Apc for min maintenance or max profit -part 1
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1) The author disagrees with Dr. Friedman's recommendation to sacrifice 30% of potential benefits from advanced process control (APC) in order to reduce maintenance costs. 2) Well-designed APC can generate $1-2 per barrel of crude refined, so sacrificing 30% of benefits to minimize APC maintenance could result in losing $60,000-$120,000 per day for a typical refinery. 3) The author argues that better financial quantification of the benefits and costs of APC is needed to properly assess tradeoffs between performance and maintenance.
![HPIN CONTROL
PIERRE R. LATOUR. GUEST COLUMNIST
SR2@msn.com
APC for min maintenance or max profit?—Part 1
First, rlianks to Dr. Y. Zak Friedman' for referencing niy ]iily
1997 ///'editorial.' I commend him tor using /^Z'publications
fmin more than a decade ago in his editorial.
While I appreciate Dr. Friedman's effort to offer ideas to design
advanced process control (AI'C.') to perform better in the real
HPI world, I continue to be dismayed abotit the inability of the
process control, instrumentation and IT businesses to measure its
llnanciai profit contribution properly,^*'' which leads Friedman to
recommend' sacrificing 30% of potential APC^ benefits to reduce
maintenance costs, by simplifying a MVC software matrix, with-
out quantifying the performance loss or maintenance saving.'
I believe Dr. Friedman and I agree on the facts and situation of
APC practice in the HPI,''' but naturally differ on how to address
them. I am troubled by Zak's broad claim in his first paragraph,'
"Considering the history of APC maintenance, the latter (forgoing
30% of poieiitial benefits) is better by far."' It may be pragmatic,
but it also may be unprofliablc. Just beware of the taith theory.*
Since well-designed APC can generate $1 to $2/bbl crude
refined,--'''-^ sacrificing $03 to 0.6/bbl x 200 kbpd/reflnery =
S60,000 to $ 12ü,000/day for a typical refinery to minimize APC
maintenance illustrates the source of my distnay.
Like Zak, I certainl)' would also sacrifice a lirtle performance
in exchange for a substantial maintenance cost reduction; and I
stippose Zak woukl retain .significant performance in exchange for
a little maintenance. Surely he would agree if one could quantify
these, the decision becomes easier. And forgoing 30% of APC
benefits is an ad hoc rulc-of-thumb from his experience. It would
Ix- hclplul it /,ak reported the maintenance cost saving he achieved
by .simplitying the MVC matrix on that column;' compared to
the 30% lost financial performance.'
My experience suggests the rea.son the HPI does not maintain
APC well is its perception that maintenance cosr is high and return
is invisible.'^'' No one seems able to properly quantify that >$ 1/bbl
benefit.** '" It will remain hard to perform good maintenance until
this value is visible, qtuintiPied, accepted and worthwhile.
Kern** explains the common organiziitional barriers that hinder
operations management, process control and IT from acquiring
their own economics to optimize risky CV/KPI tradeoffs and align
their hydrocarbon proce.ssing with their economics/''^
I also agree with Deshpande'' on the importance of combining
CVmean target setting witb variance reduction.^'^'^
All I atn recomtnending is better financial qtiantification""'''
of hcfießt - cost = proßl, to sharpen the decisions Friedman pro-
poses."""''' I find keeping financial score correctly is a useful and
pragmatic way to communicate with management and customers
about tlie valueof APC work and techniques. I think process con-
trol engineers should know process economics intimately. I fail to
find any disagreement from Friedman's writings on that idea.
I renew my pleas to the HPI to adopt a clearway to measure per-
formance value before spending money on
One must quantifi,' the C'lifftcnt profit tradeoff for each risky CV/
KI^I to have any hope of setting means properly, assessing the
value of variance reduction and justifying control system and IT
expenses. T will identify the panacea in Part 2 next month. HP
LITERATURE CITED
' Friedman, Y. Z.. "AI'C." designs tor miiiinuim maintcnanto—l'an 1," HPIn
Cxjntrol Lùiitorial, Hydrocarlmn !ocasi'i^, V88, n6, Junt 200'), p. 90.
' Uiour, P. R., "Doc; the HPI do ii.i CIM bmincw right?," HPIri Control guest
Ediiorial, Hydrocarbon ¡'rotrssiiig, V76, n7. July 1997, pp. 15-16.
l-aiour, P. R.. "Ücmise and keys ro the ri.se ol process control," Hydrocarbon
Processing, V85. ii(). March 2006. pp. 71-80.
•* Friedman, Y, /... "Audit your APC applicatiotis," Hydrocarhoti Pnicfssing, V85,
nl2. December 2006.
'' FTiednian. Y. Z., (and P. R. Latour), "Dr. Pierre Ijtoiirs views on APC,"
HPIn Control Editorial. Hydromrbon Processing, V84, nl 1, November 3005,
pp. 17-18.
'' Latour, P. R., "Set vapor velocity sctpoints properly," Hydrocarbon Processing,
V«5, nIO. October 2006, pp. 51-56.
Ijtour, IÎ R., "Align HPI operations to economics—Clifltcnt optiinizcx risky
tradcofFs ¡it limits," Hydrociirbon l^icessing, V87, nl2. December 2008, pp.
103-111.
" Kern, A. C, "! T/aiitomation convergence revi.sitcd^Kecping aiitoniatlon
dose-COIIpled lo operation is key," Hydrocarbon ¡h-ocasing. V88. n6, Jtme
2009. pp. 61-62.
'' Deshpande, P li. and R. Z. Tantalean. "Unifying framework for six .sigma and
process control." Hydrocarbon Processing, V88, n6, June 2009, pp. 7.1-78.
'" Al-Dossary, A. et a!., "Optimize plant perl-ormancf using dynamic simulii-
lion—Ihis plant case history illustrates rhc benefits." Hydrocarbon Processing,
V88, n6, June 2009. pp. 3.1-43.
" Sharpe. J. H. and P R. T.atour, "Calculating Real Dollar Savings from
Improved Dynamic Control." Texas A&M University Annual In.struments
and Controls .Symposium, Oillege -Station. Texas, January 2.1, 1986.
'- Iatour, P R., "Advanced Computer Control of Oil Relînerie.s—Wlierc We
Are. Where We Are Going," Paper 21, Peiroleum Refining Conference,
Tokyo, Japan. 1988. Ilie Japan Petroleum Institute. October 21, 1988,
and Paper 6A, Fourth Refinery Technology Conference, Onter for High
Technology. Indian Oil Corporation Ltd., Vatlodara, India, June '), I '189.
'•' I..atour. P R-, "Modeling Intangible, Hidden lletiefu.'. from Iletter Product
Quality Cxintrol," Inrernaiioiial Cotiforence on Ptoduttivity and Quality In
the Hydrocarbon Process Industry, Hydrocarbon ñvcfssing maga/.ine/Coopers
and lybrand, Houston. Texas, February 27, 1992. Hydrocarbon l^ocessing,
V71. ñ5, May 1992, pp. 6I-Í.6.
''' Latour, P R..'"Role of RJS/APC for Running Refineries in ihe 1990s."/'MC/
Reformuliiiion. V2. n2. March 1992. p. 14.
''' Latour, P. R., "A Personal Vision for Process Automation," Keynote Guest
Speaker, Technology Lxchange Symposium, ARCO Chemical Company,
Houston Marriott North at t^reenspoint, Houston. Texas, October 19,
1992.
"f- Larour, P R., "Role of RIS/APC for Manufacturing RFG/I.SD." National
Petroleum Refiners Association 1994 Annua! Meeting, San Antonio, lexas.
Mardi 21. 1994.
'' I-Hour. P R., "CIMI'UliLS". bi monthly contributing editorial. ¡-'UfiL
Rffhrmidmion. September 19')'S - February 1998.
The author, president of CUFFTENT Inc , is an independent consuttmg chemical
engineer specializing in identifying, captiihng and sustatning measurable financial
value from HPI dynamic process control, IT and CIM solutions (CUFFTENT) using
performance-ba5ed shared risk-shared reward (SR2) technology licensing.
HYDROCARBON PROCESSING OCTOBER 2009 15](https://image.slidesharecdn.com/apcforminmaintenanceormaxprofit-part1-140512005637-phpapp01/85/Apc-for-min-maintenance-or-max-profit-part-1-1-320.jpg)
Apc for min maintenance or max profit -part 1
- 1. HPIN CONTROL PIERRE R. LATOUR. GUEST COLUMNIST SR2@msn.com APC for min maintenance or max profit?—Part 1 First, rlianks to Dr. Y. Zak Friedman' for referencing niy ]iily 1997 ///'editorial.' I commend him tor using /^Z'publications fmin more than a decade ago in his editorial. While I appreciate Dr. Friedman's effort to offer ideas to design advanced process control (AI'C.') to perform better in the real HPI world, I continue to be dismayed abotit the inability of the process control, instrumentation and IT businesses to measure its llnanciai profit contribution properly,^*'' which leads Friedman to recommend' sacrificing 30% of potential APC^ benefits to reduce maintenance costs, by simplifying a MVC software matrix, with- out quantifying the performance loss or maintenance saving.' I believe Dr. Friedman and I agree on the facts and situation of APC practice in the HPI,''' but naturally differ on how to address them. I am troubled by Zak's broad claim in his first paragraph,' "Considering the history of APC maintenance, the latter (forgoing 30% of poieiitial benefits) is better by far."' It may be pragmatic, but it also may be unprofliablc. Just beware of the taith theory.* Since well-designed APC can generate $1 to $2/bbl crude refined,--'''-^ sacrificing $03 to 0.6/bbl x 200 kbpd/reflnery = S60,000 to $ 12ü,000/day for a typical refinery to minimize APC maintenance illustrates the source of my distnay. Like Zak, I certainl)' would also sacrifice a lirtle performance in exchange for a substantial maintenance cost reduction; and I stippose Zak woukl retain .significant performance in exchange for a little maintenance. Surely he would agree if one could quantify these, the decision becomes easier. And forgoing 30% of APC benefits is an ad hoc rulc-of-thumb from his experience. It would Ix- hclplul it /,ak reported the maintenance cost saving he achieved by .simplitying the MVC matrix on that column;' compared to the 30% lost financial performance.' My experience suggests the rea.son the HPI does not maintain APC well is its perception that maintenance cosr is high and return is invisible.'^'' No one seems able to properly quantify that >$ 1/bbl benefit.** '" It will remain hard to perform good maintenance until this value is visible, qtuintiPied, accepted and worthwhile. Kern** explains the common organiziitional barriers that hinder operations management, process control and IT from acquiring their own economics to optimize risky CV/KPI tradeoffs and align their hydrocarbon proce.ssing with their economics/''^ I also agree with Deshpande'' on the importance of combining CVmean target setting witb variance reduction.^'^'^ All I atn recomtnending is better financial qtiantification""''' of hcfießt - cost = proßl, to sharpen the decisions Friedman pro- poses."""''' I find keeping financial score correctly is a useful and pragmatic way to communicate with management and customers about tlie valueof APC work and techniques. I think process con- trol engineers should know process economics intimately. I fail to find any disagreement from Friedman's writings on that idea. I renew my pleas to the HPI to adopt a clearway to measure per- formance value before spending money on One must quantifi,' the C'lifftcnt profit tradeoff for each risky CV/ KI^I to have any hope of setting means properly, assessing the value of variance reduction and justifying control system and IT expenses. T will identify the panacea in Part 2 next month. HP LITERATURE CITED ' Friedman, Y. Z.. "AI'C." designs tor miiiinuim maintcnanto—l'an 1," HPIn Cxjntrol Lùiitorial, Hydrocarlmn !ocasi'i^, V88, n6, Junt 200'), p. 90. ' Uiour, P. R., "Doc; the HPI do ii.i CIM bmincw right?," HPIri Control guest Ediiorial, Hydrocarbon ¡'rotrssiiig, V76, n7. July 1997, pp. 15-16. l-aiour, P. R.. "Ücmise and keys ro the ri.se ol process control," Hydrocarbon Processing, V85. ii(). March 2006. pp. 71-80. •* Friedman, Y, /... "Audit your APC applicatiotis," Hydrocarhoti Pnicfssing, V85, nl2. December 2006. '' FTiednian. Y. Z., (and P. R. Latour), "Dr. Pierre Ijtoiirs views on APC," HPIn Control Editorial. Hydromrbon Processing, V84, nl 1, November 3005, pp. 17-18. '' Latour, P. R., "Set vapor velocity sctpoints properly," Hydrocarbon Processing, V«5, nIO. October 2006, pp. 51-56. Ijtour, IÎ R., "Align HPI operations to economics—Clifltcnt optiinizcx risky tradcofFs ¡it limits," Hydrociirbon l^icessing, V87, nl2. December 2008, pp. 103-111. " Kern, A. C, "! T/aiitomation convergence revi.sitcd^Kecping aiitoniatlon dose-COIIpled lo operation is key," Hydrocarbon ¡h-ocasing. V88. n6, Jtme 2009. pp. 61-62. '' Deshpande, P li. and R. Z. Tantalean. "Unifying framework for six .sigma and process control." Hydrocarbon Processing, V88, n6, June 2009, pp. 7.1-78. '" Al-Dossary, A. et a!., "Optimize plant perl-ormancf using dynamic simulii- lion—Ihis plant case history illustrates rhc benefits." Hydrocarbon Processing, V88, n6, June 2009. pp. 3.1-43. " Sharpe. J. H. and P R. T.atour, "Calculating Real Dollar Savings from Improved Dynamic Control." Texas A&M University Annual In.struments and Controls .Symposium, Oillege -Station. Texas, January 2.1, 1986. '- Iatour, P R., "Advanced Computer Control of Oil Relînerie.s—Wlierc We Are. Where We Are Going," Paper 21, Peiroleum Refining Conference, Tokyo, Japan. 1988. Ilie Japan Petroleum Institute. October 21, 1988, and Paper 6A, Fourth Refinery Technology Conference, Onter for High Technology. Indian Oil Corporation Ltd., Vatlodara, India, June '), I '189. '•' I..atour. P R-, "Modeling Intangible, Hidden lletiefu.'. from Iletter Product Quality Cxintrol," Inrernaiioiial Cotiforence on Ptoduttivity and Quality In the Hydrocarbon Process Industry, Hydrocarbon ñvcfssing maga/.ine/Coopers and lybrand, Houston. Texas, February 27, 1992. Hydrocarbon l^ocessing, V71. ñ5, May 1992, pp. 6I-Í.6. ''' Latour, P R..'"Role of RJS/APC for Running Refineries in ihe 1990s."/'MC/ Reformuliiiion. V2. n2. March 1992. p. 14. ''' Latour, P. R., "A Personal Vision for Process Automation," Keynote Guest Speaker, Technology Lxchange Symposium, ARCO Chemical Company, Houston Marriott North at t^reenspoint, Houston. Texas, October 19, 1992. "f- Larour, P R., "Role of RIS/APC for Manufacturing RFG/I.SD." National Petroleum Refiners Association 1994 Annua! Meeting, San Antonio, lexas. Mardi 21. 1994. '' I-Hour. P R., "CIMI'UliLS". bi monthly contributing editorial. ¡-'UfiL Rffhrmidmion. September 19')'S - February 1998. The author, president of CUFFTENT Inc , is an independent consuttmg chemical engineer specializing in identifying, captiihng and sustatning measurable financial value from HPI dynamic process control, IT and CIM solutions (CUFFTENT) using performance-ba5ed shared risk-shared reward (SR2) technology licensing. HYDROCARBON PROCESSING OCTOBER 2009 15