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What's the added value of Industry 4.0?

Within Sitech Asset Health Center, we distinguish four value drivers which could potentially add economical value to the plant of the client. These value drivers, combined with both the most advanced data-science techniques and the best practices regarding maintenance & asset management, will provide you with the necessary information to establish the most beneficial business case for your specific use case.

The value drivers:
1) Asset Utilisation - maximisation of revenue;
2) Cost Control - reducing the operational expenses;
3) Capital Allocations - reducing capital and investment expenses;
4) SHEQ Control - mitigating risks concerning safety, health, environment & quality.

Calculation of an anonymised business case
In this example we calculate the added value of an anonymised business case.
For example: the technical availability of a plant amounts to 90%, which means that there is an inefficiency of 10%. In the first scenario we would portray the current situation. Then, in the following scenarios, the technical availability will be calculated as a result of the decrease in efficiency. In regard to the second scenario, the technical availability would increase by 2% (a decrease of the inefficiency up to 20% of the actual inefficiency).

The feasible scenario depends almost completely on the commitment and perseverance of the client. To completely transform a corporation to industry 4.0 standards, the process could take several years. Even though the deployment services of the SAHC might already be completed by then, the internal improvements will have to continue to fully embrace all the potential of the offered solution.

For a real-world example of a business case, let us look at an anonymised client. The client has an installation with a residual lifespan of 10 years, while the gross margin (15%) averages around 6.75 million euro per year. Let’s also assume that the technical availability amounts to 80%, the maintenance costs equal 4.3 million euro per year, and the annual investment costs equals 1.6 million euro. The four value drivers, together with the different scenario’s would then achieve the following added value over a span of 10 years:

Asset Utilisation

Inefficiency decrease up to 20% Inefficiency decrease up to 30% Inefficiency decrease up to 40%
Added value: €2.3 million Added value: €3.4 million Added value: €4.5 million

Cost Control

Inefficiency decrease up to 20% Inefficiency decrease up to 30% Inefficiency decrease up to 40%
Added value: €5.8 million Added value: €8.7 million Added value: €11.5 million

Capital Allocations

Inefficiency decrease up to 20% Inefficiency decrease up to 30% Inefficiency decrease up to 40%
Added value: €2.1 million Added value: €3.2 million Added value: €4.3 million

In addition, for the SHEQ scenarios, we have taken two incidents into consideration. First, a safety risk with a probability of 0,5% per year combined with consequential damages of around 25 million euro. Then, a quality incident with a probability of 0,1% per year and consequential damages of around 375 million euro.

SHEQ

Inefficiency decrease up to 20% Inefficiency decrease up to 30% Inefficiency decrease up to 40%
Added value: €0.7 million Added value: €1.0 million Added value: €1.3 million

The results will vary per case and company.

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