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Managing Increasing Cost Pressures in Metal Manufacturing

Metals are an important component of building, infrastructure and engineering industries around the world. To sustain profitability, metals production – across aluminum, steel, zinc and copper – must navigate cost pressures stemming from three concurrent forces: global competition, a shift in the skilled workforce and increasing carbon emission regulations.

A growing number of countries and companies – including those affiliated with Baker Hughes – have committed to net-zero carbon dioxide emissions by 2050. So while carbon emission reduction is an important global goal, meeting it will add costs, compliance requirements and complexity for metal producers. Likewise, global competition is creating increased pricing pressure, and skilled workers are retiring en masse, creating knowledge gaps in manufacturers’ operations.

Metal manufacturing is at an inflection point that can be summarized by the adage: “What got you here won’t get you there.” A transformation is needed. This transformation is Industry 4.0, otherwise known as the adoption of automation and digitization practices that will enable new ways of thinking and doing that deliver the next-level cost reductions required for future viability.

As metal manufacturers move to Industry 4.0 and adopt smart manufacturing capabilities, the starting point for cost reductions lies with one under-optimized and under-leveraged area: maintenance.

Maintenance, optimized

According to industry estimates, in metals manufacturing, a 10% reduction in maintenance spend can generate a 30% increase in profitability. To achieve outcomes of this scale, leading metal manufacturers are looking to proactive maintenance, enabled through condition monitoring.

It is the pivot from reactive to proactive maintenance that enables manufacturers to better predict and manage asset health – at the lowest possible cost and the most advantageous times. According to Deloitte, predictive maintenance, on average, can increase productivity by 35%, reduce breakdowns (and unplanned downtime) by 70% and lower maintenance costs by 25%.

by Michael Sparks, Baker Hughes

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Unplanned downtime is the bane of all manufacturing; it can be especially costly in metals production. Large steelmakers can spend as much as $4 billion each year on maintenance. Since an estimated 20-25% of maintenance is spent on unexpected downtime, that equates to around $900 million per year in unplanned maintenance costs. A good portion of that spend could have been avoided with the proper, proactive maintenance approach.

Let’s look at one large steelmaker in India, which understands the benefits of mitigating unplanned downtime before it occurs

A large steel manufacturer in India averts unplanned downtime

For this Indian steelmaker, a high-tension motor bearing began to experience elevated vibration levels shortly after routine maintenance had found the bearings to be in good condition. The high vibration caused repeated machine trips; the Bently Nevada Machinery Diagnostic Services (MDS) team was asked to diagnose and identify the root cause.

An analysis of the monitoring data indicated signs of rubbing in close clearance areas, such as a bearing or seal. The motor was opened to find the precise location of the rub and, upon inspection, the root cause was identified as an improper fitting and insufficient clearance on the bearing seals. The seals were adjusted and the motor restarted; the vibration pattern returned to normal.

“A 10% reduction in maintenance spend can generate a 30% increase in profitability.”

The result? By identifying the problem early, the Bently Nevada MDS team saved the customer valuable time and resources. Any further damage to the motor bearings would have resulted in unplanned downtime, forcing the customer to stop production and halt downstream processes.

Additional impacts of unplanned downtime can escalate quickly and erratically to morph into catastrophic events that cause costs to soar exponentially. To put this in perspective, a non-catastrophic unplanned event in a large steel mill is estimated to cost $23.9 million per day. If this event remains unresolved or escalates to catastrophic levels, the company could soon face such negative impacts as lost production, customer defection, financial and legal risks, health and safety issues, regulatory penalties and urgent maintenance callouts.

It is vital to avoid unplanned downtime and mitigate the costly risks of its occurrence. Let’s take a look at a steel plant in Germany to see this principle in action.

A German steel manufacturer avoids catastrophic event
A steel plant in Germany operates several axial air compressors that provide air for its blast furnaces. After a major overhaul of one of the units in 2015, the customer encountered two catastrophic failures of the compressor rotor. After these events, the steel manufacturer used Bently Nevada MDS for startup assistance, monitoring and testing its operations over the course of several months.

During a scheduled shutdown in 2020, the vibration levels at the compressor bearings reached the danger limit. Remote analysis of the data indicated that the vibration was caused by a surge event or process-related issues rather than by mechanical damage. This data helped inform next steps and ensure a path to safe recovery.

inefficiencies and mitigate unplanned – and costly – downtime. Starting with asset-based condition monitoring and evolving into plant-wide and then enterprise-wide systems will usher in smart manufacturing capabilities that deliver next-level outcomes for the innovative metals industry.
 
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The result?  The unit was restarted without issue. The properly defined condition-monitoring solution with remote access allowed immediate support during a critical situation. An answer was generated within three hours of the customer request – supporting a safe, informed decision and the ability to start up operations as planned. After this event and the value provided, the German steel plant immediately moved to expand its condition-monitoring implementations.

Getting Started

Metal manufacturing companies need to optimize production better to stay competitive globally. The first step in that optimization is condition monitoring, which will help companies to overcome existing maintenance