total cost of ownership - schneider...

Total Cost of OwnershipA deeper understanding of your operations#DigitalEvolution

#InnovationDay

#EcoStruxure

Schneider Electric |

Presenter

Lanny CarrConsulting Business Partner

Oil Gas & Petrochemical Segment

Schneider Electric

Total Cost of Ownership - Overview

What information/data is required to address LLC?

What has Schneider Electric done in this area?

Which innovations are required?

Why is this relevant?

What does this mean for the client supplier relationship?

What are the characteristics of LCC?

CAPEXLife Cycle

Cost

End of Life

Cost

What does the LLC structure look like?

What are the benefits?

Current Practice – Life Cycle Management Planning

• Build long term, site by site, lifecycle management plans for installed equipment that aligns to:

• Business Drivers & Operational Objectives

• Technology Roadmaps (Existing and Future Technology)

• Identify monitoring sensors/instrumentation, inspections, model-based condition monitoring

• Corporate and Site Strategies

• Digitization

• Operational KPIs

• HSE

• Maintenance policies

• Cyber security

• Risk Reductions

• Improvement initiatives

• Site Shutdown/Turnaround Schedules

• Value capture – risk reductions, profit improvements, efficiency improvements

• Coordinate and maintain lifecycle management across the enterprise in order to leverage:

• Best practices

• Lesson learned

Life Cycle Management Planning Process

Define Future

State

LCM

WorkshopLCM

Workshop

Generate

Budgetary CostsRepeat Annually

Discovery

• Understand client

business and

operational:

• Drivers

• Objectives

• Challenges

• Philosophy

• Expectations

• Potential Value

• Technology outlook &

Digital Enablement

overview presentation

Planning

• Review SE’s LCM

Program/Guidelines

• Define Client upgrade

guidelines

• Review & adjust risk

categories

• Assign Value

characteristics

• Installed base

validation

• Review TA schedule

• Identify high risk

assets

Post Workshop

• Define upgrade &

modernization paths

aligned to client

objectives, TA

schedule and value

capture

• Redraw lifecycle

• Repeat process

annually

• Produce upgrade

“look aheads” for

budgetary costing for

each TA.

• Run TCO & ROI

calculations

Technology People

Process

Active Risk

Monitoring

• Automatically run

Risk Model based on

new incident

information

• FRACAS – Failure

Reporting And

Corrective Action

System

• New

• Optional

Long term, site by site, life cycle management plans for installed equipment that are aligned to:

Life Cycle Management Planner (Triconex)

• Optimal lifecycle stage by technology category

• Technology roadmaps

• Business drivers and operational objectives

• Site Shutdown/Turnaround Schedules

=Date=Product Introduction Date=Transition to Available Date=No longer Repairable

ARROW ----> INDICATES NO IDENTIFIED TRANSITION DATE TO THE NEXT PHASE

PRODUCTS LIFECYCLE PHASES Prefered Available Mature Lifetime Obsolete

Date=Withdrawn from Sale Date=Transition to Lifetime

System Qty Product Number Product Category Description Unit TA Date Risk Category Risk Impact20

17

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

204

3

204

4

2045

2046

System 01 2 3201 Communication Modules ASSY MOD COMMUNICATION (CM) TRIDENT < Jun-16

System 01 8 3301 Input/Output Modules ASSY MOD DI 24VDC 32PT TMR < Feb-00 ---------->

System 01 2 3451 Input/Output Modules ASSY MOD SRO 24VDC 32PT SINGLE < Feb-00 ---------->

System 01 3 3351 Input/Output Modules ASSY MOD AI 0-5VDC 32PT TMR < Feb-00 ---------->

System 01 6 3401 Input/Output Modules ASSY MOD DO 24VDC 32PT TMR < Feb-00 ---------->

System 01 3 3101 Main Processors ASSY MOD MAIN PROCESSOR TRIDENT V1-V3 < Feb-00 ---------->

System 01 1 7254-8 Software (per Version) ASSY PKG TS1131 V4.5.136 < Jan-14 ---------->

System 02 2 8102 Cabinets, Chassis & Baseplates ASSY CHASSIS REM I/O EXP LODEN TRICON < Jan-04

System 02 7 8101 Cabinets, Chassis & Baseplates ASSY CHASSIS I/O EXP LODEN TRICON < Jan-04

System 02 1 8100-1 Cabinets, Chassis & Baseplates ASSY CHASSIS MAIN LODEN TRICON < Jan-04

System 02 3 4200 Communication Modules ASSY MOD PRIMARY RXM MULTI-MODE FO < Jan-97

System 02 3 4201 Communication Modules ASSY MOD REMOTE RXM MULTI-MODE FO < Jan-97

System 02 2 4351B Communication Modules ASSY MOD TCM COMM (RJ45) V10-V11 < Apr-07

System 02 2 3703E Input/Output Modules ASSY MOD EIAI 16PT 0-5/10VDC TMR < Jan-92

System 02 2 3504E Input/Output Modules ASSY MOD HDI 64PT 24/48V DC TMR < Jan-93

System 02 2 3617E Input/Output Modules ASSY MOD ESDO 48VDC 8PT TMR < Jan-03

System 02 3 3601E Input/Output Modules ASSY MOD EDO 115VAC 16PT TMR < Jul-15

System 02 2 3503E Input/Output Modules ASSY MOD EDI 32PT 24V DC TMR < Jan-93

System 02 8 3501E Input/Output Modules ASSY MOD EDI 32PT 115V AC/DC TMR < Jul-15

System 02 2 3502E Input/Output Modules ASSY MOD EDI 32PT 48V AC/DC TMR < Jan-93

System 02 4 3604E Input/Output Modules ASSY MOD EDO 24VDC 16PT TMR < Oct-06

System 02 10 3636R Input/Output Modules ASSY MOD ERO NO DRY CNTC 32PT SIMPLEX < Oct-09

System 02 3 3008 Main Processors ASSY MOD TRICON MAIN PROCESSOR V9-V10 < Jul-15

System 02 18 8305A Power Supply Modules ASSY MOD POWER LD I/O CHASSIS 120VAC/DC < Jan-99

System 02 2 8300A Power Supply Modules ASSY MOD POWER LD MAIN CHASSIS 120VAC/DC < Jan-99

System 02 1 7254-12 Software (per Version) ASSY PKG SW FULL LIC TS1131 V4.7.0 < Sep-15 ---------->

Jan-19 Jan-24 Jan-26

Apr-22 Apr-32 Apr-34




Apr-22 Apr-32 Apr-42 Apr-44





Jul-25 Jul-27

Jul-19 Jul-22 Jul-24

Apr-42 Apr-44

Jul-25 Jul-27


Apr-22 Apr-32


Oct-19 Oct-21



Life Cycle Management – Common Feedback from our Clients

• Obsolescence is not a justification for modernization

• Early risk identification and mitigation is key to

upgrade/modernization planning

• Clients looking to be more proactive in long term turnaround

planning

• Clients wanting to be more predictive with budgeting (short

& long term)

• Clients need help with strengthening business justification

• Client visibility into development roadmaps aiding with

informed decision making

• Clients seeking to maximize online versus offline upgrades

and define windows of opportunity for units/equipment that

is always critical to operation.

Total Cost of Ownership - Elaboration

• TCO is the correct way to view an asset

• However, the difficulty lies with quantifying the LCC uncertainty:

• We need to look at the LCC over long time periods, e.g. 20 years

• Inherent uncertainty in the life of the asset

• Asset life is impacted by usage conditions and physical environment

• Asset life is also impacted by asset management approach

• We therefore need a formal way to quantify the risk and the LCC

Life Cycle Cost Structure

• How best to address and formulate this problem?• What other questions must first to be answered?• Which additional questions would we like to answer?• How often should the LCC be calculated?• What data is required?• What information is required from the supplier?

Life Cycle Cost

Asset Management Repairs HSE Operational Losses Efficiencies

• Inspections

• Condition monitoring

• Expert monitoring

• Preparation time

• Repair time

• Test time

• Spares

• Crew size

• Logistics time

• Special equipment

e.g. cranes

• Ramp down time &

av. rate during ramp

down

• Downtime &

production rate

• Ramp up time & av.

rate during ramp up

• Likelihood of accident

during inspections

• Likelihood of accident

during repair

• Likelihood of

consequential

damages due to

repair/shutdown

• Environmental

excursions

• Energy efficiency

• Operational

inefficiency

• Other efficiencies:• Separation

• Conversion

• Mixing

• Efficiency is accounted

for separately

LCM - RAM Modeling Extension for Risk Assessment & LCC

INPUTS

• Failure Distribution

• Repair Distribution

• Generic Failure Data (e.g. OREDA, MIL-217, etc.)

• Repair Crew availability (e.g. # of Crews and

corresponding logistic delays)

• Labor Costs

• Spare parts availability and costs

• Preventive Maintenance policies

• Inspection policies (e.g. condition monitoring)

SUPPORTS

• LCC

• Spares Provisions

• RCM

OUTPUTS

• Availability

• Reliability

• MTBF

• Downtime

• # of Failures

• Throughput

• Costs

BENEFITS

• Identify Bad Actors

• Perform "What-if" Analyses

• Identify Process Bottlenecks

• Perform Predictions

(Availability, Costs,

Production, etc.)

RAM model provides:

• A strategic view of the asset’s

performance over longer time

scale

• Quantification of each asset’s

contribution to the overall

system availability and

reliability.

• An analysis of various failure

mode interactions of the assets

Questions answered – design & operations phases

• Ranks of various design options and scenarios

• Spare parts modeling

• Identify critical systems and critical components within a system

• Evaluate the impact of design alternatives on availability and cost

• Predict impact of equipment redundancy

• Predict impact of predictive technologies

• Design consistent with maintenance philosophy

• Risk reduction during commissioning and early plant life

• Breakout of LCC

Operations phase

• Inspections

• Logistics

• Supports RCM

• Throughput analysis – uptime,

downtime, slowdowns

• Maintenance resources and

constraints

• Optimal replacement time

Dynamic Reliability and Risk Model

Asset Inventory

Asset AdvisorAgeing Models Operating conditionsReliability Models

Sensor InputsPlant Historian

RAM ModelBlock Diagram

ReliabilityAvailabilityMaintainability

Updated Lifetime Data Analysis

Models

Costing InformationMaintenance PoliciesLogisticsSpares

Maintenance Records

Inspections Repair CrewsMaintainability

Scenario 1 OutputSLDsP&IDsPFDs Scenario 2 Output

Environmental Conditions• Temperature• Hygrometry• Degree of salty atmosphere• Concentration of corrosive

gases

Usage conditions • Intensity• Voltage, • Power• Reactive power• Harmonics• Number of trips

Scenario 3 Output

RAM Model Outputs

• Risk ranking of systems• Sub systems and equipment risks• Spares inventory requirements• Maintenance approach• Turn around planning input• Life Cycle Costs

Feed Detailed Design OperationalCommissioning Near Real-time

Lifecycle Management Planning BECHTEL.pptx

Crude Distillation – Reliability Block Diagram (simplified)(Diagrams from Reliasoft Blocksim module)

Optimum replacement time

System Total Cost - costs for tasks, crews and spare part pools.

RAM Analysis Results for Crude Distillation(Results from Reliasoft Blocksim module)

General

Mean Availability (All Events): 0.99295

Std Deviation (Mean Availability): 0.000972

Mean Availability (w/o PM, OC & Inspection): 0.994375

Point Availability (All Events) at 175200 hr: 0.98

Reliability at 175200 hr: 0

Uptime (hr): 173964.8595

Total Downtime (hr): 1235.140487

Summary Metrics

MTTFF (hr): 2179.233259

MTBF (Total Time) (hr): 2360.231712

MTBF (Uptime) (hr): 2343.592342

MTBE (Total Time) (hr): 881.68688

MTBE (Uptime) (hr): 875.471086

MTTM (hr): 6.215794

MTTR (hr): 13.276943

Waiting Downtime (hr): 0

Critical Downtime (hr): -

System Failures

Expected Number of Failures: 74.23

Std Deviation (Number of Failures): 9.832121

CM Actions

Number of CMs: 73.91

CM Downtime (hr): 985.547498

Inspections

Number of Inspections: 0

Inspection Downtime (hr): 0

PM Actions

Number of PMs: 124.8

PM Downtime (hr): 249.59299

OC Actions

Number of OCs: 0

OC Downtime (hr): 0

State Change Triggers

Number of OFF Events by Trigger: 0

Total

Total Events: 198.71

Opportunity Costs

Opportunity Cost(Total): $0.00

Total Costs

System Total Cost: $3,171,954.04

Revenue

Total Revenue: $0.00

Throughput

Total Throughput: 1739648.595

Throughput Metrics

Maximum Capacity: 1752000

Actual Utilization: 99.30%

Throughput Analysis Summary

System Overview

Metrics

Downtime Summary

Event Count Summary

Cost Summary

Block Name RS FCI RS DECI RS DTCIMean Av. (All

Events)

Expected #

of Failures

Number

of CMs

CM

Downtime

(hr)

Number

of PMs

PM

Downtime

(hr)

Total Cost

Crude Tank 8.97% 3.35% 11.33% 0.999201 6.66 6.66 140.0 0 0 $254,093.19

Pump 2.41% 13.67% 4.76% 0.999523 1.79 1.79 7.8 37.89 75.78 $99,859.37

Distillation Tower 39.92% 14.91% 21.01% 0.998518 29.63 29.63 259.6 0 0 $1,507,456.15

Compressor 13.61% 14.56% 13.27% 0.998835 10.1 10.1 126.2 39 78 $227,356.32

Pump 2.56% 14.56% 5.06% 0.999521 1.9 1.9 8.3 37.82 75.64 $101,986.92

Gasoline Tank 8.88% 3.32% 11.19% 0.999211 6.59 6.59 138.2 0 0 $251,375.21

Pump 2.37% 14.17% 4.93% 0.999523 1.76 1.76 7.9 37.86 75.72 $99,217.56

LPG Tank 9.39% 3.51% 11.73% 0.999173 6.97 6.97 144.8 0 0 $265,674.09

Pump 2.67% 14.51% 5.08% 0.999518 1.98 1.98 8.9 37.79 75.58 $103,603.03

Heavy Oil Tank 9.23% 3.45% 11.65% 0.999179 6.85 6.85 143.9 0 0 $261,332.22

Inlet (No Fail) 0.00% 0.00% 0.00% 1 0 0 0 0 0 $0.00

Individual Block Summary

Corrective

Misc. Corrective Costs: $2,854,053.44

Costs for Parts (CM): $0.00

Costs for Crews (CM): $0.00

Total CM Costs: $2,854,053.44

Preventive

Misc. Preventive Costs: $317,900.60

Costs for Parts (PM): $0.00

Costs for Crews (PM): $0.00

Total PM Costs: $317,900.60

On Condition

Misc. On Condition Costs: $0.00

Costs for Parts (OC): $0.00

Costs for Crews (OC): $0.00

Total OC Costs: $0.00

Inspection

Misc. Inspection Costs: $0.00

Costs for Crews (IN): $0.00

Total Inspection Costs: $0.00

Block Consequential Costs

Total Block Consequential Costs: $0.00

Indirect Pool Costs

Total Pool Holding Costs: $0.00

Additional System Level Costs

System Level Failure Cost (CM): $0.00

System Level Downtime Costs (CM): $0.00

System Level Total Costs (CM): $0.00

System Level Failure Cost (Total): $0.00

System Level Downtime Cost (Total): $0.00

System Level Total Costs (Total): $0.00

Total Costs

Total Costs: $3,171,954.04

Opportunity Costs

Opportunity Cost(Total): $0.00

System Revenue Summary

Uptime Revenue: $0.00

Throughput Revenue: $0.00

Total Revenue: $0.00

System Cost Summary

Block Name Total Cost CM MiscCM

Part

CM

CrewPM Misc

PM

Crew

OC

Misc

OC

Crew

IN

Crew

Block

Failure

Block

Downtime

Block

Uptime

Crude Tank $254,093 $254,093 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Pump $99,859 $36,583 $0 $0 $63,276 $0 $0 $0 $0 $0 $0 $0

Distillation Tower $1,507,456 $1,507,456 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Compressor $227,356 $162,226 $0 $0 $65,130 $0 $0 $0 $0 $0 $0 $0

Pump $101,987 $38,828 $0 $0 $63,159 $0 $0 $0 $0 $0 $0 $0

Gasoline Tank $251,375 $251,375 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Pump $99,218 $35,992 $0 $0 $63,226 $0 $0 $0 $0 $0 $0 $0

LPG Tank $265,674 $265,674 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Pump $103,603 $40,494 $0 $0 $63,109 $0 $0 $0 $0 $0 $0 $0

Heavy Oil Tank $261,332 $261,332 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Inlet (No Fail) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Block Cost Summary

• FCI – Failure Criticality Index

• DECI – Downing Event Criticality Index

• DTCI – Downtime Criticality Index

• CM – Corrective Maintenance (unscheduled)

• OM – On Condition Maintenance (condition detected, e.g. inspection)

Reliability Transformation

CollectConnect Analyze Act Visualize

DCS

PLC

SCADA

Wireless

Sensors

CMMS

Notifications

Workflow

KPIs &

Reports

Asset Health

Dashboard

Life Cycle

Cost Analysis

Models &

Machine

Learning

Global Aging

Framework

Anomaly

Detection

Product Lifecycle

Policy &

Guidelines

End of Life

Prediction

Probability of

Failure

RAM Model

Update Risk Matrix

MCC

=Date=Product Introduction Date=Transition to Available Date=No longer Repairable

ARROW ----> INDICATES NO IDENTIFIED TRANSITION DATE TO THE NEXT PHASE

PRODUCTS LIFECYCLE PHASES Prefered Available Mature Lifetime Obsolete

Date=Withdrawn from Sale Date=Transition to Lifetime

System Qty Product Number Product Category Description Unit TA Date Risk Category Risk Impact2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

System 01 2 3201 Communication Modules ASSY MOD COMMUNICATION (CM) TRIDENT < Jun-16

System 01 8 3301 Input/Output Modules ASSY MOD DI 24VDC 32PT TMR < Feb-00 ---------->

System 01 2 3451 Input/Output Modules ASSY MOD SRO 24VDC 32PT SINGLE < Feb-00 ---------->

System 01 3 3351 Input/Output Modules ASSY MOD AI 0-5VDC 32PT TMR < Feb-00 ---------->

System 01 6 3401 Input/Output Modules ASSY MOD DO 24VDC 32PT TMR < Feb-00 ---------->

System 01 3 3101 Main Processors ASSY MOD MAIN PROCESSOR TRIDENT V1-V3 < Feb-00 ---------->

System 01 1 7254-8 Software (per Version) ASSY PKG TS1131 V4.5.136 < Jan-14 ---------->

System 02 2 8102 Cabinets, Chassis & Baseplates ASSY CHASSIS REM I/O EXP LODEN TRICON < Jan-04

System 02 7 8101 Cabinets, Chassis & Baseplates ASSY CHASSIS I/O EXP LODEN TRICON < Jan-04

System 02 1 8100-1 Cabinets, Chassis & Baseplates ASSY CHASSIS MAIN LODEN TRICON < Jan-04

System 02 3 4200 Communication Modules ASSY MOD PRIMARY RXM MULTI-MODE FO < Jan-97

System 02 3 4201 Communication Modules ASSY MOD REMOTE RXM MULTI-MODE FO < Jan-97

System 02 2 4351B Communication Modules ASSY MOD TCM COMM (RJ45) V10-V11 < Apr-07

System 02 2 3703E Input/Output Modules ASSY MOD EIAI 16PT 0-5/10VDC TMR < Jan-92

System 02 2 3504E Input/Output Modules ASSY MOD HDI 64PT 24/48V DC TMR < Jan-93

System 02 2 3617E Input/Output Modules ASSY MOD ESDO 48VDC 8PT TMR < Jan-03

System 02 3 3601E Input/Output Modules ASSY MOD EDO 115VAC 16PT TMR < Jul-15

System 02 2 3503E Input/Output Modules ASSY MOD EDI 32PT 24V DC TMR < Jan-93

System 02 8 3501E Input/Output Modules ASSY MOD EDI 32PT 115V AC/DC TMR < Jul-15

System 02 2 3502E Input/Output Modules ASSY MOD EDI 32PT 48V AC/DC TMR < Jan-93

System 02 4 3604E Input/Output Modules ASSY MOD EDO 24VDC 16PT TMR < Oct-06

System 02 10 3636R Input/Output Modules ASSY MOD ERO NO DRY CNTC 32PT SIMPLEX < Oct-09

System 02 3 3008 Main Processors ASSY MOD TRICON MAIN PROCESSOR V9-V10 < Jul-15

System 02 18 8305A Power Supply Modules ASSY MOD POWER LD I/O CHASSIS 120VAC/DC < Jan-99

System 02 2 8300A Power Supply Modules ASSY MOD POWER LD MAIN CHASSIS 120VAC/DC < Jan-99

System 02 1 7254-12 Software (per Version) ASSY PKG SW FULL LIC TS1131 V4.7.0 < Sep-15 ---------->











Jul-25 Jul-27

Jul-19 Jul-22 Jul-24

Apr-42 Apr-44

Jul-25 Jul-27


Apr-22 Apr-32


Oct-19 Oct-21



EMCS with Online Condition MonitoringPrevent critical asset downtime

mA (4/20; -20/20; 0/10;

…)

Discrete I/O

Serial com (Modbus, DNP, …)

Ethernet com (IEC61850, Modbus, DNP, …)

Treatment

Unit

EcoStruxure™ Asset Advisor

(Service bureau)

EcoStruxure™ Substation Operation

(on premise)

Schneider

Electric

cloud

• Local Treatment Unit is performing local Online Condition

Monitoring on critical assets (Transformers)

• Data acquisition from various sources (sensors interfaces)

and data refinement.

• Standard interface to EcoStruxure Asset Advisor for

predictive maintenance (digital services)

Monitoring Sensors - Transformer

Client Supplier Symbiosis

• Cooperative• Frame agreements - support outcomes & objectives

• Spares management

• Crew availability

• Remote monitoring

• Predictive analytics

• Feedback to supplier• FRACAS – Failure Reporting, Analysis & Corrective Action System

• Design for reliability

• Influence development plans

• Input to client• Roadmaps

• Product Life Cycle Policy

Life Cycle Management - Benefits

• Reliability improvements

• Risk reductions (identification and mitigation of highest risks)

• Continuously current environment

• Improved availability

• Lower TCO/support costs

• Optimal upgrade or replacement decisions

• Upgrade justification beyond obsolescence

• Optimal spares levels

• Aligned with objectives

• HSE improvements

• Identify opportunities, e.g. operational efficiencies

• Visibility into technology roadmaps

• Ability to influence product development aligned to customer needs

• Protection against cyber threats

• Standards compliance

• Predictable budgeting

• Operational and project risk avoidance associated with large upgrade projects

• Disaster recovery readiness

• Obsolescence avoidance

LCM

Assessment

Discussion points

1. Has your company implemented a methodology to calculate and track Life Cycle Cost

(LCC) of equipment? If so, what are your experience?

2. Do you see value in calculating Life Cycle Costs?

3. If the answers to question 2) is yes, what are the main obstacles or challenges that you

have encountered in the calculation of Life Cycle Costs or that is currently preventing you

from doing so?

4. Does your company have a formal process or methodology for Life Cycle Management

(LCM)?

5. In order to reduce the LCC have you or are planning to make use of advanced equipment

condition monitoring?

6. How do you think Digital Transformation (i.e. IIoT, Cloud Computing, Big Date, etc.) will

impact and facilitate LCM and LLC?

7. Can you share best practices for equipment and systems risk assessment and

quantification?

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