Archive | August, 2006

191

12:44 am
August 2, 2006
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Industry Outlook: They Called Me Nuts

thomas burke

Thomas J. Burke, President & Executive Director, OPC Foundation

Yes, they really did call me nuts-and a few other names, too. They told me I was crazy to suggest that competitors would work together to develop an interoperability standard, which they would then build products to support. As it has turned out, however, that wasn’t such a nutty idea after all.

Like other industry standards, developing this one did require competitors to collaborate with each other. Enhancing it demanded even more intense collaboration with both vendors and other competitive standards organizations-all focused on creating a successfully deployed standard that addressed multi-vendor interoperability.

As you probably know, many industry standards are not worth the paper they’re printed on. For example, a standard could be technically superior and well on the way to solving world hunger, but end users would have to embrace it and insist (through their purchasing power) that vendors actually build solutions based on it. Otherwise- despite good intentions and sound science–such a standard wouldn’t be considered “successful.”

But, back to my crazy (some said “fundamentally flawed”) dream of total interoperability. . .

Because I had been told so many times that it would be impossible to achieve cooperation among competitors, in the beginning we chose to solve a problem that the vendors themselves wanted. The side effect would be that we actually were solving a problem that end users could benefit from.

To do so, we hand-picked a small set of competitive companies to work together, hoping to build consensus and adoption among them first. Later, we would prove the technology and massmarket it to others in the hope that they would adopt the technology for total interoperability across the automation domain. That’s when reality set in.We never could have imagined the challenges and uphill battle we would face attempting to get our standard adopted by those outside our initial task force of core companies.We learned plenty in the process, though, including:

  • That you must solve real-world problems that vendors and end-users want solved
  • That the business value proposition in all cases must be the fundamental reason for a standard
  • That the guiding principle is one of achieving consensus through collaboration with vendors and consortiums
  • That competitors must check their weapons at the door
  • That success is measured by adoption-the best solution might not be the most feasible one

This year, the OPC Foundation celebrates its tenth anniversary. That’s 10 years dedicated to building interoperability-one step at a time. To say that I am delighted with the adoption and support of both OPC members and non-members alike would be an understatement. It has been a remarkable journey. Through it all, I’ve tried to remember the following advice I received early in my career. . .

“Maintain, at all times, a positive, constructive, progressive attitude towards your job, your company and your working associates. Always think in terms of how things can be done, never in terms of why they cannot. Such an attitude leads upward. An attitude of indifference can only lead to mediocrity and failure.” I trust these words will encourage you, too, as you pursue your own crazy, nutty dreams, whatever they may be. MT

thomas.burke@opcfoundation.org

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200

12:42 am
August 2, 2006
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Uptime: The Least Defined Of All Industrial Activities

 

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Bob Williamson, Contributing Editor

What are the perceptions, and the reality, of “maintenance” in today’s world? While there are many recognized national and international standards (definitions, metrics, measures, methods) for workplace safety, quality, environmental, health, banking & financial, pharmaceutical, aircraft and even nuts, bolts and road signs, there are no broadly recognized standards for industrial maintenance and reliability (M&R).

 

Sure, there are bits and pieces, terms and definitions. There are military standards, Automotive Engineering standards, emerging European standards, industry-specific standards and others. Some large industries even have their own M&R standards. But, there are no overarching standards for M&R “best practices”and how to consistently measure their attainment-despite Edwards Deming having long ago reminded us that “you cannot improve it if you don’t first standardize it.

Given such a perennial void, many large companies and consultants have created their own unique ways to measure M&R activities and effectiveness. That’s helped make “standardization” even more difficult.

The Society of Maintenance & Reliability Professionals (SMRP) Best Practices Metrics Committee has set out to identify and define the most important aspects of maintenance and reliability. Since beginning in earnest fall 2003, the committee has defined five major categories, including 46 individual metrics, now in varying stages of development. Still, until these and other standards are adopted, “maintenance”will continue to be the least defined of all major industrial activities-an aspect of our profession that I recognized back in 2004 as a member of the SMRP committee.

Standardizing M&R metrics is an extremely critical endeavor that will allow us to make decisions about our equipment care practices based on objective FACTS, rather than opinions or assumptions. (Refer to Occam’s razor, defined in the July 2006 installment of this column: the decision or explanation with the fewest assumptions is liable to be the correct one.)

Let’s look beyond specific “M&R metrics”for a moment and consider the terminology and even the buzzwords associated with our profession.”Maintenance,” for example, means sustaining a desired level of performance.Mechanics, however, were called “fixers”in the 19th century textile industry-a term that carries over to this day. In many plants, “maintenance”is dominated by fixing things that break-repair. In turn, this sets the stage for the popular misconception that the primary job of maintenance people is to “fix things that break.”Ugh!

Who actually performs industrial maintenance work? It’s the mechanics, general mechanics, technicians, multi-skill mechanics, journeymen, craftworkers, skilled trade workers, machinists and, yes, the fixers, among us. In some plants, there are specific “trades”(electricians, instrument mechanics, mechanics, welders, millwrights, machine repairers, HVAC/ refrigeration techs, setup mechanics, etc.).While some of these job roles are very specific (e.g. HVAC/refrigeration techs), others can be quite broad (e.g. general mechanic). The U.S. Department of Labor has historically lumped these jobs into the classification of “Industrial installation, maintenance and repair occupations.” Job-specific maintenance training and qualification standards typically have not existed!

A project started in 1997 by the Manufacturing Skills Standards Council (MSSC) has created “A Blueprint for Workforce Excellence”that defines skills and knowledge standards for six broad job concentrations, including industrial maintenance, installation and repair occupations. The MSSC skills certification system, defining core skills and knowledge, common across 14 manufacturing sub industries, has been published. It’s a great start to begin developing industry and job-specific training and qualification for front-line maintenance personnel.

Terms that define how “maintenance”work gets accomplished can be confusing too: self-performed, contracted out, supplemental contract and operatorperformed maintenance. The “age of Lean manufacturing” has contributed new buzzwords to the mix, including “outsourcing”(referring to manufacturing by outside/offshore suppliers) and, now, “outsourcing” of maintenance. (Then, of course, comes the latest wrinkle: “in-sourcing,”or bringing back unsuccessfully “outsourced”work.) Unfortunately, the term “outsourcing” has taken on some rather negative connotations out on the plant floor. That’s because it typically means job loss when we “outsource”all or part of the equipment and facility maintenance functions.

In too many businesses, maintenance continues to be viewed as an “overhead expense”or “indirect cost.”The Quality Revolution of the 1980s attacked maintenance as a “non-value adding”function in manufacturing plants. Today, many Lean leaders continue to label maintenance as a “non-value adding (but necessary) activity.”Ironic, isn’t it?

The very focus of a maintenance group tends to be the company’s assets-in many cases, its single largest investment-its equipment and facilities. Yet, in countless organizations across this country, those assets that enable so much generation of revenue are being entrusted to the care of “non-value adding”personnel. Ugh!

Words (and labels) are powerful. Every time we speak and act, we influence our profession, our future or someone’s perception of our business- be they CEOs, plant managers, prospective employees or students.While I’m not pleased that “maintenance”still is the least defined of all major industrial activities, I am delighted that positive change seems to be underway. To keep it on track, we all should strive to better “define”ourselves.

We need to stay focused on the true mission of M&R in today’s rapidly changing, globally competitive economy.We also need to choose wisely when it comes to the terms we use to define M&R. Avoid using buzzwords; they can send very mixed messages. Support consistent and objective metrics and measures of the M&R activities in your plant or business. Most importantly, keep your eyes on the prize. Properly maintained, reliable equipment lowers operating costs and improves the competitive position of your business-and our Nation! MT

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230

12:38 am
August 2, 2006
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Listening To You… And Responding

bill_kiesel
Bill Kiesel, Vice President/Publisher

As you go through this issue of MAINTENANCE TECHNOLOGY, you may be thinking that its purpose is strictly proprietary – just another product of a for-profit magazine publisher. It’s not. Our mission runs much deeper.

Our goal—as it has been for almost 20 years– is to regularly deliver timely, relevant information on strategies and solutions that help your operations continually run better, smarter, safer and more cost-effectively. We do this through a variety of value-added media vehicles, including monthly print publication(s), monthly e-Newsletters, special sections and themed supplements, www.MT-online.com and technical conferences and product exhibitions.

The past year has seen significant changes at MAINTENANCE TECHNOLOGY. To better serve you, we’ve brought new energies into our organization, and all of us have been working hard to strengthen our commitment to you–and helping you grow your own businesses. But, successful publishing ventures like ours don’t operate in a vacuum. Many of our recent changes have been based on your specific feedback.

No doubt, you’ve already noticed changes in editorial direction (including more emphasis on successful, best-practice case study articles), changes in size and content of some regular columns, letters to the editor, more news, book reviews, a broadening of the products and markets that we cover, etc. We bet you’ve also noticed a change in our approach to visual elements, some of them subtle—others, including our colorful and compelling new cover designs, not so subtle.

The changes at MAINTENANCE TECHNOLOGY, though, go well beyond direction and design. We’ve also added several ancillary products to keep you more informed of crucial industry issues. Take, for example, the regular UTILITIES MANAGER supplement we launched this year. It focuses on helping plants and facilities across all industry sectors optimize their electrical, gas, compressed air, water/wastewater treatment, refrigeration, steam and hot oil systems—increasing reliability, reducing downtime and taking a bite out of their energy bills in the process.What company isn’t interested in those types of successes?

As part of our electronic link to the marketplace, we are continuing to upgrade our monthly e-Newsletter and www.MT-online.com offerings. Going forward, look for these products to improve even more (and to become your number one connection( s) to the maintenance and reliability arena).

Finally, we recognize that the development and availability of a skilled workforce are key concerns for most of our readers.Moreover, we know you have great respect for ongoing professional development— and are constantly seeking ways to enhance it for yourselves and others within your organizations. These issues are real drivers for us, too. That’s why we will continue to identify, develop, grow and improve educational opportunities for you, including our annual Maintenance & Reliability Technology Summit (MARTS), scheduled for April 16-19, 2007, in Rosemont, IL. MARTS 2007 is now in its final planning stages.You’ll want to put it on your own calendar ASAP as your premier “must attend” professional development event for next year.

We know that you and your operations are constantly being challenged by a changing world and economy. Just remember that you’re not having to go it alone. MAINTENANCE TECHNOLOGY intends to be right there in the thick of it with you, keeping you up-to-date on all the issues and technologies critical to the maintenance and reliability community–and focused on all the opportunities. But, we can’t fulfill our end of the bargain without your input and support.

We need you to tell us what’s on your minds. Don’t hesitate to stay in touch with me personally. My e-mail address is bkiesel@atpnetwork.com – I encourage you to use it. In the meantime, stay tuned. . . there’s lots more to come! MT

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192

12:35 am
August 2, 2006
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Industry Outlook: Core Values – Global Competition Drives Maintenance Partnering

Saying global competition is the main trend facing manufacturers is both dimly trivial and deeply true.

Manufacturers are faced with high-quality, lowcost products from countries where quality competition was previously unseen. We face global competition in our own companies as corporate planners weigh financial benefits of existing plants in developed economies, or new plants in growing economies.Contrary to those declaring manufacturing’s demise, we believe manufacturing will continue to be important here. But, we also believe manufacturing can no longer play by “old rules.”

We believe capital expenditures as a panacea is the biggest “old rule” that no longer applies. According to ARC Advisory Group1, capital expenditures as a percent of revenue have declined annually by 4.3% since 1997, due to efficiencies gained through mergers, productivity increases and a shift in manufacturing competencies to partners.

0806_outlook_7_img_1Driving partnering is the willingness to recognize that we can’t be good at everything. In Profit From the Core2, Christopher Zook notes that achieving sustained, profitable growth is difficult without having at least one strong, differentiated core business. Operational execution of this core business requires selecting core business processes. Maintenance is a process that more manufacturers are deciding is not core (see Fig. 1).

A major paper mill in the southern U.S. chose ABB as a partner to assume maintenance responsibility, deciding ABB can better improve reliability. A greenfield mine in Canada chose ABB as maintenance partner, banking (successfully) that ABB’s deep reliability knowledge would help start the mine faster. A major tire company, with a tough automotive industry, rising material costs and Chinese competition, selected ABB as a maintenance partner to help improve efficiency, productivity and competitiveness.

Transferring maintenance to a partner is a big step. Yet, it is possible to decide maintenance is not core without transferring it.

A major North American chemical maker identified core businesses, and then chose ABB to coach it to higher reliability. A major North American food company selected ABB to coach it to more efficient MRO processes. A major building products company with few maintenance people chose ABB to develop and implement its maintenance practices.

With global competition as our primary challenge, we must ignore the old rule of “spend capital and make more,” and embrace the new rule of focusing on core products and processes. Then, we should consider partners who are world-class at the remaining processes. MT

References
[1]”Capital Expenditure Survey 2006,” by David Humphries. Published in 2006 by ARC Advisory Group [2] Profit From the Core, by Christopher Zook. Published in 2001 by Harvard Business School.

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192

12:33 am
August 2, 2006
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Industry Outlook: Asset-Lifecycle Interoperability And A New Asset Management Paradigm

paulgray

Paul Gray, CEO, NRX Global

Two of the immediate challenges faced-by asset-intensive process and discrete manufacturers and public sector entities are realizing their full investment in asset management and improving interoperability across the entire asset lifecycle.

Owner operators are under increasing pressure to optimize business processes to improve plant performance by increasing reliability, availability, and operations and maintenance productivity. However, many asset owners have limited asset visibility and are experiencing user adoption issues with their enterprise systems. For existing assets and facilities, this has hindered an asset owner’s ability to transition its organization from a reactive to proactive asset management paradigm and to collaborate effectively with external partners, such as EPCs and OEMs. The ability to perform these things better is critical, as spending on MRO parts and labor can be up to 40% of operating expenditures for asset intensive companies.

For new assets and facilities, the information needs of “design and build” stages are quite different from “operate and maintain” stages. Data exchange that bridges information gaps during the commissioning phase often falls short.According to the National Institute of Standards and Technology, the lack of interoperability in the capital facilities lifecycle costs U.S. organizations $16 billion annually-$10 billion of which is borne by asset owners.

This industry dynamic clearly is creating strong growth in the demand for Asset Management tools, as evidenced by the rapidly emerging (100%+ annual growth) multi-billion dollar market for Master Data Management (MDM) solutions. Our company is committed to meeting that demand. Already, companies such as Valero, Chevron, American Electric Power, Conectiv Energy,William Wrigley, Jr.Co. and Weyerhaeuser are leveraging our solutions to pursue operational excellence-and they are paying off for them.

For example, following a fire in a major coal handling/barge unloader system control room at an American Electric Power plant, it typically would have taken three to four days to get back to normal-even with the most experienced people on the job. According to management, though, with the NRX master data management solution in place, personnel had all the information they needed to complete their purchase orders in just four hours, thus accelerating the supply chain process and greatly reducing system downtime.

NRX also is joining forces with asset lifecycle ecosystem partners such as SAP, IBM and EMC Documentum, EPC firms and industry standards consortiums such as FIATECH to tackle the interoperability challenge. Our shared goals are important to everyone. According to Sid Snitkin, vicepresident & GM, Enterprise Services, ARC Advisory Group,”To achieve asset lifecycle interoperability, the data in the Enterprise Asset Management system, content in the document repository and information in the engineering data warehouse need to be related and interoperable.”

We believe that NRX is one of the few, if not the only solution provider specifically focusing on the challenge that Sid Snitkin references. Furthermore, we will continue striving to provide value by supporting the collection, transformation and dissemination of information across all Design, Operate and Maintain factors. An asset master data foundation is an essential input for process improvement and reliability initiatives where information integrity is a key. Providing these solutions will be how we best serve our customers into the future. MT

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192

12:30 am
August 2, 2006
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Industry Outlook: Helping Drive Maximum Asset Utilization

ken brown

Ken Brown, President, Invensys Process Systems

The biggest challenge that our customers face today is how to drive maximum utilization and contribution from their human and industrial assets–without compromising asset availability or human safety. To a large degree, this is a knowledge management problem. In other words, how can personnel in industrial enterprises most effectively capture, retain, disseminate and apply critical plant-, supply chain- and market-level knowledge across their organizations to drive overall asset performance?

At the plant level, process-related knowledge requirements include real-time insight into process variables, understanding process control strategies and the knowledge to understand how interactions between these variables affect both process and finished product. A great amount of asset-related information also is needed at the plant level.What physical assets (instrumentation, equipment, process units, etc.) are available and what is their current status? When were they last inspected, maintained or overhauled? Are they showing signs of performance degradation? If so, at what point will this degradation begin to affect the process–and how much?

At the supply chain level, it’s critical to have an accurate understanding of the various options available for obtaining raw materials from suppliers and how these will affect the ability to produce and deliver on-specification product to customer when it’s needed. At the market level, planners need to understand market dynamics such as supply, demand, and pricing for raw materials, intermediates, and finished products; and be able to accurately interpret the likely impact of geopolitical activities on these dynamics.

Invensys Process Systems is helping our customers to capture and apply this type of critical knowledge through our asset performance management approach. Utilizing a variety of innovative methodologies and applied solutions, asset performance management (APM) provides our customers with the capability to balance asset availability and utilization to respond to rapidly changing market demands, and thus drive business value. Our new enterprise control system provides a platform for delivering APM. (What’s really different about this system is that rather than replacing existing automation and information assets, it’s designed to build upon and enhance the automation and information assets already in place in our customers’ plants–providing a cost-effective means to unify these assets into a common data and application model.)

The APM approach forces our customers to take a more holistic view of the plant and the enterprise. This type of view breaks down the silos between operational, safety, maintenance, engineering and business departments.

Our new enterprise control system collects data from across the plant, aggregates and combines this data with business intelligence, then transforms it all into actionable information and delivers the information to the right people, at the right time, in the right context. It also provides the means to capture, deploy and re-deploy equipment, process and application knowledge (as nested and reusable objects) that would otherwise be lost through attrition.

This critical knowledge can be–and should be– used to help end users move to a more predictive and proactive operating model to drive overall asset performance. This is Invensys’ focus today and will remain our focus for years to come. MT

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172

12:27 am
August 2, 2006
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Industry Outlook: Reducing Electricity Consumption

Over the last several years, electricity costs have risen in some areas to 20-year highs. Due to high demand, some cities have suffered brownouts and blackouts. Over 60% of a manufacturing company’s electricity bill is consumed by running electric motors and this increased cost hurts profitability.

At Baldor,we view our electricity cost as a cost we can control. We’re consuming one million fewer kilowatt hours today than we were five years ago. Reducing costs by conserving electricity is something every manufacturing company can do. It is good for profitability and the environment.

Since 60% of a manufacturing company’s electric bill comes from operating electric motors, this is a good place to start your conservation efforts. Many efforts to conserve energy involve unpopular tradeoffs. The use of high-efficiency motors and drives does not.We can turn up our air conditioning thermostats and sit in buildings that are too hot, or we can reduce the costs of running our air conditioning by using high-efficiency electric motors and drives.

An industrial electric motor will sometimes use 40 times its original cost in electricity in the first year. To put this another way, over 97% of the lifetime cost of a motor is its electricity consumption. With this in mind, industrial motor users should select a motor with the highest efficiency when replacing failed motors or purchasing new equipment.

The small premium you pay for a high-efficiency motor is often earned back in the first few months, depending on the duty cycle and the cost of power. The savings in electricity will then continue year after year. Since motors often last 15 to 20 years, the savings can be substantial–if the right decision is made up front.

Further savings can be achieved by using adjustable speed drives to control the performance of motors in applications, such as pumps and fans. In some cases, an adjustable speed drive connected to a high-efficiency motor can save as much as half the electricity consumed by that motor.Today, only 5 to 10% of all industrial motors are equipped with adjustable speed drives–and according to the U.S. Department of Energy, as many as 25% should be.

A recent Department of Energy study concluded that if all motors were replaced with today’s high-efficiency motors, and if drives were used where appropriate, up to 18% of our electricity consumption in industry could be saved. This would be over a billion dollars of savings that could be used to improve industry’s profitability or competitiveness in world markets. If we lower electricity consumption, perhaps we wouldn’t see blackouts, brownouts and high electricity costs.

As United States industry faces more competition from producers around the world, and as we try to manufacture products that can be competitively sold in the global marketplace, we must always remember that electricity is a substantial part of our cost. But, once again, it is one you can control. In doing so, you will be benefiting both your bottom line and our environment. MT

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197

12:25 am
August 2, 2006
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Industry Outlook: Turning Maintenance Into A Competitive Advantage

mike laszkiewicz

Mike Laszkiewicz, Vice President, Customer Support & Maintenance, Rockwell Automation

The biggest challenge currently confronting manufacturers is achieving and sustaining a competitive advantage.Having the right technology in place isn’t enough; today, advantage comes from having the proper resources in place to develop and support optimum technology performance. Companies of all sizes are finding that one technique for achieving a competitive advantage is implementing a comprehensive asset utilization and maintenance program that is aligned with their overall business goals.

Turning maintenance activities into an advantage requires managing production assets efficiently and achieving the optimum level of asset utilization. Companies can no longer afford to overlook the value of a strong maintenance program. A comprehensive strategy balancing the predictive, preventive and reactive maintenance needs of the organization will lead to lower production cost per unit and increased production capability-both of which impact the bottom line.

When turning maintenance into a competitive advantage, no one approach fits all situations. At Rockwell Automation, our philosophy is that individual needs and dynamics are different for each customer.We believe in finding the right balance of predictive, preventive and reactive activities to support a company’s business goals.

Implementing maintenance activities of any form will positively impact a company’s performance, but realizing the true value of maintenance requires an overall strategy perspective. Every maintenance program should be viewed as a long-term strategy, measured at short-term increments, using business metrics such as Overall Equipment Effectiveness (OEE),Return on Net Assets (RONA) and asset availability.

The best approach for many plants will be to implement maintenance initiatives in phases, starting with the most critical equipment and systems and then expanding. This is particularly true in smaller companies, where limited investment resources require starting small and adding new technology when the time is right. Any extent of strategic maintenance will reduce a plant’s total operating cost.

Determining the right mix starts with assessing a company’s maintenance processes to identify factors that inhibit overall performance.This requires understanding the criticality of the equipment and resources needed to support the activity. Once identified, we work with the customer to develop strategies and implement the techniques and resources necessary to meet the defined objectives. In some instances, this may mean implementing programs to reduce employee turnover, improving technology training or engaging an outside service provider for assistance.

The savings a company can anticipate realizing vary depending on the current sophistication of its maintenance strategy. Typically we see a minimum of 25% savings from the preventive maintenance programs. In the first year, these savings are realized through reductions in unplanned downtime and scrap and maintenance costs- with payback periods of four months or less. Many companies experience better results, reducing unplanned downtime 50% to 95% in the first year. As the program duration continues, the benefits increase as well.

Bottom line? Companies must realize that a comprehensive asset utilization and maintenance strategy can become a competitive advantage. To achieve this, however, they first must change their perception of “maintenance as a cost center” to one of “maintenance as a business strategy.” MT

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