In 2006, Bob De Maria, Reliability Superintendent of Dakota Gasification Company (DGC), presented to his company's Board of Directors a business plan for improving the company's bottom-line through better management of its equipment assets. When he returned to the boardroom with the documented results 15 months after implementation, the news was even better than expected. Rewind
Like most significant change, it evolves. In 2000, DGC formed its Reliability Group as a first step in figuring out a means for better managing the company's 100,000 plus equipment assets. Its mission was three pronged:
- optimize maintenance expenses
- maximize equipment availability for production
- maintain equipment in a safe operating condition
Management of equipment information, knowledge and work history was quickly identified as key to achieving the company's reliability mission. Easier said than done given that the company had over 100 stand-alone databases, hard copy equipment information and information losses due to retirement and promotion attrition. A team of representatives from the company's IT and Reliability groups was formed to begin the work of finding a solution. After three years of research including evaluation of in-house versus available packaged solutions, a product assessment and documented customer successes, the team selected Meridium.
Justification for the purchase was made to the BOD in 2006 based on:
- current software program shortfalls
- expected benefits
- results experienced by other energy industry users
- project costs and return-on-investment
Following board approval, equipment assets and work history were loaded into Meridium in January of 2007 and the savings started racking up quickly.
Big savings in identifying previously unknown opportunities
Once Dakota Gas moved to the Meridium integrated data approach for the management of their equipment assets, unknown opportunities, previously hidden below the surface of their earlier data management approach, were quickly identified. Using Meridium, the company quickly drilled down through their data and identified over $10MM in maintenance savings related to their bad actors. Dakota Gas projects continued reductions in maintenance costs through the demonstrated ability Meridium offers to systematically identify their macro problems (bad actors) and then drill down through the data to identify the micro reasons associated with their failures.
Moving from a narrow to a panoramic view
When the company began to examine maintenance costs by discipline, fixed equipment was identified as offering a significant opportunity for reliability improvement and return-on-investment. Following a benchmarking assessment, and a Meridium gap analysis, the company determined that the source of their fixed equipment problems wasn't simply a few bad actors, but rather a systemic problem rooted in the company's fixed equipment work processes; a discovery which helped move the company's view of asset management from a narrow, individual equipment problem solving approach, to the adoption of a more panoramic view of how well-managed assets could add value to the company not only through significant reductions in maintenance costs, but through reduced production losses, as well as helping to ensure documentation of mandatory OSHA compliance to process safety management standards. The gap analysis identified three improvement areas:
A case in point: In December of 2007, the company experienced a crack in a critical process vessel resulting in a 60 day total plant outage. While the company thankfully escaped any safety incidents, the costs in terms of production losses far exceeded the associated maintenance costs.
Show me the money
In May of 2008, it was time for Bob to revisit the boardroom and "show them the money". The Board was pleased with the demonstrated reduction in maintenance costs versus their Meridium investment. And this good news was followed by more good news - by more fully utilizing Meridium capabilities the company could experience even further and more significant savings through the reduction of unexpected production losses. Success breeds confidence and with upper management's strong approval the DGC Reliability Group has reorganized and added six new positions and has Meridium at the center of several 2009 priorities in the development and implementation of the Dakota Gasification Company World Class Fixed Equipment Reliability Program.
Click here to view Dakota Gasification Company's Meridium 2009 Presentation Our Road to Plant Reliability and Meridium - 2009 Update - "Show Me the Money" and learn more about DGC's:
- Identification of bad actors
- Identification of greatest value-added opportunities using a risk/reward methodology
- Meridium investment vs. maintenance cost savings
- Mechanical seal alliance using Meridium resulting in 2008 benefits of more than $500,000
- 2009 priorities
