It is nice to hear from our customers and read in the literature that it has become important to not just replace obsolete control system equipment, but to also provide operational improvement. For the longest time I have been puzzled by the idea of not taking the opportunity to improve process operations when installing a new control system. I guess I was indoctrinated as a young engineer to always look for ways to improve operations and plant profitability. I also had the opportunity to design and start-up a few small chemical plants, which instilled in me the important role of process automation and how a well-designed control scheme can improve process operations.
It is important to realize that operational improvements do not just happen by replacing an older control system with a state-of-the-art system. Automation modernization projects need to be planned to get desired results just like any other project. When planning a modernization, we engineers like to jump into the technical problems and engineer the modernization execution plan. Then we might think about where the value will come from.
Instead it is best to start with baselining the existing process and understanding where the improvement opportunities are. That means understanding the operational objectives and determining historical performance. And since capital projects normally need to be financially justified you might as well start with the financial performance cost sheets. These sheets are normally done on a monthly basis and will document the amount of product produced and the normalized production costs. Look for consistently higher than expected costs or variability in the individual normalized costs. These costs relate to the plant business performance and operational issues and are areas of opportunity.
Once you understand the business issues, dig into the process to understand what activities are associated with the opportunity. Troubleshoot with operations and the production engineers as to the cause of the poor performance or variability. Decide if automation including new measurements, control points and a better control strategy can fix the operational issues.
Next, the financial gain needs to be estimated. Go again to the costs sheets and look again at the monthly financial results that were chosen as opportunities for improvement. Calculate the yearly losses for costs that have budgeted standard dollars and have actuals higher than budgeted. If you do not have budgeted costs to use as a baseline, look at the high variability costs and compare the average monthly costs versus the lowest monthly cost.
This difference may be used as the potential savings. Working with the operations department, estimate the percentage of that potential savings that may be attributed to the improved control strategy that was earlier designed. Obviously, the amount of savings chosen can only be a prediction and many times is a conservative number that is typically based more on the amount needed to justify the estimated cost of the solution. That is why at the completion of the project, it is not uncommon for the actual savings to be greater than expected.
From Jim: If you’ll be joining us for the October 24-28 Emerson Exchange conference in Austin, Texas and want to learn more, make sure to catch John’s presentation, Show Me the Money! Need to Justify Your Automation Project? – Let’s Dive into the Methods. You can also connect and interact with other automation migration and modernization experts in the Improve & Modernize group in the Emerson Exchange 365 community.