Are you using risk management to improve your productivity?

Safety is one of the most critical indicators we have for measuring success in industrial firms. And when it comes to hazards we have a lot of established ways to analyse and manage risk. But have you ever thought of risk management methodology as a way to improve your productivity?

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Let me tell you how risk management can boost:

  • Productivity in existing plants
  • Performance of your investments
  • Success in your IoT strategy

Is your data sufficient?

High reliability in plant machinery and equipment is often considered synonymous with safe and smooth-running operations. For the user, high reliability means uninterrupted production flows, minimal maintenance costs, lower personal and environmental risks, and energy saving.

Reliability analyses are widely used in areas where statistical component data can be employed. However, when reliability data is not available, performance and productivity data are also very important. Unfortunately, even this is not always enough to support decision-making when remedial productivity improvement measures are being handled in existing production systems.

It’s in cases like these that risk management offers systematic tools for identifying and analysing the causes of decreased productivity. And the major data source in this instance is your organisation’s experienced personnel. The tacit knowledge, or even gut feeling, of experienced people is often an underused resource when it comes to the supplementation and evaluation of collected data.

There are plenty of case studies demonstrating that the people who know a plant’s production system well are qualified to make rather reliable engineering judgements. This is very important when it comes to identifying the most significant factors affecting decreased productivity as well as for considering the right remedial actions.

In other words, if you cannot trust your existing data, when you’re working to avoid undesired production breaks, you needn’t wait for the completion of an extensive next round of data collection. You can always use a risk management approach to gaining a leap in productivity.

Are you making the right investments?

In today’s competitive global conditions, companies need to make efficiency and profitability investments that support strategic decision-making on different levels (corporate, business, and functional). Return-on-investment requirements are getting shorter and fierce competition leaves little margin for error.

In risk management, there are several useful methods for investment portfolio management, which are managerial and strategy intensive. These methods integrate technical and operational information as well as strategic targets designed to improve the quality of investment and business decisions. These methods therefore aim to select the right set of investment projects for execution, in order, for example, to ensure enhanced productivity. Furthermore, the ability to make the right investments to fit prevailing business conditions and achieve planned ramp-up time can significantly affect productivity.

Firms investing in complex technology and delivering on those investments, quite often require rather large value networks, involving several intertwined organisations. Managing them is demanding, and there are frequent pitfalls to avoid along the way.

Having said that, risk management offers a lot of useful tools for these kinds of demanding investment projects. It’s been proven that risk management is actually quite an adequate means of increasing e.g. knowledge sharing among different actors in a value network. So why not use it for the effective communication of the overall objectives and requirements of a certain investment project, as a means to reaching or even exceeding your investment targets?

IoT, great, but what do you do with it?

Digitalisation and Internet-of-things (IoT) are coming, bringing great business potential, but how can your business capitalize on the opportunities these new technologies offer? If your equipment and component fleet is huge, should you put sensors on every one of them?

To enhance productivity, one great option when making an IoT, Industrial Internet, and Industry 4.0 implementation plan is to take into account the top-down approaches that risk management serve. With risk management tools it’s quite effective to reason the most critical functions of a production system, find the most critical components in these functions and, for instance, define the failure modes of these critical components. This kind of information is constitutive for example in designing online conditions monitoring systems. But don’t install sensors only for information on equipment criticality.

Risk management also offers many cost-benefit analysis tools for calculating the profitability of different options. In combination with criticality information, this techno-economic analysis can offer you the right pathway to the successful implementation of your IoT technology strategy.

Risk, bad or good?

Traditionally we have understood risk as the threat of something negative or bad happening, or of losing something valuable. Nowadays, luckily, we can think about risk more as a two-sided coin. The positive side of looking at risk being that you can find value in it as well as discover new opportunities.

Find out more at: www.vttresearch.com/properscan

Pasi Valkokari VTT

Pasi Valkokari
Senior Scientist
Twitter: @PValkokari

VTT ProperScan® enables you to define the current status of your plant or its single components. Due to extreme conditions, phenomena such as corrosion, erosion or wear may cause failures that can be difficult to predict. ProperScan® helps predict how to react to changes in your operating environment and how risks can be monitored and controlled. With the help of ProperScan® services, you gain information on e.g. how long your plant can be operational with the present parameters and when to perform the needed repairs in the plant.

With ProperScan® you can:

– extend the lifetime of plant components

– have uninterrupted and safe operations

– reduce economic risks at system level

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