Ray Hardee is a principal founder of Engineered Software, creators of PIPE-FLO and PUMP-FLO software. At Engineered Software, he helped develop two training courses and teaches these courses internationally. He may be reached at email@example.com.
Piping systems are widely used in our industrialized economy to manufacture products and provide services needed to make the products. Several disciplines—technical and financial—work together to determine how these systems impact the profitability of a facility.
Since these piping systems are used to make a product for sale or provide services needed for continued operation, they have a major impact on the facility’s financial success. These systems are designed, operated and maintained to maximize system uptime, providing a positive effect on a plant’s revenue.
The operation of a fluid piping system is continually changing, and the ability to recognize how these interactions affect the financial success is often misunderstood. The following example is presented to illustrate the point.
The True ROI Achieved
In the July 2019 issue of Pumps & Systems, the article “Cost of a Misbehaving Pump” discussed problems at an integrated paper mill in the southern United States. The paper mill was meeting production goals and had an excellent safety record. Each plant department worked to meet its specific objectives while collaborating with the facility management to meet the plant’s financial, quality and production goals.
The facility was experiencing a systemic problem with cracking in the chloride dilution pump discharge header every six to nine months. Repairing the cracked pipe required shutting down the chloride dilution piping system, draining the contents to the waste collection system, making the necessary repairs, and then testing the system. This process took approximately two days to complete. Some of the repairs were done during scheduled maintenance downtime, but most required an unscheduled outage.
After evaluating the system, the pump rep recommended adding a variable speed drive (VSD) to the chloride dilution pump. The most difficult part of the project was getting the approval for this system. After six months of review by all the stakeholders in the plant, this $45,000 expense was approved. The justification for the approval was based on projected energy savings resulting in a 20-month payback, which in today’s world may not be worth the effort.
After a year of operation, documented maintenance savings reduced payback to 10 months. This still may not be adequate to be prioritized as a need to change action. There was more. When looking at actual plant data, the number of forced shutdowns associated with the vat dilutions system cost the plant in excess of $500,000 a year in lost production revenue. Factoring the cost of shutdowns resulted in a payback of three weeks.
Taking Action Sooner
In looking at that example when the various disciplines within the mill started working together, they were able to identify the problem, propose a solution and validate the results. The downside of this example was it took more than six years to recognize the problem and arrive at the solution.
Based on my experience, people are often more comfortable living with known problems than discovering the root cause of the situation. In this example, the facility had been running profitability, so the problems associated with the chloride dilution pump were understood and considered a cost of doing business. It was not until upper management identified the problems associated with the chloride dilution system that corrective action was taken.
A New Outlook
What if instead of looking for ways to improve system operation by reducing operating and maintenance costs we start looking at ways of increasing plant revenue by increasing system uptime?
In future Pump System Improvement articles, we will look for ways to increase system uptime when addressing real-life concerns of pumping systems. The objective is to create a clear picture of how the system operates, identify ways to deploy system improvements, determine the most effective means of achieving the desired improvement, and validate the results to ensure the desired increased plant revenue is achieved.
Today it is almost impossible to get a company to sign off on a case study, so we will take a lead from the entertainment industry. All the examples described in future articles are “Ripped from the Headlines” from operating plants. We will replace the plant’s name and location with a general term such as “integrated paper mill in the southern U.S.”
Each article topic will be based on actual questions asked in training classes, from end user visits and from readers. Next month, we will start with a simple pump system and see how to best address their concerns.