Benefits of equipment life optimization programs

Operations and maintenance is not one-size-fits-all and an equipment life optimization program (ELOP) can help engineers achieve equipment reliability while cutting costs.

By Grant Lanthort June 22, 2017

In today’s competitive environment, there is constant downward pressure on costs, including operational and maintenance (O&M) spending. Unfortunately, management often takes a one-size-fits-all approach to cutting costs, instead of applying engineering and economic principles to develop optimized maintenance strategies. This penny-wise and pound-foolish approach typically saves tens of thousands of dollars per year at the expense of one or more multi-million dollar outages later.

As not all maintenance spending is the same, and not all maintenance practices are equally effective, engineers have developed a methodology to optimize equipment lifecycle management across a plant or fleet. Through this, engineers can identify, prioritize, and correct equipment maintenance problems. By doing so proactively, high equipment reliability is achieved at the lowest cost. The flowchart shows an outline of this approach.

Critical equipment identification

A core task within this approach is understanding the consequences of a given component’s failure as well as the mitigation strategies and associated costs of prevention. For example, a small motor may be essential to production but relatively cheap to acquire and store as an extra in inventory. Other parts may be the opposite scenario—expensive and hard to replace, but part of a parallel system where loss causes a derate in production versus a complete stoppage. A variety of situations exist between these extremes, and engineers understanding their facility is a key part of identifying and ranking critical equipment.

Risk appetite and management

Another aspect is the ability of plant staff to manage risk and understand the risk appetite for a given facility. For example, a base load power generation facility has a target goal of zero forced outages for the interval between planned outages. A manufacturing facility may have the same target if 100% of production is expected to be sold without issue. These facilities would have a smaller appetite for risk and may choose a more conservative inspection and maintenance plan.

A factory that only runs one or two shifts, and is not fully utilized, may have a different tolerance. In these cases, small production losses can be absorbed and more risk can be taken with maintenance. The downtime also allows for more regular maintenance without time pressure, possibly making the tradeoff in spending worthwhile.

An engineer seeking to optimize plant availability must first define what is and is not an acceptable level of performance. From there the general steps of an effective life optimization strategy are:

  • Establish equipment criticality to prioritize resources appropriately
  • Organize and maintain key inspection and overhaul reports for analysis and trending
  • Conduct engineering analysis to determine fitness for service
  • Disseminate critical equipment health information to responsible decision makers
  • Provide input to plant staff for use in planning and contracting of third parties for inspections and/or analyses.
  • Regularly revise and review program effectiveness.

The goal of this program is to develop a risk-informed and proactive maintenance strategy that weighs the costs of maintenance against the benefits. Optimizing the approach should reduce the time and money spent on low-value tasks while ensuring high-value tasks are conducted regularly and appropriately. In some cases, O&M costs can actually go down while availability goes up, especially for a facility that has not updated their maintenance strategy in some time.

Grant Lanthort project engineer, asset integrity management group, Intertek. This article originally appeared on Intertek’s blog. Intertek is a CFE Media content partner. Edited by Hannah Cox, content specialist, CFE Media,

Original content can be found at Oil and Gas Engineering.