Defining 5 Terms to Demystify Digital Transformation

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Regardless of the industry you are in, the digital transformation is upon us. While this content references market factors directly affecting the global Oil & Gas industry, the digital transformation concepts that we define and discuss are relevant for every industry.

The downstream oil and gas industry has found itself operating at a ‘new normal’. When barrel prices dropped significantly, the industry was forced to find a way to survive. Most, if not all, companies were forced to stretch thin – cutting workforce and running resources longer became common practice. As oil prices gradually work their way back up, companies are choosing to remain lean to ensure profitability. Reluctant to spend more money and lessen margins, plants need a competitive edge to stay alive – digital transformation.

While oil prices are not expected return to the $100 per barrel level any time soon, digitalization is imperative – you can either digitize or die. But what does it mean to digitize? There are a few key trends and concepts that plants must utilize to stay lean and mean in this time of a new normal in the oil and gas industry.

Industrie 4.0

Industrie 4.0 is the overarching concept – it is all about digitizing the entire plant lifecycle. This concept refers to a cyber-physical system that offers a digital representation of a physical system that can communicate real-time data to other cyber-physical systems and applications. This increased data collection then leads to more informed decision making – allowing enterprises to act on all the data in a more strategic manor for more streamlined operations and greater profitability. If oil refineries fail to compete today, where digitalization rules, they are likely to be shut down, unable to remain cost competitive in the ‘new normal’.

IIoT Connect Collect Analyze Act


The Industrial Internet of Things (IIoT) strictly relates to the operational phase of Industrie 4.0. It specifically involves connecting and collecting asset data that can be analyzed to provide insight on how the plant is running. Equipped with this improved operations visibility, refineries can act to improve operational efficiency without spending more – and with a more informed understanding of plant asset safety. 

Digital Thread

The digital information you pass from one part of the plant lifecycle to the other is known as the digital thread. It refers to the framework of communication that connects data flow and integrated asset data throughout its lifecycle. The digital thread concept is a core component of Industrie 4.0 because of its ability to transfer digital data helps plants set a new standard for timely, more accurate information. As a result, all-encompassing plant lifecycle visibility works to deliver a framework to connect, collect, analyze and act. 

Digital Twin

A digital model of a physical asset, the digital twin includes design specifications and engineering models that detail its materials, components and behavior. The digital twin also includes the integrated data and operational data unique to the specific asset. This yields a more effective assessment of a system’s current and future capabilities during its lifecycle from design to operations and optimization. 

 Industrie 4.0 Digital 360° View

Digital 360° View™

But what would our industrial world look like if we could extend these concepts beyond just the operational layer? What if we could create a true Digital 360° view™ across the entire value chain?

The intent isn’t to inject further confusion into the digital space. Rather, the goal is to tie it all together. Join us on a journey of what a true Digital 360° view can look like, may already look like, and how it truly transforms the way we work, operate, leverage data and serve our customers.

It all started with the digital twin – the live, virtual representation of the plant’s physical processes and assets in real-life, which is kept up to date periodically thanks to the amount of data that is available. But, the true and maximum value of such a digital twin is obtained through the continuous and consistent capture of relevant data throughout the entire lifecycle – from engineering to operations – converting the data to business contextual information and enabling a digital closed loop of value to every aspect of the lifecycle.

Digital Twin Lifecycle

  1. As part of the process design early in the lifecycle, a “first born” digital twin of the plant is created through a model to simulate the entire plant before the assets are even designed.
  2. The processes, equipment and operations are analyzed through multiple simulations for optimal safety, reliability and profitability.
  3. This digital twin matures further to incorporate the physical assets design information associated with the process design of the entire plant. Aspects of the plant digital model are used to train operators with virtual reality based immersive training environments.
  4. During the operational stage of the plant, variations from optimal process and asset design are captured during run-time, and the digital twin is updated with this information.
  5. Operations and maintenance personnel use augmented and virtual reality technologies with mobile devices to address plant and field based maintenance issues for the involved assets. Given the current state of an asset, the digital model with predictive learning technology enables proactive identification of asset failures before they occur.
  6. Using artificial intelligence, predictive learning technologies used with advanced process control, control strategy design and process optimization, the necessary variations from process and asset design are fed back to the engineering stage of the lifecycle enabling a complete and efficient digital value loop.

We at Schneider Electric are excited to work with you to turn this vision into a reality, accelerating the digital transformation of your enterprise value chain through a true Digital 360° View. Closing the loop through the digital link across process engineering, augmented reality based asset performance, cloud based predictive analytics and artificial intelligence based process optimization enables you to tab into the high value reservoir of information provided by a true 360° digital twin of the plant.

The future is now. Together, IoT-enabled assets give actionable data for improved operations by providing a true Digital 360° View™ that provides as-designed requirements, validations and calibration records, as-built data, flow data and as-maintained data. All together, these steps for connectivity bring Industrie 4.0 to plants and position them to be lean and mean in the challenging current industrial landscape– remaining competitive in a time where you have two options: digitize or die.

To learn more on digitally transforming and optimizing your operations using IIoT, download the whitepaper: Delivering closed loop operations for the refinery enterprise.

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  • Very informative article , I am automation engineering student really very valuable information I get.

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