Cover Your Assets

Feb. 20, 2015
According to an Automation World survey, plants from all industries are finding benefits and significant ROI from their asset management programs, though some still don't see what all the fuss is about.

Automation suppliers have long offered products and services geared toward asset management, and have moved progressively into preventive and predictive maintenance programs as well. Case studies abound showing the benefits that their customers have received from asset management solutions—from increased uptime and less disruptive maintenance routines to improved commissioning times and a better understanding of the assets themselves.

And yet there are questions from some corners about the true value of asset management, and whether the advertised return on investment (ROI) is really all that it’s cracked up to be. So we wanted to find out from you, Automation World readers, how widely you’re implementing asset management approaches, and whether it’s delivered what you expected.

What we found out was largely positive, but there are still some readers in the dark about what’s available and how they can get the resources needed to implement their own programs.

“Most people understand the concept and understand there are benefits to the technology,” notes Laura Briggs, product marketing manager for Emerson Process Management. “But some still struggle in actually getting the technology integrated into their work practices.”

Maintenance maturity can factor into the equation, adds Bart Winters, product director for asset management solutions at Honeywell Process Management, who notes that some people are still satisfied with the break/fix mentality. “It’s difficult to convince them to make that leap to proactive maintenance as a first step, and then to get on continuous improvement to predictive maintenance.”

Getting the payback

Nonetheless, more than 63 percent of those responding to our survey already have an asset management program in place, with an additional 11 percent planning to within the next year. And two-thirds of those who have implemented a program have already achieved or even exceeded their ROI expectations. An additional 20 percent are not there yet, but still expect to reach ROI.

And make no mistake—the ROI numbers that automation suppliers are claiming are nothing if not compelling. “The savings potential is tremendous,” says Kevin Starr, director of product management for service products in ABB’s process automation division. “For every dollar you spend, you can return $10.”

The ROI depends in part on what stage of the lifecycle the plant is at. If purchasing an asset management program as part of an initial greenfield project, the payback can be immediate and substantial. “In some cases, they can have a complete payback on initial investment just in the configuration and initialization phase,” Briggs says. “If looking more from a reliability perspective, some people are able to justify one to three years just over maintenance. And for some people, just one event is able to provide the ROI for that application.”

What kind of benefits and ROI manufacturers see has a lot to do with how they’re implementing their asset management program. Since there are a variety of possible applications that focus on different types of assets, Emerson Process Management, for example, works with customers to see where they could see the biggest bang for their buck in their operations.

“Let’s take a look at what you’re doing today and where some of the places are in your operations where you have the most opportunity to benefit,” Briggs explains. Often they look at what kind of steps a manufacturer could take to get some advantage right away, and that success could be used to justify more applications, she adds. “Then you can continue growing your program and getting benefit out of it.”

A laundry list of benefits

From those respondents who have implemented a program already, the benefits of asset management were considerable. Highest among them were the ability to respond more quickly to maintenance issues (66 percent), easier access to maintenance/reliability information (63 percent), the ability to plan downtime/repairs better around the production schedule (63 percent), and reduced plant or machine downtime (59 percent). Less prevalent, but still garnering response from 38 percent of those with asset management systems was the benefit of replacing devices only when needed rather than on routine schedules. And at about 32 percent was improved device commissioning time.

Other benefits listed out by survey respondents included longer asset life, reduced maintenance costs, the ability to prioritize work based on risk assessment, an increased awareness of the system, accurate asset tracking, reduced calls in the middle of the night, a historical record of repair, and improved warranty protection due to having good data on hand.

There’s not really a particular industry or application that is more likely to receive benefits from an asset management program. Among our readers, those implementing are all over the board—oil and gas, water/wastewater, food and beverage, machine OEMs, fabricated metals, and a full range of other industries.

Rather than being specific to any particular industry, those more interested in asset management are those that are really cognizant of downtime, whether that’s because of sold out production or other reasons, Briggs says. “It’s where the asset itself isn’t the thing that they’re most concerned about, but the money they’d lose to downtime,” she says. “Then your monitoring is more critical.”

For example, a temperature transmitter might not be that big of a deal, so maybe you think you don’t need to monitor it. “But if that temperature transmitter is on a heat exchanger or a bigger piece of process equipment, it could be causing downtime,” Briggs explains. “Then those types of data points become really important to you in terms of downtime.”

Honeywell’s Winters agrees. “Customers with the most value are the ones with critical assets that have a high impact on safety or production,” he says. One of the earliest adopters of asset management that Honeywell saw was the power generation industry because they don’t really have any storage capacity if power production stops, he adds.

“We’re definitely seeing an uptick in interest in condition monitoring and surveillance systems,” Winters also notes. “I see a progression from the basic condition monitoring (vibration) into more of the performance monitoring; using performance as a leading indicator for potential equipment problems.”

Who’s adopting asset management also depends on the state of the economy in those markets, according to Kevin Price, EAM product director at Infor. “With oil and gas, they’re trying to protect the assets that they have; they’re trying to not spend where they don’t have to,” he says by way of example. “When you have environments like that, you have a very conscious effort to maintain those assets.”

Water reclamation or distribution facilities are also primary candidates for asset management programs, Price adds. Because pumps provide such a large energy drain on the business, they become that much more important to maintain.

A changing landscape

The benefits of asset management have shifted over time. Emerson Process Management’s AMS device manager, for example, looked more like a configuration management tool when it was released 15 years ago, Briggs notes. But now it has more to do with online diagnostics and predictive maintenance.

These days, it’s primarily about avoiding unplanned downtime and optimizing maintenance.

Without asset management, ABB’s Starr likens the maintenance picture to Whack-a-Mole—as soon as you knock one problem down, the next one pops up, until they’re finally popping up so quickly, you can’t keep up.

Some customers are turning their automation or controls off because they can’t deal with the problems that come with it. “When I first started working in industrial plants, automation was a guy with a screwdriver and a pneumatic controller,” Starr says. “The maintenance practices that we’ve grown up with are falling short because the technology and automation is growing faster than the manual techniques we’ve seen in the past.”

When manufacturers become aware they’re having a production problem, the tendency is to put in a “smart whatever,” Starr says. But he compares the situation to a time when a friend of his installed smart sensors on his car tires. Failing to install one of them correctly, every day he would look at that data and say the pressure was good so everything was fine, despite the fact that a simple visual check showed that the tire was flat.

“Every level of automation works only if you apply another level just to make sure it’s working right,” he says. “If somebody has an automation solution, we’ll put in a check to make sure it’s reading properly.”

For those having problems managing their assets, that is often where the deficiency lies, Starr says. “People just want to put it in and not worry about it. And you can’t do that. Otherwise you have false positives, which is the kiss of death.”

This has created a bad taste for some people who don’t understand the importance of keeping an asset management program in good health. “They realize the power of it, but then forget about the maintenance to keep it there,” Starr says. “They don’t put any protective measures in place to make sure the results don’t erode.”

The asset management program that ABB put in place helped a customer in Indonesia increase production by about a million dollars each month. But then the customer opted to do its own service to keep it running. “Literally six months later, all the savings had evaporated. They didn’t do any maintenance,” Starr says. “They assumed they could do it on their own. They went back to their old methods and expected production to stay the same.”

Now they’ve had a service agreement in place with ABB for about 10 years. “They could see the benefit clear in dollars and cents,” Starr says. “This service is so inexpensive to guarantee their returns. It is sustainable and it does work.”

Ongoing service has become an important aspect of several asset management providers’ programs. “That’s something that we’ve focused on at Emerson in the last few years, offering service and support beyond the technology itself,” Briggs says. That was behind Emerson’s acquisition of Management Resources Group (MRG) in 2013, she adds, “to help people integrate these technologies and figure out how to build a reliability program.”

Changing philosophies

“At one time, service was a bad word. There must be something wrong with your automation solution if it needs service,” Starr recalls. “But now customers are saying, ‘Unless you show us a service program, we won’t even allow you to bid.’ The philosophy is changing. They now realize there is a service component. You monitor unscheduled downtime, and you offset that with proactive service.”

There was also a time when condition monitoring was considered too expensive. But that’s changing with the Internet of Things, and everything becoming more IP addressable, Price says. “When we started this whole venture, it was started from the fact that we’re monitoring the condition of these assets,” he says. “But people moved away from that because the systems were expensive. They were all proprietary, and used different gateways.”

But now there’s a resurgence back in that direction, Price says, largely because the Internet of Things, with devices so interconnected, makes things easier and less expensive. “People had it, and thought it was important, but moved away from it because they thought it was an expensive proposition,” he says. “Now we have all these touch points to understand that asset more. Understanding the condition of the asset is making a resurgence.”

Lacking Resources, Know-How

Though almost two-thirds of our survey respondents already have an asset management plan in place, some have no plans in the foreseeable future to implement one. For the most part, though, it’s not because they don’t think it will deliver results. Very few of them actually lack the faith. What they lack more are the resources or information needed to get started.

The chart above shows what’s holding everyone back from implementing asset management—whether they have plans to in the near future or not. Of those that have no plans to implement, almost 47 percent said they didn’t know enough about what options are available.

That is even more the case with respondents who said they plan to implement an asset management program sometime in an undetermined future. All but one of them indicated they lacked the resources, the knowledge or both to get started. For those with a plan to implement within the next 12 months, that swayed considerably toward the resources side, with two-thirds of those respondents saying they lacked the necessary resources.

But in some cases, they’re just not seeing the value. There’s “no clear or compelling business case,” as one respondent put it. In fact, about 15 percent of those who haven’t implemented asset management responded that it was because there was no need to improve production at their plants.

That attitude could be coming directly from the plant floor, or from on high. “My biggest issue is getting management support with all of the other plant issues,” says one respondent.

About the Author

Aaron Hand | Editor-in-Chief, ProFood World

Aaron Hand has three decades of experience in B-to-B publishing with a particular focus on technology. He has been with PMMI Media Group since 2013, much of that time as Executive Editor for Automation World, where he focused on continuous process industries. Prior to joining ProFood World full time in late 2020, Aaron worked as Editor at Large for PMMI Media Group, reporting for all publications on a wide variety of industry developments, including advancements in packaging for consumer products and pharmaceuticals, food and beverage processing, and industrial automation. He took over as Editor-in-Chief of ProFood World in 2021. Aaron holds a B.A. in Journalism from Indiana University and an M.S. in Journalism from the University of Illinois.

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