Article#25 - Evaluating Equipment Redundancy using RAM Models
The Concept of Equipment Redundancy
Adding equipment redundancy to a system can improve uptime and reliability leading to increased output. When adding new equipment, it is cheaper to evaluate the benefits, or lack of thereof, on paper before implementing the change. Typically done as part of the design phase. However it can also happen after commissioning but its is more expensive. In other words, its better to get it right before “shovels go in the ground”.
A system is a collection of items that operate together to produce an output, often a production value. Let us consider a system comprised of 2 pumps. We want to add a third identical pump and evaluate the benefits. As illustrated in Diagram 1 below. The system requires 2 pumps to run simultaneously. If any System 2 pump fails, the spare or “hot standby” pump activates immediately. Thus avoiding a system shutdown.
The redundancy introduced can contribute to many improvements listed as follows:
- With System 2, the maintenance of a pump will not require a system shut down. For System 1, a shutdown is inevitable.
- In case of an unplanned System 1 pump failure, maintenance crews have to work under stressful conditions. They have to rush and get repairs done as production is likely impacted.
- With a spare third pump in System 2, more time could be allocated to the preventive maintenance or repair tasks. This leads less potential for errors or “maintenance induced failures”.
An operator would be tempted to run System 1 to the limit. That is for longer than it should be due to production constraints. This often leads to unplanned failures that can erase all the expected benefits. Akin to “getting caught with one’s pumps down”.
RAM Model Example
Adding redundancy can come at great cost. This requires additional equipment and installation expenses. Post commissioning, a fair amount of “re-jigging” work will be required. This increases costs even more. Therefore, the investment has to be justified. A RAM model is the tool of choice to evaluate the economics of redundancy.
The fundamental purpose of Reliability, Availability, and Maintainability (RAM) modeling is to quantify system performance, typically in a future time interval. Building a RAM model requires inputs such as equipment performance records, operating philosophy, operating costs, and the desired production throughput. The model runs for a future time interval. For example, the next five years. It provides valuable information to the operator and helps with decision making. This information can include the total cost of operating the system, production losses, spare parts usage, as well as the impacts of weak links or bottlenecks in the system.
In what follows, we build a simplified RAM model based on System 1 and 2 above mentioned. The following pump and system characteristics are used.
System 1 and 2 RAM simulations run for 5 years. The results are provided in Diagram 2 below. Adding a third pump reduces the number of system failures completely. From 4.26 for System 1 to zero for System 2. And logically Reliability and Availability both jump to 100%.
Is the pump investment financially justified? It depends…
In this example, justifying the redundant pump investment would depend on the net incremental revenue. In other words, does the incremental revenue pay for the new pump? The net incremental revenue is the incremental output minus the incremental operating cost. Let’s assume the following revenue and investment costs.
In Diagram 2 above, we generate an incremental amount of 37,583 units over 5 years by adding a third pump. The gross revenue is $37,583. Minus an incremental maintenance cost of $150, the net revenue is $37,433.
Therefore, the investment into a new $100,000 pump is not justified based on 5 years of operation. Running the RAM model over multiple years, provides us with the break even point. That is the number of years after which the pump investment is justified. As illustrated in Diagram 3 below.
Therefore, operating System 2 beyond 13 years justifies the extra pump investment. Note that more information put into the model refines the calculation further. Additionally, the time value of money (or Life Cycle Cost ) is not considered in this analysis. Nevertheless, the RAM model is highlighted as the right tool to make the final investment decision.