According to a recent ARC study, 58% of us have no formal plan for managing the lifecycle of equipment. Based on my experience in working with life sciences companies, production facilities that operate aging equipment without a plan for managing end-of-life technology face a variety of risks that can increase downtime and decrease profitability should legacy systems fail. Since we can't always rip-and-replace, here are five suggested steps to mitigating your obsolescence risk.
Installed base evaluations
Companies with multiple locations should conduct installed base evaluations at all their sites. By comparing the excess and inactive inventory at each plant against the historical purchases of those same parts at other plants, an immediate return on investment for the Installed Base Evaluation can be realized, simply by moving inventoried parts from the plants where they are not needed, to the plants where they are needed. An Installed Base Evaluation should also lead to the creation of a prioritized obsolete asset migration list, which takes into consideration the criticality of a particular machine to production, the obsolete parts on that machine, the lack of available spares and the complexity of moving the obsolete parts to current technology. Taking all of these risk factors into consideration enables a Plant Director to determine, which obsolete part on which machine, has the potential to result in the greatest loss of production should it fail. Armed with this information, a Plant Director can then allocate funds to eliminate the greatest risks to the plant's production in a prioritized fashion.
Perpetual preventive maintenance
As equipment reaches the end of its useful life, age and wear take their toll. Failure rates drastically increase, as do maintenance costs. Plants are one major part break or machine failure away from a shut down, and legacy equipment is more susceptible to these sorts of hiccups. As a result, preventive maintenance becomes absolutely essential.
To drive consistent preventive maintenance of discontinued products, maintenance engineers need to be constantly asking questions, such as:
- Are the filters replaced regularly?
- Is the current operating environment within OEM specifications?
- Are cooling fans operational and clear of obstruction?
- Does the equipment possess the latest firmware update?
- Is there an updated logbook documenting inspections of obsolete equipment?
- When was the last time grounding was checked?
After determining the answers, maintenance needs to act to remedy any problems and correct any irregularities. Finding a way to get it done – either by outsourcing or reprioritizing – is paramount to extending the useful life of equipment.
Preventive maintenance activities will only be productive if performed by personnel with the know-how to handle the machines they are maintaining. It's not uncommon for a production facility to be running equipment that's more than 20 years old, and most of the people that designed and installed it have moved on from the department or organization. Oftentimes, these experts have been replaced by younger engineers who simply can't be expected to hold the same level of knowledge on legacy equipment. If the in-house staff doesn't have the time or expertise required to teach new talent, it's valuable to invest in an outside resource that does. A trained workforce can improve performance and metrics like downtime, on-time deliveries, vendor support expenses, overtime, scrap rate, programming costs and maintenance.
Save the Spares
Just as important as having the right people is having the right parts – an ineffective spares management process can extend downtime by 15 to 35 percent and legacy products can make this statistic even worse.
Maintenance, Repair & Operations (MRO) departments are constantly seeking opportunities to cut carrying costs by reducing inventory. To do so, they examine the turnover rate of each part. During this process, internal financial entities often pressure the department to get rid of parts that aren't turning over quickly. While this approach makes intuitive sense, it is the opposite of what should be done, especially with legacy automation equipment. As availability of these legacy parts begin to dry up on suppliers' shelves, firms that rely on them need to carry extra inventory to counter potential shortages.
When they don't, the result is often less-than-ideal – some production managers even resort to buying unverified spare parts from an auction site. Having a machine's health, and ultimately the company's profitability, be entirely dependent upon someone's last purchase on the Internet is simply not a sound business model. Parts management programs can help reduce inventory and carrying costs, and can help provide more immediate spare parts availability.
Watch for Change
Within a year or two of conducting a comprehensive audit of the installed base, production facilities often start to discover products that were once active have become discontinued. If risk isn't being continually assessed, it's much more likely status changes and threats associated with them will be missed.
To prevent this, companies need to establish a process for monitoring lifecycle stages of equipment. This should include developing a database and assigning subject matter experts within the organization to collect and maintain all lifecycle information. Vendors also can help provide additional information around lifecycle statuses, parts and service availability, and migration recommendations that align with business goals.
So, are you ready to mitigate your obsolescence risk? If you are, begin by conducting an installed base evaluation to identify all of your risk areas.
For help with this evaluation or creating a comprehensive equipment obsolescence plan, visit Rockwell Automation Life Sciences Solutions.
Published March 24, 2015