Asset Performance Moving Beyond Just Reliability Because of Industry 4.0

The good news is that organizations don’t need to take on a massive redesign or make huge investments to achieve value from pursuing APM 4.0.

Posted: August 30, 2018

Asset Performance

Asset Performance Moving Beyond Just Reliability Because of Industry 4.0

For the last couple of decades reliability-centered maintenance (RCM) has been considered the pinnacle of maintenance philosophies. Although almost ½ of all companies today still have reactive (or break-fix) maintenance as their dominant approach to maintenance, the prevalence of preventative maintenance (PM), predictive maintenance (PdM) and condition-based maintenance (CBM) techniques is fast becoming the norm. For many companies the shift to PdM or RCM is viewed as state-of-the art maintenance. However, LNS believes this takes too narrow a view of the benefits of digital transformation. The reality is that if you are pursuing Industry 4.0 or Smart Manufacturing or more broadly, digital transformation, and relying on Smart Connected Assets to drive your business forward then reliability is but a stepping stone to the real benefits of asset performance management (APM) 4.0 level performance.

In the past maintenance has frequently been seen as a cost of doing business and an opportunity area for cost savings. Some more enlightened organizations have adopted RCM driven programs that focus on reliability and downtime reduction, but success has often been measured by savings, not overall profit improvement. However, organizations that have committed themselves to Digital Transformation can pursue loftier goals. LNS Research has crafted an APM 4.0 framework, and in this framework, the value delivery object of APM is overall performance, not simply reduced costs or downtime.

foundational technologies

APM 4.0

In the APM 4.0 model, reliability is only one factor of value. Profits, quality, employee and customer satisfaction, sustainability and other factors are all improved when a suite of tools can operate together, processing a diversity of information across the entire value chain. That information might be structured (i.e. from a business records database), semi-structured (historian data) or unstructured (images, text documents, media feeds, or vibrational spectral data). This applies whether the data is coming from devices on the plant floor, at a corporate location or from the cloud. It may be traditional IT type information, or it might be OT data at the edge.

The key to deriving value from this diverse data is to use multiple tools ranging from AI and Machine Learning to First-Principles-based models, incorporating financial data and taking a systemic view of the opportunities. In the past, the trend has been to focus on a single problem area. For instance, focusing on the reliability of a specific piece of equipment. These failure-prone and production-impacting elements were treated as the “bad actors” and the focus was on preventing their failure.

However, many firms found that despite reducing the frequency of failure on a specific piece of equipment, maintenance costs are as likely to go up as they are to decrease, and overall plant profitability may not even change. This can happen when the particular bad actor was throttling the production flow and hiding more fundamental flow issues. Or, it could be the activity to address the bad actor took critical resources or skills away from other critical process elements.

Leveraging the Digital Twin

The key to realizing the maximum potential from your plant is a robust and comprehensive digital twin. A digital twin is the tool that you leverage to not only better understand what is happening in your plant but the implications of future decisions. It is the digital twin that takes an organization to the next level of analytics – prescriptive analytics (RxM) where operational alternatives are presented with all their implications, so operations can make the best-informed decision on how to manage operational risk, improve profitability and drive stakeholder returns. The foundational technologies, data and the seven pillars of APM 4.0 described in the figure are the essence of the digital twin.

The good news is that organizations don’t need to take on a massive redesign or make huge investments to achieve value from pursuing APM 4.0. In many cases portions of the technology pillars are already part of a plants portfolio today. Investments in replacement technology often bring in new foundational capabilities such as the IIoT by default. All that is really needed to get started pursuing APM 4.0 is the vision, a defined architecture that supports APM 4.0 and the decision to make future technology investments that align with that architecture.

To learn more about how APM is evolving and your company can get the most from analytics and increase your profitability watch the On-Demand webinar with LNS Research sponsored by AVEVA

author
Written By
Dan Miklovic

Dan Miklovic is a Research Fellow with LNS Research; he primarily focuses on industrial operations, asset management, and energy management, with collaborate coverage across the Industrial Internet of Things (IIoT), paper and packaging, mining, metals processing and other industry verticals served by LNS Research. Mr. Miklovic is a Lean Sensei with more than 40 years’ experience in manufacturing IT, R&D, engineering, and sales across several industries, and has held key positions with companies like Emerson Electric, Mallinckrodt Chemical, Weyerhaeuser, Scott Paper, Aspen Technology. He is a fellow of the Industrial Computing Society and past leader in ISA, TAPPI and SME, and held an adjunct faculty position at Central Washington University for 16 years. Mr. Miklovic holds a BS in Electrical Engineering from the University of Missouri and earned a Masters of Science in Management from the University of Southern California.

Sign up for our newsletter and get all the latest information straight from the source.

See how APM 4.0 drives measurable and immediate results to your bottom line. Get Connected

Related Blog Posts

Stay in the know: Keep up to date on the latest happenings around the industry.

Asset Performance
Key success factors for adopting condition-based and predictive maintenance

Industrial organizations can no longer afford to operate in a reactive environment, it’s critical to reduce downtime, failure and production loss. We ...

Asset Performance
Pushing A Data Driven Future with Predictive Asset Analytics

Digital transformation in chemical manufacturing is occurring at a rapid pace. Watch this video to learn how Covestro is implementing predictive asset ...

Asset Performance
Continuous Online Monitoring as the Foundation of a Condition-Based Maintenance Strategy

The shift from Time-Based Maintenance towards Condition-Based Maintenance (CBM) in Power highlights the importance of detecting potential failure at the ...

Asset Performance
How To Drive Real Results With An APM Strategy

When executed effectively, asset performance management can enable dramatic improvements in a company’s ability to achieve overall corporate objectives. A well ...

Asset Performance
Digital Work Culture

For smart utilities to successfully adopt digital transformation they must embrace new autonomous assets and adopt a new way of performing work. Predictive ...

Asset Performance
Predictive Analytics Pilots That Work

Implementing new technology is inherent in digital transformation. But qualifying new technology like predictive analytics and implementing it into production ...

Asset Performance
What’s really holding back your digital transformation? Technology or people?

Roy Hill, Enel, Southern Company weigh in on whether it is the readiness of the technology, or the workforce itself, that was most challenging in applying ...

Food and Beverage, CPG
Improve Food and Beverage and Consumer Packaged Goods Operational Efficiency with Predictive Analytics and Augmented Reality

To exceed reliability, safety and performance goals, food and beverage and consumer packaged goods manufacturers are implementing AR/VR, Mobility and Analytics ...

Asset Performance
Asset Performance Moving Beyond Just Reliability Because of Industry 4.0

The good news is that organizations don’t need to take on a massive redesign or make huge investments to achieve value from pursuing APM 4.0.

Asset Performance
In Mining Industry 4.0 Translates to APM 4.0

Mining, metals, and minerals companies are asset-intensive businesses and have long focused on asset performance management (APM) as a core competency. As ...

Asset Performance
Profitability Management is Possible - Thanks to Digital Transformation

The key to being successful with APM 4.0 is to take a systems perspective. Instead of looking at just the asset look across the entire value stream of the ...

Oil and Gas
How Closed-loop Operations Enable Digital Transformation of Oil and Gas Fields

Today, the advancement in technology – cloud platform, analytics and computing power – is revolutionising the way how companies can leverage big data and ...

Asset Performance
Increase Asset Availability, Reliability and Performance with APM 4.0

Industry 4.0 and the Industrial Internet of Things (IIoT) are bringing the asset to the forefront of the business. This is the future of APM – APM 4.0.

Oil and Gas
How Pipeline Operators are Working to Improve their Asset Reliability

Asset reliability is a key component of an overall asset performance management strategy. And it plays a big part in helping midstream oil and gas operators ...

Oil and Gas
Maximizing Midstream Profits with OT IT Convergence

Historically midstream oil and gas organizations have kept two critical functions within their businesses almost entirely separate – IT and OT. One of the ...

Asset Performance
How does predictive analytics fit in a pipeline operator's maintenance strategy?

As midstream companies progress through their digital transformation journey, opportunity is being uncovered on how to better use their data to drive ...

Chemicals
Freud was Right: Accidents are Avoidable

As IIoT/Industrie 4.0 continues to enable smarter equipment that creates increasing amounts of data, chemical companies are faced with both the challenges and ...

Asset Performance
3 Easy APM Use Cases

I’ve talked a lot about the value of Enterprise APM, the components necessary to implement it and the benefits it brings, but I haven't discussed the best use ...

Chemicals
Chemical Companies Deliver Outstanding Customer Experiences Through Digital Transformation

Leading chemical companies are turning to digital transformation and asset performance management to augment and overhaul their traditional industrial and ...

Chemicals
5 Benefits of Digital Transformation in Chemical Manufacturing

Chemical manufacturing is an ever increasingly competitive industry with margins shrinking every day. Here are the top five opportunities for digital ...

Chemicals
Augmented Reality in the Chemical Industry

Let’s take a step back and try to understand the real value proposition of augmented reality and address how and where it’s actually an applicable technology ...

Asset Performance
Researching APM Providers Part 1: Look for Proven Results

The APM industry has so much hype around IIoT, digital transformation, Industry 4.0 etc., that it's important to focus on concrete results achieved. When ...

Asset Performance
Researching APM Providers Part 2: Long-term Roadmap and Vision

This series will cover three things you should look for in your APM provider. The first blog in the series, “look for proven results” posted last week. Read ...

Asset Performance
Researching APM Providers Part 3: Open, Agnostic System

This is the last blog in a three part series on the three things you should look for in your APM provider. Read more.

Oil and Gas
How Advanced Analytics improve Margins at Natural Gas Processing plants?

mproved fracking technology in oil and gas fields is creating an unprecedented boom in natural gas production, exerting tremendous pressure on natural gas ...

Oil and Gas
Digitizing the Mobile Workforce

The front-line opportunities to improve plant reliability, safety, and profitability are infinite. Value lies in digitizing the mobile workforce.

Asset Performance
3 Ways to Maximize Return on Assets with Risk-Based Maintenance

Here are three steps companies can take to implement a risk-based maintenance strategy to maximize their economic return on assets.

Asset Performance
3 Steps to Optimizing Your APM Strategy

Implementing any APM strategy is a journey, and APM Assessments are a critical tool enabling companies to evaluate and select the optimal strategy.

Asset Performance
Utilities Squeeze Assets with Predictive Analytics

Utilities must embrace new technology, such as predictive analytics, to increase reliability, enhance performance, cut costs, and reduce asset failure.

Asset Performance
Empower People with the IIoT to Improve Asset Performance and Reliability

While machine-machine communication is an important component of IIoT, it's just as important that solutions empower people to make informed decisions.

Asset Performance
How You Can Optimize Your Maintenance Today with the IoT

Operators are being pushed to reduce maintenance costs, extend asset lifecycle and increase performance - digital transformation can provide the answer.

Food and Beverage, CPG
Three Ways to Improve Agricultural Efficiency and Sustainability with Digital Transformation

Digital transformation can offer significant benefits in agriculture by optimizing the value chain to feed the world more efficiently and sustainably.

Food and Beverage, CPG
How F&B Companies Can Improve Uptime with Predictive Maintenance

Predictive maintenance is enables Food and Beverage manufacturers to improve uptime and production, enabling them to remain competitive in today's market.

Food and Beverage, CPG
Drive Operational Excellence with Digital Transformation

Food and beverage manufacturers can drive operational excellence across the value chain by implementing digital transformation.

Food and Beverage, CPG
Three Ways to Extract Value from IIoT in Food and Beverage

Learn how food and beverage manufacturers can leverage the IIoT to increase asset utilization, improve OEE and lower costs.

Oil and Gas
How Big Data and Analytics increase Production Asset Uptime in Oil Fields?

Oil companies must continue to make investments in improving operational efficiencies to sustain and improve their profitability.

Chemicals
Cracking the Code

An insider’s view on America’s turbulent Steel Market.

Asset Performance
Digital Transformation of People – Risk Prevention

With digital transformation of people established as the next big thing, the question is, what will the implications be for businesses? There are two main ...

Chemicals
Congratulations, it’s Twins! How to get the Most from Your Digital Twin in the Design Phase

A digital twin is a complete 360° digital representation of a physical asset, i.e., a pump, motor, turbine, or an entire plant. By creating digital twins of ...

Chemicals
Improve Reliability in Chemical Manufacturing with Predictive Asset Analytics

Predictive asset analytics enable chemical manufacturers to catch problems before they occur. This means companies can optimize their MRO inventory by ...

Asset Performance
EAM Crystal Reports Training

Enterprise Asset Management Crystal Reports training in our Burlington, Ontario office.

Asset Performance
It is OUR data not MY data

There is a lot of interest in advanced analytics to inform better decisions and make additional revenue.

previous next

Sign up for our newsletter and get all the latest information straight from the source.