Process Industry Downtime and Key Performance Metrics

By Larry O'Brien

Category:
ARC Report Abstract

For many years, ARC Advisory Group has been looking into some of the key indicators used to measure the overall health of process manufacturing.  These include the impact of unplanned downtime on production, the age of the installed base of systems and their need for replacement, and the use of key performance metrics, like overall equipment effectiveness (OEE) and replacement asset value (RAV). 

Recently, ARC conducted a survey on these key performance metrics and indicators.  The survey results helped support existing ARC research on these metrics, but also provided some surprising answers that go against conventional industry wisdom. 

In the process industries, historical downtime information has been passed on and accepted as truth.  In ARC’s view, many of these statistics don’t necessarily represent a realistic view of the industry today.  For example, we believe that the true impact of unplanned downtime on the revenue and profitability has been vastly underestimated.  ARC estimates that downtime costs the process industries somewhere in the area of a trillion dollars a year. 

Most unplanned downtime occurs when the plant is in a transitional state, such as startup or grade changes that typically involve specific operating procedures.  Survey respondents also cited delayed maintenance turnarounds as a major source of unplanned downtime.  New approaches, such as procedural automation and Industrial Internet of Things (IIoT)-enabled technologies can help reduce the likelihood of downtime at any time. 

ARC also asked end users about issues related to the aging installed base of systems.  We learned that efforts to modernize and migrate the installed base have accelerated over the past couple of years, even as the market for new capital projects has been drying up.  With an older installed base desperately in need of replacement, the desire for end users not to be “locked in” with a particular vendor’s largely proprietary system has manifested itself in industrywide initiatives, such as the Open Automation Forum spearheaded by The Open Group, Lockheed Martin, and ExxonMobil. 

Table of Contents

  • Executive Overview
  • Survey Respondent Demographics
  • When, Why, and How of Unplanned Downtime
  • Aging Installed Base
  • Process KPIs:  OEE and RAV
  • Recommendations

     

     

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Keywords: Industrial Internet of Things (IIoT), Process Manufacturing, Unplanned Downtime, Procedural Automation, ARC Advisory Group. 

 

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