By Gary Nichols
, PE, Jacobs Engineering Group
ANALYZER Lifecycle Costing (LCC) is an accurate, descriptive, short name for an analyzer system reliability program, and “analysis and optimization of full lifecycle costs” is a functional, short description of the activities and results of a well-planned and well-run analyzer reliability program. This article describes and quantifies the lifecycle cost impact of typical analyzer system project issues and line items, which, if addressed early in the lifecycle of the project, can result in lifetime cost savings. It’s important to note that “project,” as used in the current context, means from concept to retirement, though retirement isn’t addressed here.
One can’t open a current issue of many trade publications without seeing an article with “reliability” in the title or section headings. In his article, "The Top Five Reasons Why Companies Don't Measure Reliability," Ricky Smith (Plant Services, December 2005) notes that, surprisingly, reliability still may be struggling to become part of routine management. Related terms include “asset management” and “asset lifecycle management.” Concurrent engineering (CCE) as Rich Merritt pointed out in "Back From the Grave," CONTROL, Oct. '04, is a closely related concept and project management tool that involves “…multiple people, organizations and/or companies in a control system project,” which “…goes beyond control systems to include the rest of the plant’s operations and functions, from design and construction to startup.”
Figure 1 below shows the lifecycle cost of a hypothetical, but representative, analyzer system project. For simplification, we’ll assume this is a small, standalone project to install a new analyzer system in an existing process unit. Figure 2 below shows the cash flows for the same project. Teh costs don't consider interest, inflation, and tax consequences.
FIGURE 1: LIFECYCLE COSTS
(Click image to enlarge.)
If we define the major lifecycle stages of a capital project or generic device as: 1) concept and planning, 2) design and development, 3) production and manufacturing, 4) operation and repair, and 5) wear out and disposal, then 65% of the project or device’s total lifecycle costs have been determined at the end of concept and planning, and 85% of its total lifecycle costs have been determined at the end of design and development, according to Robert Dovich and Bill Wortman in The Certified Reliability Engineer Primer, 3rd Edition. Of course, this doesn’t mean the money is spent and reflected as cash flow early in stages 1 and 2. Instead, its meaning is more subtle.
For those with experience in capital project engineering and maintenance management, the implication is that ongoing maintenance, service, and lifecycle costs can be optimized (minimized!) with more thought and attention in the early lifecycle stages before capital equipment, direct labor, or direct materials have been purchased or, perhaps, even estimated. This article will use these and other assumptions, which may or may not apply to the readers’ analyzer system projects and installations. Readers must work with their engineering, maintenance, and accounting organizations and relevant data to implement a valid, working analyzer system reliability program for a particular technical and business environment.
FIGURE 2: CASH FLOW
*Assumed percentage of cost commitment in respective stage for discussino purpose. Calculation Basis: Total Lifecycle Cost = $300,000. (Click image to enlarge.)
Production and Operation
Whether the figures of 65% and 85% apply to analyzers can be debated, but many readers can readily relate to stages 3 and 4 of a process analyzer’s lifecycle, especially when unnecessary costs are incurred. For example, during stages 1 and 2, special DCS needs may have been overlooked; an improper sample-handling system alloy may have been specified; ergonomics may not be fully vetted; and basic principles of sample-handling system design may not have been fully considered. Any of these oversights can necessitate inconvenient and costly (safety, time, money, and quality) reengineering, redesign, and replacement during commissioning and start-up. Even a Stage 1 decision can cascade to Stage 2 redesign because the design team failed to note that the analyzer is more critical during process plant upsets and other irregular operations than in steady-state or normal operations.
The following lists describe several typical project scope development and preliminary engineering-stage items for capital analyzer projects at stages 1 and 2. Though all should be addressed during these early stages, they’re grouped to characterize the stage of an analyzer project when they’re most likely to arise if not addressed early.