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    E J P Modernization Using: Conomic Ustification of Lant Automation

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    This document discusses the economic justification for modernizing manufacturing plants through automation. A small investment in upgrading automation systems can provide a quick return on investment by making plants safer, more productive, and better able to compete. Developing a long-term "Master Plan" to identify areas for automation improvements helps maximize benefits. Justification involves setting business, process, and automation objectives then calculating payback periods, with upgrades often justified if payback is less than two years. Examples show how increasing sales through higher throughput can justify automating batch sequencing.

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    E J P Modernization Using: Conomic Ustification of Lant Automation

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    This document discusses the economic justification for modernizing manufacturing plants through automation. A small investment in upgrading automation systems can provide a quick return on investment by making plants safer, more productive, and better able to compete. Developing a long-term "Master Plan" to identify areas for automation improvements helps maximize benefits. Justification involves setting business, process, and automation objectives then calculating payback periods, with upgrades often justified if payback is less than two years. Examples show how increasing sales through higher throughput can justify automating batch sequencing.

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    This document discusses the economic justification for modernizing manufacturing plants through automation. A small investment in upgrading automation systems can provide a quick return on investment by making plants safer, more productive, and better able to compete. Developing a long-term "Master Plan" to identify areas for automation improvements helps maximize benefits. Justification involves setting business, process, and automation objectives then calculating payback periods, with upgrades often justified if payback is less than two years. Examples show how increasing sales through higher throughput can justify automating batch sequencing.

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    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    71 views3 pages

    E J P Modernization Using: Conomic Ustification of Lant Automation

    Uploaded by

    api-26191239
    This document discusses the economic justification for modernizing manufacturing plants through automation. A small investment in upgrading automation systems can provide a quick return on investment by making plants safer, more productive, and better able to compete. Developing a long-term "Master Plan" to identify areas for automation improvements helps maximize benefits. Justification involves setting business, process, and automation objectives then calculating payback periods, with upgrades often justified if payback is less than two years. Examples show how increasing sales through higher throughput can justify automating batch sequencing.

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    ECONOMIC JUSTIFICATION OF PLANT MODERNIZATION USING AUTOMATION

    Alex Habib, PE

    With the recent wave of corporate takeovers and plant acquisitions a new challenge is emerging
    for managers and engineers to strive to make manufacturing plants safer and more productive
    just to stay in business -- A relatively small investment in up-grading a plant’s automation
    system can deliver a quick return-on-investment as well as ensure a safer, more productive,
    environmentally clean operation and the ability to compete more effectively in today’s global
    manufacturing marketplace.

    Justification

    • Market drivers:

    The following are examples of some of the challenges facing existing manufacturing plants
    in general and food processors, pharmaceuticals and specialty chemicals in particular:

    o Large number of mergers and acquisitions


    o Increased awareness of technology
    o Profit margins shrinking
    o Skilled labor shortages
    o Increased competition and need to ensure customer satisfaction
    o Short product turnaround
    o Tighter safety and environmental compliance requirements

    • Automation Master Plan:

    It is recommended before any attempt is made to up-grade or modernize an existing


    manufacturing facility that a well-coordinated long-term automation “Master Plan” be developed
    for the entire site.

    The following are some of the reasons for developing an effective “Master Plan” that can be
    used for both short and long term planning:

    o Identify the plant areas that will deliver the best payback when
    automated
    o Take advantage of available communication networking technologies
    o Obtain better prices for system hardware, software and services
    o Minimize spare parts and simplify plant personnel training
    o Ensure buy-in from senior management to make sure the required funds are
    available when needed when it is time to upgrade

    Partitioning the plant by process areas can help in determining which area should be the first
    candidate for retrofit (see Figure 1 as an example of a partitioned plant)
    Business Objectives Business Objectives Business Objectives
    Process Objectives Process Objectives Process Objectives
    Automation Objectives Automation Objectives Automation Objectives
    Payback Payback Payback

    Discharge

    Gas Waste Treatment

    U Train Process Units P


    T A B C D E A S
    Raw S
    I 1 Extraction Distillation Reaction Compounding Drying C T
    Material T
    L K O
    O 2 Extraction Distillation Reaction Compounding Drying
    I A R
    R Product
    T 3 Distillation Reaction Compounding G A
    A Extraction Drying Shipping
    I I G
    G 4 Extraction Distillation Reaction Compounding Drying
    E N E
    E
    S Reaction
    G
    5 Extraction Distillation Compounding Drying

    Liquid & Solids Waste Treatment

    Discharge

    Figure 1

    In the example shown in figure 1 above three areas namely: Extraction, Distillation, Reaction
    have been identified as candidates for an up-grade.

    After establishing the business, process and control objectives a payback period is calculated
    for each process unit.

    Assuming that the manufacturing facility is in a sold out situation, that is, product demand is
    greater than manufacturing capacity then it is relatively easy to justify the expenditure.
    Usually a payback of less than two-years is acceptable by most enterprises.
    The following are examples of the different objectives (Figure 2)

    Process
    Business Objectives Control System
    Objectives Objectives

    Business, Process & Control Objectives

    * Increase Throughput • Automate Batch Sequence


    Increase • Add Operator Consoles
    Sales * Add New Products
    • Add Sensors
    * Decrease Wasted Batches

     Improve Delivery (Time to Market) • Improve sensor Accuracy


    Increase
    Price  Improve Quality • Optimize Process

     Decrease Raw Material Usage


    • Add Redundancy
    Decrease  Energy and Utility Savings
    Mfr.Cost • Add Safety
     Decrease Disposal Cost and Instrumented System
    Environmental Compliance Penalty
    • Add Data Historian
     Increase Equipment Life
    • Close Control Loops
     Increase Labor Efficiency

    Figure 2

    An example of a business objective could be to increase sales. In a product sold-out situation


    the more product made in a specified time period (usually year-to-year), the more can be sold
    and the more profit can be realized since certain operating costs such as manufacturing labor,
    manufacturing overhead, G&A are likely to remain fixed. This translates into a process objective
    to increase throughput, which in turn can be achieved by automating the batch sequence as a
    control system objective.

    Once the increase in sales (and profit) and the cost of automating the batch sequence has been
    established and quantified, a payback can be estimated which depending on the return can
    provide the incentive to upgrade the control system.

    About the Author

    Alex Habib, PE is an Automation and Validation Engineering Consultant. He holds a MSEE


    degree and has over 19 years experience in automating and modernizing specialty chemicals,
    food, Flavors, pharmaceutical and Bio-Tech plants and research facilities. Alex’s work
    experience includes assignments at Hoffmann La Roche, Givaudan Flavors, IFF, Merck,
    Invensys, Pfizer, Rhone-Poulenc, Olin Chemicals and Jacobs Engineering.
    Tel: 732-742-7913
    e-mail: alex-habib@msn.com

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