Traditional management of industrial steam systems focuses on operations and maintenance. Competitive pressures, technology evolution and increasingly complex regulations provide additional challenges. Operating a steam system effectively demands the managerial expertise of a "steam champion," a facility professional with the skills, leadership and vision needed to maximize the effectiveness of a plant's steam system.
More importantly, the steam champion acts as liaison between the boardroom and the plant floor by translating the functional aspects of steam optimization into equivalent corporate rewards, such as increased profitability, reliability and workplace safety. The prerequisites for becoming a steam champion include skills in business, management and engineering.
Steam is a significant element of manufacturing. Steam systems account for approximately two thirds of the fuel consumed there. In 1995, this consumption totaled 9.34 billion quads (one quad = one quadrillion BTU = 1015 BTU), and cost $21 billion. Steam continues to be an ideal thermal medium for processes that involve transforming, distilling, shaping or curing.
Plant managers usually view steam as a utility that supports core process activities. They attribute value solely to process applications. No such attribution is given to steam utilities. This implies plant managers don't think of steam systems as sources of additional value waiting to be captured. Instead, they consider the steam manager's job simply as a way to ensure a reliable steam supply. At worst, it suggests some managers are unaware of the opportunities to control steam system operating costs.
An optimized steam system can return real value to its owner. But it requires sophisticated management, proper system design, balancing, maintenance and repair procedures. Balancing refers to a continuous process of matching steam supply to steam demand.
Increasingly, however, business priorities enter the steam management agenda. Competition and cost pressures demand manufacturers squeeze plant expenses while generating revenue from marketable products. New technologies that enhance steam system productivity emerge. Other technologies threaten to replace steam. At the same time, the imposition of environmental regulations and operator certifications complicate steam management.
A more sophisticated managera steam championis a professional equipped with the skills, leadership and vision necessary to manage industrial steam operations. The capabilities of a steam champion include:
Performance management for evaluating plant functions relative to industry peers or benchmarks.
Operations management for identifying and implementing maintenance and operations processes to ensure reliable steam output.
Personnel management for allocating and developing human resources as needed to perform system operations.
Business management for analyzing and communicating steam system performance as it pertains to business priorities and goals.
Planning and anticipating changes in the business environment, including new technologies, regulations, market conditions and human resource issues.
Performance management is the first step in optimizing a steam system. Several key operating metrics allow comparison among systems within the same industry and tracking one system's performance over time. For example, boiler efficiency compares the heat content of the steam produced to the heat content of the fuel consumed. While sharing data with competitive firms is usually problematic, professional engineering societies, local utilities or manufacturing assistance programs may be of help. Operations benchmarking also takes place if a plant is one of many belonging to the same corporate group.
The true effectiveness of steam operations can be evaluated with only a few fundamental metrics. The cost per thousand pounds of steam produced is a comprehensive measure of system operating expense. Steam's contribution to plant output is another potential metric, and can be expressed as pounds of steam required per unit of production. Comparing the metrics to industry standards provides a relative measure of a steam plant's operating condition. Knowledge of relative performance is a prerequisite to implementing an ongoing optimization program. Table 1 suggests the steam champion's checklist of performance management items.
Table 1. Steam champion's performance management checklist.
This involves identifying and implementing improvement opportunities. Some activities, such as fixing leaks, are remedial or reactive. Others, such as monitoring and recording performance data, are routine. Still others are proactive, requiring an investment in new equipment to enhance productivity.
Optimized steam systems deliver thermal energy with minimum heat loss between boiler and steam users. Best-in-class benchmark comparisons can identify the features of an optimized system. Reference to such comparisons should lead directly to the formulation of an operations management program, with system optimization as its goal.
The steam champion's operations management program requires diligent monitoring and maintenance to ensure system reliability and to discover and correct dangerous anomalies. Disciplined operations preclude downtime, thereby improving productivity. Proper combustion, water treatment, condensate control, insulation and refractory, accompanied by leak repair, ensure good heat transfer. Compromising on any of these increases the fuel flow rate along with operating costs, combustion emissions and the liabilities associated with them.
Applying more intensive operations and maintenance can cause certain steam plant costs to increase. Operations and maintenance costs include labor and consumables, communication and documentation expenses. The steam champion understands that, over the boiler's lifetime, fuel alone will dwarf other costs, including the capital outlay for the boiler itself. Fuel savings more than offset the rise in incidental operations and maintenance costs needed to optimize the system.
System optimization is an ongoing process. Continuous improvement, or judiciously maintained optimization, is the rule. Many plant managers make the mistake of implementing a one-time, comprehensive system improvement, only to let the hard-won efficiency gains erode over time.
The operations management program requires well-trained, motivated and disciplined personnel. Plant technicians must apply mechanical as well as record-keeping skills. The steam champion must train the staff to understand the big picture, that is, the steam load's relationship to process demands. But equally important is knowing how to monitor the system and remedy operating problems. The steam champion must design and schedule a monitoring and maintenance routine to facilitate staffing and labor planning. Also, it helps the steam champion to better plan consumable purchases.
A motivated staff is an effective staff. While it is critical for the crew to understand the purpose and means of achieving plant optimization, the motivation to execute the routine is enhanced if they also share in the savings optimization provides. Rewards create the incentive to look for improvement opportunities above and beyond scheduled duties.
Training is the prerequisite to effective staffing. The steam champion seeks training resources and organizes a regimen that develops each staff member in stages. Initial training introduces basic operational concepts and safety. Intermediate training is intended for those with some operational experience, who are prepared to improve their range of technical abilities. Advanced training presents the use of industry standards and benchmarks, introduces operating liabilities related to resource management and emissions control and, perhaps, the fundamentals of human resource management.
The steam champion also has a personal training agenda. Business principles are important, while new technology development, energy market functions and regulatory policies are worthy of repeat study.
Membership in a professional engineering society is a worthwhile commitment for key staff as well as the steam champion. These societies offer excellent training and development resources. Paying for membership and its perquisites also is a way to reward staff.
Training culminates in the ability to realize operations program goals fully. The ongoing optimization of the system provides savings that accrue to the plant's bottom line.
Steam production is conducted for business purposes. The steam champion's business management agenda is two-fold: contribute to plant output while demonstrating steam's contribution in meaningful business terms. Success on both counts gets the attention of upper management, who ultimately decide how much financial and material support is available.
The advent of submetering technologies helps the steam champion track steam's contribution to different process lines within a plant. That metering data is a primary input for demonstrating business results.
Why do operations data need to be translated into business terms? Few chief executive or finance officers have an understanding or an interest in the engineering functions and measurements that define operations management. Describing the impact of steam optimization in terms of BTUs, pounds per hour or efficiency ratios may have little meaning to them. Increases in net income and return on assets are meaningful measures to a corporate audience. The steam champion discusses the impact of steam optimization in these terms.
Central to business dialog is the improvement of net income. Other financial effects depend on this measure. The preceding discussion of system operations management describes how optimization reduces fuel expenditures. Those expense savings can translate directly into new income. A thorough discussion of steam system efficiency's financial impact, with examples, is available in Steam Efficiency: Impacts from Boilers to the Boardroom, published in Steam Digest 2000.
Return on assets is the ratio of net income to the value of assets in place during an accounting period. Corporate decision-makers use return on assets as a measure of how hard assets work.
Competition in some industries forces managers to focus on cost. This is especially true for high-volume, commodity processes such as refining, chemicals, and pulp and paper production. In these cases, the marketplace usually dictates prices and profitability depends on cost containment. A steam champion documents and communicates the results of optimization in terms of cost reduction per unit of output. The corporate audience often responds better to this measure than to a statement of aggregate costs saved. Sometimes, a few pennies saved per unit can have a meaningful effect on the product's marketability. A steam champion can identify the incremental unit cost savings attributable to steam optimization.
The steam champion's own interests are best served by contributing to the firm's financial and corporate priorities. Steam managers compete with process managers and others for a share of the capital budget. Managers who demonstrate superior returns on capital investment proposals will get greater corporate support.
The manager's agenda encompasses more than mechanical concerns about the industrial steam plant. Regulation, human resources and technology evolution affect steam management to varying degrees. The steam champion monitors these forces and plans for change.
Emissions control regulations affect most large-scale combustion processes. Current restrictions limit sulfur dioxide and nitrous oxides emissions. Emerging legislation in response to global warming concerns will focus on carbon dioxide and carbon monoxide. Industrial steam managers must control emissions through alternative fuel selections, proper combustion techniques and abatement technologies. The acceptable emission thresholds are subject to constant revision. Professional and industry associations have excellent resources for interpreting U.S. Environmental Protection Agency regulations as well as the technologies and practices that facilitate compliance. The American Gas Association and the American Petroleum Institute also offer resources. The steam champion uses these resources to adjust the operations management plan.
Safety and emissions regulations shape the personnel certification requirements for steam system operations. The cost of acquiring certifications, as well as the compensation properly certified personnel demand, is a challenge. Under-trained apprentices are easier on the payroll, but a corresponding loss in productivity may be the tradeoff. It's desirable to develop these personnel, assuming they can be retained after being trained. The steam champion must make tough choices for sustaining acceptable levels of certified labor. Depending on labor market conditions and the plant manager's tolerance for continuous hiring and staff development, the choice is between outsourcing operations to a certified energy performance contractor, or managing a staff with a few key professionals and a complement of apprentices who learn on the job. In the best of circumstances, the steam champion can plan staffing needs in response to statutory certification requirements. But in practice, this human resource challenge may defy planning. The steam champion needs executive level commitment to training and compensation as the means for attaining system optimization.
New technology is relevant to emissions control, professional certification and plant and process design. Emerging control, monitoring and automation technologies will boost system productivity. Other technologies will emerge as substitutes for steam. The steam champion monitors development on every front and uses the knowledge to influence plant asset selection.
Monitoring technologies rely on data flows over time to determine the system's operating norms. Monitoring reports warn the operator when a data snapshot captures operating results out of the ordinary. Boiler operations, distribution elements and end-use applications can be monitored in this fashion. Automation technologies perform a variety of functions, from signaling the failure of key hardware components to controlling the mixture of fuels used simultaneously for combustion. The steam champion monitors the implementation of these innovations and employs them to the extent they are compatible with available human resources. To elaborate, it is theoretically possible to monitor every system component; this could be a problem if there is insufficient staff to interpret the data generated by monitors.
New technologies also involve substitutes to steam. Infrared applications, both electric and natural gas fired, have supplanted steam for drying paper coatings. Sonic vibrators, in combination with membrane sifters, are emerging as a non-thermal method for distilling liquids. Countless electric applications have been devised to provide thermal energy with pinpoint accuracy in product fabrication processes.
Steam champions monitor relevant technology developments. In some instances, they may determine that a substitute technology is superior to steam. The deciding criterion is the degree to which a technology will add valueeither through cost reduction or product enhancement. Steam champions in certain industries or facilities may have to evolve with the prevailing technology. But in the industries featuring large scale, continuous thermal energy, steam will most likely prevail. The need for steam champions to support these systems will continue for the foreseeable future.
Christopher Russell is senior program manager for industry at the Alliance to Save Energy, Washington, D.C. He can be reached at 202-530-2225.
Go to www.plantservices.com for additional information related to to this story, including a list of references and a checklist of operations management duties.
Figures: Alliance to Save Energy