Despite Today’s Turbulent Markets, It Is Possible to Reach Top Quartile Performance
With energy markets in turmoil and uncertainty ahead, companies must turn their attention to strategic levers that are completely within their control. That’s why Emerson has launched its Top Quartile Performance initiative, an effort to help companies achieve performance within the top 25 percent of their peers in areas like capital construction projects, operational reliability and energy management. Operators performing in the top quartile of their peers in these areas are also positioned to move quickly and effectively to navigate a volatile energy market.
Emerson is helping forward-looking companies realize significant boosts in operational performance, from greater reliability and more dependable safety today. Large plants and industrial facilities may have dozens of potential sources of inefficiency. By focusing on plant reliability, for example, process industries could save upwards of $50 billion in wasted maintenance alone — plus over $10 billion in energy costs, even at today’s prices. That money would go straight to the bottom line.
Meanwhile, although estimates vary, a 5 percent improvement in production availability could bring hundreds of billions of dollars in top-line revenue. At the same time, the industry is wasting staggering sums — an estimated $430 billion — in poorly executed construction projects. That’s capital that could be redirected to other strategic investments or simply saved.
By harnessing the industrial version of the Internet of Things (IoT), companies can leverage transformational technologies to gather critical, real-time insight about how their assets are performing — and turn that data into actionable information.
Applying our decades of experience to help companies identify opportunities for game-changing improvements, Emerson provides expertise in areas that will most directly impact savings and operational performance. These areas include:
About 65 percent of new capital projects valued at $1 billion or more fail to achieve their performance goals, due to cost overruns or scheduling delays, or both. The cost implications of these failures are staggering, with bottom quartile performers seeing true costs of $1.6 billion for construction of a $1 billion scope capital project. Top Quartile performers, on the other hand, see actual costs of $750 million…well under budget. Delivering a new plant on budget and on time also helps companies to see an earlier return on investment for shareholders.
Emerson helps companies develop project plans with Top Quartile Performance in mind. One proven approach to achieve performance goals is to make strategic engineering decisions earlier in the project. Historically, overly-rigid engineering decisions early in a project result in limited flexibility late in a project, when changes often occur. That lack of flexibility results in excess engineering and labor hours, increased cost and schedule delays.
Top Quartile performers in operational reliability see maintenance costs that are 3.5x less than those operating in the lowest quartile. Equipment failure, the most frequent cause of unplanned downtime, can result in excessive maintenance, repair, and equipment replacement. Top Quartile companies enjoy more than 13% greater production availability of their assets over fourth quartile performers. Additionally, outdated maintenance procedures and technology may expose staff to greater safety risk.
Emerson works with customers to develop more predictive and proactive maintenance operations, using our automation technologies and predictive data analysis to identify potential issues before they become real issues. Just as importantly, we help customers update their processes to help them act upon their predictive data efficiently.
Industrial Energy Management
Energy is one of the biggest operating costs in manufacturing and, according to a U.S. Department of Energy study, as much as 37 percent of energy brought into industrial plants is wasted annually. Inadequate monitoring of furnaces and gas-fired heaters can cause excessive fuel consumption, increased emissions—more than 2x—and added maintenance cost.
Emerson can help companies reduce energy costs by implementing an energy management program that allows them to reliably use low-cost fuels and minimize energy. Emerson’s energy management technologies and expertise can help industrial sites reduce energy waste, make better use of low cost and waste fuels, and improve efficiency—to achieve best reliability, lower emissions and reduced cost.
Top Quartile performance can help industry players navigate the turbulent market, seize emerging opportunities as they arise, and free capital to support the bottom line. Emerson’s experts will show companies how to be Top Quartile performers by focusing on the technologies, process improvements and critical areas that can lead to more efficient operations and increased flexibility to adjust to shifting market demands.
Emerson shared perspectives on efficiency and reliability at the 2016 IHS Energy CERAWeek conference, the premier energy event where industry leaders gather to discuss strategies for success.