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Bruce Gheesling – Sr. V.P GAS March 20, 2007 Six Key Metrics to Align Asset Management & Energy Efficiency David Berger; Contributing Editor, Plant Services magazine – WMC Rod Ellsworth; Vice President Global Asset Sustainability – Infor
Improvement in one may result in deterioration of another
Too many measurements
No focus across the organization
Expensive to collect and track
Increased likelihood of errors
Risks of not using the right metrics
Major safety, environmental or operational failures
Reduced efficiency resulting in financial loss
Total plant shutdown
Poll – Question
OEE question to viewers
What are the 6 Key Metrics?
Availability (vs machine downtime)
Utilization (vs available but not used)
Reliability (eg. MTBF, MTTR)
Performance (ie, efficiency)
Quality of output
Total Cost of Ownership (ie, lifecycle cost)
OEE is Insufficient
OEE is “Overall Equipment Effectiveness”
OEE = Actual Output from an Asset / Theoretical Maximum Output from that Asset
OEE = Availability x Performance x Quality
The problem with OEE:
Does not explicitly capture all of the tradeoffs
(eg, reliability, utilization, and total cost of ownership)
May miss the largest cost drivers
(eg, energy efficiency, emissions, throwing people at a problem)
Formula complicated and not easily understood – better to track the individual metrics
Obscures the root cause
The Bigger Picture
MRO spending: US companies spend $100 Billion annually on capital equipment and services
Energy spending: US companies spend $400 Billion annually on energy – and climbing
Next to personnel, the single highest cost for a typical manufacturing facility is energy
So why do companies maximize asset availability / performance / quality (ie, OEE) without properly understanding the two biggest cost drivers?
Would you take on the cost of a high performance limousine, that is always available, and gives you a quality ride from A to B, if it has a high purchase price, guzzles gas, requires a team of people to maintain, has a poor economic life, and is scoffed by passersby?
OEE does not tell the whole story
Energy Prices are Rising
From a survey conducted last fall by Plant Services magazine, it is clear that business leaders are concerned about rising energy prices – 77.3% felt energy prices would have the highest impact
Criticality Analysis – Looking Forward based on Engineering Design
Failure History Analysis – Looking Forward Based on History
Predictive Maintenance Analysis – Looking Forward Based on History/Eng/Stats
Lifecycle Analysis – Repair/Replace Decision Based on Cost History
Key Asset Performance Analysis Tools
A. Criticality Analysis Looking Forward based on Engineering Design
What does this component do?
What happens if it fails?
Major safety, environmental or operational impact (eg total shutdown)
Other financial loss (eg. quality problems)
Negligible impact (therefore run to failure)
What maintenance program is required for this component (cost/benefit analysis)?
Reactive (run to failure)
Preventive (time-based inspection)
Predictive (condition-based monitoring – what are the predictors?)
Examples: replace the light bulb; change the oil; replace the bearings
reactive preventive predictive
B. Failure History Analysis Looking Forward Based on History Considering asset sustainability (eg, energy costs, environment), is a new approach to EAM. Most companies are stuck in an old OEE paradigm. What does your EAM system provide? What are the cost drivers?
C. Predictive Maintenance Analysis Looking Forward Based on History/Eng/Stats
Identify high cost failures: (eg, engine failure)
Examine history of failure and determine correlated conditions prior to failure: (eg, temperature, energy usage, or excessive emissions prior to engine failure)
Track trends in condition of predictor: (eg, spikes in energy usage and trends to upper control limit)
Take appropriate action depending on severity: (eg, activate an alarm, send an email, and/or launch a PM routine to inspect)
Improve equipment performance and reliability using root cause analysis: (e.g., monitoring energy consumption increases MTBF)
D. Lifecycle Analysis Repair/Replace Decision Based on Cost History
Determine problem codes that resulted in high repair/replace costs charged to a given asset:
(eg, spent average of $10,000 on replacing type 1 motors)
Examine historical data to determine root cause:
(eg, spikes from power source vs faulty motor)
Perform cost/benefit analysis for repair/replace decisions:
(eg, $200 to filter spikes vs $10,000 to replace motor)
Replace asset/component if total cost of repair exceeds
replacement cost, assuming alleviation of root cause:
(eg, if spikes, don’t replace motors; if faulty motor, it may be cost-effective
to replace with alternative motor)
Repeat for predictive based on engineering probabilities:
(eg, high probability that motor will fail within the year based on energy
Large asset-intensive company in energy sector
More than 1000 assets
Multiple CMMS/EAM packages looking to consolidate
No clear maintenance strategy
Poor history records
Chose key assets/components for pilot
Tracked history via CMMS/EAM
Used analysis tools to determine optimal maintenance policy (reactive/preventive/predictive)
Results: Significant savings (+20% savings)
Bruce Gheesling – Sr. V.P GAS March 20, 2007 Six Key Metrics to Align Asset Management & Energy Efficiency Rod Ellsworth Vice President Global Asset Sustainability – Infor
Poll – Question
Energy Efficiency question
The management of property, plant, and equipment to meet a company’s valid operations and financial requirements
EAM Evolution – “The Paradigm Shift ” Global Asset Sustainability
Capacity, Availability, Quality
< 30% of O&M Expense
Based on industry standards
EAM Enablement Yesterday
Capacity, Availability, Quality
> 80% of O&M Expense
GHG & Fugitive Emissions
GAS Enablement Today Infor Solution The management of property, plant, and equipment to meet the operations, economic, and socio-economic needs of today without compromising the ability of future generations to meet their own such needs. Rod Ellsworth;Vice President, Infor Global Solutions; 2007 Enriched Infor Solution
Current Situation Need for Automated Continuous Commissioning
Equipment is not properly commissioned, operated nor maintained even though capabilities of PLC and BAS continue to increase and maintenance programs are in place
Improper operations lead to inefficiencies and reduced lifetime of the equipment
Commissioning and retro-commissioning fixes do not persists over time
Manual periodic commissioning can be expensive
Field demonstrations of diagnostic tools indicate
Many assets are improperly operating, including those that are newly commissioned
Even when problems are identified, operators rarely take corrective actions
So, Just What is Continuous Commissioning? Continuous Commissioning Process Preliminary Data Collection (e.g. equipment nameplate information, set points, energy efficiency, operations limits) Continuously monitor and run equivalent functional asset tests Continuously record, analyze and interpret observations and functional test results Manually correct problems, change installation, replace, repair Report results. Store and archive data Commission fixes Continuous Commissioning
ongoing process for monitoring systems and assets, diagnosing and resolving issues, and making energy consumption as efficient as possible while maintaining or improving asset performance.
includes all asset life-cycle operating and maintenance aspects from physical maintenance, to control strategies, to prioritizing and implementing retrofits.
optimize current operations
Cost Benefits 20 % + energy reduction for monitored assets DOE Continuous Commissioning Guide Book Independent Study by Texas A&M
Integrating Sustainability into Asset Management Operations – 3 Steps
Step1: Quantify Energy Intensity & CO 2 Footprint
Asset performance : energy : generation : CO 2
Step 2: Assess Company Risk
Step 3: Adapt in Response to Risk
Maintain and Change Capital Infrastructure
< Energy Intensity & CO 2
It is envisioned that this is a continuous improvement process to ensure long term sustainability.
Energy integration into EAM strategy…
Maintenance Program Management: factoring asset operating performance (Energy consumption) into maintenance strategy and activities
Alert Management : alerting of existing asset condition or trend outside of optimum operating parameters for assessment or remediation
Planning: assessing existing asset configuration (design basis) and performance (energy consumption) for optimization
… to improve a company’s overall equipment operating performance at the least cost and environmental impact.
Energy is the single largest indirect operating expense; > 80% of O&M expense
Energy is the largest contributor of CO2 Gases which comprise 63% of all GHG
Improve OEE … at the least cost and environmental impact Asset Sustainability Spend ($208B N.A. C&I Market) 4,475B kWh N.A. Energy Market 16,599B kWh World-wide Energy Market
Solving the Problem Infor EAM Asset Sustainability; Continuous Commissioning Process Preliminary Data Collection (e.g. equipment nameplate information, set points, energy efficiency, operations limits) Continuously monitor and run equivalent functional asset tests Continuously record, analyze and interpret observations and functional test results Manually correct problems, change installation, replace, repair Report results. store and archive data Infor Asset Sustainability is an enterprise repository for all asset data Infor Asset Sustainability alert management provides continuous AFDD monitoring & testing Infor Asset Sustainability alert management records, interprets, and tests real time BAS and metering observations Infor Asset Sustainability automatically generates work orders to rectify anomalies and validate fixes Infor Asset Sustainability quantifies results, and stores data for anomaly determinant Commission fixes
Environmental Sustainability: Intuitive Actionable Information The G.A.S. index reduces complex manufacturing and facility operating problems of optimizing asset design performance at the least total energy cost and environmental risk into simple, intuitive presentation of actionable information . G.A.S. Index = Availability * Performance * Quality * Energy Efficiency
Environmental Sustainability: Operating Performance vs. Energy Cost Infor EAM Asset Sustainability Edition Asset performance management can reduce energy consumption by 6% to 20% These percentages have been established by international studies which indicate that a company’s asset management operations would benefit from integrating energy consumption into their asset management strategy. Terry Wireman; Benchmarking Best Practices in Maintenance Management ISBN: 0-8311-3168-3 Infor EAM Asset Sustainability Edition
Environmental Sustainability: Environmental Impact Comprehensive GHG emissions management. Direct and indirect CO 2 determination by fuel type or fuel mix of provider. Performance benchmarking Infor EAM Asset Sustainability Edition
In conclusion, do you know…
If your asset operations performance consume more energy than it was designed to consume?
If some assets are consuming more energy than a like or comparable asset in your enterprise?
If there are more energy efficient products and if they could impact your operation and financial performance?
How energy consumption impacts your asset repair vs. replace analysis?
How your operations energy efficiency compares to industry benchmarks and guidelines ?
Thank you for attending today’s Webinar on
“ Six Key Metrics to Align Asset Management & Energy Efficiency. ”