Enterprise asset management (EAM) software can ensure asset uptime while an asset performance management (APM) approach can ensure optimal levels of cost reduction and reliability.
In these cost-constrained times driven by low oil prices, the goals behind asset reliability initiatives shift somewhat. While asset uptime will always be the central focus when it comes to asset performance, in a down market, having the insights to let noncritical parts run to failure to save on maintenance costs and to help right-size spares inventory becomes more important.
A full year into the oil price plunge, which began in mid-2014, few would argue with the notion that oil and gas industry managers need to do everything they can to curb costs, including reexamining maintenance strategies. Part of the challenge, however, is that EAM systems excel at executing maintenance processes, but do not necessarily contain the type of analytical functions and improvement workflows that help a company establish and follow through on maintenance strategies.
Inventories of spare parts and other maintenance, repair, and operations (MRO) supplies must be further tightened in this down market. In 2013, research firm IHS highlighted the problem of "toxic MRO catalogs" that plague asset-intensive industries. IHS reported that MRO stockpiles were growing by 9% per year, and that up to 30% of MRO inventory will never be used.
To optimize MRO inventories and ensure that the most critical assets stay productive, the trick is to assess which assets are the most business-critical, which are less critical, and rethink maintenance strategies accordingly. As part of that, more companies are examining asset performance management (APM) strategies.
More companies in the oil and gas industry are putting in place APM technologies, which use analytical tools and functionality for managing recommendations to improve asset effectiveness. Reliability technologies are essential to APM in that they help companies establish maintenance strategies, according to Ralph Rio, research director with ARC Advisory Group.
"Reliability technologies determine which assets are most critical to APM, and what kind of maintenance plan you should apply to a particular asset," said Rio. "The end goal for APM is to improve return on assets and it tends to place emphasis on maintenance planning, whereas EAM is more about executing maintenance processes."
APM software solutions, according to Rio, can have different types of applications, but reliability centered maintenance (RCM) is the key type of APM application. Such software usually has an analytical component to assess factors, such as safety or downtime risks. However, added Rio, APM is more than business intelligence layered on top of EAM history in that these technologies typically have workflows to manage recommendations, and their analytics can take in many types of asset-related data, not just EAM history.
The APM vendor landscape is still emerging, with plenty of overlap among players involved. The market includes a handful of vendors that specialize in APM or RCM applications, EAM vendors with RCM technologies, major enterprise system vendors who have manufacturing execution system (MES) technology with plant intelligence software that addresses equipment reliability, and major control system vendors who have plant intelligence software that addresses reliability and asset health. Additionally, some end-user companies have custom-built solutions for functions like RCM. "ARC views APM as a developing space that for the most part, has been user-driven, with many customized technologies that have been created to maximize return on assets," said Rio.
Simply deploying APM software, however, is no guarantee of improved reliability, warned Rio. One major hurdle is organizational: The people in a company analyzing asset reliability might be disconnected with groups in charge of maintenance, those in charge of production, and those in charge of IT. "Organizational hurdles are real, and they can, and often do, lead to problems," Rio said.
The organizations that have learned to excel at APM have done things like create asset reliability groups with participation from leaders across disciplines, reporting up to a single chain of command. Other organizational changes that can help is to have a manufacturing IT group that is separate from corporate IT. A manufacturing IT group can help users of APM technologies collaborate with users of EAM and control systems. In some instances, it may be possible to build links between APM and EAM technologies so that a recommended action from APM analysis gets passed into the EAM technologies for execution.
"Some integration between asset reliability and EAM application can be important and necessary, but it may not suffice to actually improve performance if the right information isn’t also provided to the maintenance organization, or it isn’t deemed credible enough from their viewpoint," said Rio. "So you have to layer some organizational change on top of any application integration."
Another key concern in getting APM and EAM processes in sync is master data management. Tools within APM and EAM solutions that manage master data over assets can help, but ultimately, the user organization must decide which technology will be the system of record for asset information. "Getting to a state of consistent master data can take years," said Rio, "and may be best pursued as companies perform major upgrades to a plant, rig, or other key asset."
In practice, APM initiatives typically involve applications that pinpoint failures to critical equipment and also set maintenance plans for different classes of equipment. These implementations typically tie into EAM technologies to follow through on changes to maintenance procedures, and to verify improvements.
For Super Octanos, a Venezuelan manufacturer of gasoline additives, such as methyl tertiary butyl ether (MTBE), an APM program and supporting software has improved equipment reliability and uptime. Back in 2007, the company decided to pursue an APM initiative after seeing the gap between its asset availability plan and actual performance reach 27%.
Super Octanos wanted to increase availability by eliminating or reducing failures, thus improving its "on-stream factor," which is a percentage measure of the time that a process unit is operating. The initiative was successful in improving the plant’s on-stream factor, in part, by analyzing and recommending fixes to a recurring failure in a critical motor. The short-circuit ring electric motor (11 MW), part of an Italian design compression system for an MTBE plant, failed six times between 2008 and 2012. Images of the asset revealed physical failure of the circuit’s contacts due to melted copper. The motor was one of five in existence worldwide, limiting available support. Each repair to the short-circuit ring electric motor could result in lost production of 1,692 metric tons of MTBE, or more than $1.4 million in revenue.
Training and establishing industrial systems reliability specialists.
Super Octanos chose APM software from Meridium as its APM foundation and to support failure elimination processes. The APM software includes asset taxonomy, which is a hierarchy and classification of asset structure, and an event history with a standard process to capture and integrate performance history and condition data. The company integrated the APM software with data from its Oracle EAM system, as well as other asset-related data, to support analysis and identify assets experiencing the highest failure rates, thus helping to develop mitigation strategies.
Using APM-failure-elimination technology and work processes, the company used standardized asset taxonomy to understand where its asset failures were occurring and enact recommendation management to implement repairs and monitor success in reducing failures. The company also instituted event-reporting work processes, work-order reporting processes, and lost-production opportunities analysis.
According Juan Garcia, technical manager for Super Octanos, the APM initiative boils down to a structured "find it, fix it" process for identifying equipment and/or procedures prone to failure, and then instituting the fixes and follow-ups. "To say ‘find it, fix it,’ sounds simple, but there are many work processes and cultural changes involved in doing this successfully," said Garcia.
With the short-circuit ring electric motor, the APM process came up with recommendations that included working with the supplier to ensure dimensional control of key components, updated work instructions for maintenance personnel, a new training plan, and use of a quality voltage-monitoring system. These steps have been successful in nearly eliminating downtime from the motor. Overall, through the implementation of Meridium’s APM and failure elimination applications, Super Octanos’ gap between its on-stream plan and actual data has decreased significantly, down from 27% in 2007 to 2% in 2014.
To overcome the cultural challenges initiated in the APM transformation, Super Octanos worked with Meridium to assign key resources as functional leaders, communicated new information policies to all employees, and built reliability into the company’s framework and mission. As Garcia summarizes, "We established a reliability-focused culture and eliminated failures with the help of Meridium’s knowledge and leadership expertise."
– Roberto Michel is a freelance writer and editor with more than 20 years of experience with business-to-business publications. Edited by Eric R. Eissler, editor-in-chief, Oil & Gas Engineering, eeissler@cfemedia.com.