Optimize your maintenance costs

Date: September; 28; 2013 | Author:
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Cost analysis, data history and benchmarking. Babcock & Wilcox Vølund is now offering a free tool to be included in service agreements. The tool can be used both to optimize costs and to make data comparisons with other plants.

Maintenance expenses constitute 40-45% of the total cost of operating a waste-to-energy plant. While most maintenance costs are necessary, there are also others that can almost always be optimized with regard to the plant operating with a minimum of outgoing expenses.

"The first requirement for optimization is having access to data history, which shows the plant's development from year to year. There is nothing new about this. But what if the data history included key figures that could be compared over time with similar plants? Suddenly, one would have an overview to pinpoint areas that are underperforming financially," says Jef Poulsgaard Hansen, manager of aftermarket services at Babcock & Wilcox Vølund.

Free add-on

For two years, Babcock & Wilcox Vølund has gathered data from various plants, which it has used to develop a model for processing data and for analyzing operating and maintenance costs. The model can thus be used both for internal cost optimization and external benchmarking with other plants.

The service will now be made available for all service agreement clients, as a free add-on to the agreement.

"For our clients, this means having access to knowledge and data across plants in the industry, and, quite simply, the chance to assess and adjust their costs, so that their money can truly be well spent," explains Jef Poulsgaard Hansen, who goes on to remark:

"For Babcock & Wilcox Vølund, it is interesting to gain insight into the total lifetime costs for our products. Farther down the road, we also anticipate being able to compare different technologies, different operating and maintenance strategies, spare part strategies, etc."

Service agreements create value

The cost analysis is a natural development of the service agreements, which have been regularly improved since being introduced in 2006.

"After seven years, we're beginning to see the effect of the service agreements and the relationships the agreements create. Put simply, they bring about the desired value for our clients and for us. This is something we attest to based solely on the fact that more than 20 clients have opted to enter into service agreements, and some have renewed their agreements up to four times. They know that long relationships and data gathering create value," says Jef Poulsgaard Hansen, who goes on to elaborate:

"The expertise and data gathering we obtain through long-term agreements give us some tools to improve a plant's operation and maintenance processes. And we now want to share these tools with our service agreement clients as part of the loyalty program they've signed up for."

How it works

Initially, Babcock & Wilcox Vølund performs a cost analysis based on available data. The cost analysis provides a number of key figures that can be used to pinpoint areas in need of optimization. Depending on the data quality and degree of detail, key figures can be generated that make it possible to track the development right down to component level.

The key figures are set up to the extent possible, so that they can be compared over time with other plants. Benchmarking in relation to other plants is naturally only performed at the individual plant's request, and if an agreement exists in this regard.

The results from the analysis are then used in the strategic work of planning and evaluating the service agreement's activities.

Babcock & Wilcox Vølund updates the cost analysis once a year, when new annual data is available. 

Data collection

Data collection and analysis entail:
  • Primary data consists of the actual costs paid out by the financial system.
  • Background data is usually data from the operation of the plant.
  • Background information describes the conditions that may have a particular impact on costs or operations.
Data is typically collected at a meeting held at the plant, during which data is made available in the form of print-outs, data files, etc. The employee representative from Babcock & Wilcox Vølund collects the material and will then be responsible for further data processing.

Service agreement

  • Service agreements have been offered since 2006.
  • More than 20 clients today have service agreements with Babcock & Wilcox Vølund. Some have renewed their agreements up to four times.
  • The service agreement means that operations and maintenance are always carried out in a professional and equal dialogue based on thorough knowledge of the individual plant. Clients have found that service agreements provide flexible and smooth assignment completion and troubleshooting in their daily operations, even in the most pressing situations.
  • Service agreements are tailored to the individual plant and can contain all services included in the planning of the annual maintenance shutdown, spare parts and ongoing maintenance, including the overall coordination and services such as cleaning and scaffolding.
  • The next step is a functional agreement, which entails setting a goal for the results of the partnership. It is still a service agreement, but the assignment is first completed when the agreed function has been fulfilled.
  • Henceforth, the service agreement may also include assistance in devising a cost optimization strategy.
  • The entire process is carried out in close partnership with a designated member of staff from Babcock & Wilcox Vølund.
Read more about service agreements

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