Taking the long view
Simon Charlesworth of ABS looks at key LCC factors in pump-purchasing decisions
All pump owners will know that the purchase price of a unit often represents only a small proportion of the total cost of owning it. The life-cycle cost (LCC) of any piece of equipment is the total lifetime cost to purchase, install, operate, maintain and dispose of it. LCC analysis is now a key feature of planning and investment decisions, particularly in industries such as water and wastewater, where private and public municipal authorities alike are seeking to reduce the amount of maintenance resource available.
While the LCC process does not guarantee a particular result, it does allow plant managers and designers to make a reasonable comparison between alternatives within the limits of the available data, and a method of predicting the most cost-effective solution. So, LCC is now an increasingly key element of pump-system design.
Although pumps are typically bought as individual components, they provide a service only when operating as part of a system. The purchase price is a small part of the life-cycle cost for high-usage pumps.
Cutting energy and maintenance costs
Greater understanding of the components that make up the total cost of ownership enables end-users to dramatically reduce their energy, operational and maintenance costs. It also helps pump manufacturers to develop products and services that are genuinely customer-facing.
The pump-selection process usually includes these considerations:
For the majority of facilities with pumping systems, lifetime energy and maintenance costs will dominate the lifetime cost of ownership, with initial purchase price playing a relatively small part in the overall equation. See box below for the LCC equation.
The initial purchase price, however, is often an area where purchasers working under tight financial constraints will attempt to make savings – particularly relevant in situations involving split budgets.
Split budgets can significantly hinder the LCC process. For example, while the maintenance department might be investing in new system components, any savings accruing due to better energy-efficiency operation will frequently find their way on to another part of the corporate balance sheet.
For LCC to operate effectively, it is therefore important that all parties in the supply chain are similarly motivated – ensuring the interests of one end of the chain isn’t confined to up-front costs, with focus at the user end geared to lifetime costs.
This is key when choices are being made at the initial selection stage where the quality of equipment can have a major impact on lifetime costs. For example, there may be options on materials with different wear rates, heavier duty bearings or seals, or more extensive control packages. These may incur higher initial costs in comparison with cheaper alternatives but ultimately both significantly reduce LCC costs and increase the working life of the pump.
The traditional method of applying LCC to pump applications involves three major elements: equipment (11%), energy (as new, 80%), and maintenance or equipment repair (9%).
Traditional LCA thinking is always to select pumps with the best efficiency – an approach which makes sense as energy always represents the highest percentage of on-cost. But these figures mask the real costs of operator support and efficiency fall-off, yet these are key points in the LCC process, which offer real opportunities to achieve optimum efficiencies and significant long-term savings.
To achieve the maximum benefit from LCC modelling, major costs – including operator support costs, blockage and efficiency fall-off – must be explicitly identified and built in to the LCC model. In sewage applications, for example, these traditional LCC percentages can be further broken down as follows:
On this basis, energy cost falls to 53%, with operation and maintenance of equipment now accounting for 47% of the total cost of ownership. Purchasing decisions are increasingly likely to be focused on achieving the optimum LCC by analysing how equipment with a working life spanning decades is being maintained and operated.
Maintenance strategy will usually incorporate a number of key
elements. Firstly, routine maintenance, which usually consists of routine monitoring, activity-based routine maintenance, managing sump condition, level-control equipment and equipment maintainability.
Unexpected failure-related maintenance includes repair-standard MTBF, response to alarms, maintenance strategy and frequency, repair versus replacement, and workshop repair efficiency. Collection and removal of damaged equipment and parts, together with delivery and installation of replacements, involves removal and installation costs, transport costs and on-site maintenance costs.
Auxiliary equipment covers panels and controls, self-cleaning, valves and non-return valves. Finally, MTBF will also cover quality of repair versus price, OEM spares versus alternative sources, repair versus replace, and costs and quality of materials of construction, such as rewinds, bearings and seals.
Closed high-efficiency impellers require more frequent maintenance, and any leakage will result in a reduction in efficiency. Given that most municipalities are now looking to reduce the amount of maintenance resources available, it is essential suppliers do not select impellers that require more maintenance than they can provide.
Recent studies performed by ABS examined the reasons for operator call-outs to pumping stations has highlighted the importance of making pump-purchasing decisions based on accurate LCC analysis and forecasting. Some 400 breakdown calls to 388 typical pumping stations over an eight-month period were analysed as follows:
The main causes of the 55% of operator call-outs to pumping stations as a direct result of pump-related problems were:
If you look at the cost of attending these breakdowns, the benefits of applying LCC to pump-purchasing are self-evident. The average time spent on site to correct a pumping station fault (including an average travelling time of one hour) is three hours and 15 minutes.
The average number of breakdown calls outside working hours is 30%. The average cost for one service engineer to attend a site during normal working hours is e145-215. And in many countries, for health and safety, two engineers need to attend. A separate survey of 500 breakdown calls showed that the average site-visit cost was e304 per visit, based on an hourly rate of e45 and including one hour’s travel.
The obvious conclusion is the critical importance of blockage-free pumping to achieving a low LCC.
ABS pumps and services are designed with LCC firmly in mind, with the aims of minimising maintenance- and repair-related downtime, and inefficiencies due to component wear and energy consumption.
Investment decisions are increasingly made on the basis of LCC minimisation. ABS is aware of the critical importance of LCC. The cost of ownership of a pump that blocks or fails can rapidly escalate – the additional overheads can be a nightmare for any organisation. Visit www.abspumps.com for LCC calculation software to calculate the Life Cycle Cost for your own installation
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