After decades of development, China’s petrochemical industry now ranks first in the world in oil refining capability, reaching 770 million tons in 2017. China also owns six fundamental oil-refining technologies, such as catalytic cracking and hydrocracking, and five major technology suites for refining oil at the level of tens of millions of tons, and ethylene and aromatic production at the millions of tons level. The industrialization of China’s petrochemical industry ranks among the top-tier in the world in terms of scale.
However, China’s petrochemical industry has many aspects that still need modernization despite its large scale. For example, the physical plant layout is not optimal because it is spread out; refining equipment is operating at 72 percent of capacity; meaning that production capacity is excessive. General products account for a large proportion of current production and there is a low degree of self-sufficiency for high-end products. The industry also has problems with high energy and material consumption, strict requirements for safety and environmental protection, and high production costs.
The new wave of ICT, energy efficiency technologies, and Electric Vehicles (EV) pose severe challenges to the continued development of China’s petrochemical industry. The development of EVs is noteworthy, as the EV ownership in China is increasing. Faced with the emergence of new energy efficient vehicles, do traditional petrochemical enterprises face a development crisis? In addition, the petrochemical industry urgently needs to improve its safety and environmental protection standards. These changes are a reminder to the petrochemical industry — and the vast majority of traditional enterprises in the energy industry — that they must formulate an advanced strategic plan for the future.
China Petrochemical Corporation (Sinopec Group) is the largest petroleum and petrochemical enterprise group in Asia, and in 2017 was ranked third in revenue in the Fortune Global 500. As a traditional enterprise, Sinopec faces the above-mentioned challenges in its transformation and development, and must carefully consider how to respond.
Sinopec’s Road of Smart Manufacturing
Sinopec believes that smart manufacturing is the only way to promote the efficient and ecologically friendly development of China’s petrochemical industry. The company’s goal is to grow from being merely big to being robust. Petrochemicals is a process-dominated industry with the following characteristics: Strongly coupled physical and chemical processes make it difficult to build digitalized mathematical models; raw materials are complex; and production conditions highly variable. Because of these factors, process-dominated industries face many challenges to the adoption of smart manufacturing protocols. Smart manufacturing for discrete industries, as embodied by Germany’s Industry 4.0 program, is not fully applicable to process-dominated industries. To realize an efficient and ecologically friendly process-dominated petrochemical industry for China, Sinopec must innovate independently. To this end, Sinopec has chosen a subsidiary company, Petro-CyberWorks Information Technology Co., Ltd. (PCITC), to work with selected Chinese universities and the world’s leading ICT enterprises, such as Huawei and Accenture, to build an industrial IoT and smart manufacturing platform for Sinopec.
Sinopec has a long history of activity in the field of smart manufacturing. This work can be divided into three phases:
• 2003 – 2011: Construction and promotion of a Manufacturing Execution System (MES). The MES developed in-house was applied to all refinery enterprises under Sinopec and promoted to other large domestic energy suppliers such as China Shenhua Energy Company and ChinaCoal. The successful application of the MES helped these traditional enterprises improve production management and control, and have laid a solid foundation for a digital-network-based and intelligent petrochemical industry.
• 2012 – 2015: Sinopec completed the overall planning and design of Smart Factory 1.0, including pilot applications deployed across Sinopec’s four subsidiaries: Sinopec Beijing Yanshan Company, Sinopec Zhenhai Refining & Chemical Company, Sinopec Maoming Company, and Sinopec Jiujiang Company. Sinopec ‘Smart Factory 1.0’ tested theories, solutions, and core software products, and in 2015, Sinopec Jiujiang Company was recognized by the Chinese government as a model for smart factory pilots.
• 2016 – Now: Sinopec initiated the construction of ‘Smart Factory 2.0’ and collaborated with Huawei to build ProMACE 2.0. The Smart Factory program was upgraded and ProMACE added a smart cloud component. In 2016 and 2017 respectively, Sinopec Zhenhai Refining & Chemical Company and Sinopec Maoming Company were also recognized by the Chinese government as models for further Smart Factory development. Also in 2016 and 2017, Sinopec was recognized for defining the China’s Smart Factory standards, and in 2017, PCITC was listed in a national catalog for being a part of ‘the first generation of recommended smart manufacturing system solutions providers.’
The Smart Factory construction program has enabled Sinopec to benefit from increased digitalized, network-based intelligent operations that promote its digital transformation and improve its product quality and production efficiency. The practice has proved extremely fruitful: Sinopec’s average labor productivity has increased by over 10 percent. The automatic collection rate for production data now exceeds 95 percent. 100 percent of the Sinopec production system is now monitored in real-time, with analysis and warning alerts implemented for all key emission points. The performance of Sinopec Zhenhai Refining & Chemical Company’s ethylene plant is among the best in the world, with a profit of more than USD 1.5 billion (CNY 10 billion) for three consecutive years (2015 to 2017). The labor productivity for the Sinopec Maoming Company has nearly doubled between 2013 and 2016, and its 2017 profit exceeded USD 1.5 billion (CNY 10 billion) for the first time. Sinopec Jiujiang Company started making a profit in 2015 and its profit in 2017 exceeded USD 252 million (CNY 1.6 billion), ranking at the top among the enterprises of the same scale.
During the process of building ‘Smart Factory 1.0’ and again during the process of upgrading to ‘Smart Factory 2.0’, the application of the ProMACE Smart Factory Solution brought significant changes to Sinopec:
• Collaboration between production operations: Sinopec was the first to build an industrial 4G wireless network among all refinery enterprises. This network helps implement intelligent inspection and collaboration between internal and external operations, improve the on-site handling efficiency, increase the operations stability rate by 5.3 percent, and improve the operations qualification rate from 90.7 percent to 99 percent.
• Risk notification based on Big Data: Based on historical data analysis of catalytic devices and the alarm rules for digging equipment, a knowledge base has been formed and an updated warning model established. Critical alarms can be reported up to 1 to 2 minutes prior to an error to help operating engineers to take measures to avoid production risks in a timely manner.
• Coordinated optimization for planning and dispatch: Mechanism-modeling algorithms are leveraged to optimize planning, dispatch, and operations to help maximize economic benefits throughout the production process. The comprehensive economic benefit of pilot enterprises has increased by more than USD 157 million (CNY 1 billion).
• Daily benefit analysis: A deep learning algorithm implements intelligent scheduling and dynamic production optimization to allow daily benefit analysis instead of the monthly analysis as done previously.
•Digital material warehouse: IoT technology is used to implement real-time inventory tracking and intelligent distribution of materials to help pilot enterprises improve their material handling efficiency and reduce annual inventory costs by more than USD 7.8 million (CNY 50 million).
• Automatic stereoscopic warehouse: Sinopec Zhenhai Refining & Chemical Company adopted Chinese technology to build a large, unmanned polypropylene stereoscopic warehouse, a first in China’s petrochemical industry. This warehouse enables automatic management of solid product packaging and warehouse operations, as well as unmanned loading and shipment.
• 3D digital chemical plant: A 3D digital chemical plant is built to enable training, equipment hoisting simulation, engineering workload estimation, equipment fault location, emergency drilling scenarios, and other applications.
• Device health and reliability management: Big Data technologies are leveraged to evaluate the running status of devices and perform intelligent diagnosis for predictive device maintenance and reducing unplanned downtime.
• Energy management throughout the entire process: The energy management center supports supply, production, transfer, transmission, and consumption.
• Online optimization of energy flows: An optimization model of plant-wide steam power production and output has been built to improve the operations of devices such as boilers, steam turbines, and heat exchangers. The model promotes energy savings, emission reductions, cost reductions, and efficiency improvements; and helps the enterprise save more than USD 1 million (CNY 7 million) in energy costs.
• Emergency command coordination: Incident reporting, incident reception, and incident handling are systemically linked to ensure quick response. The impact scope of incident diffusion is calculated based on models such as explosions, leakage, and fire to help provide guidance for on-site rescue operations.
• Online management and control for environmental protection: Pollution emissions (chemical oxygen demand, ammonia, sulfur dioxide, and volatile organic compounds) are monitored in real time in accordance with the environmental protection map, and all abnormalities pushed to the appropriate party.
Building a Brand-New Smart Factory
If ‘Smart Factory 1.0’ is completed and operating successfully, why is Sinopec so focused on the development ProMACE? The pilot construction of Smart Factory 1.0 started in 2012 using a traditional information system architecture. Because the Smart Factory 2.0 program began in 2016, Sinopec chose to adjust the entire approach to system construction to accommodate newer technologies that are better positioned to meet the changing business requirements.
According to the ‘Made in China 2025’ strategy, PCITC’s goal is to build a network-based and intelligent modern factory. To achieve this outcome Sinopec has proposed a ‘Platform + Data + Service’ construction model for building a new type of Smart Factory. Sinopec and Huawei launched ProMACE jointly in 2016.
The ProMACE cloud project is not to develop Sinopec’s smart manufacturing capability, but also to support the entire process-dominated industry. Revolving around Smart Factory and capitalizing on smart logistics and services, ProMACE will integrate with Smart Campus and Smart City platforms to form new development modes and new business models that integrate traditional industries and with IT to lead the way for future industrial development.
As the primary support platform for Sinopec’s smart manufacturing developments, ProMACE has the following five core elements:
• Secure and controllable industrial IoT: Comprehensive sensing and interconnection form a ubiquitous industrial IoT environment to implement identification and management of materials, products, equipment, environment, and personnel.
• Open and intelligent process-dominated industry cloud platform (Industrial PaaS): The cloud platform is an industrial operating system for smart manufacturing. The platform provides five core capabilities: centralized integration, real-time computing, intelligent analysis, IoT access, and 2D/3D visualization.
• Industrial Apps that incorporate best practices: Industry-level core applications integrate the best practices of production control, safety, and environmental protection for process-dominated industries.
• Expert services based on industry experience: Expert resources (such as academic design experts, equipment experts, and process experts) provide customers with special services such as remote device diagnosis, refining process guidance, and safety and environmental protection consulting.
• Standards and safety systems: Redundant systems and standardization ensure the continuous operation of ProMACE.
ProMACE is part of the effort to maximize leverage and unleash the full potential of Cyber-Physical Systems (CPS) in the Smart Factory environment for the petrochemical and other process-dominated industries. ProMACE realizes our vision to transform fixed, physical factories into easily rearranged, modular ones. The first dimension for process-dominated industries is the visual representation of factory assets using a 3D model. The second is process representation using a mechanical model. The third is the formation of a Big Data model with self-learning capabilities. ProMACE data models are combined with optimization and control techniques to implement interactions between computed and physical processes to incorporate CPS capabilities. In addition, ProMACE supports three primary business activities: production control, supply-chain management, and asset-lifecycle management to form the next-generation production operations paradigm.
The Huawei win-win ‘ecosystem’ program cooperates with partners to bring historic development opportunities across different industries, though for the manufacturing sector. Using the same concept, ProMACE is committed to a similar ecosystem for process-dominated industries over the next three years. By aggregating over 1,000 expert services and providing access to over 100 devices, ProMACE will provide professional services for more than one million users and over 100 large enterprises. ProMACE will launch over 1,000 core industrial Apps, develop more than 300 mechanical models, and build 10 demonstration sites for smart manufacturing. At the same time, over 100 partners will be involved to extend the scale of the developer community.
We sincerely hope to cooperate with experts, enterprises, and partners both in and outside the petrochemical industry to become pioneers in the digital transformation of manufacturing. We hope to contribute our strengths to China’s national project to improve manufacturing power and promote the deep integration of the Internet and AI with the real economy.