BEST PRACTICES: Condition monitoring
Top concerns for businesses are directly related to reliability risks, which can be every bit as devastating to a corporation's financial health as an unexpected rise in borrowing costs or the failure of a new product launch.
BP’s struggle with the consequences of the catastrophic Deepwater Horizon oil spill underlines the magnitude of the risks that lie buried in industrial companies’ operating assets. These risks can pose significant threats to the companies’ financial health – either by causing catastrophic failures or, more commonly, simply jeopardizing the ability of the company’s plant and equipment to meet its marketing targets.
According to a Duke/CFO Magazine Global Business Outlook Survey, a CFO’s top five concerns about their own companies were, in descending order:
- Ability to maintain margins
- Ability to forecast results
- Maintaining morale/productivity
- Cost of healthcare
- Working-capital management
Four of five of these top five concerns (cost of healthcare is the exception) are directly related to reliability. Reliability risks can be every bit as devastating to the corporation’s financial health as an unexpected rise in borrowing costs or the failure of a new product launch. Yet, CFOs and other executives often don’t grasp how reliability risk management can be used to address these concerns. Condition monitoring is a powerful tool to establish reliability risk management.
The vulnerability of physical plant assets to unexpectedly breakdown is complex to evaluate. It requires timely data on the condition of the assets; ideally with a non-intrusive monitoring technology. The monitoring frequency is dictated in large part by the criticality of the asset, in order to ensure safe, uninterrupted production. It also requires expertise to filter and analyze condition monitoring data to make it actionable.
One of the difficulties is that many plants suffer from an awareness gap. In the industrial world, this awareness gap is frequently caused by a lack of clarity between asset reliability performance and business results.
Organizations often lack the capability to link asset reliability performance with business results because of weak execution of an effective work management system; effective work management systems provide equipment history that can be analyzed. The result is unusable historic data. Demographics and employee turnover play a role, with retiring baby boomers and other people who leave, taking their knowledge and experience with them. In the developing world there is often the issue of the rapid growth in industrial capacity outpacing the supply of seasoned engineers.
Fortunately, the modern risk manager can leverage the power of the Internet, powerful screening software and advanced diagnostic tools to establish condition monitoring in a scalable, cost-effective manner. The Internet allows data that was traditionally inaccessible in stand-alone databases at the plant level to be moved, aggregated and analyzed at a central, secure host.
Making the potential of condition monitoring a reality requires that large amounts of data be collected, monitored, filtered and turned into actionable information. The cheaper and more ubiquitous the computerized monitoring hardware becomes, the greater the volume of data and the more challenging it becomes to manage and interpret.
With a well functioning work management system and a Web-based condition monitoring system, the third element is accessible human expertise, which is necessary to confirm and augment the system diagnosis. Expert human engineering support must be available to augment recommendations from the expert software for risk management decision support. This augmentation will reduce false alarms, and assist the risk manager by providing confirmation, or amplifying information on indicated equipment defects.
One benefit of the centralized database and expert software is that it provides the accumulation of highly valuable equipment history and decision tools; a valuable knowledge resource, collected in a highly efficient manner.
Problems can be brought to the appropriate expert who is closest to the problem, rather than the other way around. Whether the troublesome pump or high speed turbo-compressor is located in India or Indianapolis, the local, qualified expert can view statistical data, pictures, even ’listen’ electronically to the machine despite being located thousands of miles away. A disciplined peer review process can be implemented to ensure automatic cross-checking of fault diagnosis, just as there might be when two cardio surgeons consult on the appropriate intervention for a heart patient from different geographic locations.
The advantage of this approach is that it provides a quantifiable risk-based analysis of equipment health. The solution is scalable across multiple facilities and solves the problem of knowledge retention because it is not dependent on a handful of individuals.
The Web-based condition monitoring solution is also ideally suited to an outsourced service provider in partnership with client staff and corporate risk managers. The service partner provides always-available data hosting and advanced expert software tools, without the company needing specialized IT support or organic software modeling.
The outsourced service provider also supplies diagnostic experts whose skills are honed by continually working on the toughest problems in their clients’ industries, and in many other industries. This outsourced condition monitoring expert support can either augment or replace in-house engineering skills. The plants co-own the program so that program recommendations are implemented and feedback is incorporated into the expert software system, and a process of continuous improvement is established and sustained.
When data is available to link equipment and asset performance with business results, risk managers can better appreciate the company’s points of vulnerability, and develop action plans to deal with them effectively.
- Tom Moriarty is president of Alidade MER, Inc., an Organizational Reliability professional services firm providing insight, advice and support in operations, maintenance and reliability. Moriarty had a 24-year career with the U.S. Coast Guard and was recognized with a Federal Engineer of the Year award. He holds an MBA, and is a registered Professional Engineer in multiple states and a CMRP.
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.