7 blogs, 7 days - Focus on the benefits to win safety system upgrade approval

Carrot or Stick? Focus on the carrot = improvements and benefits  

The goal of the new project is not to compare old and new systems, but to compare project investments and their gains. In general, the outcome needs to create additional value to the organization, either reducing bottom line costs, improving operating margins or creating increased revenue.

When justifying safety system upgrades, I am reminded by the “carrot and stick” approach to motivating decision makers, i.e. a combination of reward (carrot) and punishment (stick) to induce an outcome or decision. When building the business case to upgrade emergency shutdown systems, it is all too easy to fall victim to the negatives (the stick), to list all potential downsides and the risk / consequence to the business. Whilst this is important and shouldn’t be overlooked, it does leave a negative lasting image in the mind and a sour taste in the mouth of the decision makers. 

However, many companies realize that this approach is ineffective, decision makers are more motivated to do a better job for their companies and highlight the potential upsides and value to the business.

TIP: Sometimes the benefits of upgrading are intangible and difficult to quantify in an ROI Calculation.  

In this case, it is important to at least capture and document these benefits, even if they can’t be quantified, to further build understanding, importance and significance to the business case and organization. In other words, “Document them, even if you can’t easily quantify them”.

Break the fixation on costs.

It is only natural to want to keep upgrade project costs to a minimum and spend only what is required. At the end of the day there are only 3 choices:

1.     Spend nothing, do nothing

2.     Spend a little, do the minimum

3.     Spend a lot, do everything

Nobody will be surprised at the desire to choose option 1! However, this may not be sustainable, as at some point in time, something will break and then investment will be forced. If unscheduled, this can have a damaging effect on planned activities, resources and budget. No-one likes unexpected bombshells.

Manufacturing operations have little incentive to replace something that is operating. Age alone is rarely reason enough to upgrade, which is why there is so much aging infrastructure still operating today!  The challenge is delivering enough benefits to justify the expenditure. How much improvement is enough? What is the associated cost and what do I get in return? Is there a correlation between $1 investment to $X return? 

Not like for like - Better performance, better reliability, better availability

Doing a “replacement in kind” provides little or no benefit. There needs to be additional value created for the business, otherwise why upset the status quo? The key is to recognize that a change of one or more generations of hardware and software brings with it the opportunity to make an investment leading to future benefits. It is also important to remember the desire to minimize cost potentially reduces improvements to be gained from the upgrade effort.

Reliability and Up-time

One aspect to consider is increased reliability and up-time. Many older safety systems do not fully support the diagnostic capabilities of newer instruments and equipment. Newer instruments provide more diagnostic information to the safety system and asset management system helping to quickly identify the root cause of maintenance issues. In addition, the internal diagnostics built into modern safety systems together with modern software applications and mobile “go anywhere, know anywhere” technologies help avoid and certainly minimize trouble shooting time.

Improve operational performance, reduce operating costs

When looking for improved cash flows and formulating cost justifications, it is worth taking a moment to explore potential operational improvements. Take the time to talk to operations, maintenance and engineering departments who daily operate the plant / process as ROI opportunities tend to be plentiful when listening and hearing their perspectives.

For example, one major oil and gas operating company needed to upgrade more than 80 burner management systems as part of a program to update the furnaces to meet NFPA regulations. As part of the upgrade, the team identified ways of improving the operation of the furnaces, updating the standard operating procedures, for more efficient and effective operation of the furnaces.

Look for innovation opportunities

The objective should not be to simply replace, but to innovate and explore areas of potential improvement. Many improvement opportunities are driven by compliance to safety standards and recognized best practice. But upgrading the safety system should be an opportunity to put in place a safety system that will enable the manufacturing operation to be more sustainable, efficient and safer for the remaining operating life of the plant. Upgrading the safety system must unlock new opportunities.

For example, the improved contextualization of priority alarms, and situational awareness graphics improve operator efficiency, result in faster, better decision making and incident avoidance. The specific impact on ROI should include the likelihood of incident avoidance, production quality / waste product rework product cycles, rate improvements and reduced operational downtime.

For example, the use of modern digital automated logic testing applications significantly reduces the man power and time required to perform:

• Validation of upgraded / migration application logic functionality
• Testing efforts (pre-FAT, FAT, SAT)
• Start-up durations
• Validating logic changes / modifications and Mod packs
• Loop testing and commissioning
• Periodic proof testing
• Periodic logic re-validation
• Operator training

Such automated tools enhance test quality, improve consistency (the same test, every time), increase accuracy and test coverage (give more confidence in the application logic), increase integrity (can test for both positive and negative outcomes) and compliment traditional manual tests. Unless the safety system is upgraded, it may not be possible to capitalise on these potential new benefits.

For example, the use of automated digital trip analysis tools reduces the time to investigate plant trips and outages, returning the plant back to production sooner, or back to making money!

Unlock new potential

There are many benefits to be realized from modern safety systems that create new benefits, to improve top line and bottom line financial performance. For example:

1.     Online upgrades can now be performed, which means you never have to stop the safety system, so product operations aren’t interrupted.

2.     The ability to have more flexible implementation architecture (copper, fibre, Ethernet, central, distributed, remote etc.) means you can optimise equipment layout, reduce field cabling, have less interfaces, reduce maintenance costs etc.

3.     Better controller performance:

a.     you can incorporate more applications in a single controller, which equals less footprint, less capital cost, less operational cost, less maintenance, less spares etc.

b.     You can do more complex safety logic, for example dynamic safety calculations where safety set points change according to dynamically calculated risk criteria

4.     Better ability to future-proof investment (universal safety I/O, expand online, upgrade online, cyber readiness etc.)

5.     Deeper, richer diagnostic environment and easier HART integration reduce trouble shooting times, reduce maintenance activities and costs etc.

Reduce energy costs

Modern equipment typically consumes less power and generate less heat. This has potential to reduce energy costs.

Go Virtual

This is also a good time to consider the potential advantages of “virtualization”, the associated life-cycle benefits for the future operating life of the system, including:

• Fewer computers are required reducing the cost of hardware
• Less dependency on hardware versions, operating system versions etc reduces maintenance and support costs
• Reduces space – often at a premium, plus a smaller footprint reduces energy consumption and heating / cooling requirements
• Easy to add new servers quickly to adapt to changing needs

 Summary

In the next blog we will take a closer look at how to "Pitch to Win"