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Companies once approved new plant automation systems simply to maintain up-to-date computer and instrumentation systems. But with today’s tight budgets, you now need to define a clear return on investment to win approval for your automation or information solutions upgrade.
Since operations personnel typically own the daily use of these new systems, it’s easy to identify ROI examples from their perspective. When you’re looking for improved cash flows and formulating cost justifications for your next project, use these four variables in evaluating the expected reduced operating costs of new automation systems.
1. Better Situational Awareness Boosts Revenues
Newer graphical control systems typically increase situational awareness. This allows the operator to correct adverse conditions more quickly and improve plant safety. But safety may be hard to quantify. You can calculate more direct positive impacts of improved situational awareness in terms of increased plant throughput. When corrective actions to process conditions are executed faster due to increased situational awareness, plant throughout, and thus plant revenues, are positively affected.
2. New Systems Support Knowledge Retention
As aging workers retire, they take their operations and maintenance expertise with them. Because companies are reluctant to train new employees on legacy systems, that knowledge is simply lost. By updating their systems, operations teams can improve their ability to make changes and systems enhancements. Newer systems also attract younger technical employees who want to work on state-of-the-art equipment. Companies benefit from greater knowledge retention and a more efficient hiring process.
3. Improved Batch Consistency Increases Overall Throughput
Legacy systems often impede batch consistency. For instance, a long and complex manufacturing process that involves manual steps may be susceptible to errors. Or perhaps aging operators have streamlined their individual process runs based on intuition and experience, but younger employees can’t duplicate their success. By implementing a fully automated system with a data historian, companies can improve batch consistency and reduce errors, thereby increasing throughput per annum.
4. Centralized Control Requires Fewer Operators
Older systems may rely on several separate control systems that require numerous operators throughout the plant. Implementing a centralized control system reduces the number of control room operators needed. This frees up manpower for other maintenance and troubleshooting tasks, which in turn streamlines operations and helps combat attrition.
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Shop floor to top floor system connections are slowly becoming more common. The idea of connecting control systems to enterprise systems has around for a while, but mostly has been limited to specific occasions.
The most common example of how this is being done today is when a company creates a connection to an ERP system. Among ERP’s, SAP is the dominant platform but there are a number of others a typical provider might encounter. Another common integration target, especially in chemicals and life sciences, is with Laboratory Information Systems. These systems will usually be relational databases, many times SQL Server, so that makes the integration story much simpler. An interesting side effect many customers find when they create these connections is that the use cases will blossom when other parts of the organization want to take advantage of the connectivity to perform a different function. Examples of this might be exchange of maintenance data with the shop floor or integration of operator training records into security for equipment.
A combination of software and technologies are continuing to make the integration story easier and more cost effective. Integration to older ERP systems tended to be via formatted text files pushed around via FTP. Now, there are a variety of affordable and easy to use solutions for making direct calls to these ERP systems. Another area that has made these systems much more accessible is the continued advance in generic interface mechanisms like web services and more modern RESTful API’s. Having these technically simpler interfaces, along with more capable SCADA platforms that can interact in a more native fashion, makes the integration portion a smaller part of the overall cost and schedule for the project.
When considering the Internet of Things (IoT), some companies are adding limited technology into the traditional manufacturing space but most have not made a wholesale adoption of much of the technology that’s available. Customers are picking and choosing technologies that are being developed for IoT and using them in slightly different ways.
For example, we recently had a customer with a remote warehouse facility that needed to be monitored from the main campus. They were running an extension of their existing SCADA system over a wireless point-to-point radio which wasn’t reliable. We explored the concept of using MQTT with a cloud-based broker to publish encrypted data from the warehouse and subscribe to the data in the SCADA system at the main facility. That is just one example of how IoT technologies might be repurposed for something other than their original use case.
These types of connections will likely become even more commonplace when they become familiar for traditional automation practitioner. A perfect example of this is with both Kepware and Wonderware writing MQTT drivers that live side-by-side with their traditional PLC drivers. Delivering data via this familiar technique allows engineers to focus on the value of the data and not the mechanics of data acquisition.
When it comes to Big Data today, only the most sophisticated customers are in a place where they can truly take advantage of this type of technology. A common misnomer is that Big Data is going to take a pile of random data and put big red glowing circles around the really important things and then explain exactly what steps need to be taken to improve costs or reliability by X%. These software tools are really there to help progressively sort through the correlations. It still takes deep knowledge of how a process functions before the results of the Big Data analysis can be turned into actionable information. What is encouraging, however, is the rise of a number of specialty analytics software packages focused on the manufacturing industries. These packages tend to hide most of the complexity of the math and the models and leave the engineer to focus on the most important function which is conceptually mapping the results of the models to real world manifestations in their processes.
No matter the technique for improving your operations; ERP Integration, Big Data, or IOT technologies, the best way for facilities to start is to sit down and make the business case first. When making the business case consider end goals such as cost reduction, improved traceability to support quality investigations or recalls, new product agility, or reduced errors, etc. Once this justification is solidified then you can work on identifying the gaps in your current processes and how these different technologies can be leveraged to close those gaps.
The best results are typically achieved when customers spend the time and money developing a coherent strategic plan and then attack each area in a very tactical way. No matter how execution is started, it should always be based on this strategic plan. If a customer doesn’t clearly understand the potential benefits and at the same time perceives the cost of the project to be high, they are going to be fearful about even starting an exploration.
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Many facilities run on antiquated and inefficient control systems. This means that maintenance teams often struggle to support the plant’s outdated hardware and software, and corporate engineers have trouble accommodating the disparate legacy systems in use at different sites. When key staff can’t make informed operation and maintenance decisions because the company lacks the systems needed to gather, maintain, and analyze the necessary data - overall efficiency and revenues suffer.
If this sounds familiar, you likely need to write an automation or information systems upgrade proposal. In this new white paper, we’ve outlined the key financial justifications you’ll want to consider and included a formulaic approach you can use to calculate the quantitative ROI of a plant system upgrade.
Demonstrate ROI for Industrial Automation Improvements
Successful project proposals today focus more on demonstrating a clear return on investment (ROI) and less on conveying the perceived benefits of updating to the most current platform. To write effective capital improvement requests, you need to explore and then demonstrate the ROI of upgrading your automation and information systems.
The goal of the project proposal should not be to compare and contrast new systems versus existing legacy systems, but to compare and contrast project investments and their associated gains. In general, these cash flows represent either reduced cost or increased revenue and can center around a number of plant areas, including:
Your Next Automation or Information System Upgrade: Define ROI to Win Approval explores each of these areas in detail, providing both analysis of different ROI scenarios and real-world examples of the ROI benefits that automation and information systems can provide. Written for operations managers, process controls engineers, and corporate engineers, our paper guides you through the process of evaluating the anticipated ROI on your capital improvement project and provides a formulaic approach and actionable steps to help you write a winning project proposal.
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Chemical makers are always looking for affordable ways to increase the sustainability of their operations. Fortunately, there are a number of inexpensive steps you can take to improve the triple bottom line of people, plant, and profit. To get started, consider these ideas from this recent article in Chemical Processing.
Refine Loop Control
If you can only focus on one sustainability measure, make it loop tuning. Inefficient loop control causes valves to oscillate more than necessary, which leads to premature wear, more frequent replacement, and greater power usage. By contrast, a well-tuned loop can produce a desired output repeatably, accurately, and efficiently. Plus the payback period is often only a matter of hours.
Implement Regular Boiler Maintenance
Poorly maintained package boilers typically consume more fuel than necessary, so they increase a plant’s carbon footprint and waste money. To improve boiler efficiency, you’ll want to reduce stack losses, minimize air leaks, improve heat transfer, and recover waste heat. In some cases, you may even need to consider replacing an old system with one that provides more effective boiler control.
Fix Steam Leaks
A leaking steam trap that’s only 1/8-in. in diameter can cost a plant almost $15,000 per year – and the U.S. Department of Energy estimates that 15-20% of all steam traps leak. Not only is this expensive, it’s dangerous. You can limit these costs and hazards by conducting an annual steam-leak survey or using an ultrasonic detector to identify leaks that might otherwise be obscured by insulation.
Upgrade Motor Control
Every centrifugal pump operates most efficiently at a specific flow rate, but traditional, fixed-speed pump motors can’t consistently maintain this optimal rate. Variable-frequency drives (VFDs), on the other hand, adjust the motor speed to provide the ideal flow rate. A pump with a VFD also consumes less power the slower it operates, which reduces overall operating costs.
Install LED Lighting
For a quick efficiency boost, update plant lighting. Light emitting diodes (LEDs) use less energy, last longer, and radiate less heat than fluorescent and incandescent bulbs. And LED lighting is now available for Class I, Division II locations. Energy monitoring indicates that the payback period for installing LEDs is usually under four years, and state rebate programs may help you attain your ROI even faster.
The quest for sustainability is ongoing. To realize yearly savings, you’ll want to implement a formal program to identify new opportunities and build on previous improvements. You can read this full article, Improve Sustainability on a Shoestring, for more detailed suggestions.