Hydrocarbon Processing - November 2022 - 50A

Maintenance
and Reliability
R. BHATTACHARYA, Mumbai, India
Obsolescence management in a manufacturing unit
Obsolescence is one of the most detrimental and worrisome
issues in manufacturing units. This is predominantly because
of rapid advancements in technology. Consistent innovations
and development in this era are throwing existing devices and
equipment into the obsolescence basket. Similar performing
products are being introduced continuously by competitors,
with enhanced features and greater capabilities that can yield
optimum performance for users.
Original equipment manufacturers (OEMs) are finding
that existing products do not generate enough revenue, forcing
the withdrawal of support for the supply of spares and services.
Compulsion forces most end users to take knee-jerk actions
for sustenance. The small business houses continue operation
with limping equipment, which leads to unwanted outages
of units, resulting in fiscal losses. Conversely, big houses immediately
infuse capital expenditure (CAPEX) for upgrades/
revamps of obsolete equipment for production continuation.
These monetary transactions come as an immediate means of
survival and happen on an extemporary basis without a clear
path of progress to tackle the issue more systematically.
This article details incremental threat management of obsolescence
in a manufacturing unit, detailing how to build a
management system to tackle obsolescence before it cripples
production units.
Apart from the vast amount of CAPEX involved, the production
unit must be stopped for a prolonged period since upgrades
may not be possible while the unit is operating. This
means that tackling obsolescence must be a carefully considered
action based on meticulous techno-economic analysis.
Equipment obsolescence in a manufacturing unit is a natural
phenomenon and can happen anytime.
Establishing a process of obsolescence management in a
manufacturing business is paramount so that a systematic plan
is in place to counter the obsolescence threat. Organizations
must identify potential obsolescence through the system and
display the desire to move from a reactive obsolescence management
program to a proactive process. The end users must
act in advance to avoid the yielding phase of a production unit.
A systematic obsolescence management process must be in
place to tackle this issue before it cripples production.
An obsolescence issue in a manufacturing unit may arise
due to many reasons. Equipment is under supplier or technical
obsolescence when the OEM withdraws support for spares
and services. Sometimes, a business decision is taken to stop
using equipment and its spares due to costs or health, safety
and environment (HSE) considerations. This is user-specific/
functional obsolescence. Economic obsolescence involves replacing/upgrading
critical equipment because it has outlived
its usefulness or is beyond economical repair.
Among these, technical obsolescence is the most worrisome
issue for a production unit, and the threat of equipment
becoming irrelevant during its lifecycle looms. Critical equipment
faces outages due to the unavailability of OEM support,
which challenges manufacturers to continue uninterrupted
production without critical obsolete equipment.
Generally, OEMs extend support in two phases: warranty
and post-warranty support. In the warranty support stage,
OEMs confirm the availability of the product. During this
phase, OEMs extend all spares and services support for the
product. This phase spans out up to 5 yr after the product is
introduced to the market. Subsequently, the product enters the
end-of-life and end-of-service (EOS) stages. These stages are
between 5 yr and 8 yr after the product launch.
In the post-warranty support stage, the OEM ends all equipment
development and declares limited support for the product.
This is the penultimate stage before the product is phased
out, known as the end-of-development phase. Generally, it becomes
prominent within 8 yr-14 yr of the product's lifecycle.
The ultimate phases of the product are the EOS life and
end-of-support phases. In these phases, the OEM declares the
product obsolete and indicates EOS and the unavailability
of any product updates. In this stage, the OEM stops selling
equipment spares and service contract renewals for maintaining
the equipment. Typically, this phase appears within 14 yr-
20 yr of the product's launch. Beyond this phase, the equipment
becomes completely obsolete and continuing to operate
it becomes challenging and costly.
When the obsolescence phase engulfs an operation unit,
it experiences frequent downtime due to the absence of
virgin spares and OEM services. There is an added risk of
damaging credibility with customers if a plant fails to meet
anticipated output.
Additionally, attempts should be made to reduce maintenance
costs by reducing rush orders due to obsolete equipment
spares. It is also paramount to increase plant safety levels by
timely decommissioning and disposing of obsolete equipment.
Therefore, a process of obsolescence management must be
in place that enables a mitigation plan to be framed before it
impacts the production unit. The following is a general framework
for the process:
Hydrocarbon Processing | NOVEMBER 2022 50A
Hydrocarbon Processing - November 2022

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