All Member Open Forum

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Good evening Jason,

When it comes to condemning equipment, I have always taken a life cycle costs based approach. For eg: if an immediate repair worth 60% of the price of new, ( material+labour) assures no major issue/expense for the next 5 years due to the known reliability of the parts used and the method of repair, then why not continue with the repair ? Such an approach would work for machinery with several sub-component such as pumps wherein one faces eroded wear rings in about 5 -10 years or worn casings due to an aggressive pumped medium etc. Valves on the other hand - I am not sure what kind of valves are these but it is again a call that needs to be taken based on the number of failures in the last 3 years/failure rates X cost of repair.
If your business is the kind that suffers budget fluctuations in proportion to the market conditions and company revenue, it might not make sense to write down 60% as a fixed limit or company policy. When times get tough, every dollar matters and decisions tend to get more case by case...

All the best.

------------------------------
MATHEWS VADAKKAKARA
MSPL Diamond PTE Ltd
Bedford
------------------------------

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Good point about the life cycle approach.  As for the valves my question is should all repairable items be a rotating asset?  Thank you.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Original Message:
Sent: 09-19-2022 06:29 AM
From: MATHEWS VADAKKAKARA
Subject: Rotating assets

Good evening Jason,

When it comes to condemning equipment, I have always taken a life cycle costs based approach. For eg: if an immediate repair worth 60% of the price of new, ( material+labour) assures no major issue/expense for the next 5 years due to the known reliability of the parts used and the method of repair, then why not continue with the repair ? Such an approach would work for machinery with several sub-component such as pumps wherein one faces eroded wear rings in about 5 -10 years or worn casings due to an aggressive pumped medium etc. Valves on the other hand - I am not sure what kind of valves are these but it is again a call that needs to be taken based on the number of failures in the last 3 years/failure rates X cost of repair.
If your business is the kind that suffers budget fluctuations in proportion to the market conditions and company revenue, it might not make sense to write down 60% as a fixed limit or company policy. When times get tough, every dollar matters and decisions tend to get more case by case...

All the best.

------------------------------
MATHEWS VADAKKAKARA
MSPL Diamond PTE Ltd
Bedford

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Original Message:
Sent: 9/19/2022 7:58:00 AM
From: Jason Resler
Subject: RE: Rotating assets

Good point about the life cycle approach.  As for the valves my question is should all repairable items be a rotating asset?  Thank you.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Original Message:
Sent: 09-19-2022 06:29 AM
From: MATHEWS VADAKKAKARA
Subject: Rotating assets

Good evening Jason,

When it comes to condemning equipment, I have always taken a life cycle costs based approach. For eg: if an immediate repair worth 60% of the price of new, ( material+labour) assures no major issue/expense for the next 5 years due to the known reliability of the parts used and the method of repair, then why not continue with the repair ? Such an approach would work for machinery with several sub-component such as pumps wherein one faces eroded wear rings in about 5 -10 years or worn casings due to an aggressive pumped medium etc. Valves on the other hand - I am not sure what kind of valves are these but it is again a call that needs to be taken based on the number of failures in the last 3 years/failure rates X cost of repair.
If your business is the kind that suffers budget fluctuations in proportion to the market conditions and company revenue, it might not make sense to write down 60% as a fixed limit or company policy. When times get tough, every dollar matters and decisions tend to get more case by case...

All the best.

------------------------------
MATHEWS VADAKKAKARA
MSPL Diamond PTE Ltd
Bedford

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Yes, 60% is a number I've been given in the past, but be aware that the current supply chain situation has turned that rule on its head. There are a lot of things you just can't get new, or at least not for several months. One component I was looking into recently has a lead time of 1-1/2 years. Repairs and rebuilds have become necessary in many cases, with local machine shops custom fabricating replacement parts.

For example, on Friday I visited our electric motor supplier, and they pointed out an overflow room full of motors waiting to be rebuilt. They are having a hard time getting new ones, so many more customers than usual are opting to rebuild motors that normally would be scrapped.

------------------------------
Dale Nicholson, PE, CMRP, CRL
Reliability Engineer
Evonik Corp
Lafayette IN
------------------------------

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

I know what your talking about with today's supply chains.  I was talking with my motor rep last week about this question.  He told me that they have their holding lot for incoming rebuilds full.  He said that they are rebuilding motors down to 10HP even,  its crazy times.

Do you

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Original Message:
Sent: 09-19-2022 06:31 AM
From: Dale Nicholson
Subject: Rotating assets

Yes, 60% is a number I've been given in the past, but be aware that the current supply chain situation has turned that rule on its head. There are a lot of things you just can't get new, or at least not for several months. One component I was looking into recently has a lead time of 1-1/2 years. Repairs and rebuilds have become necessary in many cases, with local machine shops custom fabricating replacement parts.

For example, on Friday I visited our electric motor supplier, and they pointed out an overflow room full of motors waiting to be rebuilt. They are having a hard time getting new ones, so many more customers than usual are opting to rebuild motors that normally would be scrapped.

------------------------------
Dale Nicholson, PE, CMRP, CRL
Reliability Engineer
Evonik Corp
Lafayette IN

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Original Message:
Sent: 9/18/2022 9:38:00 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Jason

Here is the program that we developed in the US DOE, which is the primary method still used today: Motor Repair Tech Brief (energy.gov)

This is an article I'd written on the topic which fits today with availability of replacements: Motor Reliability | Electric motors: Repair or replace? Assess impact on production, reliability, suitability and cost | Plant Services

And here are US DOE resources on rotating machinery (as well as other tech such as compressed air, steam, etc.) : Motor Systems | Department of Energy

The guidance developed in all of these programs were from experts in the field combined with energy, academia, and national labs work.

As for a rule of thumb - it generally fell between 60 and 80% of new.  Only in a few cases have I seen 50%.  The average was 70% the cost of new especially when upgrading energy efficiency.

Hopefully you find this helpful.

------------------------------
Howard W Penrose, Ph.D., CMRP
Random Past SMRP Chair (2018), 2019+ Govt Relations Smart Grid, Infrastructure and Cybersecurity Working Group Chair,
Vice Chair Technical Standards wind, solar, energy storage, American Clean Power (formerly AWEA), and
President
MotorDoc LLC
Lombard, Illinois
------------------------------

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Good topic and discussion.  I have seen over the years the 50% rule applied but I've never liked the rule.  It is too general and a bad guideline which doesn't take into account all the other factors such as life cycle, particular failure modes, delivery times, MTBF of asset, level and risk of repair, spares available, # of applications in service, etc.  

Consider this.  50% of a $3000 item isn't that much so just buy new, but 50% of a $50,000 item is $25,000 so would you rather throw away $25,000 to buy a new one?  I can fix and improve lots of stuff for 25K.  It really depends on the item.  

We have a gearmotor now that it cost about the same to rebuild than a new one, however, a new one is like 6-8 month delivery.  Our failures (multiple applications) come up in the 4-6 month range.  We really can't afford to wait for a new one all the time.​

------------------------------
Randy Riddell, CMRP, PSAP, CLS
Reliability Manager
Essity
Cherokee AL
------------------------------

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Original Message:
Sent: 9/20/2022 8:52:00 AM
From: Randy Riddell
Subject: RE: Rotating assets

Good topic and discussion.  I have seen over the years the 50% rule applied but I've never liked the rule.  It is too general and a bad guideline which doesn't take into account all the other factors such as life cycle, particular failure modes, delivery times, MTBF of asset, level and risk of repair, spares available, # of applications in service, etc.  

Consider this.  50% of a $3000 item isn't that much so just buy new, but 50% of a $50,000 item is $25,000 so would you rather throw away $25,000 to buy a new one?  I can fix and improve lots of stuff for 25K.  It really depends on the item.  

We have a gearmotor now that it cost about the same to rebuild than a new one, however, a new one is like 6-8 month delivery.  Our failures (multiple applications) come up in the 4-6 month range.  We really can't afford to wait for a new one all the time.​

------------------------------
Randy Riddell, CMRP, PSAP, CLS
Reliability Manager
Essity
Cherokee AL
------------------------------

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Dear Jason,

It's generally not a good idea to set a fixed cost threshold for deciding whether to repair or replace an asset. The decision to repair or replace should be based on a number of factors, including the expected cost of the repair, the expected useful life of the asset after the repair, the value of the asset to the organization, and any potential risks associated with the repair. For example, if a repair is likely to extend the useful life of the asset significantly, it may be worth doing even if the cost is relatively high. On the other hand, if the cost of the repair is relatively low but the asset has little value to the organization or is at high risk of failure, it may be better to replace it.

Regards,



---------------------------------
Hasan Putra BEng
Maintenance Planner and Scheduler
PT Paiton Operation and Maintenance Indonesia
---------------------------------



Original Message:
Sent: 09-20-2022
From: Jason Resler
Subject: RE: Rotating assets

Thank you all for your responses, this has all been good feedback!  Have a safe day.

 

Best Regards,

 

 

Jason Resler, CMRP | Reliability Manager 
Green Plains, Ottertail LLC

Cell:  218-770-3719

Email: Jason.resler@gpreinc.com

www.gpreinc.com 

 

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Original Message:
Sent: 9/20/2022 8:52:00 AM
From: Randy Riddell
Subject: RE: Rotating assets

Good topic and discussion.  I have seen over the years the 50% rule applied but I've never liked the rule.  It is too general and a bad guideline which doesn't take into account all the other factors such as life cycle, particular failure modes, delivery times, MTBF of asset, level and risk of repair, spares available, # of applications in service, etc.  

Consider this.  50% of a $3000 item isn't that much so just buy new, but 50% of a $50,000 item is $25,000 so would you rather throw away $25,000 to buy a new one?  I can fix and improve lots of stuff for 25K.  It really depends on the item.  

We have a gearmotor now that it cost about the same to rebuild than a new one, however, a new one is like 6-8 month delivery.  Our failures (multiple applications) come up in the 4-6 month range.  We really can't afford to wait for a new one all the time.​

------------------------------
Randy Riddell, CMRP, PSAP, CLS
Reliability Manager
Essity
Cherokee AL
------------------------------

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------

Dear Jason 
- If the M&R cost >50% of the Marketing Value (not the new value), If you can not estimate the marketing value, then you can calculate it as follow :
   Marketing Value = Land cost x (1- Age (Y) * .03 - .05)  ... 0.03-.05  according to the type of the equipment small or big , example Crawler crane with 10y , Marketing value will be approx. 70% of the land cost 
- Regarding to the repairable assets set up as rotating assets, It is according to your usage, we have both Fixed Asset (it have to be fixed back after repair) and Rotating asset which can be used wherever required after repair (but we have to update the location accordingly in the register.
Hopfully to be clear 

------------------------------
Ahmed Hamed Abdelrazek Idris
Asset Manager
National Marine Dredging company
Abu Dhabi
------------------------------

Original Message:
Sent: 09-18-2022 09:38 PM
From: Jason Resler
Subject: Rotating assets

Good evening all,

I'm am currently working on the strategy for our rotating assets.  At what cost for a repair are you replacing with new instead of repairing?   I believe typical is 60% of new.  Also do you have all of your repairable assets set up as rotating assets or are there some assets that you simply repair and place back in inventory?  Obviously we have our motors, pumps, and decanter bowls set ups as rotating.  What do you do with smaller items such as valves and tank cleaning machines?  Thank you in advance for your feed back.

------------------------------
Jason Resler, CMRP
Corporate Reliability Manager
Green Plains Inc.
Omaha, NE
jason.resler@gpreinc.com
218-770-3719
------------------------------