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Why does your production site need an Alarm Philosophy?

Jul 24, 2018 7:05:00 AM / by Ove Heitmann Hansen

Why does your production site need an alarm philosophy?

The easy answer is: "Because it is a statutory requirement". An Alarm Philosophy has to follow specific standards, and in a court of law you could be held accountable for not applying the standards to your alarm system design. However, there is more than the legal aspect to it. The Alarm Philosophy exists for operational, safety, work environmental, design and behaviour reasons - and ultimately, cost effectiveness.

This is why it is important to understand the main needs and business rationale for an Alarm Philosophy, not only the legal requirements.

These are the most important aspects and benefits your production site will gain from having a professionally crafted Alarm Philosophy:

What does the Alarm Philosophy have to cover?

An Alarm Philosophy has to establish guidelines for how to address all aspects of alarm system management and governance of alarms at a site. This includes:

  • Roles & responsibilities
  • Rationalisation
  • Design
  • Operation effectiveness
  • Condition-based maintenance
  • Testing
  • Training
  • Cost
  • Management of change

 An Alarm Philosophy is the starting point for design and implementation of new alarm systems, in addition to any improvement initiatives associated with mature, existing systems.

The most important aspect for an Alarm Philosophy is to set the premise for alarm systems, since this is the primary operator support system for alerting and handling abnormal situations, and thus constitutes an important barrier that prevents unwanted conditions from developing into accidents.

It is also the main area where we can analyse and find root causes to a site that is not operating in a cost-effective way, and thus maximise the potential of the site.

An Alarm Philosophy has to ensure that the basic principles and reasons for the decisions made in the design of the alarm system are documented.

The complexity and level of details required to design, engineer, and operate an entire facility demands standards, as well as philosophy and best practices to be followed for safety, reliability and cost effectiveness. 

Why would you treat something that is so critical for safe and reliable operation differently than you would any other system?

Click to download Free White Paper: Alarm Performance Standards

 

The benefits and aim of a thorough and enhanced Alarm Philosophy

The Alarm Philosophy should enable optimal use of the plant and support the alarm system from the management level, the engineering level, the operator level, the investors level and the safety team level. In other words, the Alarm Philosophy requires buy-in from all stakeholders.

A poor and/or missing Alarm Philosophy will result in an unregulated alarm system, which you have no real control over. A thorough Alarm Philosophy will lead to better control on how your alarm system is designed, implemented, operated and maintained.

The principal benefits of a thorough and proven Alarm Philosophy are;

  • Safe and reliable operation
  • A consistent approach to alarm design
  • Improved regulatory performance and up-time
  • Cost reduction and increased productivity of your plant
Not to mention a good work environment with less stress, incorrect operation, less time-consuming troubleshooting and more efficient operators. In most cases, the investment in a good Alarm Philosophy is a win-win situation.

Every alarm is a cost - an Alarm Philosophy business case

Every alarm is a cost to the company and should be systematically evaluated.

Recommended reading: The cost of an Alarm in Process Control and Safety Systems.

A thorough and enhanced Alarm Philosophy, following international standards, is the documented necessity to guide the behaviour of console operators, automation engineers, and operation management, and will have a positive impact on safety and profit.

An Alarm Philosophy should be developed in a cost-effective manner and within a reasonable business case for all sites. This business case, will focus on heuristics, experience, simple financial models and in order to best calculate the benefits.

Some variables give smaller benefits or may be more difficult to quantify. These result from safety improvements, fewer environmental incidents, energy savings and compliance with government rulings. For this reason, we will not estimate legal, safety and design limitations as variables, but focus on cost-effectiveness, profit and behaviour.

To develop the business case and equation needed, we will use an example of an oil installation.

Our hypothesis is that a thorough Alarm Philosophy will reduce cost, optimise production, and create a better work environment that has a positive effect on profits. We will not consider a plant without an Alarm Philosophy, but rather focus getting a thorough Alarm Philosophy in place. 

The case:

  • A 50.000 bpd. oil production plant
  • A conservative oil price; $45 per barrel
The main economic categories are fewer abnormal situations, increase production within physical limits but not exceeding them, reduction of maintenance, decrease in capital expenses for equipment and repairs, and creating a better work environment for the operators.

 

1. Fewer abnormal situations.

A thorough Alarm Philosophy, that sets the premise for continuous alarm management, will give reduction in frequency of alarms and fewer abnormal situations.

Using $45/bbl. and a charge rate of 50.000 bpd. results in a calculated revenue of $2.25 million/day.

With a basis of accumulated four days per year of unplanned downtime, a 30% reduction in unplanned downtime yields a conservative annual benefit of $2.70 million. 

2. Increase production within design specifications.

The operators should be more confident to run the unit closer to actual physical constraints due to having an Alarm Philosophy and proper just-in-time alarming systems in place.

Using the previously calculated daily revenue of $2.25 million/day, an increase of only 0.2% in production capacity yields a conservative annual benefit of $1.64 million. 

3. Reduction in avoidable maintenance costs.

When human-error-caused abnormal incidents occur, unplanned maintenance work is required. This estimate attempts to quantify those preventable costs.

The benefit is calculated by a 2.5% reduction in a plant maintenance budget of $52 million annually, which gives us an annual cost reduction of $1,3 million.

Reduction in abnormal incidents will also decrease costs associated with equipment repairs. The benefit is calculated by a reduction in the plant capital budget of 1% in total material costs of a $35 million annual budget, which gives us an annual cost reduction of $0,35 million.

4. Better work environment.

A thorough Alarm Philosophy, should also result in a better work environment, which will result in less sick-leave, less workload, increased wakefulness, increased capacity and a better situational awareness.

This is calculated by a reduction in labour cost of 2% in total actual. Given an average cost of $28 million annual budget we will get an annual cost reduction of $0,56 million.

You might also like:   Why do some Alarm Improvement Projects fail? 

 

Clear benefits of having an Alarm Philosophy

As made evident, a thorough and enhanced Alarm Philosophy is relevant throughout all the phases of the alarm management lifecycle; from identification, design and implementation, through to operation, maintenance and ultimately decommissioning.

Investing in a thorough Alarm Philosophy is beneficial for the work environment, can reduce costs and make a positive contribution on profits.

 

Click to download Your Guide: A Successful Alarm Improvement Project

 

 Image: Ole Jørgen Bratland, Equinor.

 

Topics: Alarm Philosophy, Alarm Management

Ove Heitmann Hansen

Written by Ove Heitmann Hansen

Ove is the Managing Director of Eldor. He has extensive management experience from different industries, including 30 years of experience within change management, Integrated & Remote Operations, Stakeholder Management, and Improvement Processes. He has two Master degrees from Universities and leadership education from the Royal Norwegian Navy Academy.

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