The document discusses an asset replacement strategy for control systems, highlighting the importance of lifecycle management in the oil, gas, power, and chemical sectors. It emphasizes key factors influencing asset replacement decisions, such as safety, integrity, reliability, and environmental performance, while discussing the effects of aging and degradation on equipment. The document outlines a systematic approach for determining the optimal timing for replacements and the considerations involved in making these decisions.

1. ASSET REPLACEMENT STRATEGY AND
AGING FACTORS OF CONTROL SYSTEMS
March 20, 2014ASSET LIFECYCLE INTEGRITY PARTNER PAGE 1
Willem D. Hazenberg MBA EUR ING RI
March 5 - 6, 2014
MERCURE Hotel Amsterdam City - The Netherlands
EUROPEAN INDUSTRY
FORUM 2014

2. ONE Stork in ONE Page
2
High Voltage
Service
& Diagnostics
Engineering &
Maintenance
Support
Energy Efficiency
Solutions
Brownfield
Engineering
Equipment
Diagnostics
High Pressure
Equipment
CooperHeat
Equipment
Electric
Machinery
EPC
CooperHeat Services
Decommissioning
Relocations
Power trains
Prefab Piping & Skids
Inspection & Testing
Services
Project mgt
Turbo Machinery
Boiler Services
Pump & Valve
Services
Industrial Equipment
Rental Services
Maintenance
mgt
Blade
Production
Dearators &
Swirlflash
On-site Machining &
Bolting Services
Industrial Equipment
Sales
Turnaround mgt
Gearbox repair
Burners & Retrofits
Manufacturing
Services
Industrial Equipment
Education
Fabric maintenance
Hardware &
Softwareengineering
Industrial IT & MES Control cabinet
Assembly
Electrical
installation
Electrical building
systems
Instrumentation
Inspection ServicesConsultancy
ASSET LIFECYCLE INTEGRITY PARTNER
Vision
Our vision is be the leading global provider of knowledge based asset
integrity services focusing on the Oil & Gas, Power and Chemical Sectors
Mission
We help our clients to reduce risk, assure safety and improve
environmental performance, and we enhance profits through innovative
solutions, and integrating ‘Thinking and Doing’

3. Stork Geographies
Revenue 2012
€ 102 million (7%)
Revenue 2012
€ 219 million (16%)
Revenue 2012
€ 181 million (13%)
Revenue 2012
€ 393 million (28%)
Revenue 2012
€ 455 million (32%)
3ASSET LIFECYCLE INTEGRITY PARTNER
CONTINENTAL
EUROPE
UK /
AFRICA
MECAP
AMERICAS
SOLUTIONS
Revenue 2012
€ 60 million (4%)
SALES AND
RENTAL
Employees fulltime
2012 13.895
Net Turnover (2012)
€ 1,411 Million

4. Remnant Life Methodology
Asset Integrity Management
Compliance Ranking
Future Impact: Business
Ranking
Future Impact:
Operating
Ranking
Commissioning
Design Life
(e.g. 30 years)
Year 1987 2017
?
Remnant Life
Study
Remnant Life
2014
Horizon
2034
Year 1987 20172014 2034
Year 1987 20172014 20342018

5. Asset & production ref. plan
Maintenance
& Replacement
Strategy
Maintain
Replacement
Candidates
Business
Case
Value upgrade?
Production impact?
Remaining life?
Replacement
Project
Company Strategy
Maintenance & replacement plan
Establish decision drivers:
 Safety
 Integrity
 Reliability
 Availability
 Future demand
 Etc.
Build business model
for replacement
decision making:
Pilot project
on one unit
Step 4
 Establish Risk Matrix
 Collect data on:
• plant and process
• current equipment status
• planned replacements
 Criticality analysis
 Gap analysis
(incl. remnant life of
most critical equipment)
 Select replacement
candidates
 Set up planning for 20 year
replacement studies
 Establish Risk Matrix
 Collect data on:
• plant and process
• current equipment status
• planned replacements
 Criticality analysis
 Gap analysis
(incl. remnant life of
most critical equipment)
 Select replacement
candidates
 Set up planning for 20 year
replacement studies
Overview Long Term Asset Replacement Project

6. Main questions in a replacement study
Main questions in this field:
1. What is the expected life of my assets?
2. Why should I replace my assets?
3. When should I replace my assets?

7. WHAT IS THE
EXPECTED LIFE OF
MY ASSETS?
DISTRIBUTED CONTROL SYSTEMS
N M
T(X; Y;Z) =X – Σ YI + Σ ZI
I=1 J=1
March 20, 2014ASSET LIFECYCLE INTEGRITY PARTNER PAGE 7

8. What is expected life
Depends of the view – Who is looking:
• Engineering - design lifetime
• An assumed time period within which a component/system can be
maintained as scheduled, is free from major repair and can fulfill the
original usage.
• Accounting:
• Tax deductible depreciation;
• Operational:
• How long can it perform the ―current?‖ requested task?
• Can it perform the ―near‖ future requested task?
• Technical:
• Maintenance:
• How long can we maintain the component/system?
• Do we need to anticipate by strategy on obsolescence?

9. Asset Integrity Management Compliance Ranking
Design Procure/
Construct
Operate/Maintain Change/Replace
Equipment
Type
Design Life
[Years]
Asset Integrity Measurement rankingSpent life
[Years]
According
international specs
Maintain-
ability
Operat-
ability
Proven
Technolo
gy
Design
As per spec Building
Instructions
Maintenance and
Operating (OEM)
Manual
OEM
recommended
Spare Part list
Procure/ Construct
Up/below design
specifications
Preventive
maintenance plan
Follow OEM techn.
Recommendations
Condition Monitoring Available resources
and skills
Environmental
/cleaning conditions
Accidents/
incidents
analyses
(RCA)
Operate/Maintain
Replacement
parts on
condition
Replacement
parts on use
Registration Maintenance
History
Change/Replace
NEN 2767, PAS55 / ISO 55000 are the reference base.

10. What is expected technical life
• Prediction, based on normal patterns.
• After the normal expected life failure data will be irrational.
• This mainly caused by an unacceptable MTTR in case of failure of a
component since no direct replacement product is available anymore.
• This impose a unacceptable risk if no life cycle solution is
implemented.

11. ENGINEERING – DESIGN LIFETIME
AGING AND DEGRADATION
March 20, 2014ASSET LIFECYCLE INTEGRITY PARTNER PAGE 11
Definition degradation:
An undesired departure in the operational performance of any
device, equipment or system from its intended performance.
Note: the term degradation can apply to temporary or permanent failure.

12. Aging and degradation assets
Aging factors
• Age of components;
• Degradation of material;
• Environmental stress; (see next slide)
• Use of components:
• Load of energy;
• Movement of component.
Degradation of relay spacer
material
Degradation of E-Wiring material

13. Aging factors – Environmental stress
Aging factors – Environmental stress:
• Temperature (Ambient, Thermal load, high, Low)
• Relative humidity
• Climate factors (Sun, wind, water, snow and ice)
• Occurrence of dust
• Mechanical vibration (G forces/ seismic activity's ground)
• Et cetera.

14. Expected Life DCS components
PCS Components 1970-1995 1995-2010
systeem software 15 year 5 year
HMI Client 15 year 5 year
HMI server N/A 6 year
Network 20 years 6-12 year
Controller 16 year 8-12 year
Input/Output 16 year 8-12 year
Termination panel 15-25 year 15-20 year
Field wiring 25-30 year 25-30 year
field devices 10 year 10 year

15. WHY SHOULD I
REPLACE MY ASSETS?
DECISION TRIGGERS MECHANISM DISTRIBUTED CONTROL SYSTEMS
March 20, 2014ASSET LIFECYCLE INTEGRITY PARTNER PAGE 15

16. Triggers for replacement decisions
There are different triggers to decide to start a replacement.
Triggers are internal and external.
Most important triggers for aged equipment are:
• OEM marketing / Trust;
• Operations;
• Technical;
• Business;
• Organization;
• Legislation.

17. What a modern DCS can do for you (DCS vendor
marketing info)
Automation technology has probably changed significantly since your existing
system was installed 10 or 20 years ago and so has the business climate. Today’s
successful industrial operations require much more from their DCS than just
safely controlling the process.
1. An integrated system — enterprise-wide;
2. A lower total cost of ownership;
3. A truly open technology platform;
4. A verifiably cyber-secure system;
5. High reliability and performance;
6. An architecture that evolves with your needs;
7. An easy-to-use system;
8. Improved asset management.
But why buy people new systems?
www.dcsselect.eu MBA Thesis Willem Hazenberg 166 inputs from 39 country's

18. Business reason long list selection
Knock – out criteria 40,3%
Knock – out criteria 12,8%
Knock – out criteria 12,0%
Knock – out criteria 11,8%
Knock – out criteria 13%
Knock – out criteria 21%
Knock – out criteria 10,1%
Knock – out criteria 13,3%
Knock – out criteria> 10% shown
……………………………Knock – out criteria 12%
Knock – out criteria 13,3%
Knock – out criteria 13,7%
Knock – out criteria 10,8%
Could not maintain old system
Replace obsolete system

19. Importance of business case reason
0% 20% 40% 60% 80% 100%
% end users response
Impor tance of :
Coul d not mai ntai n ol d system
Repl ace obsol ete systems
Impr oved Automati on
Use of advanced contr ol al gor i thms
Impr ove l oop contr ol
Impr ovement of pr oduct Qual i ty
Cr eate a mor e cost-ef f ecti ve pr ocess
Automati c star t-up and shutdown r outi nes
Hi gher pr oducti on
Reducti on i n Equi pment M ai ntenance
Impr oved pr oduct Yi el d
Removal of manual pr ocesses
Impr ove r epor ti ng
Incr ease r eal -ti me deci si on maki ng
Need f or a ease to use system
Incr ease i n pr ocess knowl edge
Ef f i ci ent wor kf l ow
Impr oved use of Raw M ater i al s
Incr easi ng i nf or mati on f or the wor kf or ce
Impr oved engi neer i ng data
Reduce wor kf or ce
Reduce compl ai ns of customer s
Removal of r edundant pr ocesses
Regul ator y r equi r ements
busi ness i nf or mati on to the pl ant f l oor
Impr ove accounti ng data
Lar ger pr oducti on mi x
M or e peopl e thi nki ng i n the bi g pi ctur e
Importanceof
Importance for business case
Extreme important
Very important
Important
Somewhat important
Not very important
Not important at all
Could not maintain old system
Replace obsolete system
Improve Automation
Use of advanced control algorithms

20. Migration balance between risk, performance,
cost and benefits
Cost/Risk evaluation

21. Product life cycle (ABB Example)
• Active (active R&D and Sales)
• Classic (product maintenance Phase)
• Limited (Support by ABB Service)
• Obsolete (“try to fix when it fails”)
Product sales release
>7 Year >3 Year
Limited ObsoleteClassicActive
Last Buy
>12 month
Manufacturing End
>6 maanden
Obsolete announcement
Obsolete products are products for which, despite best efforts, support,
maintenance and repair is no longer feasible
O
b
s
o
l
e
s
c
e
n
c
e

22. In the interviews we focus on these questions
Some obsolescence factors:
• Age of the system?
• What is current Life cycle stage of the product?
• Did the vendor declare the product obsolete?
• Year of Obsolescence?
• Is the original vendor still in the market?
• Was there a vendor company take over?
• Are there migration solutions from vendor or new owner?
• Are there migration solutions from 3e parties?

23. Operational replacement reasons
• How long can it perform the ―current?‖ requested task?
• Are there performance problems for operations?
• Are there downtime cost for operations?
• Is there a corporate objectives for enterprise-wide data sharing?
• Can it perform the ―near‖ future requested task?
• Do you need new functionality from the system in the next five
years that the current system can’t provide?
• Process changes;
• Advanced control capabilities enabling increased throughput.

24. Technical /maintenance replacement reasons
• Maintenance:
• Can we maintain the component/system?
• Reduced equipment reliability;
• Technical reliability (emotional EHS Fear + Availability);
• (increased failure rate or bad actors);
• Reparability;
• Serviceability;
• What is the primary fail component that the asset should be
replaced.
Mission Maintenance department
"Maintenance will safely accomplish our goal of providing Service
Excellence (including increased Uptime and increased Overall
Equipment Effectiveness) ….

25. Maintenance approach survey
• Maintenance Execution:
• Skilled Resources people on site;
• Numbers employees;
• Function levels;
• Trainings level.
• Service Contracts:
• Is there service contracts/Call in contracts?
• Number of spare parts?
• Spare parts position (as a long term strategy)?
• What is the call out time?
• What is the quality of speed en service?
• Logistics:
• Spare parts level on site (%);
• Spare parts level of site under contract (%);
• Time to get external parts (hours).
• Operation risk:
• Comply to Alarm management Status according EMMUA 191 standard

26. Maintenance approach technology benefits gap survey
Technology - Asset management needs:
• Fieldbus need;
• Wireless technology.
• Hart need;
• Profibus need;
Organization Factors
• Conversion approach;
• Coping mechanisms;
• Degree of technological dependence;
• Organization IT maturity.

27. Equipment health survey
Performance standards
KPI Check
Check history records:
• Operation;
• System logs;
• Maintenance;
• Inspection.
Check integrity quality of answers

28. Business/economics replacement reasons
• Operational Asset availability risk increasing;
• Safety risk;
• Increased downtime operational cost;
• Business strategy Availability, Lost revenue;
• Financial Operating costs:
• Maintenance cost internal;
• Cost saving (maintenance contract - hours)
• Investments Re-investment budgeting & capital rationing;
• Reputation risk.
Optimal Economic EOL date

29. Organization replacement reasons
• Equipment expertise disappears from customer/ vendor;
• Project management resource and engineering capabilities;
• Standardization of technology platforms;
• New project that need newer technology;
• Centralization of control functions;
• Reduction in Staff – operators in control room or plant.

30. March 20, 2014ASSET LIFECYCLE INTEGRITY PARTNER PAGE 30
• DCS/SCADA Security certification requirements? ISO / IEC 17799
and 270001;
• Relocating of Production facility by government rules;
• Lower Pollution rules need new Process;
• Military want to use certain technology – radiofrequencies;
• Compliance with food safety and traceability needs (FDA);
• Regulatory compliance, while responding to customer demands
for better product quality and faster delivery.
―Legislation‖ triggers for replacement decisions
Training - services
Guidelines and manuals
Codes of best practice
Standards
Legislation
Policy

31. WHEN SHOULD I
REPLACE MY ASSETS?
DISTRIBUTED CONTROL SYSTEMS
March 20, 2014ASSET LIFECYCLE INTEGRITY PARTNER PAGE 31

32. When should I replace my assets?
What kind of company are you?
• Technology trendsetter (early adopters);
• Technology follower (main stream);
• Late stage;
• Laggards.
Depends also on your company:
• Profit/lost;
• Market;
• Shut down time table;
• Expected life (EOL) plant;
• Expected life plant business.
Best time for the replacement is before you get into the obsolesce phase.

33. THANKS
QUESTIONS &
DISCUSSION
March 20, 2014ASSET LIFECYCLE INTEGRITY PARTNER PAGE 33
MAYBE WE HAD JUST FORGOTTEN THAT MAN SHALL NOT MAKE DECISIONS BY ECONOMIC ANALYSIS ALONE.

34. 34
ONE Stork, Servicing global customers globally
From multiple islands of excellence, ONE Stork delivers one common
service to our customers around the globe.
We are dedicated to continuity by sharing the responsibility and
integrate the way of working.
We do not deliver hours, we deliver results
ASSET LIFECYCLE INTEGRITY PARTNER