As economic recovery gains momentum, increased activity is straining processes, equipment and patched networks of outdated machinery. As a result, plant managers are faced with multiple operational challenges. Suddenly, multiple assets need to be upgraded or replaced to take advantage of IoT technology and digital thinking. But, where to start? Along with providing managers with a wide-angle view into the plant’s operational framework and helping spot early warning signs of impending issues, condition-based monitoring (CBM) can help determine priorities for capital investments.
Undertaking several initiatives at once is hard. The wish-list of sensor-enabled machinery, equipment for automating assembly, and robotics for managing tedious tasks can be lengthy. CFOs are bombarded with requests—each promising return on investment (ROI) benefits.
In addition to limited cash reserves, the workforce is also limited, reinforcing the need for strategic modernization of assets. Replacing retiring baby boomers, especially those with IT skills, is proving to be challenging for many companies. So, even if the company has funds to invest in machinery with high-tech components and network abilities, the internal IT team may not have the bandwidth to support the efforts—especially upfront deployment.
Enterprise asset management (EAM) software—especially when used to its full potential—can help managers make well-informed decisions about asset strategies and investment of capital funds. Unfortunately, companies can become stalled in early stages of the EAM maturity model, using the solution in a purely reactive approach—responding to incidents and equipment failures. The maturity model classifies EAM users as typically progressing through three stages of maintenance sophistication. Each stage represents more advanced applications and fuller use of the functionality. Stage one is a reactive model, responding to failures when they occur. In stage two, the company moves to a more predictive application of the tools, and uses sensors to monitor for early warning signs of deterioration. By spotting potential issues early, preventive maintenance can be scheduled during non-peak times, creating the least amount of interruption. The third stage in the maturity model is condition-based monitoring, which views multiple assessments of the asset, from its status to its critical role or cost to replace.
Experts say that a reactive, elementary maintenance program can cost three to four times more than programs that focus on preventive maintenance. This is largely due to the high cost of downtime and the inefficient use of technicians’ time as they rush from emergency to emergency. Deloitte says that unplanned downtime cost industrial manufacturers $50 billion last year and reduced productive capacity by 5-20%.
A more mature approach
CBM maximizes the potential benefits of the EAM solution. This approach generates a detailed index rating for each asset, monitoring a wide range of factors from expected lifespan and critical ranking of the asset, to expected cost and time to replace. This allows managers to see at a glance where the most pressing issues lurk.
CBM supports multiple roles in the organization, from operations and line-of-business managers to the financial team and C-suite officers, who formulate strategies and sign off on investments. Asset managers can see beyond the surface-level checklist of common issues, like flat tires or belts that need to be replaced. With CBM, it becomes possible to understand the complex interrelationships of multiple factors at once, and answer more difficult questions, such as whether an ailing asset should be repaired, upgraded, or retired and replaced.
Independent surveys indicate industrial savings that can be achieved when CBM is deployed:
- Reduction in maintenance costs: 25-30%
- Elimination of breakdowns: 70-75%
- Reduction in equipment or process downtime: 35-45%
- Increase in production: 20-25%
Six benefits of condition-based monitoring
Enterprises with aggressive plans for growth or large volumes of costly, mission-critical equipment will reap major benefits from upgrading to a CBM approach. Examples include:
Objectivity: Asset managers often struggle to interpret anecdotal reports from users regarding assets not living up to expectations or complaints of assets failing. The dialogue between those who purchase and those who use the assets can become contentious and emotional. A clearly defined index system that assigns points to an asset based on measurable facts, not frustration, makes it easier to discuss core issues and make objective evaluations.
Flexibility: Condition-based monitoring solutions can scale as the company grows or as its needs change. Highly flexible solutions allow managers to add assets, change priorities, adjust formulas and continually reevaluate what asset criteria should be monitored. The flexibility means the system can manage a variety of assets, across multiple locations, and can consider thousands of data points.
Funding justification: A condition-based system will provide the facts needed to justify an investment in asset replacement or repairs. It provides the ability to investigate “what if” scenarios and consider many influencing factors.
Resource planning: With a thorough understanding of asset conditions, managers can plan use of resources from personnel to capital. Long- and short-term plans can be created that prioritize responses based on need and opportunities. Various teams affected by the asset plans can be informed in a timely manner, so they can adjust schedules as needed.
Operations planning: The condition of assets and plans for replacing or upgrading them affect operations at multiple levels, from capacity planning to staffing the warehouse. A thought-out, well-documented plan based on condition assessment can be shared with operations, so they can make adjustments and communicate with stakeholders such as sales and purchasing.
Capital strategies: By viewing the short- and long-term needs for assets, managers can develop sound strategies for investing capital based on priorities, not knee-jerk reactions. Data can be used to make pragmatic proposals to top decision-makers, showing justification of the investment.
Growth depends on top-notch performance and often, investment in new or upgraded machinery and equipment. These demands for assets place strain on the IT team as well as finances. CBM allows the company to understand the multi-dimensional view of assets and set priorities based on an index rating, not anecdotes or hunches.