Managing Increasing Cost Pressures in Metal Manufacturing
Metals are an important component around the world, enabling progress in building, infrastructure and engineering industries. To sustain profitability, metal manufacturing -- 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.
An estimated 60% of the world’s GDP and over 50% of companies have committed to net zero emissions by 2050 (a shared goal across Baker Hughes). Thus, while carbon emission reduction is an important global goal, meeting it will add cost, compliance requirements and complexity for metal manufacturers. Likewise, global competition is creating increased pricing pressure, and skilled workers are retiring en masse, causing knowledge gaps in operations.
Thus, metal manufacturing is at an inflection point, which 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, which will enable new ways of thinking and doing that delivers the next-level cost reductions required for future viability. As metal manufacturers move to Industry 4.0 to adopt smart manufacturing capabilities, the starting point is cost reductions, primarily focused in one under-optimized and under-leveraged area: maintenance.
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. Per Deloitte, predictive maintenance, on average, can increase productivity by 35%, reduce breakdowns (and unplanned downtime) by 70%, and lower maintenance costs by 25%.
“A 10% reduction in maintenance spend can generate a 30% increase in profitability.”
Unplanned downtime is the bane of all manufacturing and it can be especially costly in metals manufacturing. Large steel manufacturers can spend as much as US $4,000,000,000 a year on maintenance. Since an estimated 20-25% of maintenance is spent on unplanned downtime today, that equates to approximate US $900 million / year of maintenance spend on unplanned events. And, a good portion of that spend could have been avoided with the proper, proactive maintenance approach. Let’s take a look at one large steel manufacturer in India who understands the benefits of mitigating unplanned downtime before it occurs.
For one large steel manufacturer in India, a high tension (HT) 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 and the Bently Nevada team was asked to diagnose and identify the root cause issue of the abnormal vibration.
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, the motor re-started and the vibration pattern returned to normal.
The result? By identifying the problem early, the Bently Nevada MDS team saved the customer valuable downtime. 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 exponentially skyrocket costs. To put this in perspective, a non-catastrophic unplanned event in a large steel mill is estimated to cost US $23.9 million / day. If this event remains unresolved or escalates to catastrophic levels, the impacts grow even steeper and can do so very quickly (i.e., from areas such as lost production, customer defection, financial and legal risks, health and safety issues, regulatory penalties, urgent maintenance call-outs). 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 steel plant in Germany operates several axial air compressors that provide air for the 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 Machinery Diagnostic Services (MDS) for startup assistance, monitoring and testing 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 vs. mechanical damage. This data helped inform and ensure a path to safe recovery.
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 3 hours of the customer request, enabling 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 their condition monitoring implementations.
Metal manufacturing companies need to better optimize production today to stay competitive globally. The first step in that optimization is condition monitoring, which will help to overcome existing maintenance 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, securing their future – and ours.
Speak with one of our experts today to get started on building a stronger future for your metal manufacturing operation.