Innovation in Process Plant: A Case Study of Ethylene

Abstract

Successful companies in any industry recognize the importance of involving customers and suppliers in the design and development of products and services. When complex product and process technologies are involved, these relationships create a network of companies and industries, each of which is a potential source for technological innovation. At the same time, however, such interrelationships further complicate the already challenging task of analyzing the evolving nature and sources of innovation.Using ethylene manufacture as a case study, Peter Hutcheson, Alan Pearson, and Derrick Ball present a three‐stage model of innovation. The model provides a framework for understanding the evolution of technological innovation in ethylene manufacturing, as well as the changing roles of the equipment suppliers, the process plant suppliers, and the operating companies througout this evolution. The applicability of this approach to other sectors of the chemical processing industry is also evaluated.In much the same way that a product's life cycle can be traced through distinct phases of creation, growth, maturity, and decline, technological innovation progresses through three main phases: uncoordinated, segmental, and systemic. The progression through these three phases is marked by changes in the relative levels of product and process innovation activity. In this three‐stage model, innovative activity progresses from an extreme of high product and low process innovation during the uncoordinated phase, through the segmental period of low product and high process innovation, to the low product and medium process innovation levels of the systemic phase. In other words, as the industry matures, the focus of innovative activity gradually shifts from the product to the process.As illustrated by the example of ethylene manufacturing, companies operating in an industry that has reached the systemic stage will find little or no scope for innovation in the end product or the core manufacturing technologies. In such a mature market, the product is a commodity item, and the fundamentals of the manufacturing process are well known. At this stage, the quest for productivity improvements focuses on cost reductions from task structuring and specialization, task integration, and automation. As such, equipment manufacturers play an increasingly important role in refining existing technologies and improving equipment reliability and capabilities. Such efforts are facilitated by close cooperation with the operating companies, which can contribute process expertise that the equipment manufacturers might otherwise lack.