Why real-time asset monitoring is the secret component of asset management system
Decreased cost of intelligent devices and increased computing power and capacity are transforming traditional energy and utilities industries.
Companies need to transform their businesses in order to stay competitive and meet new market, regulatory and consumer demands. Best practices are needed to analyze data, monitor processes, conduct secure operations, extend the life of assets and improve productivity and safety.
Increasing demand for renewable energy solutions, smart grids, distributed energy resources and distributed energy storage systems, among other factors, is transforming the energy & utilities sector, from a centralized generation and delivery model to a dynamic one that requires data analysis, and real-time command decisions. For network operators, the priority is reliable and resilient electric supply and delivery. For market participants, the same priority at the lowest cost.
Energy resources with low cost of exploration, production and processing are increasingly rare for oil, gas and chemical companies. New IoT technologies and solutions optimize operations through predictive maintenance, remote asset monitoring, track & trace devices, emergency alerts and evacuation systems, and energy efficient facilities.
A new daunting reality for plants, facilities, and equipment
Energy consumption is eroding profit margins. As rising energy costs continue to take a larger part of the operating and maintenance budget, corporate executives must focus on the challenge of managing energy use, as well as growing public and government concerns about carbon emissions and other pollutants.
To meet that challenge, software companies are stepping up to provide advanced tools for monitoring energy consumption at the asset level to support maintenance, replacement, and process control decisions, and even behavioral change. These tools factor energy demand management with traditional asset management functions. The result is the elimination of waste for better operational efficiency, lower energy costs, and improved regulatory compliance from lower carbon emissions.
Commercial and industrial companies often spend over 80% of their non-labor operating and maintenance budget on energy. The environmental impact of consuming energy, which produces greenhouse gas emissions, is adding to energy worries. Global complexities and competitive constraints have applied even more pressure to the challenge of maintaining operational efficiency and meeting financial performance goals.
Companies are now reassessing the traditional factors they use to determine the efficiency of individual assets. It’s no longer enough to look at excessive inventory, downtime, and non-value-adding paperwork to reduce waste without integrating energy performance.
A lean, best-practice approach to asset management called global asset sustainability provides a clear and comprehensive definition of efficiency. It includes whether an asset is consuming more energy than it ought to, which has often been invisible. It allows enterprises to continuously monitor and manage the energy consumption of their assets, and drives improved financial results throughout the enterprise, all while managing assets for optimal performance.
Managing energy efficiency
Most businesses rely heavily on energy-consuming assets such as motor-driven equipment; heating, ventilating, and air-conditioning (HVAC) systems; chillers and boilers; and materials handling and production equipment to achieve and maintain financial success. Traditionally, companies assessed three factors to determine overall equipment effectiveness (OEE): availability, performance, and quality. Their goals were to maximize uptime to ensure availability, guarantee that performance of an asset meets the specifications rating, and keep each asset’s output at high-quality levels.
But today, many companies are also focusing on a fourth important component to optimize asset performance: energy efficiency. These four major components make up the global asset sustainability index. This new measure is the key performance indicator (KPI) that allows organizations to not only gauge individual asset performance, but obtain a global, enterprise wide view of all asset performance to minimize energy waste and the associated costs to ensure best operational, financial, and environmental performance for the company.
Asset management systems also need to facilitate continual improvement in energy performance. The systems need to combine people, processes, and technology that support energy policy and strategic planning to provide visibility for monitoring, measuring, and analyzing asset performance. The systems also need to identify nonconformities, corrective actions, and preventive measures, with auditing capabilities for conformance.
Savings from Energy Management
An asset’s energy consumption may change over time under different operating and maintenance conditions, which can eat into profit margins. For example, a single 100-hp motor running continuously at 95% efficiency over a five-year period will cost a company nearly $350,000 in energy ($0.10/kWh). If the same motor consumes only 5% more energy under less than optimal conditions (energy waste), the motor will cost almost $17,500 more to operate.
By monitoring energy usage, an organization can view the asset’s true operating costs and take action (notify maintenance and operations) when energy consumption exceeds the specifications rating.
Tools for Monitoring Energy
Asset sustainability combines energy management with existing EAM functions to proactively identify, optimize, and automate maintenance, comparing assets’ performance with their energy usage across the enterprise. Best-of-breed EAM products provide tools to help organizations gather information from all their energy-consuming assets to support better decision-making about how and when to maintain, replace, or alter assets based on all relevant costs.
These products also help organizations meet the requirements of environmental sustainability by reducing energy consumption and carbon emissions. Furthermore, the solutions provide alerts when asset performance is degrading — much earlier than traditional asset management systems — to allow corrective action to reduce operating and maintenance costs while reducing the risk of asset failure.
Optimizing asset performance
On average, companies waste 20% to 30% of their maintenance resources and considerably more energy in the process of supporting peak performance of their operations. In fact, energy consumption constitutes 50% of operational and maintenance budgets. But they can reduce that number using technology that monitors energy consumption and integrates it with the conditional status of their asset infrastructure. They need to know that their assets are healthy by being able to detect weaknesses and find solutions.
Best-of-breed asset sustainability systems make energy consumption visible at meaningful and actionable levels, with automatic alerts that notify the right person at the right time to take corrective action when assets are operating at an unhealthy level. These solutions integrate real-time equipment data to provide a single, holistic view of plant and asset conditions.
For example, an asset sustainability system automatically sends an engineering manager an early warning of a condition on his EAM dashboard. He assesses the KPIs, views the work order showing increased power usage compared to normal operating conditions, views asset records and maintenance history, and concludes that it may be worth changing filters early to save wear and energy usage. He then checks whether that asset is within a planned maintenance program window, and if needed parts are available. Next, he opens a labor scheduling screen and concludes that he also needs an electrical engineer. He checks for the first available date, assigns the extra person required, and keeps the assets on his watch list.
By continuously monitoring and managing asset performance, organizations can detect any weakness in assets across the enterprise and make a complete assessment to find the best solution that reduces energy consumption, optimizes the lifecycle of each asset (operational), improves uptime, saves costs, and reduces environmental risks.
To optimize asset performance, organizations also need to be able to tailor the asset sustainability system to suit their unique needs so they can focus on their business and avoid firefighting. They need to define their unique processes and fine-tune the system on the fly, creating tools to solve day-to-day business challenges.
Market leaders in industries such as chemicals, paper, food and beverage, petroleum, transportation, and healthcare are moving to reduce energy consumption and costs as a top priority. In fact, a large pharmaceutical company claims that focusing on sustainability not only demonstrates good corporate citizenship, but is a business driver and differentiator in the industry. They’re using asset sustainability solutions to maximize asset availability, reliability, and performance, while minimizing energy consumption and costs for each asset across the enterprise.
To stay competitive in a rapidly changing market, organizations need to incorporate asset management capabilities that optimize not only their assets’ availability, performance, and quality, but also their energy consumption. With energy costs draining more than 80% of a company’s operational and maintenance budget, asset sustainability that focuses on energy efficiency is becoming a top priority for many companies within industries such as chemicals, paper, iron and steel, petroleum, transportation, and healthcare to improve their operational, financial, and environmental health.
Best-of-breed enterprise asset management systems provide tools that incorporate the global asset sustainability index using four components — availability, performance, quality, and energy efficiency — to gauge individual asset health as well as the total asset health across the enterprise. These systems provide visibility into asset performance at meaningful and actionable levels and automatically send alerts to the right person at the right time to take corrective actions and preventive measures.
Companies that have added the energy consumption component to their asset management systems have realized big reductions in energy usage, a quick return on investment, and improved environmental conditions, as well as increased shareholder value and new market opportunities.