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Solving the maintain vs. modernization equation


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Facility personnel often face the choice of maintaining aging equipment or buying new. Now there is another, more cost-effective, option to increase equipment reliability, efficiency and productivity….modernization. Learn key considerations and advantages of upgrading existing equipment to current technology.

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Solving the maintain vs. modernization equation

  1. 1. Schneider Electric 1- Division - Name – DateSolving the Maintain vs ModernizationEquationSteve MalingMarketing Director, Field ServicesBryan WestServices Sales ManagerTweet Live!#SchneiderXE
  2. 2. Schneider Electric 2- Division - Name – DateObjectivesUpon Completion of this course, you will be able to●Identify key market drivers●Differentiate OpEx from CapEx●Define key customer concerns●Define causes of equipment breakdowns●Define key decision factors●Define equipment maintenance●Characterize options to maintain vs. modernize●Describe equipment modernization solutions
  3. 3. Schneider Electric 3- Division - Name – DateMarket DriversO&M EnvironmentAging facilities and budgetgaps forcing organizationsto maintain with fewerresourcesLabor ConditionsIncreasingly difficult tohire, develop, and retainqualified staffOutsourcingBusinesses choosing tooutsource services andengage in strategicpartnershipsRisk ManagementAwareness & accountabilityof facility risks and workersafety is increasing andbecoming more complexEmerging TechnologyTechnology will impact howfacility managers do theirjobs and buildings operateSustainabilityDemand escalating forenvironmentally friendlyhigh performance buildingsCritical facility management drivers that are impacting all industries…
  4. 4. Schneider Electric 4- Division - Name – DateLifecycle Costs: Opex vs. Capex●Investment in Technologies vs. Infrastructure Systems● Automation & Control technologies are on a 5 to 20 year life-cycle● Infrastructure systems are on a 15 to 30 year life-cycle●Infrastructure Lifecycle
  5. 5. Schneider Electric 5- Division - Name – DateTimeCostImpact SeverityProbabilityCost of FacilityOperationsUtility CostsMaintenance CostsCost Reduction Risk MitigationNegative EventFinancial PerformanceRevenueTimeKey ConcernsCost Reduction Risk MitigationFinancialPerformanceTime Impact Severity TimeProbabilityRevenueCost
  6. 6. Schneider Electric 6- Division - Name – DateBuilding Systems need Maintenanceand/or ModernizationElectrical distribution Safe: Protect people and assetsCritical Power & cooling Reliable: Prevent power outages & quality varianceHVAC controlLighting controlEnergy monitoring & controlMotor controlAccess controlSecurityEfficient & productive:• Measure and controlenergy, automate, provide relevantdiagnosis• Manage processes• Make all the utilities of anyInfrastructure more efficientRenewable energiesGreen: Ensure systems function properly toimpact energy savingsSystem Maintenance
  7. 7. Schneider Electric 7- Division - Name – Date3XCauses of Equipment Breakdown
  8. 8. Schneider Electric 8- Division - Name – DateCost of Equipment Breakdown●Tangible Costs● Equipment replacement costs● Contractor costs● Loss of production● Additional inventory/spares● Impact to personnel/medical costs/lawsuits●Intangible Costs● Fixed and variable costs wasted duringdowntime● Possible loss of customer orders due toinability to fulfill shipments● Time spent in internal/external meetings● Personnel resources allocated to the repairApplication Loss**Heathcare Human LivesStock markettransactions$12,600,000Credit card sales $3,600,000Petrochemical $140,000Automobile $40,000Food Processing $30,000*Source: Contingency PlanningResearch and Schneider Electric**Based on 1-hr. production shutdownTrue Cost of Downtime*:
  9. 9. Schneider Electric 9- Division - Name – Date*Example of complete costs for a device*The costs shown are yearly costs●“Total Costs” are lower asthe useful service life ofthe equipment is longer●Preventive maintenancelimits the cost of curativeor reactive maintenance(reliability)Impact of Maintenance on Costs
  10. 10. Schneider Electric 10- Division - Name – DateBalancing Key Decision Factors●First Level of Needs● Safety● Cost● Uptime●Second Level of Needs● Business Effectiveness● Environment Conditions● Product Quality● Safety Concerns● Energy Efficiency● Operational CostsThe question is not whether theequipment will malfunction, but WHEN!
  11. 11. Schneider Electric 11- Division - Name – Date“I think my spell checker is broken, it keepschanging l-u-c-k to m-a-i-n-t-e-n-a-n-c-e!”
  12. 12. Schneider Electric 12- Division - Name – DateMaintenance of Equipment“Active” components consist of the protective devices that protectboth people and assets●Mechanical Components● Involve moving parts, thereforethey must be maintained in orderto operate as intended● Will wear out over time● Some components requirereplacement upon use●Solid State Components● The rise in utilization gives rise toanother mode of failure that cannotbe easily detected● Inspection and verification for properfunctionality● Obsolescence is a key consideration
  13. 13. Schneider Electric 13- Division - Name – DateApproaches to Maintenance●Corrective Maintenance● Repair work conducted after a failure orbreakdown●Preventive Maintenance● A specified list of inspections, cleaning, testingand part replacement during a pre-defined, time-based schedule●Predictive Maintenance● Scheduled based on diagnostic evaluations.Also factors in equipment age, environmentalstresses, criticality of equipment, etc to decideon schedule
  14. 14. Schneider Electric 14- Division - Name – DateMaintain Equipment vs. Modernize?●Even properly maintained equipment is subject to two key phenomena:● Ultimately degrades and reaches the end of its useful life● No longer sustainable solution due to technological advances●Factors to consider:● Age of Equipment● Operating Environment● Availability of Spare Parts● Reliability of System Components● Cost of Ongoing Maintenance● Emerging Technology● Worker Safety
  15. 15. Schneider Electric 15- Division - Name – DateModernization Solutions●Cost-effective options● Reconditioning● Replacement● Retrofill●Benefits● Reduced Maintenance andOperating Costs● Improved Reliability● Increased Capabilities*● Less Downtime and Cost forInstallation vs. New Equipment*Applicable to Retrofill andReplacement, not Reconditioning
  16. 16. Schneider Electric 16- Division - Name – DateModernization Project Example● LV direct replacement breakers and monitoring system install● Each feeder/main breaker trip unit communicates data for energy analysis● Enhanced safety features of upgrade and improved system reliability● Existing asset upgraded at reduced cost/downtime compared to a new installBefore After 180 view
  17. 17. Schneider Electric 17- Division - Name – DateModernization Project Example● Platform standardized to simplify operations and maintenance● Improved integration by streamlining SCADA● Improved reliability by migrating late stage equipment● Improved network connectivity● Validated solutions through automated software conversion● Reduced labor time due to pre-engineered Quick wiring adapters● Minimal production disruption by rapid turnkey installationBefore AfterRockwell SLC500Schneider Electric M340
  18. 18. Schneider Electric 18- Division - Name – DateSummary●Equipment Preventive Maintenance is Critical●Equipment Ages and Will Eventually Fail●Key Factors to Consider in Maintain vs. Modernize Equation:● Age of Equipment● Operating Environment● Availability of Spare Parts● Reliability of System Components● Cost of Ongoing Maintenance● Emerging Technology●Cost Effective Options are Available to Modernize Aging Equipment●Maintaining and Modernizing Equipment will:● Reduce Costs● Mitigate Risks● Improve Productivity
  19. 19. Schneider Electric 19- Division - Name – DateSchneider Electric ServicesDedicated to maintaining and improving your system’s productivityand efficiency, our broad range of services support your facility’sinfrastructure, and include:Automation & ControlServicesCritical Power & CoolingServicesEnergy SustainabilityConsultation ServicesIndustrial Repair ServicesBuilding Lifecycle &Energy ServicesElectrical DistributionServicesEngineering ServicesPower Monitoring Services
  20. 20. Schneider Electric 20- Division - Name – DateThank You!Questions?The Schneider Electric Field Services Team
  21. 21. Schneider Electric 21- Division - Name – DateTest Questions1. Critical facility management drivers that are impacting all industries include:a) Risk Managementb) Labor Conditionsc) Out Sourcingd) All the above(Identify key Market Drivers)2. Operational Expenditures make up 25% of the total facility Lifecycle costs.a) Trueb) False(Define Opex vs. Capex)3. Companies that focus on Cost Reduction solutions while striving to Mitigate Risk canimprove their overall Financial performance.a) Trueb) False(Specify Key Customer Concerns)4. According to IEEE, the rate of equipment failures is ____ times higher in facilities that donot perform preventive maintenance on their electrical systems.a) 2Xb) 3Xc) 4Xd) 5X(Delineate Causes of Equipment Breakdowns)5. Facility Managers must balance Key Decision Factors that can impact Worker Safety,Costs associated with an outage and Uptime to maintain production.a) Trueb) False(Detail Key Decision Factors)
  22. 22. Schneider Electric 22- Division - Name – DateTest Questions6. End-users that don’t employ a solid Electrical Preventive Maintenance program, oftenrely on this to avoid an unplanned outage.a) Skillb) Knowledgeable personnelc) Luckd) None of the above(Describe Equipment Maintenance)7. Active components consist of protective devices that require maintenance in order to:a) Protect on time shipments and production goalsb) Protect people and assetsc) Protect jobs and benefits(Describe Equipment Maintenance)8. A sound approach to an Electrical Preventive Maintenance Program will employ:a) Corrective Maintenanceb) Preventive Maintenancec) Predictive Maintenanced) All the above(Describe Equipment Maintenance)9. Even properly maintained equipment can degrade and reach the end of its useful life.a) Trueb) False(Characterize Options to Maintain vs. Modernize?)10. Equipment Modernization Solutions exist that can save an end-user downtime andmoney.a) Trueb) False(Describe Equipment Modernization Solutions)