Identifying opportunities for leveraging industry 4.0 technology in petrochemical engineering, procurement, and construction projects in South Africa

Abstract

Engineering, procurement and construction projects (EPC) are notorious for cost and schedule overruns. With the declining profit pool of the petrochemical industry in South Africa, EPC contractors need to answer the call to reduce the capital expenditure of petrochemical plants by increasing the efficiency of capital project execution. The manufacturing sector enjoyed high productivity gains with the introduction of Industry 4.0 in the German public-private sector. On the contrary, the construction sector saw marginal increases in productivity, which is partly the effect of the delayed adoption of technology. This study aimed to identify opportunities to leverage Industry 4.0 technology against the challenges faced by the petrochemical EPC sector in South Africa. The study's primary objective was to derive a theoretical framework for leveraging Industry 4.0 technology to address challenges in the South African petrochemical EPC sector that result in cost and schedule overruns in EPC projects. To derive the framework, the study consulted the literature available to identify recurring challenge themes faced in engineering and construction projects. As a secondary objective, causation research was conducted to determine the factors that influenced the recurring themes. The literature was further reviewed to uncover the potential applications of Industry 4.0 technology in EPC projects. To validate the challenge themes and to identify additional challenges true to the geographic demarcation, the researcher conducted semi-structured interviews with experienced project professionals within the petrochemical EPC sector in South Africa. The challenge themes were validated, and as secondary objectives, the current state of digitalisation and the perceived barriers to technological innovation within the petrochemical EPC sector in South Africa were determined. The study finds that the challenges faced by the petrochemical EPC sector in South Africa are fundamentally the result of poor communication through the various and complex interfaces in the project functions. A framework is presented wherein increased collaboration between project stakeholders is promoted, and communication is enhanced by leveraging Industry 4.0 technologies. Building Information Modeling (BIM) is deemed the technology that would form the foundation of the technological shift of the petrochemical EPC sector in South Africa. It is proposed that BIM strategies be developed in close collaboration with the owners of petrochemical plants in South Africa to achieve standardisation in implementing BIM throughout the South African EPC sector.

Addressing the challenges faced in the South African EPC sector will not be possible with technology as the only change source. The author notes that even though the findings show enormous potential within Industry 4.0 technology, a parallel cultural shift is required among project stakeholders to create an EPC environment characterised by trust and transparency. Therefore, an integrated approach to project delivery is implemented as part of the framework, which promotes contractual agreements that reward project stakeholders for achieving their shared objectives, is characterised by shared risk rather than shifted risk, and promotes collaboration between project parties. Charles Darwin famously said: "It is neither the strongest, nor the most intelligent of a species that survives, but the one that is most adaptable to changes". The South African petrochemical EPC industry is changing, and EPC contractors need to answer the call to reduce the capital expenditure of petrochemical plants.