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Trends in the Lifecycle Management of Automation Assets

Posted on 02 February, 2010 | Tags: Asset Management

Asset lifecycle management is a critical concept in present scenario. It is a discipline that influences the capacity of an existing automation investment while simplifying the integration of new technology. It has become a new pathway to the industry to have better productivity in smaller investment

Where repairing of various assets of an automation system is concerned, the manufacturer replaces all the parts even if the system is well designed.  An industry research firm named Australian  Research Council (ARC) has estimated that USD65 billion in automation assets are approaching the end of a useful lifecycle and has identified following   matters  that need to be taken care of while upgrading or replacing assets

• Avoid unscheduled downtime
• Take advantage of a new or emerging business opportunity
• Avoid the rising cost of supporting an aging system
• Implement the new benefits that technology brings
• Replace  a system that a vendor no longer supports or has phased out of production
• Meet new business needs not supported by the current system.

Some manufacturers take up a 'just leave it alone' method to fight with the challenges or in other words they just want to solve the asset's problem temporarily in a eco-friendly way.  But, this can result in short-lived cost savings or can   become an increase in return on existing investments with great risk. If there is an unexpected outage, the cost of downtime, rush charges and replacement purchases can be controlled. Many companies have a tendency to replace only existing functionality of the system to make it easy-to-use but in this process they miss out on competitive advantages that could come from advances in technology.
The companies who have additional resources might go to extreme situation removing old systems and replacing them with new ones. However, the new implementation has some advantages, they need some downtime and costs. A total system replacement has risk of paying for functionality, which can never be utilized, or wasting technology that may still have many years of working life. In fact, up to 95percent of the existing system is likely to still be functioning.
An increasing number of companies are now using a third approach, one that combines the economy of 'just leave it alone' with the business and performance benefits attainable from today's advanced technology. This approach is called asset lifecycle management. This is a new method that makes the investments eco-friendly while making things easier at the same time with the new technology.
Practicing lifecycle management means while individual components change over time, the total automation system never becomes old-fashioned. It develops the component as per the need of the business. The biggest drawback in the lifecycle management approach is the need for significant commitment on the part of the automation vendor.
The cost of engineering, personnel training and testing across multiple generations of a product, can be overwhelming. The vendor's job to manage multiple generations of components within its own supply chain shows that true lifecycle management is rare within the automation industry. As process manufacturers today seek new ways to improve the availability and utilization of automation assets, they are demanding more support from their automation suppliers to use this method to keep their systems up to date.
Whilst some vendors continue to sell closed-end, proprietary solutions without an easy upgrade path to newer technology, most vendors are beginning to design technology that is more open and expandable like desktop monitor replacement, CPU or keyboard with products from multiple vendors. The automation industry is now moving toward enabling the replacement of automation components such as workstations, control processors, I/O and instrumentation.
The progress in application developments makes the life cycle management easier than before. Advanced object managers, Service-Oriented Architectures (SOA) and design on industry-standard platforms such as UNIX workstations and Microsoft. Net development environments for instance make the all functions easy and also increase the company's process knowledge.
In addition, progresses in technical support services are facilitating the enterprise through greater ability for managing the technical support lifecycle. Advanced data and knowledge management tools capture and enable the ways to share   the databases that gives the maintenance history of each asset.
Continues 24/7 management of a single global technical support queue optimizes the resources that are applied to resolve problems. Real-time remote monitoring, diagnostics and follow-the-sun support removes geographic barriers for keeping systems running fast.  If the technology is not managed to a proper end, it cannot result in a truly evergreen operation, no matter how open and integrated the technology is.
There is a need of a holistic approach for the lifecycle of each automation asset. Knowledge of future product development, combined with the identification of product transition allows users to make intelligent and cost-effective choices.

Managing the Automation Lifecycle
While automation users can track information on the availability, utilization and performance of assets themselves, they are entirely dependent on automation vendors to control the availability of each component in their automation system. Many process manufacturers are surprised when they receive notice from a vendor that the technology on which their business depends on is no longer useful to them.
The users face lots of uncertainties if they do not receive the vendor's future plans.  These concerns range from increasing costs of buying spares, to availability issues or the potential for unexpected shutdowns. If manufacturers are   also aware of the original position about their automation asset's lifecycle and to what extend the vendor will rely on the product future problems can be avoided.
Manufacturers also need to know the vendor's plans for transitioning products from one generation to the next like how the products are communicating with every parts of the system. Thus, they can plan positively for the future.  This kind of information makes budgeting more effective, enables users to co-ordinate with company actions, such as outages, take strategic initiatives and provide hard data that they can bring to management to justify cost and expense of equipment upgrades.

Definition of Lifecycle
Lifecycle management includes a clear definition of the product life span and available support at each phase, clear rules defining backward compatibility  across generations and a roadmap that provides a proper view of future developments which is called a  forward compatibility.
The first step toward gathering information is the creation of a classification system that identifies the progression through the lifecycle.  The following are the five phases of lifecycle phases.
Preferred Products These products are the most recent hardware and software available in this functional area. These are actively produced, sold, promoted and supported.
Available Products These products are available for sale and are still supported in production, but have been replaced by more advanced technology. Available products are typically sold for expansions, rather than new installations.
Mature Products These are no longer for sale, but are still supported and maintained through repair for a defined period of time.
Lifetime Products Lifetime products are reaching the end of their usable life and components are becoming unavailable. These products are in jeopardy of becoming unrepairable and should be upgraded or replaced.
Obsolete Products These are the products for which, despite best efforts, support, maintenance and repair are no longer feasible.
Vendors should provide advance notice of at least 12 months before transitioning to obsolete, along with proposals and suggestions for upgrading to new products. The automated tools make the process easier, take the effort to develop a timely and precise categorization and also communicate effectively with the customers.
 
Backward Compatibility
Backward compatibility is a basic design decision and is critical to assure that the oldest and newest equipment communicate and share critical messaging structures.  Vendors should identify the type of information that is communicated between various generations of products, which is primarily a function of the hardware design. They should also make sure that customers know which equipment is compatible and what is a key part of the lifecycle management discipline. End-users should also understand the rules that govern that compatibility and vendors should work with each of its customers to ensure that the best lifecycle planning decisions are made.

Forward Compatibility
Due to changing technology and emerging standards, very few vendors can be 100 percent sure about how future products will finally be designed. While there is a risk in sharing development plans, many vendors are finding that it is in their best interest to share estimates of planned enhancements, new offerings and development schedules with their customers.
Both clients and vendors understand that although a roadmap does not represent a commitment to deliver a specific product, service, or functionality on a specific date, it can be very supportive for the preliminary planning. Development activities that are scheduled to release in the near-term will have a great deal of detail about the new offering, its functionality and the benefits to the user. The anticipated delivery date will also be firmer than long-term activities.
As projected timeframes are extended, the details will be fewer and the delivery window will increase. The given information provides the details that how the customer can make better long-term planning and budgeting decisions. However, it knows that the vendor is trying to develop a product to satisfy a need like a new type of I/O devise or a new wireless sensor. This roadmap provides the customer with a vision of where the vendor is taking the product.
Return on Upgrade Investment
In addition to having a clear understanding on the lifecycle phase of each asset and its backward and forward compatibility, the financial benefit must be real and easy to communicate. Most companies justify upgrades based on projected cost increases of maintenance and the acquisition of spares. While this is likely to be a significant upgrade driver, given are other lifecycle management reasons to replace aging equipments. Upgrades are significantly less expensive, faster and less disruptive than bulldozing and rebuilding; a discounted purchase price may be available on new equipment in exchange for the return of older products; lifecycle planning simplifies the long-term planning and budgeting processes; lifecycle replacements can be justified using maintenance money and reducing capital expenditure and upgrades can be aligned with the business strategy.
One of the most convincing metrics is comparing the cost of a unit upgrade to the cost of replacing an entire system. For example, only a very small percentage of a system requires to be replaced periodically. In fact, over the life of the system, as little as 5-10 percent of the original installed cost will typically keep the system up to date.
The calculation of the costs of engineering, procurement and construction to install a completely new system is added to the cost of routine upgradation of even the small parts of the original system.   In addition to that costs of lost production and the total investment increases dramatically.
Keeping a system refreshed helps savings in the preservation of intellectual property, such as designing and engineering the control strategy, historian configuration, graphic displays and databases. If the entire system were removed and replaced, this would all need to be recreated. The fact that smaller-scale purchases are generally approved quicker than large capital budget expenditures, means that benefits of the upgrade are realized sooner, is yet another way that lifecycle management can reduce costs. Additionally, upgrades can be installed in hours or days, versus weeks or months, significantly reducing downtime.
Financial benefits of lifecycle management apply to software licenses as well. A scalable software license, allows the selection of only those features and functions relevant to each application. A customer can organize a workstation   excluding licensing of engineering tools if they are not required. Or, if an operator requires access to only a small number of I/O points, the license for that workstation would be less than a license that has plant-wide access. If total access is required at a later date, the option can be added.
 In addition to enabling more selective purchases, a lifecycle management discipline enables users to leverage the maximum value of their asset base through trade-up and product exchange. The price of the new equipment can be based on the vintage and version of the returned product, as defined by the lifecycle phase. Products that are returned and are newer will receive a higher trade-in value.
For example, products upgraded from the available phase to the preferred phase might receive a higher discount than products upgraded from the mature or lifetime phases. These incentives may be applied to the list price of the product being purchased, based on the return equipment meeting specific, predefined functional requirements.
Vendors justify such deep discounts by refurbishing trade-in products and making them available to other customers for spares or repairs, until customers are ready to upgrade to the latest versions. Reducing capital expenditure and also growing in popularity is the trend toward purchasing upgrades from maintenance budgets. Money targeted for purchase of product upgrades can be included in a service agreement. Using this method, customers can take the money from their maintenance budget to pay for planned upgrades, rather than the capital equipment expense, which is generally harder to justify.
This approach also provides some flexibility  while investing 100 percent of money while delivering and implementing the new upgrades. Aligning with business strategy, making proper budgets for the upgrades according to the available revenue is very challenging. Traditional cost management systems rarely have the granularity necessary to map the benefits of equipment upgrades to strategic business objectives.
However, advances in the areas of real-time finance are making this increasingly easier. A revenue boosting strategy for a refiner in today's market might involve boosting output, which means that upgrades supporting that strategy should have the greatest impact on the bottom line. If a process engineer is seeking the upgradation can demonstrate the new equipment's role in boosting output, it should be relatively easy to cost-justify the upgrade.

Ramping Up to the Enterprise
An ever-fresh approach delivers the latest productivity-enhancing software, the fastest and  most capable control, the sharpest graphics with highest capacity and the most powerful applications at the lowest possible cost. Using this approach, manufacturers continue to use their oldest products until they are ready to upgrade or use multiple product versions together to meet their business needs. Where very few vendors are focused on keeping even their own product installations current, it is now feasible to think about an evergreen enterprise, in which the entire asset base is upgraded using a managed, disciplined approach.