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1.3 What is Profit Maximization and Sweating of Assets All About?

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In chemical process industries (CPIs), profit maximization is attained in many fragmented ways. Energy managers in a plant try to increase profit by increasing energy efficiency, production engineers increase profit by pushing the plant to its highest possible capacity, control engineers try to optimize the plant in real time by advance process control, maintenance engineers try to maximize the critical single line equipment availability by doing proper preventive and predictive maintenance, reliability engineers try to reduce the failure rate by proper inspection, the human resource (HR) department tries to reduce manpower cost and increase employee's productivity, safety engineers try to minimize the incidence and accident rate, etc., and many people try to maximize profit in a multi‐dimensional fragmented way. However, all of the above approaches are not independent but are deeply interrelated and sometimes conflicting. For example, running equipment beyond its design limit for maximization of plant capacity will definitely increase its failure rate. Therefore, profit maximization is an approach that sees all these conflicting attempts in a holistic way and evaluates the strategy that will maximize profit of the plant in the long run and sustain it.

In simple terms, profit maximization means maximize dollar per hour generation from the plant and make sure that this is sustained. In mathematical terms,

Maximize

Profit generation in $/h terms from the plant

Subject to constraints: all process and safety constraints need to be honored and all equipment limitations should not be violated

Some common ways to maximize profit are (but not limited to) (Lahiri, 2017a):

 Maximize plant throughput while obeying all operational and safety limits imposed by the designer.

 Minimize raw material and utility consumption.

 Reduce production costs by maximizing process efficiency (like catalyst selectivity, yield).

 Increase plant and process equipment reliability while obeying all design and safety limitations so that the profit‐making production process can be sustained for longer periods, etc. In still other cases, there is a tradeoff between increased throughput and decreased process efficiency and so process optimization is needed.

There are many multi‐faceted dimensions of the profit maximization project. The profit maximization project (PMP) involves all the activities to increase profit in the plant. As the scope is vast and multi‐disciplinary, this book only addresses some of the ways that are related to chemical engineering/process engineering and suggest some alternative new ways to generate profit, some of which are given in Figure 1.2 below.

Critically assess current plant operation and identify and exploit the opportunities.

For any process unit, there are various constraints and limits, as shown in Figure 1.1 which stops the plant from continuously increasing capacity (Lahiri, 2017b).


Figure 1.1 Various constraints or limits of chemical processes

The normal operating zone for any process is bounded by these limits. It is a common tendency among panel operators and production engineers to operate the plant at the center of this acceptable operating region, far from any constraints. The reason is simple: the panel operator gets a maximum amount of time to respond to disturbances before it drives the process beyond the acceptable operating region. This center region is the comfort zone of the operator as it gives some flexibility in operation. However, to get maximum profit from the process, it has to push several constraints or limits and usually this most economic operating point lies at the edge of the boundary limit (see Figure 1.2) (Lahiri, 2017a).


Figure 1.2 Optimum operating point versus operator comfort zone

The most common way to increase profit is to run the plant at maximum possible capacity. This essentially means push the plant to its limit so that multiple pieces of equipment or assets touch their maximum operating limits. This is called “sweating of the asset.” One major target of the profit maximization project is sweating of all assets in the plant. Plant engineers and managers are also considered as valuable human assets of the company and sweating them intellectually is also needed.

Running the plant at maximum capacity does not mean to run it at its nameplate capacity, i.e. process flow diagram (PFD) capacity. That is the bare minimum target. All over the world, good companies are running at 125–150% of their nameplate design capacity. Normally they follow three basic steps to increase plant capacity:

 Step 1: A 10–15% capacity increase over its nameplate design capacity is usually possible by exploiting the design margin usually available in process equipment.

 Step 2: Another 5–10% capacity increase is possible by a small investment or minor modifications with resources already available in the plant or outside with little capex.

 Step 3: Rest 20–25% capacity can be done by a major revamp and with big capex.

All good plants follow these three steps in order and continuously improve themselves so that with the same plant they can run 25–50% extra capacity. This is one of the surest ways to increase profit.

Running the plant lower that its nameplate design capacity is no longer a viable option and all the plants running at a lower capacity will not be able to cope with stiff international competition and eventually will perish over time. Hence the first and most important step in profit maximization is to know the techniques of how to run the plant at its highest possible capacity. This essentially means:

 How to know and exploit the design margin available in installed equipment?

 How to know the equipment that is a bottleneck for a further capacity increase?

 How to carry out a detailed cost benefit analysis for a major revamp project?

However, the profit maximization project does not end by maximizing the capacity only and involves all the multi‐faceted activities to increase profit in the plant. Following this project an old generation plant can be transformed to a new generation plant. As the scope is vast, this book only addresses some of the proven techniques related to chemical engineering and suggests some alternative innovative ways to generate profit. Some of the ways to increase profits (but are not limited to these) are given below (make a diagram similar to that in Figure 1.2):

 Assess existing plant operation and identify and exploit the opportunities to increase profit.

 Implement an advance online process monitoring system to monitor equipment and process performance in real time.

 Implement a real‐time fault diagnosis system to detect any abnormality of equipment/process at its incipient stage and take preventive and corrective action.

 Identify and implement a major debottleneck project.

 Utilize a process modeling and simulation technique to optimize process parameters to increase profit.

 Identify hidden margins available in major distillation columns and push them to their limit.

 Utilize different modeling techniques (data driven or kinetic driven) to generate a model of a major reactor and subsequently optimize reactor parameters to increase profit.

 Identify the scope of utility savings and waste reduction to increase profit by implementing them.

 Install APC and RTO to stabilize and optimize the process in real time to increase profit amid various disturbances.

Profit Maximization Techniques for Operating Chemical Plants

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