Turn Assets into Dollars

It’s easy to turn assets into liabilities. A variety of solutions exist to turn them into profits instead.

An RFID tag is mounted on a forklift and connected to engine diagnostics. A technician just walks by the forklift and collects d
An RFID tag is mounted on a forklift and connected to engine diagnostics. A technician just walks by the forklift and collects d

What is an asset? Discussing asset management strategies and solutions leads to definitions as varied as type of manufacturing done at a facility and kinds of assets required. Types of solutions offered by suppliers are almost as varied as the number of suppliers. Solutions range from monitoring control valves in process manufacturing to managing maintenance inventory. All the solutions have one common element—they all are designed to provide significant returns by helping companies prevent downtime.

Houghton LeRoy, research director at ARC Advisory Group Inc., in Dedham, Mass., says he looks at many kinds of assets in his research. There are plant assets, ranging from valves to units to equipment. Then there are enterprise assets. In addition, he also follows fleet management, facilities and “linear assets”—for example pipelines, railways and the like.

Drilling down into asset management strategies, LeRoy says, “There is a downside to preventative maintenance (PM)—a strategy in which equipment is fixed before it breaks. Lots of PMs are unnecessary. Sometimes they even cause infant mortalities (or early failure of a device or piece of equipment). Condition-based maintenance, on the other hand, can minimize the number of PMs and lower the incidence of infant mortality, thus keeping machines running longer. Sometimes maintenance can make the situation worse. Maintenance and repair are not time sensitive, they are incident sensitive. Things fail based on condition or health.”

Todd Stauffer, PCS7 product manager for automation vendor Siemens Energy & Automation Inc., in Spring House, Pa., defines assets as valves, transmitters, motors, drives, smart motor control centers, analyzers and distributed control system infrastructure—in other words whatever’s in a plant. Says Stauffer, “Where asset management gets the most bang for the buck is monitoring motors and drives. The point is not just doing predictive maintenance on the motor, but in operating it at its most efficient point. An important point to consider as part of your maintenance strategy is that it is estimated that 60 percent of scheduled visits for maintenance are unnecessary. So most of the time you are checking on things, it’s a waste of time.”

Straighten up your crib

Imagine beginning a new job as maintenance manager for a Pepsi bottling company and having the regional manager walk through and comment on the sorry state of the maintenance parts crib. It happened to Tony Yanora in the Pepsi bottling plant in Detroit.

“I began looking for a solution to the numerous sensor and drive issues we had during the storeroom remodeling in March of 2003,” says Yanora. “Based on the number of parts we stored, it was obvious we were out of control in our ability to manage the inventory. Our personnel had to have a direct match of parts in order to complete a repair to an optic or proximity sensor, or we would order—in most cases on an emergency basis—a replacement.”

Many of the parts required by the production processes were from Milwaukee-based provider Rockwell Automation Inc., and Yanora worked closely with his representative from a local Rockwell distributor, McNaughton-McKay Electric Co. “When I was approached with a proposal from Rockwell, it appeared to meet all of my needs, and we were off and running. We developed a plan to assure that all of the expectations between us were reasonable and could be met.”

Ramp it up

Yanora entered into a Rockwell Automation Asset Management Program (RAAMP) agreement by which the supplier assumes responsibility for the maintenance stores. The supplier took an inventory and recommended ways to consolidate the inventory and also recommended types and amounts of spare parts required to keep the plant running. The business benefits from this parts management agreement include reduced inventory, less training expense, lower overtime cost and the ease of finding a part. Yanora adds, “We are in the midst of a step change in our efficiency averages. A number of factors are responsible for the increase, but the parts management agreement is a part of that reason. On average, we’ve seen about a 3.5 percent improvement over last year and we are still in an upward trend. I cannot comment on how many dollars a 1 percent efficiency gain is worth to Pepsi, but let me assure you it is substantial.” And the regional manager? He was delighted upon his return.

Another bottling company experiencing excellent returns from partnering with its supplier for maintenance of assets is Paris-based Pernod Ricard S.A. This company is the second largest operator in wine and spirits in the world. Managers at its North American bottling plant had gotten hung up on getting their computerized maintenance management system (CMMS) running, and forgot about the equipment, according to Dave Biros, business development director for reliability services at ABB, in Columbus, Ohio.

This left Pernod Ricard with the multiple problems resulting from lack of a systematic approach to maintenance and a system of reacting to breakdowns rather than anticipating problems and preventing those breakdowns. As a result, employee attrition was growing, while equipment performance and availability were declining. In fact, things were bad enough that the viability of the plant was a concern.

At this point, managers decided to talk with ABB about its PM-30 program—a hosted maintenance system in which the server is at ABB’s facility and the customer’s personnel input information regularly. ABB then provides reports daily to help discipline and streamline the customer’s preventative maintenance efforts.

As a result of the new system, Pernod Ricard showed an 8 percent improvement in line efficiencies, with a 5 percent to 15 percent reduction in cost of maintenance. Unplanned maintenance was cut by 44 percent. Management saw a 10 percent increase in staff utilization.

Get huge savings

How would these numbers that Chevron Products Co.’s El Segundo, Calif., refinery realized look to your management? The savings from an implementation of Emerson Process Management’s Asset Management Suite Device Manager included:

  • $45,600 saved on troubleshooting in one year

  • $136,800 saved by avoiding unnecessary valve maintenance

  • $90,800 saved by improving the performance of one steam control valve

  • $100,000 saved through a program of salvaging surplus valves.

Ken Howard, an analyst in the Instrumentation/Electrical Reliability group at the refinery, had to win over the maintenance department with the new asset management technology he brought in, but it paid huge dividends.

As Howard describes the history, he also describes how to win over the maintenance crew to new technologies. “A progressive engineer several years ago wanted to be the first to use Hart fieldbus interface on control valves, and set up a pilot project. He wanted to be able to look at various parts and document an asset’s performance. I didn’t have a lot of resources, so I went with an online monitoring system—the Asset Management Suite Device Manager from Emerson. The pilot was only steps from my office, so we ran wires from the valves to a computer there. The system has grown since then. Now, I’m linked to the shop and the server plus another station and many of the plant’s control valves.”

Howard says, “When I first started, they (the maintenance staff) figured I didn’t know anything about valves—and I did have a lot to learn. So, I used them as consultants.”

In one incident that turned the tide of acceptance, operators were complaining that a steam valve was frozen. “Maintenance wanted to blame me for the problem,” relates Howard. “They put a laptop on the valve and didn’t see anything. I went back to the office to watch on my asset management system. They fixed the blocks and stroked it. I called them and said it was only going 27 degrees, so it really wasn’t opening. They now knew that I could see the asset from my office. That’s when maintenance started to realize that we might have something here. You have to get maintenance involved in an asset management implementation for it to work.”

Being online in order to see and track the status of valves is valuable, as was seen at Chevron. Another aspect of online connections to assets is using a Web-based browser to look at what’s going on in the plant and make better decisions because of it.

Dave Wiedenfeld is group project leader at the Donaldson, La., plant of CF Industries Inc., a manufacturer of nitrogen and phosphate fertilizer products. He uses the Avantis.dss decision support tool from Invensys plc, the London-based automation conglomerate. The latest version contains a Web-based visualization tool that works with Microsoft Excel so that users can see their key performance indicators (KPIs). “With limited IT (Information Technology) resources, I can use this to do analysis faster than before. The instant feedback given by the system gives incentive to users to actually do the data entry. The dss kit includes basic KPIs so that we could get started. Then managers could see something and then tweak them to get the information they want. We’re gaining efficiencies in automated input, which means we have less clerical time and more time to think.”

Dig more coal

The Proficy Change Management system provided by GE Fanuc Automation, the Charlottesville, Va., automation supplier, paid for itself in less than six months through reduced downtime at the BMA Saraji open cut coking coal mine near Dysart, Australia. The BHP Billiton Mitsubishi Alliance (BMA) is Australia’s largest coal miner and exporter, and the world’s largest supplier to the seaborne coking coal market.

Engineers at the mine carried out programmable logic controller (PLC) and supervisory control and data acquisition (SCADA) maintenance manually. Documentation of changes was done by the “hope” method—they hoped someone did it. Of course, this method is not reliable, and it became difficult to track changes and to maintain the correct copies.

Automation IT, a Queensland, Australia integrator, designed and implemented an automated system to improve engineering processes along with reducing engineering and maintenance costs through implementing the Proficy Change Management software with a custom front end. The client/server architecture provided for a server housed at the central office, with clients located out in the mine. Users could diagnose problems without lengthy drives from the central office out to the sites.

In another application, this time fleet management, Clark Johnson, director of Emerging Markets for Premier Manufacturing Support Services Inc., in Cincinnati, a maintenance outsourcing company, describes a system for cutting maintenance costs and improving maintenance for a fleet of forklifts.

Premier, using technologies from Atlanta asset management supplier Infor and from Blue Dot Solutions, of Denver, has developed a fleet asset management solution using radio frequency identification (RFID) to track forklifts and optimize maintenance.

“We measure just two to four indicators on a fork lift, and this is enough to acquire sufficient knowledge about its use to be able to evaluate maintenance needs,” says Johnson. “The indicators include engine hours, up and down movement of the forks and a g-force sensor to measure acceleration and deceleration of the equipment. These readings are done in real time. The state-of-the-art prior to this was to have someone read the engine hour meter on the equipment. But these sometimes break. Or maybe they measure whenever the key is ‘on,’ not just when the engine is running.”

Automatic data

Johnson notes that a device connected directly to the engine is much more accurate. “Instead of manual data entry, someone just walks through the area with an RFID reader in a holster on a belt and automatically reads the devices,” he explains. “They return to the office, dock the reader and upload data directly to the computer and asset system.”

Premier is able to generate reports on utilization. A comparative analysis is possible, tracking products from several manufacturers, so after time, the best and worst forklift suppliers can be determined directly from the data. Adds Johnson, “We prefer to do PMs based upon total actual utilization because you lower the cost.”

So however you define it, asset management still turns things into cash. 

For more information, search keyword “asset management” at www.automationworld.com.

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