Condition Based Asset Management

1. Condition Based Maintenance of
Critical Machinery Assets
R K Gupta
Principal Consulting Electrical Engineer (Power System)
Reliability Engineer
BE Electrical
Protection, Automation, PLC & SCADA, Level 3 MCSA, Colorado USA

2. Operations and maintenance
costs affect profits
Production
Yield
Selling
PriceX
Cost of
Goods Sold
- Operating
Income
=
Cost of
Capital
- Profit=
Repairs
Labor
Contractor costs
Training
Environmental
Energy
Reliability
improvements reduce
amount of capital
required
(improved productivity)
Spares inventory
increases Cost of Capital
Production profitability is
calculated as follows
Lack of skilled labor and contractor costs
are increasing the costs of good sold

3. When you look at reliability benchmarks, a strange paradox emerges. The companies
who are stuck in the reactive mode not only have lower reliability but also higher
costs. The best companies have a low cost with high reliability.
Overall Equipment
Effectiveness
World-class
Maintenance cost as a
% of replacement value
Typical Reactive
Mode
>85%
65 - 70% 4 - 5%
<2%
World-class companies have a lower Maintenance cost with high
reliability
Availability
>98%
80%

4. Life Cycle Costs of an asset
Majority of Costs are in Operations and Maintenance (45 %)

5. Causes of large losses in Oil &
Gas/Power
Sabotage/Arson
Natural hazard
Design error
Process upset
Unknown
Operational error
Mechanical failure
0 20 40
Percentage [%]

6. Some considerations
Total % Maintenance spend*
• Corrective
• Preventive
• Predictive
Best in Class Maintenance Spend*
• Corrective
• Preventive
• Predictive
60 %
20 %
20 %
15 %
05 %
80 %
Availability 75 - 85 % 85 - 951 %
Maint. budget 4 - 6 % 2 - 3 %
of RAV (ERV)
*Data from HSBRT / Ivara / MRO Software
1 Oil & Gas Refineries best in class > 97.5%
RAV: Replacement Asset Value
ERV: Equipment Replacement Value

7. Economics of Monitoring
Strategies
Required Scan Rate
Sudden Onset
Failure
Gradual
Degradation
Critical
High
CostofLostProduction
CostperPoint
Walk Around Data
Collectors & Analyzers
Time To Failure
FastSlow
Medium
Permanent Sensors
Wired to Switch Boxes
On-Line Surveillance
Systems
Continuous
Protection Monitors

8. Reliability-focused
Maintenance Practices
The range of maintenance practices
Our goal is to help your
facility manage the
evolution of your
maintenance program. A
sustainable platform for
efficiency improvement is
easily achieved by
addressing key issues
which may involve
a dynamic mix of
programs.
Operator Driven Reliability (ODR)
Front line operators identify/describe/
communicate machine information to
the plant-wide team.
Proactive Reliability Maintenance (PRM)
Predictive maintenance applied to help
identify root causes of machine/process
problems.
Predictive Maintenance (PdM)
Machine condition assessed using
condition monitoring technologies;
unplanned shutdowns reduced.
Preventive Maintenance (PM)
Unplanned and planned shutdowns
scheduled to overhaul equipment at
pre-determined intervals.
Reactive/Corrective
Fix it when it breaks approach; unplanned
shutdowns occur when the machine breaks.

9. Normal PdM Program Cycle
PdM
Identification
(diagnostic)
Reporting Scheduling

10. Proactive Reliability
Maintenance
 Wear particle
analysis
 Precision
alignment
 Precision
balance
 Design
engineering
 Lubrication
monitoring
 Vibration analysis
 Thermography
 Motor current
analysis
Root
cause
failure
analysis
Life
extension
oriented
Condition
repairing
and
redesign
Failure
detectio
n
Residual
life
prediction
Chain
reaction
failure
Proactive Reliability
Maintenance
• PRM is a proven process that enables
maintenance and operations to eliminate
the root cause of the failure.
• Prevent recurring machine failure
– Reduce maintenance costs
– Increase machine uptime and
product quality
– Safely extend the life of equipment
– Optimize plant asset efficiency
– Improve your planning process
– Empower maintenance and
operations to succeed
Proactive
Maintenance
Predictive
Maintenance

11. • The four key elements of
PRM
– Predictive maintenance
– Prognostics and
root cause analysis
– Key performance
indicators
– Operational
review
Prognostics and Root
Cause Analysis
Operational
Review
Key
Performance Indicators
Predictive Maintenance
Proactive
Reliability
Maintenance
Proactive Reliability
Maintenance

12. PRM Loop
Maintenance
Strategy
Predictive Maintenance
(PdM)
Correction & KPIs
Diagnostic & Root
Cause Analysis (RCA)
Operational Review
PRM

13. Integrated Maintenance
Solution (IMS)
• IMS is a performance-based service
contract where AYT Reliability Systems
takes responsibility for your plant’s
physical asset management strategy.
• Shares the risk and savings.
• You get agreed-upon financial returns
and technology upgrades – without
capital investment.

14. • The 7-step process to optimize
plant asset efficiency is
customized to specific business
needs based on internal resources
and current supplier contracts:
– Assessment
– Maintenance strategy
– Proactive reliability
maintenance
– Technology updates
– Machine maintenance
– Training
Integrated Maintenance
Solution (IMS)

15. Integrated Maintenance
Solution (IMS)
We Share Risk

16. ReCap: What is PdM? PRM? IMS?
• PdM – Predictive Maintenance – Collect and analyze data to detect potential functional
failure (This is the “failure finding” part of proactive maintenance and is a common practice
among HPI/Oil & Gas facility – although the use of that data is questionable)
• PRM – Proactive approach to maintenance that includes:
• PdM
• Root Cause Failure Analysis process (This is the “failure elimination” part of proactive
maintenance and is an inconsistent practice among HPI/Oil & Gas facilities)
• Key Performance Indicators – not necessarily guarantees, but established KPIs
• Operational Review
• IMS – Comprehensive agreement that includes PRM (services and technology) with
deliver of consumables (e.g., bearings, seals, lubricants). It can include additional
services such as lubrication. (This also serves as an example, for the rest of the
maintenance function, of how to prevent, find failures, eliminate failures)

17. Progression to Sustainable Performance
Cost
Reliability
Reactive
Preventive &
Predictive
Sustainable
Performance

18. Maintenance Strategy
Time
BusinessImpact
CNA
Quick
Scan
Maintenance
Strategy
Review
Spares
Optimization Best
Practices
Process
Analysis
Recommended implementation flow
1 - 5 D 2 - 10 D 2 - 6 M 6 - 36 M 1 - 6 M 1 - 6 M

19. FOUR STAGES OF MAINTENANCE
EXCELLENCE
• More proactive than
reactive
• Balance between
functional orientation &
customer
• Weekly planning &
scheduling
• Maintenance
effectiveness measures
• Unit Cost Management
• High compliance to PM
programs
• Materials management
focus
• Computerized work order
management system
• Entirely reactive
• Little structure
• No formal planning and
scheduling
• Very few performance
measures
• No budgets
• Limited PM
• No formal Materials
Management Function
• Few Systems
• More reactive than
proactive
• Functional orientation
• Daily planning and
scheduling
• Performance measures
typically against budget
• Cost reduction programs
• PM programs in place
• Some storeroom control
• Isolated systems and cost
reporting
• Work is performed
according to plan
• Multi-functional
integration and self-
managed teams
• Longer term focus with
high schedule compliance
• Customer satisfaction and
total cost focus
• Total productive
maintenance orientation
• Ongoing assessment of
PM program effectiveness
• Total supply chain Focus
• On-line, integrated
system

20. Reliability Issues (Design)
Pre-Defined Priorities
Maintenance Strategy Project Business Goals
Maintenance
Strategy
Preventive Maintenance (time based)
Proactive Reliability Maintenance
(predictive and corrective)
Operator Driven Reliability
(observations)
Run to Failure (reactive maintenance)
Root Cause Failure Analysis
PM =
PRM =
ODR =
RTF =
RCFA =
Plant Asset Management and
Maintenance Program (Living Program)
PM PRM ODR RTF
RCFA
PRM/ODR Collection and Analysis
Information Integration and Decision
Work Order Generation
Corrective
Maintenance
Operators
Initiators
Planning
Rolling Schedule
Standard Job Plans
and Procedures
Spare Parts
Alignment
Work Execution
Post Maintenance Testing
Update Program
Work
Identification
Work
Control
Work
Execution
Master & Highest Level Business Process
The Asset Efficiency Optimisation Model

21. 80% random
20% time related
Pattern D - Initial wear-in period
Pattern E - Random failure
Pattern F - Infant mortality
Pattern C - Fatigue induced
Pattern B - Bathtub curve
Pattern A - Traditional (age related)
The reality of failure
There are six failure patterns
The majority of failures are random, not time-based and in some cases maintenance can
induce failures

22. Natural Degradation of
Equipment
Failure starts here
Condition
P
Potential
Failure
Minimum
Investment
Highest
Return
right work
at
right time
based on
equipment
condition
F
Equipment not
performing intended
function ( what
operations requires)
Functionally Failed
New definition
of failure
Equipment
broken
Old
definition
of failure
Time
We cannot prevent equipment from degrading toward failure but we can prevent
business consequences by intervening at appropriate time
High levels of
PM
Non-Value
Added
Over Investment
Too Much Too
Soon
Reactive
Highest Cost
Too Little Too
Late

23. How Can Operators Contribute
to Improved Machine
Reliability?
• Operator inspections provide increased opportunities for failure detection.
• Trending the measurement results identifies even small, incremental changes.
• Sharing the results improves teamwork and proactive decision making.
Machine
Reliability
Time
1st Measurement by
Vibration Analyst
2nd Measurement by
Vibration Analyst
Operator Input Can Make A Crucial Difference!

24. Most Companies Do It Now…..
Although they do it poorly, often
collecting data that provides little or no
value

25. Energy Efficiency = Reliability
Energy & SustainabilityAsset Reliability
Energy and Sustainability Solutions Provide
Reliability as a Byproduct
Reliability Solutions Provide Energy &
Sustainability as a Byproduct

26. 15 to 35% potential energy savings - motor & pump
Precision Alignment
(3 - 15%)
Hydraulic Problems
(3 - 5%)
Thermography
& Inspection
Electric Motor Analysis
(up to 5%)
Precision Balancing (1 - 5%)
Advanced Sealing Solutions
(1 - 2%)
Optimum Lubrication
(1 - 2%)
Bearings
(.6 – 1%)
15 to 35%

27. The Winning Way 2008-02-18 © SKF Reliability Systems Slide 27
Customers (Clients) are facing -
• Complexity due to automation & maintaining
aging assets
• Reduction in skilled labor pools
• Cost pressures due to globalization
• Increasing raw material costs & clean water
availability
• Pressure to reduce emissions & energy
consumption
• Challenges in maintaining J.I.T. supply chains
• Increase shareholder value via reduced
capital outlay

28. The Winning Way 2008-02-18 © SKF Reliability Systems Slide 28
Purchasing
•Ensure product life cycle costs
•Increase service level
•Quality services
•Reduce inventory
PLANT
PERFORMANCE
Management
•Strategy
•Business cycles
•Shareholder value
Maintenance
•Response service
•Perform precision work
•Maintain asset
•Control costs
Finance
•Budgets
•Compliance
•Reduce Admin costs
•Cash flow-ROI
Safety/
Environment.
• Reduce emissions
• Reduce energy usage
• Assure compliance
•Avoid hazards
Reliability Eng.
•Increase asset efficiency
•Increase machine uptime
•Reliability Systems
Operations
•Increased production
•Production quality
•Comply w/ maintenance schedules
•Cost effective
Engineering
•Re-design current assets
•Coordinate maintenance needs
•Control projects
•Reduce capital outlay.
What are customer priorities?

29. Key Performance Indicators
Internal
Processes
Proactive Reliability
Maintenance MetricsCustomers
Financial
Learning &
Growing
– How Should We Appear To Our
Customers?
• Equipment Availability ?
• Maintenance Quality ?
• Utilised Capacity
Effectiveness ?
• # Of Unplanned Activities ?
– How Does Maintenance Sustain
– Their Ability To Change & Improve ?
• Training Hours ?
• MTBF/MTTR ?
• New Skills Development ?
• Communication Programmes ?
– What Business Processes Must
We
– Excel At ?
• Backlog Level ?
• Maintenance Type Mix ?
• Maintenance Rework ?
– What Financial Measures Reflect the
Maintenance Strategy ?
• Maintenance Cost/Unit ?
• Cost (Losses) Of Lost Operations ?
• Spare Parts Cost ?
• PdM Cost Savings (Avoidance) ?
• Maintenance Effectiveness ?

30. The Winning Way 2008-02-18 © SKF Reliability Systems Slide 30
Value Proposition - Differentiation
Optimizing asset effectiveness:
• Improving availability, reliability & integrity
• Improving quality & performance
• Risk management (Envir, Health & Safety)
• Reducing asset Total Cost of Ownership
• Increasing customer profitability

31. What is our real benefit to end users?
Enhanced
productivity

32. R E L I A B I L I T Y
Operations Manager
Engineers
RCA RCM RBI
Director / VP
0%
10%
20%
30%
40%
50%
60%
70%
80%
1 2 3
Reliability – strategic value for business
Who needs to know what and
when?

33. Business objectives
What are the best KPI’s
for the business?
Safety CostsProduction
R E L I A B I L I T Y
Operations Manager
Engineers
RCA RCM RBI
Director / VP
0%
10%
20%
30%
40%
50%
60%
70%
80%
1 2 3
Reliability – strategic value for business

34. Source: Meridium Conference
April 2006

35. Source: Meridium Conference
April 2006

36. Thank You