Wood Group: Fueling a digital revolution in industrial engineering
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Wood Group: Fueling a digital revolution in industrial engineering

Mark Chillingworth — August 2019

From AI and digital twins to ‘Skype in a hard hat,’ engineering group Wood is applying digital innovation to sustain a leadership position in the fast-changing energy sector. Company CTO Darren Martin outlines the change agenda.

From oil rig servicing and nuclear power plant design to the construction of pharmaceutucal production facilities, only a handful of companies worldwide have the capabilities and resources to play in the global energy industry’s engineering market. But all of the sector’s Big 5 see digital innovation as the key to their ongoing success as the energy market shifts beyond its oil and gas heritage.

Wood, the $11 billion group headquartered in the UK oil capital of Aberdeen, is a great case in point. As its chief executive Robin Watson has put it: “The fourth industrial revolution is disrupting global markets and we intend to be a key player in the technological innovation critical to addressing energy transition… to ensure our innovative capability extends across a range of end markets, within and beyond energy.”

To help lead that transformation, the company last year appointed Darren Martin as its first CTO, initially tasking him with a company-wide investigation into how digital can redefine the shape of Wood’s future business.

His recommendation to the leadership team was unambiguous: “I proposed that we step up our investment in research and development and really think about what we need to do… to progress our digital footprint …[and] differentiate ourselves,” says Martin.

“Darren

One year on, Martin highlights how Wood is harnessing innovation and technology to improve operational efficiency, drive cost out for its customers and co-create new opportunities — while always mindful of its primary responsibility to ensure the safety of its workforce.



Rather than a threat, the changing energy landscape needs to be seen as a strategic opportunity for Wood, says Martin, and technology as a key component in grasping that. Already half of Wood’s revenues come from outside the oil and gas sector, with its engineers working in the fast-growing renewable energy sector as well as in the mining and chemicals industry, but it is constantly on the search for how digital innovation can open up new, exciting opportunities.

Its robotics business is a good example of a wider reach. In the automotive sector, Wood is providing automation and control solutions to the likes of Jaguar Land Rover and Ford. But it is enhancing those by delivering the programming and sequencing services for digital twins used on vehicle production, outlines Martin.

“As such cases show, we want to combine our deep domain engineering skills, tools and expertise from both traditional and new business lines with disruptive technology. That enables us to provide innovation that can solve our customers’ greatest challenges,” he adds.
Digital engineering

Martin and his team are also applying such technology to streamline and make processes both more efficient — and safer — for Wood clients. He explains how a digital twin of an oil pipeline, built for a South American customer, uses pressure-change data to find out whether a pipe has sprung a leak, perhaps due to movements in tectonic plates or people illegally breaking into the supply.

“Our digital twin of energy fluid dynamics can spot a leak and then automatically turn off the pumps. We also use tethered autonomous drones to review such sites so we can tell our engineers when it is safe to go to the area and make repairs,” Martin says. “Before such security solutions were in place, some engineers might have been in danger when they went out to fix an asset.”

“Wood”

Other digital initiatives are less hazardous. In Singapore, Wood is exploring the impact that climate change will have on the city state’s energy network. As Martin explains, Singapore is investing heavily in renewable energy, but for its generation of solar, wind and hydrogen to be sustainable, the island state needs a capability that can cope with the impact of  frequent tropical storms. “Such R&D work is of course applicable to other tropical economies such as Japan and Indonesia, so there is a big market opportunity there,” says Martin.
Innovation hub

To help fuel such innovation, Martin has established collaboration laboratories (CoLabs) at Wood’s main offices around the world. Designed to foster “client challenge partnerships,” such facilities expose participants to real-world experience of technology scenarios in an agile development setting. Alongside the CoLabs, his team has developed an online platform that allows the entire organization of 60,000 to bring its engineering and business know-how to customer challenges and opportunities. A great believer in the ‘outside-in’ principal of gathering ideas from beyond the boundaries of the organization, Martin intends to connect the CoLabs model to Wood’s partners.

Such moves have pushed the traditional role of the CTO well beyond the bounds of internal technology operations. “I am focused on the top challenges of our major clients,” says Martin. That points to a cultural change where Wood no longer looks to come up with its business solutions in isolation and then take them to market but instead collaborates with clients and partners to solve their most pressing problems.
Skills and model challenges

That doesn’t imply a lack of focus on honing its own activities. Martin says the company is constantly looking to gain efficiencies through improvements in areas such as the design of subsea oil wells and the automation of pipeline design and maintenance, as well as with its run-the-business technology functions.

And at least some of that is driven by a skills shortage. “We have already reduced the cost of labor to the business by as much as 50% in some key areas by using artificial intelligence to carry out repetitive tasks. This is helping us get through our project backlog more rapidly as well as helping with retention, as people are now focused on more challenging work,” he says. Indeed, engineering faces the same challenges as the technology sector as it seeks to ensure scarce talent is focused on rewarding opportunities.

“A lot of engineering workers are nearing retiring, creating a skills gap. So we need to up-skill our workers,” he says. The solution is often digital. For example, ‘Skype in a hardhat’ can provide video and voice communications that allow our experts in central hub locations to see what is going on at the frontline and guide engineers through complex or unfamiliar tasks.” Previously, some  tasks might have required up to five visits by different engineers before the right team arrived to carry out the work, he says.

“We have facilities that we operate [on remote pipelines] in Alaska that require at least three people to carry out a task” — two guided by the technologies such as  pipeline sensors and enhanced communications but one with a more manual task — to lookout for polar bears, Martin says. “By connecting them to our head offices, those frontline teams can carry out more tasks, reducing the operational cost and maintenance of such a facility by 70%, while improving the safety.”

Such developments have not been without their internal challenges. Contractors such as Wood are often paid on a per-engineering visit, and digitization has the potential to disrupt that model. Martin describes the necessary mindset change as  being similar to that faced by technology vendors such as Microsoft and Oracle as they move from a software license model to cloud-based subscriptions. Companies are willing to change when you demonstrate that the new model delivers improved value to clients, he says

“We took many of our leaders to [Microsoft’s HQ in] Redmond, Washington and it was an eye-opening experience for them,” he says. “It also helped them to realize that technology providers do not necessarily want to compete in our domain as engineering problem-solvers but rather that we need to partner — and put their tech solutions and our own expertise to good use for our clients.”

And that makes this “an exciting time” for Wood, says Martin as he looks to the opportunity to accelerate the digital transformation of the company’s services further. “Our world is changing faster than ever. Everything around us is becoming smarter and more digitally connected: cars, factories, ports, mines, refineries, roads, office buildings and even entire cities will be wired together in new ways and this will fundamentally change how Wood does business in the future.”

 • Additional images: Wood Group

First published August 2019
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