While the concept of a digital twin has been around since 2002, it’s only thanks to the Internet of Things (IoT) that it has become cost-effective to implement. And, it is so imperative to business today, it was named one ofGartner’s Top 10 Strategic Technology Trends for 2017.

Quite simply, a digital twin is a virtual model of a process, product or service. This pairing of the virtual and physical worlds allows analysis of data and monitoring of systems to head off problems before they even occur, prevent downtime, develop new opportunities and even plan for the future by using simulations.
Thomas Kaiser, SAP Senior Vice President of IoT, put it this way: “Digital twins are becoming a business imperative, covering the entire lifecycle of an asset or process and forming the foundation for connected products and services. Companies that fail to respond will be left behind.”
How does a digital twin work?
Think of a digital twin as a bridge between the physical and digital world.
First, smart components that use sensors to gather data about real-time status, working condition, or position are integrated with a physical item. The components are connected to a cloud-based system that receives and processes all the data the sensors monitor. This input is analyzed against business and other contextual data.
Lessons are learned and opportunities are uncovered within the virtual environment that can be applied to the physical world — ultimately to transform your business.
Pairing technology pioneered in aerospace
NASA was the first to dabble with pairing technology — the precursor to today’s digital twin — as far back as the early days of space exploration.

How do you operate, maintain, or repair systems when you aren’t within physical proximity to them? That was the challenge NASA’s research department had to face when developing systems that would travel beyond the ability to see or monitor physically. And when disaster struck Apollo 13, it was the innovation of mirrored systems still on earth that allowed engineers and astronauts to determine how they could rescue the mission. Today, NASA uses digital twins to develop new recommendations, roadmaps, and next-generation vehicles and aircraft.
“The ultimate vision for the digital twin is to create, test and build our equipment in a virtual environment,” says John Vickers, NASA’s leading manufacturing expert and manager of NASA’s National Center for Advanced Manufacturing. “Only when we get it to where it performs to our requirements do we physically manufacture it. We then want that physical build to tie back to its digital twin through sensors so that the digital twin contains all the information that we could have by inspecting the physical build.”
Michael Grieves at the University of Michigan first wrote of the concept using the digital twin terminology in 2002. Today, machine intelligence and connectivity to the cloud allows us an unprecedented potential for large-scale implementation of digital twin technology for companies in a variety of industries.
Why is digital twin technology important?
Digital twins are powerful masterminds to drive innovation and performance. Imagine it as your most talented product technicians with the most advanced monitoring, analytical, and predictive capabilities at their fingertips. By 2018, companies who invest in digital twin technology will see a 30 percent improvement in cycle times of critical processes, predicts IDC.
There will be billions of things represented by digital twins within the next five years. These proxies of the physical world will lead to new collaboration opportunities among physical world product experts and data scientists whose jobs are to understand what data tells us about operations.
Digital twin technology helps companies improve the customer experience by better understanding customer needs, develop enhancements to existing products, operations, and services, and can even help drive the innovation of new business.
For example, GE’s “digital wind farm” opened up new ways to improve productivity. GE uses the digital environment to inform the configuration of each wind turbine prior to construction. Its goal is to generate 20% gains in efficiency by analyzing the data from each turbine that is fed to its virtual equivalent.
“For every physical asset in the world, we have a virtual copy running in the cloud that gets richer with every second of operational data,” says Ganesh Bell, chief digital officer and general manager of Software & Analytics at GE Power & Water.
All indications seem to predict we are on the cusp of a digital twin technology explosion. More companies will learn of real-world and pilot program success stories and will want to deploy their very own digital twins to gain a competitive advantage.

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After being recently awarded with Shell Innovation Challenge, PhDsoft and its Digital Twin technology has just won a new prize. This time, it was the 1st prize in InnoSTARS Competition, in Shenyang, China.
The company won the Competition on September 20 after a fierce preliminary competition with nearly 1,000 companies and makers from the United States. PhDsoft presented its Digital Twin solution for process plant integrity management, in the oil and gas sector, with real-time data acquisition. This technology is a virtual model of physical assets or industrial processes that continuously learn and provide data.
The InnoSTARS Competition is a platform for innovative U.S. companies to compete and connect with investors and partners from China. Only those who succeed the preliminary competition, in the U.S., get a chance to travel to China to pitch their business and make international connections while getting real feedback in highly sought-after Chinese innovation hubs.
Focusing on the theme of smart manufacturing, each team expounded its innovative ideas and entrepreneurial ideas for project overview, industry status, market expectations, competitors, business models, risk response and entrepreneurial teams.
After the game, representatives of investment institutions, technology service organizations and other related companies communicated with the players, negotiated on specific production and development needs, and explored cooperation matters such as cooperative R&D, technology application and equity investment.

Please come by and visit us.

We are excited to speak to you about your current challenges and how we believe we can help.

Date: 1st – 4th of May 2017
Location: NRG Park, Booth #215

Over the past several years, the global oil and gas industry has had to navigate very choppy waters; after a prolonged run of high and growing rig counts, mega-capital-expenditure projects, and plentiful capital to support investment, oil prices slid precipitously in 2014 and 2015. Within a matter of months, oil companies that had invested heavily based on rosy forecasts were slowing or even halting operations.
A recent price rebound has increased optimism slightly, and efforts are under way to contain costs by reducing head count, postponing projects, and cutting spending. Still, in the face of uncertain long-term forecasts, it is time to explore more drastic strategies to boost efficiency.
In response to recent technological advancements, oil executives should consider digital technologies with the potential to transform operations and create additional profits from existing capacity. Our research finds that the effective use of digital technologies in the oil and gas sector could reduce capital expenditures by up to 20 percent; it could cut operating costs in upstream by 3 to 5 percent and by about half that in downstream.
Oil and gas companies were pioneers of the first digital age in the 1980s and 1990s. Long before phrases such as big data, advanced analytics, and the Internet of Things became popular, oil executives were making use of 3-D seismic, linear program modeling of refineries, and advanced process control for operations. The use of such technologies unleashed new hydrocarbon resources and delivered operational efficiencies across the value chain.

Thanks to the latest technological advancements, we are now poised for a second digital age that could further reduce costs, unleash unparalleled productivity, and boost performance significantly—if executives can harness the right technologies to support their business strategy. Making better use of existing technology can deliver serious returns: up to $1 billion in cost savings or production increases.1Executives that make their organizations more digital will be well positioned to pursue new growth opportunities.
The oil and gas industry is tailor-made for this transformation: operations typically span multiple regions, with heavy capital investments and extended supply chains. The visibility and clarity delivered by digital technologies and advanced analytics can give executives unprecedented, granular views into operations, increase agility, and support better strategic decision making. Digital enablers, from process digitization to robotics and automation, can also help realize this potential by supporting processes in dynamic ways.
Many oil and gas companies are beginning to harness these enablers to drive better performance. To calculate the potential impact of digital technologies, McKinsey conducted research on more than 100 use cases at oil and gas companies and identified three categories for the application of digital technologies:

A billion-dollar digital opportunity for oil companiesRead the article
  1. Operations of the future. While advanced analytics are being used to transform functions such as procurement and to support better decision making, the latest technologies, such as drones and equipment sensors, are also revolutionizing monitoring and maintenance. The potential impact of using advanced analytics for predictive maintenance is a decrease in maintenance costs of up to 13 percent. At one company, where maintenance costs accounted for 25 percent of operating expenses, this enabled preemptive equipment maintenance—in effect, vital equipment could be repaired before it broke down. This effort reduced costs by up to 27 percent while increasing reliability and uptime. Advanced analytics for energy and yield also has the potential to increase energy efficiency by as much as 10 percent.
  2. Reservoir limits. By integrating digital applications, companies have been able to increase their reservoir limits significantly, resulting in a decrease of up to 20 percent in upstream and downstream capital expenditures, in addition to ancillary benefits. Some companies have begun using 4-D seismic imaging to add a time-lapse dimension to traditional 3-D imaging, enabling them to measure and predict fluid changes in reservoirs. This enhanced view of reservoirs typically increases the recovery rate by as much as 40 percent, boosting upstream revenue by up to 5 percent.
  3. Digital-enabled marketing and distribution. Retailers in other industries have implemented digital technologies to gain a better understanding of consumer habits and preferences, optimize pricing models, and manage supply chains more efficiently. Oil companies are applying these same methods, with impressive results, potentially increasing revenue by up to 1.2 percent. By using geospatial analytics, for example, executives are increasing the efficiency of their supply and distribution networks through location planning and route optimization. Collectively, efforts in this category have lowered costs by up to 10 percent and increased revenue by 3 percent.

With the current oil and gas market, companies need to reinvent themselves to improve productivity. While capital expenditures or acquisitions might give executives pause, investing in digital technologies is a no-regrets move that could increase production from existing operations. Since these technologies are readily available and have proved their value in the form of reduced operating costs, increased efficiency, and revenue generation, oil companies should move quickly to embrace digital. It could be the difference between leading the next wave of industry innovation and being left behind.

PhDsoft was invited to join in a study that has just been released: Technological Learning and Industrial Innovation – Working Paper Series. It was made by FGV EBAPE, a renowned Brazilian Institution. The objective was to answer two basic questions: To what extent and how have companies in the Brazilian oil and gas industry accumulated technological capabilities, both for operational activities and for innovation? And how has this process influenced the reach and strength (or weakening) of industrial competitiveness?
The choice of the oil and gas sector is justified by its economic and technological importance in Brazilian industry. Oil and gas extraction and its supporting activities have a share in the country’s industrial GDP of over 10%. Petroleum and its derivatives are products of great importance in the export agenda (11% of the total exported in 2014) and oil is the main energy source used in the world and in Brazil (representing 33% and 39% of the world and Brazilian energy matrix, respectively). From a technological point of view, this industry has presented new opportunities for innovation, with overflows for other economic sectors, such as the chemical and construction industry. In addition, partnerships for overcoming technological challenges are a notable feature of the oil and gas industry.

Brazil has 6% of the world’s oil reserves, which is a stimulus factor for investments in the sector. By 2020, the total investment in equipment and services for Extraction and Production (E&P) in the country will be US$ 400 billion.

Of this sum, more than 30% will be directed to the production of submarine equipment, which shows a good opportunity of scale to develop the local productive chain. Brazil ranks 13th among oil producing countries, considering the number of barrels produced per day, corresponding to 2.7% of world production.
The study got to several conclusions and pointed to public policies that could help to develop the sector in the country: “It is important to note that the internationalization of the oil and gas industry has been a high priority in the industrial policy framework of the sector in several countries. In Norway, for example, the policy objective was to use the technological capacity developed internally for the international market, thus strengthening the growth and development of the oil cluster in the country in the long term. Today, advanced products and systems created in Norway compete successfully in the global market, including in Brazil”, concluded the study in respect of the need of support for Brazilian companies to compete in the international market.

SAN JOSE – Around the world, people are demanding change. Recent electoral outcomes – perhaps most notably, the Brexit vote in the United Kingdom and the presidential election in the United States – have highlighted rising economic uncertainty. In this environment, it is imperative that leaders articulate and deliver on a clear vision for inclusive economic growth, one that accounts not only for tax and trade policy – the focus of many of today’s debates – but also for digitization.

Representing $19 trillion in potential economic value over the next decade, digitization has the power to enable countries to kick-start GDP growth, job creation, and innovation. We’re already seeing the profound impact that digitization can have on countries that embrace it as a core driver of their economic strategies.

In India, for example, Prime Minister Narendra Modi is implementing a strategy that is transforming India into a technology powerhouse and setting the stage for a digital future. In France, the government has invested in an extensive national digital plan that is expected to create 1.1 million jobs over the next 3-5 years and contribute $101 billion to GDP over the next decade.

While other countries are embracing robust digital strategies, the US is falling behind. Despite having led the Internet race in the 1990s, the US is now the only major developed economy without a clear digitization plan. The consequences are already starting to show: according to the 2016 Bloomberg Innovation Index, the US is now the world’s eighth most innovative country, having fallen two spots since 2015.

The message is clear: when it comes to digitization, nobody is entitled to anything, and there is no time to waste. Even in Silicon Valley, we must constantly reinvent ourselves to stay competitive. The US economy must do the same, or risk losing its innovative edge. Only with a clear and effective digitization plan can the US ensure that it retains its status as a global economic leader in the Digital Age, while fulfilling its citizens’ demands for more economic opportunities.

I believe that connectivity has the power to transform economies and generate new opportunities. That is why America’s new digital agenda must rectify the fact that, despite living in one of the world’s wealthiest countries, one-third of the US population still lacks broadband access at home.

Existing Smart City initiatives promoting connectivity in Chicago and Washington, DC, are encouraging. But, to close the digital divide, a more comprehensive national digital strategy is needed, one that emphasizes digital infrastructure investment, rather than just physical infrastructure investment, as in the past. Only with broad access can technology continue to fulfill its potential as one of the great economic equalizers.

An effective US digitization plan must also support start-ups. Young companies represent the future of job creation – they are the primary source of new jobs in the US – and technological disruption. Yet start-ups are on the decline in the US. According to research by the Brookings Institution, the start-up rate (the number of new companies, as a percentage of all firms) has fallen by nearly half since 1978.

To boost innovation and job creation, we need to reverse this trend, injecting more fuel into the US economy’s start-up engine. This will require businesses and government to work together to create an environment that encourages entrepreneurs to bring their visions to life. A combination of legislation, such as tax benefits for early-stage companies, and corporate/venture capital investments that provide financial backing and mentorship opportunities to start-ups, will be vital to sustain this ecosystem.

More broadly, US leaders must create an environment that encourages all kinds of business growth and investment. Trump’s call to update US tax rules in 2017 could produce benefits on this front, assuming that the new rules promote domestic investment by encouraging companies to bring back their overseas earnings and by lowering the corporate tax rate, currently one of the highest among OECD countries. These steps could bring more than $1 trillion into the US economy, creating jobs and economic opportunities in the process.

Yet another critical element of an effective digitization plan is education and training. Businesses need to invest in the existing workforce, which largely lacks the skills necessary to compete in the Digital Age. At the same time, we must transform our education system, so that younger generations acquire the skills they need to secure the high-paying digital jobs of the future. To this end, we must move beyond emphasizing science, technology, engineering, and mathematics – the so-called STEM subjects – to think about how to apply technology and digitization to all fields.

Digitization could create $5.1 trillion in economic value for the US by 2025, while significantly lowering unemployment. But the US cannot realize this potential unless its leaders work effectively across party lines and with all industries to drive forward a digital agenda.

Technology is changing everything: the way we do business, the rules of capitalism, and entire economic ecosystems – all at tremendous speed. The US must change with it, acting now to do what it takes to reclaim its innovative edge and thrive in the Digital Age.

John Chambers is Executive Chairman of Cisco.

PROJECT-SYNDICATE.ORG

“Unplanned downtime continues to plague the oil and gas industry. The offshore sector, in particular, has been saddled with unnecessarily high costs and exposed to unnecessary risks as a result. This was made clear in a study by Kimberlite, an international oil and gas market research and analytics company, in Summer 2016. And the problem is only going to get worse as budget cuts, aging assets, and the loss of industry experience take their toll. There is a solution. Digitization enables offshore operators to reduce unplanned downtime while simultaneously reducing risks”.
The statement is part of a paper GE Oil & Gas has recently published and reached the following conclusions:

  • Offshore oil and gas organizations experience on average $49 million annually in financial impacts due to unplanned downtime. For the worst performers the negative financial impact can be upwards of $88 million.
  • Fewer than 24% of operators describe their maintenance approach as a predictive one based on data and analytics. Over three-quarters either take a reactive or time-based approach.
  • Operators using a predictive, data-based approach experience 36% less unplanned downtime than those with a reactive approach. This can result in, on average, $17 million dropping to the bottom line annually.

Digitalization and efficiency
In a world of low oil prices, organizations must move from “chasing barrels to chasing efficiency”. Unplanned downtime is not cheap, but the market’s most frequently used approaches to maintenance – which should ideally help reduce unplanned downtime – are not as effective in reducing it as more modern approaches.
Fewer than 24% of operators described, in the Kimberlite study, their maintenance approach as a predictive one based on data and analytics. The rest either took a reactive or time-based approach. As the digital worlds of organizations grow, privacy, control and security will continue to be top concerns. Evolving digitization has made sensitive data vulnerable, but it has ultimately triggered a wave of innovation as companies work to stay ahead of threats and be able to isolate and minimize their impact when they occur.
Another common concern when taking on digital initiatives is system integration. Oil and gas organizations are becoming increasingly connected across their organizations in terms of not just applications, but data as well, so there is a need to ensure that new application and technologies for better asset management can fit well into the broader organization.

Summing up, GE recommends:

  • Oil and gas executives responsible for offshore operations should work with their technology teams to create a digital strategy to reduce unplanned downtime that will be based on a foundation of data and analytics. Oftentimes there is a lack of comprehensive and specific strategies for digital opportunities with asset repair and maintenance. Strategies should be developed at a high enough level to ensure that digitization does not happen in pockets, and it is able to scale.
  • Challenge your OEMs to provide digitally-enabled equipment and machines that will provide the data necessary for reducing downtime, and they can assist with building a more comprehensive digital strategy for your asset management efforts. Ask your OEMs questions about their digital strategies, and truly understand their approaches and plans.
  • Evaluate asset performance management (APM) tools and technology to manage machine data and support more timely, data-based decision processes.
  • Consider cloud-based solutions and outsourced services. It is important to consider your organization’s core competencies and how much digitization aligns with them. Cloud-based and outsourced services can offer additional expertise and scalability to support data-driven approaches as they continue to grow and evolve.

Now is the time to embrace new digitization opportunities that will improve margins and profitability. PhDsoft is helping oil and gas companies see returns from digitization. Contact us to accelerate your path to mitigating risk resulting from unplanned downtime and to driving enhanced operational efficiency.
https://phdsoft.com/technology/c4d/

“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.