Large, greenfield projects require specification and procurement of thousands of instruments. When procurement is driven by cost, it can be extremely difficult to coordinate and consolidate the selection to reduce lifecycle cost while maximizing safety and reliability. As a result, warehouse spare part inventories often reveal unnecessary stock levels and huge potential for cost reductions.
“Buying spares by model number based on manufacturers’ recommendations often means stocking a wide variety of parts, and excess spending may cause you to run out of money before you have all the critical spares,” said Brett McCutcheon, account manager, Spartan Controls Ltd., in his session at the 2017 Emerson Global Users Exchange this week in Minneapolis. “You end up with a mishmash of wrong spares. Instead, you need to spend money the best way, to buy smarter and spend less.”
When Suncor planned its new Fort Hills production facility in Alberta, it recognized the need for standardization and the potential to improve on cost and coverage. The facility has a planned capacity of 194,000 bbl/day for 50 years, using more than 10,000 smart instruments and devices. Suncor and Spartan worked together on a systematic analysis of the Fort Hills asset database and found that with proper model analysis, they could significantly reduce requirements by consolidating recommended spares.
A four-step process
It’s a process of validation, standardization, consolidation and rationalization, said Rob Gray, technical sales specialist at Spartan. “We start by putting all the devices’ information into a large database, gathering it from the manufacturers, engineering firms and the floor. At Suncor, we had three major and more than 10 minor engineering companies involved, from many parts of the world. Assets were sourced globally from various manufacturers.”
In the database, missing or questionable data is highlighted in yellow, and the database is worked on until it’s complete. “Then we look for opportunities to replace each device or part with another, and to standardize for multiple applications,” Gray said. For example, “Control valves were standardized on bare-stem models with maximum coverage for multiple applications, and we used spare trim sets for two applications where it made financial and operational sense.”
“For regulators, we found we could use one spring for four applications,” Gray said. Pressure transmitters were standardized on transmitter heads and capillary lengths that could be used in the maximum number of applications, and separated by pressure ranges for quick standardization review. For example, three models that were unique numbers due to materials and vendors were proposed to be replaced by one.
Consolidation begins by providing the summary database of the proposed, standardized builds against asset counts and criticality. Then a case-by-case study was performed for each standardized spare. “We confirm each standardization with the user, vendor and reliability team,” Gray said.
Rationalization is where each standardization becomes the norm throughout the facility. Pricing and availability are quantified before making management of change (MOC) documentation. “MOCs are created to make changes to the datasheets and approve alternate spares,” Gray said. “And the job is not done until it’s reflected in the SAP database, which may require another set of resources.”
Then it’s necessary to do a site rollout, and champions are needed to raise awareness with maintenance teams. “This must be done or the site will just replace like for like,” McCutcheon said. “There are many stakeholders, and everyone on the site involved in maintenance and reliability has to know we’re not going to do that.”
Even with optimized standards, things can be missed when ordering spares. “The team used our findings to catch these misses, resulting in large project savings,” Gray said.
Business results
At Suncor, the number of unique valve constructions was reduced from 186 to 121. “We reduced the control valve spend from $5.5 million to $3.5 million,” said McCutcheon. “Yearly storage expenses were reduced from $1.3 million to $875,000,” assuming 25% cost of asset annually. Suncor calculated the total cost savings at $7,301,388.
The sparing strategy has been used as a feeder to an overall equipment spares strategy for the company, as the models and types spared for this facility are in many cases applicable to other facilities. This approach will continue to result in incremental business results as more standardization is done.