No Capex? No Problem

Executing Migrations when CAPEX is ConstrainedNO CAPEX? NO PROBLEM!!Jim Tramontana

June 21, 2016

Honeywell Confidential - © 2016 by Honeywell International Inc. All rights reserved.

Agenda

1

• Defining the problem

• Existing Solutions

• Migrations as a Service (MaaS)

• Developing a Migration Business

Case

• Q&A

• Customer Presentation

• Roundtable


Expect CAPEX to Remain Stagnant

CAPEX Challenges are Industry Agnostic

2

• Post Recession

investment was

not focused on

equipment refresh

• Energy prices are

depressed

• USD remains

strong

• Internal

competition for

CAPEX heightens


Existing Solutions

Long Term Financial Alternatives

• Lifecycle Management Agreement

- Built off a roadmap

- Designed for multiphase projects

- Requires SESP & Parts Management

- Flexible customer funding

• Hardware Refresh

- Allows you to save for a future investment

• Assurance 360

- Outcome based

- Requires Remediation

- Minimum 3 year agreement

3


Introducing Migrations as a Service (MaaS)

Enabling Modernization with Improved Cash Flow

So what is a Migration as a Service?

Innovative new program designed to ease your path forward

Structured to leverage OPEX

Predictable monthly payment

Fixed term, typically 5 years

Enables you to rebuild over time within budgetary constraints

Honeywell performs the migration so you can focus on your business

Allows you to leverage Honeywell technical expertise

Increases predictability & success while reducing risk and

time associated with a complex migration

4


Customer Expenditure Flow Comparison

Predictable Monthly Payments!

5


MaaS Benefits

Buy Today….Pay Tomorrow….Implement on Schedule

So why buy Migrations as a Service? Eliminates the mandatory CAPEX requirement!

Enables you to unlock the benefits of a migration faster!

Provides clarity and control of costs & risks

Predictable payment, fixed term

Excellent for Assurance 360 remediation!

Bundle with other services for a predictable monthly

payment.

Transfers the challenges of a migration to specialists

6


Industry Challenges Today

How Migrated Systems May Addressed Challenges?

7

Stronger “Do more with Less”

paradigmCustomer Challenges

1 Capital allocation / ROI

2 Old DCS / Parts availability

3 Skills gap / Retirements

4 Economic realities

5 “Big data” utilization potential

Pace of Expertise Loss vs

Technology Development

System Integrity issue misses = $$

Tactical vs Strategic addressing of

issues


8

Automation Planning Risk Assessment Tool

About the Tool

• Operational risk assessment

• Risk “dashboard” by process area

• 10 risk assessment criteria

• Labor & material availability

• Lifecycle support

• HSE & production

• Cyber Security

Useful for:

• Initiate a risk mitigation plan

• Can be used in automation planning process

• Priorities definition

Plant Area risk dashboard

Unplanned Downtime Quantification


• Green Zone - Best in class practices applied

• Yellow Zone - Industry acceptable approach is

used

• Red Zone – Below industry practices

Business Effectiveness Benchmarking Tool

9

• Reliability- Risk of downtime, production or quality loss

accessing process alarm information and automated procedures

• Maintenance- Cost of corrective maintenance accessing

event information and equipment protection

• Operations- Early detection of quality deviation, accessing

operation procedures, lab data integration, alarm management and ASM guidelines.

• Efficiency- Energy consumption savings and emission

reductions in furnaces, boilers and heaters accessing control optimization and control loops performance .

• Cyber security- Risk of Production loss, Customer’s public

credibility assessing risks associated with intrusions into the control systems environment.

High level benchmarking of plant operations

against best in class practices


BEB Assessment Process

Identifying Areas Of Possible Opportunities

10

2 - Maturity assessment

3 - Quantify the situation

4 - Estimate incremental benefits

of being best in classBenefits Quantification U$S/year

Efficiency 930,400

Reliability 150,500

Operations 1,037,650

Maintenance 1,379,450

Cyber Security 1,039,500

Overall 4,537,500

Benefits Quantification

ALARM MANAGEMENT Actual number of alarm activation 600

LOOPS OPTIMIZATION % loops working properly 10%

ENERGY EFFICIENCY %O2 average 3

OPERATIONS PROCEDURES (REPETITIVE TASKS)

unexpectated downtime in hrs

Downgrade product

Reprocess 2.00

LABORATORY DATA Delay to correct the operation in hrs 2.00

MAINTENANCE EFFECTIVENESS (corrective)delay to correct the operation in hrs

Keep the equipment running more days 24 / 5%

DISPLAY ASM

OPERATIONS PROCEDURES (SHIFT HANDOVER)

CYBER SECURITY 5

1 - Answer Questionnaire

Best in class

Moderate

Candidate for improvement

Best in class

Moderate

Candidate for improvement

Laboratory Data Integration

Maintenance Effectiveness

How is the laboratory

results made available

for the process control

activities?

Delay in transcription of result

and error avoidance. Quality

Impact on production.

LAB manual operations,

including sample log-in,

calculations, w ork f low

approval, and report

generation.

No integration w ith both

simulated distillation and plant

operation systems, manual

data entry can have

associated errors

Are you able to support

the maintenance staff

to troubleshoot E&I

issues using the

information in the

Control system?

Loss of eff iciency. Delay in

resolution of problems w ith

the f ield assets by

maintenance crew .

If the information is available in

the DCS, the maintenance

staff can investigate the

reason of assets failure,

create pattern of failure that

can improve the preventive

maintenance

No Capex? No Problem

Technology

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