MIKE STONE, GREENVILLE, SC, INFOR
OIL AND GAS companies currently face a volatile market. Yet, over time-regardless of the market environment-oil and gas executives have routinely identified cost control as one of their top challenges.
While some companies cut IT investments during a turbulent or depressed market, others have found that such a market is precisely the time when the cost-savings benefits that can be had with enterprise asset management (EAM) software will have the greatest impact. These are the top 5 ways oil and gas companies are saving money with EAM solutions:
Planned work
Planned work is safer, faster, more efficient and less expensive than unplanned work. An EAM system helps identify the right parts, permits, instructions, safety equipment and skills up front and avoids wasted time and effort-essentially, rework. Coordinating maintenance schedules with production also helps provide adequate time to do the work instead of the usual pressure to get equipment back into production when it breaks down, increasing the potential for later rework.
Safety is improved because certifications are taken into account. Tasks often require certified skills. When scheduling work, the system can help prevent non-certified people from being assigned the work with pop-ups that indicate the skills of the worker in question don't match the requirements.
Additionally, planning the right permits, safety instructions, personal protection equipment, and access to safe work videos goes a long way towards mitigating personal injury, damage, and other safety issues.
Finally, including testing repair work is a critical step-and a maintenance best practice. If a seal on a pump is repaired, for example, the pump should then be tested to make sure it's in "like new" condition. Equipment should undergo commissioning testing just as new equipment would when initially installed to identify any issues with vibration, alignment, or other issues. Reactive maintenance doesn't always provide the opportunity and instructions on proper start-up and commissioning procedures.
A company that finds itself doing a lot of rework and reactionary maintenance should take a hard look at its preventive maintenance program and overall approach to maintenance best practices.
Reducing spare parts
Most EAM systems provide inventory analytics to identify obsolete, duplicate and unused parts. Additionally, ABC analysis helps classify items according to their consumption, such as:
- items with the highest annual consumption value. The top 70-80% of the annual consumption value of the company typically accounts for only 10-20% of total inventory items.
- items with a medium consumption value. These comprise 15-25% of annual consumption value and typically account for 30% of total inventory items.
- items with the lowest consumption value. These items are the lowest 5-10% of the annual consumption value and typically account for 50% of total inventory items.
Removing obsolete, duplicate and unused parts reduces inventory costs. Additional analytics can point out inefficient stocking strategies to further optimize inventory costs.
Procurement practices can affect spare parts dramatically. The procurement team is often tasked with getting parts with the lowest costs. However, "lowest cost" should include total lifecycle cost, not just the lowest bid. For example, cheaper seals, bearings, or any other part could involve a lower outlay in the beginning, but will have to be replaced more often than higher quality items.
The best scenario involves a partnership between the procurement and engineering/maintenance teams. Procurement personnel needs to understand lowest total lifecycle cost, while the engineering or maintenance staff knows how the parts hold up (or don't) on a day-to-day basis.
Finally, suppliers should be able to back up warranty claims with data so the lowest total lifecycle cost can be accurately calculated.
Reducing equipment failures and improving uptime
Predicting issues before they become failures can be accomplished through a number of methods such as risk analysis; failure mode, effects, and criticality analysis (FMECA); and reliability centered maintenance (RCM). Some EAM systems offer reliability, planning, and analysis modules that can help define risk for a location, a system, a position, or an asset.
These types of maintenance analyses bring to light the proper maintenance approach to equipment, whether it's condition monitoring, preventive maintenance (PM), or run to failure. They also provide ranking by risk to help sort through a company's maintenance work backlog and bring focus to activities for the most important assets. They provide identification of inspection requirements and proper PM to avoid equipment failures and improve uptime.
Risk analysis is the starting point. Analyzing both the risk of failure and the consequence of failure is key. A failure that affects convenience, while important, is not as critical as one that impacts operations, safety, health, or the environment. The backlog of work should be prioritized according to the risk analysis and overall priority.
Next is FMECA-which describes how equipment fails and the effects of its failure. FMECA is a bottom-up analytical method performed at either the functional or part level. Its criticality analysis zeroes in on failure modes with relatively high probability and severity.
Finally, RCM takes those failure modes and, through the analysis, yields understanding of how assets fail and helps define how to identify failure modes before they become problems. Consider a pump attached to a motor, for example. That pump has caustic acid rolling through it. If the motor fails and the seal bursts, hot acid spews everywhere. But the cause of the failure may not be immediately apparent. The motor may be running hot, or it could be installed incorrectly and fail due to vibration, or it could have an electrical surge. In such a scenario, one or more sensors on that device can help determine if the temperature is high or vibration or electrical consumption is over a certain threshold. RCM analyses help identify what to look for and how to gather the information, in ways such as visual PM inspections, sensor-based readings, and operator observation.
RCM will also help determine if condition-based maintenance is appropriate. Not all equipment should be fitted with sensors, so in these cases, the severity of failure and cost of downtime will help determine whether condition-based, preventive, or run-to-fail maintenance is indicated.
The Industrial Internet of Things (IIoT)
The cost of sensors is decreasing, making them more affordable, so there's greater potential for instrumentation on equipment than ever before. Now, even less-critical equipment can be economically monitored. Many EAM systems can accept equipment operating conditions (pressure, temperature, RPMs, energy consumption, and so on) and perform dynamic analytics to identify issues to avoid equipment failures.
When RCM indicates that condition-based maintenance is required, sensors are installed on the asset. RCM can be used to determine where IIoT makes sense-where it will provide the best return on investment. Sensors aren't likely on non-critical assets. Criticality and cost of downtime will point the way to where sensors are needed.
The sensors transmit bulk, not filtered, data. An EAM solution picks up the data and continuously analyzes against thresholds that have been set. If readings go above or below, the system provides trends over time to ensure a real trend and not a false reading-which can be caused by degradation or bumping of a sensor, for example. If the trend proves real, an alert or work order can be issued. Preplanned work orders can be created to take care of the problem before it fails.
The EAM system can also provide a broader view. Predictive analysis can be achieved by combining temperature, energy consumption, and many other types of readings along with the known history of the asset-its mean time to failure, for example.
Warranty coverage
Effectively managing equipment warranties can significantly reduce maintenance expense by shifting costs to manufacturers and suppliers. When needed work is identified, EAM software can alert supervisors to assets under warranty, ensuring that warranties aren't inadvertently voided due to unauthorized changes to equipment. Some EAM systems can also manage campaigns to effectively handle part recalls by identifying specific equipment that contains those parts and issuing work orders for remediation.
EAM software tracks which assets, which components of those assets, and which spare parts are under warranty-along with the nature of the warranty. The maintenance team is alerted not only about what's under warranty, but how to claim the warranty coverage.
In some cases, effective warranty management can save enough in costs to pay for the entirety of the EAM system-license and implementation. That may sound like a bold statement, but several companies have happily found it to be true-and not only for new plants or expansions, but for existing plants as well.
Recalls are an important part of warranty management. Consider the example of a bearing that is recalled after 300 have been purchased and installed throughout the facility. How can they be located? The EAM solution provides a "where used" capability and allows the creation of a campaign that identifies which bearings were installed on which equipment and who installed them. It also tracks any parts purchased but still in inventory and not installed yet.
Investing in an enterprise asset management solution can be the differentiator in an oil and gas company's operational uptime, safety, efficiency, and cost control efforts. Companies that are tempted to abandon or postpone technology purchases in a down market may be missing an opportunity to increase productivity and profit margins at a time when they are most critical.
ABOUT THE AUTHOR
Mike Stone is an EAM product manager at Infor, a software company that specializes in enterprise software ranging from financial systems and resource planning to supply chain and customer relationships. Stone has more than 30 years of experience working with EAM solutions. He has led product management, development, and marketing for several commercial EAM systems, and has applied EAM technology to a variety of industries, including facilities management, oil and gas, chemicals and petrochemicals, mining and metals, manufacturing, and water and wastewater.
