Three ways asset modernisation is tearing up wasteful ‘rip and replace’ cultures

by David Pownall, VP of Services at Schneider Electric

Net Hero Podcast

Facilities managers recognise the importance of maintenance of the ‘rip and replace’ strategy for old or faulty assets; they often do not take advantage of all available repair possibilities. Understandably, this is because there are a variety of priorities to consider when deciding whether to repair or replace.

From reducing downtime and costs for the organisation to ensuring compliance with sustainability and carbon reduction targets, managers are often left to figure out how to augment the investments that have already been made. By not taking all opportunities to repair, businesses may find themselves wasting operational costs as a result of not fixing when possible, as well as missing an opportunity for sustainability through the circular economy.

When critical assets are on the line, what approach can facilities professionals take to ensure they maximise cost, efficiency, sustainability and long-term resilience? Here we explore how rip and replace culture is being challenged and what steps to take to maximise assets now, and in the future.

 

1 – Paint the full picture; from reactive repair to proactive modernisation

It starts with a full asset assessment, tracking assets down to serial number level, identifying repairable assets. That way, any failures inside the warranty period can be recovered. Don’t underestimate the scale of losses due to unrecovered warranties.

Using the latest Asset Performance Management tools, it is now easy to fully track and assess the equipment’s lifecycle and proactively monitor what is coming to the end and what is already obsolete. With a 24/7 view of assets, this smart snapshot is constantly updated with the latest lifecycle information as and when it becomes available. Furthermore, with cloud-based monitoring services, critical assets are monitored and analysed 24/7 by a dedicated team of professionals.

With a complete picture of the current state of assets, it is easier to approach broader modernisation strategies. For example, the explosion of connected data is leading to massive increases in energy consumption, placing a greater burden on electrical distribution substations. As a result, many facility managers are seeking ways to modernise power systems and accelerate automation assets, calling on professional experts to aid this journey.  Having audited the existing electrical distribution network, the experts offer recommendations for appropriate modernisation, alongside an adaptive maintenance plan. This insight answers whether refurbishment, retrofit, or replacement – or a combination – makes the most business sense.

Combining the power of data and analytics, 24/7 remote monitoring and power system expertise through modern asset management, make it possible to avoid costly ‘rip and replace’.  Failure can be predicted and necessary action taken to avoid the asset failure by transforming data into intelligence. These gains can be made in business resiliency by anticipating risk and reducing downtime through proactively identifying issues and performing maintenance only when needed.

2 – Total cost considerations; beyond new vs repair

Facility managers must stop and ask themselves, “What’s the consequence of the asset failing?”.The consequence in terms of cost of repair versus new is not always clear cut and requires analysis beyond the upfront costs. Always compare the cost of repair and buying new; don’t assume repair is the lowest cost option. It is wise to set a reasonable threshold for taking an item to repair vs buying new. Typically, this would be around the 60-70% mark.

With today’s sustainability imperative and an expanding focus on circular economy principles, it is crucial to evaluate this decision in line with sustainability targets. It is worth considering increasing the cost of repair limit to 70-80% of the new. Additionally, tracking carbon savings contributes to sustainability goals and Net Zero targets is essential.

And, with the current supply-chain challenges, it has never been more important to take all the opportunities to repair rather than buy new.

As a total consideration, the cost of new compared to repair can be complicated. This is where facilities managers may consider working with a wider team of experts to explore assets holistically while also understanding how to utilise the latest connected technologies to drive down costs and improve asset reliability, alongside audit and broader monitoring and modernisation.

3 – ‘Like-new’ remanufacture

As the Ellen MacArthur Foundation describes, “in a circular economy, growth comes from ‘within’, by increasing the value derived from existing economic structures, products, and materials.”

Embracing asset remanufacture instead of basic repair falls squarely within this description. Remanufacturing goes beyond a repair by not just replacing the faulty component but restoring it to its original condition; ‘Remanufacturing is a form of a product recovery process that differs from other recovery processes in its completeness: a remanufactured assets should match the same customer expectation as new .’

It is often available from the original equipment manufacturer and is of a much higher quality than a standard repair. All components drifting outside their normal operating parameters are replaced alongside faulty ones.

Along with high-quality repair and exchange services, it is also possible to use this as an opportunity to receive detailed reports to help minimise the risk of reincurring failures while extending the lifecycle of critical assets and reducing the carbon footprint associated with buying new. Another key benefit is that warranties are often longer on remanufactured parts, providing further assurance and protection.

Lean up

Many customers looking to ‘lean up’ their maintenance operations are turning to eternal experts to help drive down costs and make sustainability gains. At the same time they need to drive up equipment reliability and reduce downtime.

Thankfully, the rip and replace mentality is becoming increasingly obsolete. However, in its place must be a holistic approach to repair, remanufacture, modernisation and sustainability. It is no longer simply a question of out with the old, in with the new but a reimagining of how we meet complementary objectives of cost, efficiency and longevity – both in terms of assets and our broader impact on the environment. We must also consider how businesses can make the right decision and maximise the opportunities for repair by being organised and having the necessary data.