has been made possible through a common interface. Petrobras has hired the consulting branches of major classification societies to develop and update the many different models to assure the safety of offshore rigs including stability, hydrodynamics, FEM and degradation. For stability they developed their own software to keep a common interface for all rigs. The same approach has been used for degradation information by using the single interface provided by PHDC4D with the various classification societies involved.

There have been no major structural incidents with Transpetro tankers during the last two decades, when they have used this technology. In part this is due to a broader set of good practices being implemented such as better control of structure integrity status through the use of PhDC4D.

Technology standardization

A number of other organizations developed products with similar goals. Similar approaches have been used applying the same principle as the classification rules. These had to be standardized according to IACS common structural rules. On December 14th 2005, the Common Structural Rules for Tankers & Bulk Carriers were unanimously adopted by the IACS Council for implementation on 1 April 2006. The Council was satisfied that the new rules have been based on sound technical grounds, and achieve the goals of more robust and safer ships. IACS started then to implement the CSR maintenance program (IACS Procedural Requirement No32) via the IACS CSR Knowledge Centre (KC). All the agreed Q&As and CIs (common interpretations) are published on the IACS web site without delay in order to assist its member societies and industry in implementing the CSR in a uniform and consistent manner.

It took some time for the rules to be standardized and we believe there should not be the same delay for hull maintenance software. The sooner standards are established, the sooner the industry can benefit from a common interface. Establishing a common database format, but still requiring a user to have deal with multiple different interfaces according to the classes of their fleet, is not desirable. Ideally broader development cooperation should be realized to facilitate faster development and interface standardization.

PhDC4D as an innovation platform is mature for large-scale application. Building models and inputting data is a long-term process. Addressing differences between emerging technologies represents the next big challenge. PhDsoft has experienced these issues while the software was under development with models having to be adapted to reflect changing technology. The software development process, therefore, has to be sufficiently flexible to address evolving technology and successive model changes.

Please, contact us for more information: +1 (713) 340-9958 or phdsoft@phdsoft.com.

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The Evolution of Corrosion Management

“If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity”, concluded in 1972 the report The Limits to Growth, published by the Club of Rome.

This global think tank was the first to use computer simulation analyzing exponential economic and population growth versus finite resource supplies. The original version presented a model based on five variables: world population, industrialization, pollution, food production and resources depletion. These variables are considered to grow exponentially, while the ability of technology to increase resources availability is only linear. So the 1970’s would know the environmental movement.

Since corrosion has a direct impact in pollution, it was about the same time that the first evaluation of the cost of corrosion was conducted. The Hoar Report revealed that 3% to 4% of the GDP of industrialized countries is lost annually to corrosion. All similar evaluations performed later by different organizations basically came to the same conclusion. But the Hoar Report already emphasized that 25% of the annual cost of corrosion could be saved just by applying existing knowledge on corrosion control.

R&D efforts

The World Corrosion Organization published a whitepaper in 2009 (Dissemination, Research, and Development in Materials Deterioration and Corrosion Control) that concludes:

“To satisfy the basic needs of the 6.3 billion people on this globe, including proper nutrition, clean water, good health, safe housing, dependable energy, effective communication, and mobility, many technological changes with global dimensions must be accomplished. While this concept is widely appreciated as such, there is often only a limited awareness of how critical it is to solve corrosion problems and what the real implications are to society”.

The intention of the study was to demonstrate with several examples that future technological challenges can only be met by “immense R&D efforts worldwide in the fields of materials, surface protection, corrosion control, and condition-based monitoring”.

“It appears that in literally all cases, key problems related to materials degradation and corrosion must be solved. This involves materials stability under new environmental conditions or functional adjustment of environments and materials surface properties by appropriate surface modification methods. This work must include efficient management of corrosion mitigation and service integrity. Condition-based monitoring will be one of the key factors to ensure service integrity. However, this can only be accomplished with innovative sensor devices that have yet to be developed. Global standards should be established to foster condition-based monitoring as a standard procedure”, stated the document.

Maintenance and corrosion management systems

Duperron Marangon office at the beginning of the 1990sDespite the Digital Revolution and its growing popularity from the 1970’s, it was only in the beginning of the 1990’s that computers starter to be used to maintenance and corrosion management. Until that time, all the information of critical facilities, like ships or offshore platforms, was kept in papers that used to be spread in lots of piles when any repair must have been done.

“Then we were forced to follow blindly the price of shipyards without any control”, remember Duperron Marangon, naval engineer and consultant for Brazilian mining company Vale at that time, for the maintenance of its ships (the picture shows his office at the beginning of the 1990’s). It was a huge and non-intelligent work, so, he decided to develop a finite element calculator associated to digital spreadsheets that showed up to be much more efficient.

Ships are the largest steel structures produced by man. They go through a continuous process of maintaining their structures and equipment and, every five years, on average, need to stop in shipyards for structural repairs. Due to the aging fleet and the increasing environmental concerns, it has become essential to exercise better control over the maintenance of ships. Thus, they were natural candidates for carrying out validation tests of a maintenance management software.

CMMS

Today, a software like this is known as Computerized Maintenance Management System (CMMS). It is supposed to streamline the maintenance management of great responsibility structures, where failure may cause major damage, pollution and deaths, such as ships, oil platforms, bridges, aircrafts, industrial parks, minimizing the risk of accidents. The most advanced ones reproduces the 3D structures to simulate degradation over time, which results in a 4D perspective.

A software capable of performing intelligent maintenance management needs to have a graphical interface, because structures do not have identification numbers, as do the equipments, with each piece being recognized by a unique code. Even if each part of a structure is numbered in the construction project, the repair will occur in order to produce new regions, which can be inserted into the original or extend for many of them. The lack of this part number also prevents the use of the internet for the execution of quotations, since the shape of the repair and the region where it is located has a direct influence on the cost of implementation. The location, especially in large structures, has implications for the number of scaffoldings needed to perform the work.

The capability of knowledge management should be emphasized as well, because gathering information in a single database allows faster access, data security and consequent increased productivity. If you are interested in integrating the results with your ERP or other existing system, it must is also be possible. Otherwise, you will remain at Stone Age and information will just be dispersed in a very large number of plans, sketches and paper reports. Humanity is still not sure about the limits to growth in a planetary scale, but at least for corrosion management, as the music says, “the future has arrived”.

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Warning: You’re Losing Money by Not Using Corrosion Prevention

World’s foremost authority on corrosion, Nace International has just published the study “International Measurements of Prevention, Application and Economics of corrosion Technology”, Impact. In it, the association estimated at $ 2.5 trillion per year the overall cost of corrosion today, equivalent to 3.4% of world GDP. Prepared for two years and presented in Canada, the study calculated that the implementation of better corrosion prevention practices could result in an overall saving of 15% to 35% of the cost of the damage, ie between $ 375 billion and $ 875 billion.

Take a look at this 8 minute video.

“As the chief executive of Nace stated at the time, the study reinforces the need for a change in how the corrosion decisions are taken. Whether we are talking about oil rigs, ships, pipelines, airplanes or bridges, control and prevention are essential to avoid the disasters that are repeated from time to time”, says Duperron Marangon, CEO of PhDsoft and a specialist in maintenance management.

The only conclusion is: you’re loosing money by not using corrosion prevention on your company.

Impact includes a case study of corrosion management in the automobile industry that saved $ 9.6 billion in 1999, compared with 1975, to demonstrate the importance of adopting corrosion management systems throughout the life cycle of large structures such as those mentioned by Marangon. It states that the best practices in this area include: corrosion management systems that are integrated with the general policy of the organization; corrosion management information available to everyone in the organization, as well as linked to its overall objectives; and organizational leadership actively involved with the corrosion management decisions.

The problem is so critical, that NASA has a Corrosion Technology Laboratory that provides technical innovations and engineering services in all areas of corrosion.

As a university professor and CEO of PhDsoft, Duperron Marangon has been developing, in the last 20 years, softwares capable of increasing the efficiency of the process of maintaining large structures, while reducing costs. If you want to know more on corrosion or about projects in which the specialist is working nowadays, contact PhDsoft at +1 (713) 340-9958 or by the e-mail phdsoft@phdsoft.com.

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PhDC4D offers investment opportunities for oil companies

This is a Remotely Operated Vehicles (ROV) integrated with PhDC4D. It was a project financed by a private company, like the oil ones obliged to invest part of its revenue in R&D, in Brazil. Last year, this obligation resulted in more than R$ 1 billion invested in projects like this. PhDsoft is looking for new partnerships.

There are no limits for what can be done with PhDC4D. The software operates in a Computerized Maintenance Management System (CMMS) category, which is like the known businesses managements ERP (Enterprise Resource Plannning), but focused on maintenance. In terms of business intelligence and knowledge management, PhDC4D is a CMMS. Its differential is that both CMMS end ERP can be resumed as an amount of tables.

In other hand, PhDC4D begins with the modeling of a structure in three dimensions, at a specific date. Somebody could think about defining it as a sophisticated CAD, but what about this fourth dimension that allows to simulate the evolution of structure along time? It results in a 4D software that can help to solve any kind of problem.

 

R&D obliged investments in Brazil

In order to expand technology to meet the integrated needs of customers, PhDsoft has traditionally built partnerships with big players of the oil sector, like Petrobras. These partnerships has resulted in a sort of new features such as the ROV integration.

This project used PhDC4D’s technology to manage the hulls and keep track of the maintenance of an offshore platform´s operation integrity by using the exact location of the data obtained by robots in real time.

The best news is that, although it has international headquarters in Houston, PhDsoft’s development teams continue to be coordinated by its unit In Brazil. This means PhDsoft is still a Brazilian company an so can be considered eligible to the demand for national content for the R&D investments oil companies are obliged to make in the country.

 

Internet of things

Last year, the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) has changed the rules for these investments. From now on, 10% of the revenues must be invested in Brazilian companies other than the one that originated the revenue, like PhDsoft.

In the first three months of 2016, almost R$ 150 million were generated for obliged investments in R&D by oil companies operating in Brazil. In 2015, the amount reached more than R$ 1 billion. The deadline for the investments related to 2016 ends at June 30th 2017.

The next generation of projects PhDsoft is preparing intends to enroll everything related to maintenance in one only solution: static and submarine equipments, pipes, risers, structures and secondary structures, cranes, among others. One goal is to make it all ready to the internet of things. The objective is to integrate PhDC4D with sensors like the ones inserted in pipes to measure corrosion taxes or the ultrasonic thickness and strain gauges.

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PhDsoft presents recent developments of PhDC4D to one of its clients

PhDsoft’s founder and CEO, Duperron Marangon spent last April 7th in a workshop with one of the company’s clients to explain the most recent developments of PhDC4D®, like piping integrity management. He also announced rapid piping modeling – reading data from Navisworks – as one of the ongoing developments.

PhDC4D® is a comprehensive system resulting from the synergistic integration of a 4D-space-time visualization software with a predictive corrosion algorithm, a regulatory code compliance engine and automation of engineering activities and best practices that consolidates a safer and cost-effective maintenance process for structures, piping and static equipment.