Chemical Engineering July 2013 - 39

Installation
5%
Flush water
7%
Downtime
32%
Decommissioning
8%
Define unit
operations
Subcontract
all or part of
process
Supplier
designs
Capital costs
9%
Installation
Define
equipment
Environmental
3%
Process
requirements
Operating cost
9%
Electric
13%
Maintenance
14%
FIGURE 2. Initial capital costs represent a small fraction of the total lifecycle costs
for process equipment. The graph depicts the case of a " worst case " situation with
considerable downtime costs (see Table 1, scenario 1, p. 41)
The remainder of this article presents
a more-or-less qualitative view
of the LCC analysis process and the
elements that go into LCC. The " Further
reading " list at the end of the
article refers readers to several more
analytic versions of LCC,
including
Weibull analysis, risk-based cost
analysis, Monte Carlo modeling, and
other " what-if " analyses.
The main goals of LCC are: 1) To
identify risks to process operation
and efficiency; 2) Quantify these risks
in terms of downtime; and 3) Determine
how to avoid these risks and
subsequent losses early in the design
of the system (Figure 3).
LCC for the CPI
Of all the industries and all the types
of manufacturing plants in the world,
it is safe to say that the process industries
are some of the most variable
and complex. With more than 70 million
identifiable chemicals and a nearinfinite
number of combinations, and
given the number of unit operations
possible, there are many opportunities
to examine process costs. The four
primary components involved in the
LCC are:
* Capital equipment costs
* Operating costs
* Maintenance costs
* Decommissioning costs
These components are further subdivided
(Figure 4).
STEPS IN LCC ANALYSIS
LCC considers everything in the life
of a process, starting with a definition
of the process, its unit operations, and
the equipment required to fulfill those
unit operations, as well as operating
costs, maintenance costs and finally
decommissioning costs. The following
are the major steps involved in determining
LCC.
Assess process requirements.
Tasks to consider when undertaking a
new process include the following:
* Determine present and future capacity
for the product
* Anticipate the lifetime of the process.
Some processes may have a
lifespan of anywhere from a year or
two to decades. Anticipating process
lifetime will either concentrate or
extend cost impacts and affect the
long-term maintenance and reliability
of the process
* Define product quality based on customer
requirements
* Determine process flexibility. How
easily can the equipment and sysMaintenance
Operation
Anticipate
downtime
risk
Causes of failure
* Equipment design
* Proper operation
* Maintenance
* Parts availability
Decommission
FIGURE
3. The LCC analysis process
shown here is designed to minimize total
cost, even if initial capital costs are higher
tem be modified to accommodate increased
output of product, changes
in formulation or the addition of a
step in the process?
* Quantify waste. What percent of
waste is acceptable? What is the cost
of waste disposal? How can waste be
minimized by a change in the process?
Can off-specification product
be reprocessed or sold " off-spec " to a
different market?
Define unit operations
This step involves identifying the unit
operations and types of equipment required
by the process.
Subcontract. Subcontracting one or
more operations in a process is something
often overlooked, but can increase
cost efficiencies and flexibility.
Few manufacturers of process equipment
manufacture everything - motors,
gear drives and bearings are not
manufactured in-house.
Likewise,
chemical companies do not manufacture
all of their raw materials, nor
do they necessarily perform all tasks
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Chemical Engineering July 2013

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