Why is this so? Recent global events marked by political instability, falling capital expenditures, and globally economic conditions more generally, are directly challenging businesses’ efforts to achieve these three aims.
For this and other reasons, the spotlight is now on OpEx investment. This is because energy costs and insecurity have invited a rethink of how to operate and where to invest. And with this, circularity can be improved, sustainability can be enhanced, with the right OpEx investment.
While this focus on OpEx is a direct response to the challenges of now, it need not be reduced to mere reaction. It brings the opportunity for additional benefits beyond, but including, the bottom line. It can boost your business’s circularity practices, and offers a step towards embracing further sustainability, through operational expenditure asset modernization, data-driven predictive maintenance and technology, digitalization and collaboration and service partnerships.
Invest in asset modernization to reduce energy consumption and boost decarbonization
Retrofits and upgrades offer a smart, efficient and sustainable solution over replacement.Andthe benefits to this operational expenditure here are multiple.
Upgrading outdated components can reduce the cost of equipment by a third and extend their life cycle by as much as 30 years.
This reduces the breakdown risk and the potential for costly downtime. From the carbon standpoint, around 50 percent of electrical equipment can be perpetually operational without costly replacement by regular monitoring, maintaining and upgrading. Think components like circuit breakers, switches, fuses and contactors. Upgrade over replacement reduces carbon footprint and retrofitting avoids the emissions of new system manufacturing.
Take the example of the Kemijoki Oy’s hydropower plants, two of Finland’s biggest. By upgrading their circuit breakers through a retrofit solution with ABB, they saved energy and avoided the need to replace the entire switchgear. The impact? Avoiding a month-long downtime – measured in hours rather than weeks – meant they maintained vital energy production and saved potential lost revenue.
And, from a sustainability point of view, look at Finkl Steel®. They upgraded their electrical cabinet with one VD4-AF1 arc furnace breaker when two of their four circuit breakers reached the end of life. Halving the number of needed circuit breakers reduced their carbon waste footprint. Additionally, the upgraded breaker reduces maintenance costs, adds technological benefits and has greater longevity.
Invest in planned, data-driven predictive maintenance for competitive advantage
When it comes to asset management, maintenance and repairs are key. But not all maintenance strategies can be considered equal. Scheduled and condition-based maintenance are better, but predictive maintenance is most effective.
Research by the Deloitte Analytics Institute reveals that, on average, predictive maintenance increases productivity by 25 percent, reduces breakdowns by 70 percent and lowers maintenance costs by 25 percent. This brings with it the benefit of competitive advantage through improvements in operational performance which directly impacts operational expenditure.
Key to this is planning, and collaboration. Take for example the case of INPEX LNG Ichthysfloating facilities in the Timor Sea, one of the world’s largest offshore LNG plants. With support from ABB Electrification Service, their electrical maintenance shutdown for inspections, testing and maintenance went off without a hitch. Collaboration and planning made all the difference to enable them to meet production schedules and achieve the best possible ROI despite the potential for disruption. This planned maintenance provides confidence for the future, too.
Reducing downtime can mean greater business productivity, but it also means less waste.
When it comes to preventive maintenance, a fine example is Stockholm’s wastewater treatment plant, a facility that handles more than a million cubic meters of wastewater every day. They undertook a switchgear upgrade, with ABB’s assistance, when low-voltage switchgear was reaching the end of its product life cycle. ABB proposed and installed a retrofit replacement with minimal downtime. In addition, ABB connected the upgrade to ABB AbilityTM Electrical Distribution Control System, which enables remote monitoring and supports improved levels of preventive maintenance at the Käppala plant. This is highly important because the plant must remain in service at all times to ensure the water is always discharged clean.
ABB brings together condition-based insights with predictive and preventive maintenance, for improved productivity and profitability. This involves analyzing data – from asset condition, equipment importance to product lifecycle status – through digital condition monitoring and diagnostic systems which help identify and manage problems before they happen.
Invest in digital change through interconnectivity and smart automation to streamline and optimize process
The 2022 ABB commissioned Better Decisions report reveals a critical gap in digital adoption: 96% of 700 decision-makers across 12 industrial sectors recognize the importance of digitalization, yet only 35% have scaled industrial IoT implementations. This points to a whole host of missed opportunities, but positively, this is a huge opportunity for growth.
Digitalization offers so many benefits – generating actionable insights, streamlining processes, enhancing efficiencies, and boosting productivity, are just the start.
It pays to look at digitalization as a valuable addition to a focus, as mentioned earlier,
on asset management and preventive maintenance. With these working in unison, an organization can aim to extract maximum value, ensuring sustained performance and longevity.
And on top of operational benefits, there’s the sustainability benefit too.
A prime example is the Meilahti Hospital Area in Helsinki, Finland. Their modernization program with ABB helped to future-proof its power supply. By upgrading systems to maximize uptime, eliminating SF6 – a potent greenhouse gas – and extending the lifespan of electrical equipment, the hospital optimized operations and set course for a future of greater resilience and sustainability. Enabling this transformation was ABB Ability™ Energy and Asset Manager, a digital platform revolutionizing asset management. It simplifies the management process, enabling remote monitoring and providing real-time information on the condition of equipment. This is predictive maintenance in action.
Embracing digitalization and innovative asset management is essential for organizations aiming to thrive in today's competitive landscape. By adopting these strategies, businesses can achieve greater efficiency, sustainability, and future success and resilience.
Invest in collaboration and service partnerships to boost operational efficiency
It’s high time decision makers shift their focus from product to value – a focus on looking forward to outcomes. As markets evolve at pace, and industry continues to be a complex web of assets, partners, expertise and technology, those that get ahead will be the ones adopting new business models, new methods and embracing collaboration with open arms.
Collaboration, through things like service partnerships, offer an uplift on efficiency. For example, ABB offers a Power Care service agreement that provides skills development, condition assessment and regular maintenance, to emergency maintenance and sustainability services.
South America’s largest and oldest banks partnered with ABB on a service agreement. The outcome? The bank, once without a preventative maintenance contract, despite relying on a complex network of circuit breakers, switchboards and drives, has had downtime reduced to zero and an end to data losses from outages. The impact: increased reliability for the datacenter and improved confidence in its performance.
OpEx is an investment in the future and sustainability of your business
OpEx investment invites the opportunity to use less, use longer, make clean and use again, a key component of circularity. And it can improve your bottom line, paving the way to future success by better utilizing the assets you already have. Plus, it’s more than good for business. The right decisions now can boost the circularity of your operations, and turbocharge your sustainability profile.
All this, when put together, is great for business and positive for the planet.
Find out more about adopting circularity and read more on operation expenditure in our whitepaper, Making the most out of OpEx.
