Lowering Life Cycle Costs: From Front End Planning to a Zero Shutdown Goal

Rich Tree & Lou Traglia Commissioning Agents, Inc.

Agenda • The Problem with Equipment

– Life Cycle Costing (LCC) and the Decisions of Factory/Line Design

• Front End Planning (FEP) – Maintenance Prevention

• Shutdowns – Current State of Industry – Cost of Shutdowns – Why Maintenance Should Never Drive Shutdowns

• Linking FEP, LCC, and Shutdowns – The Future State

The Problems We Face With Equipment

Problem 1.Difficult to Operate 2.Difficult to Maintain 3.Chronic Defects 4.Many Adjustments 5.Complicated Design 6.Difficult to Achieve High Initial OEE 7.Unsafe – Not Failsafe

Impact on LCC Need more manpower – ↑RC Requires High Maintenance Costs – ↑RC Increases Cost of Goods - ↑RC Needs more costly manpower - ↑RC Increase equipment cost - ↑IC and more breakdowns, ↑RC ↑IC & ↑ RC Accidents - ↑RC

𝐿𝐿𝐿𝐿𝐿𝐿 = �𝐼𝐼𝐿𝐿 + �𝑅𝑅𝐿𝐿

IC = Initial Costs RC = Running Costs

Empirical Life Cycle Cost Profile

Production Friendly Equipment

Front End Planning – Maintenance Prevention

Construction Industry Institute (CII) Research Benchmarked over 600 projects: • $37 billion total project costs Average results of “good” FEP effort: • Costs: 10% lower overruns • Schedule: 7% shorter delivery • Changes: 5% fewer

Maintenance Prevention (MP) Design:

What is a Shutdown & How Much Does it Cost?

How much does an hour of downtime cost your company in lost revenue?

$500,000,000𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟365 𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑦𝑦𝑑𝑑𝑦𝑦 × 24 ℎ𝑦𝑦𝑑𝑑𝑑𝑑𝑑𝑑𝑑𝑑

=$57,078ℎ𝑦𝑦

Problems with Shutdowns

Prevailing Drivers for S/D • Preventive Maintenance • Corrective Maintenance • Projects • Fear?

Issues • Lost Production/Lost Revenue • Durations not Restrained

– S/D go for Weeks/Months – Relied Upon

• Disruptive to Operations Flow • Maintenance Efforts Often Induce

Problems • HR Challenge • Encourages Poor Planning &

Scheduling

Why Routine Maintenance Should Never Drive Shutdowns

Common Industry Maintenance Practices: • Routine elastomer replacements • Mechanical seal replacements • Heat exchanger pressure tests • Routine Derouging/Passivation • AHU pre-filters/belts • Cleanroom/HEPA Testing All driven by overly conservative thinking. Need to use risk-based and evidence-based decision making

2011 BioForum Operation Group non-scientific survey of their membership

“Have the right spare parts on hand, have at least two weeks of your backlogged maintenance planned and do the maintenance when the opportunity arises – that is the essence of good planning…”

Optimize Maintenance

Future State –The Drive to Zero Shutdowns

• All capital projects utilize FEP methods – Maintenance Prevention – Production friendly equipment – Procurement decisions based on LCC – Design in maintainability

• Shutdowns – the exception, not the norm – Use risk based decisions and optimize maintenance – Intrusive preventive maintenance creates as many problems as you attempt to

solve – Know the requirements and don’t do more than required – it doesn’t statistically

make you better – Use existing data to help with your decisions

Challenge the Assumptions