The Fluid System Model Path to Profitability

AN EXECUTIVE’S VIEW

Five reasons why dynamic fluid system modeling and predictive analytics are essential to efficiency and superior financial performance.

By Tom Suter 
CEO

One of the most celebrated people in my home state of Wisconsin—the great Vince Lombardi—once famously said this about football: Winning isn’t everything; it’s the ONLY thing. As an executive who has P&L responsibility, I’d like to respectfully amend Coach Lombardi’s axiom: Profitability is everything, and efficiency—though critically important to profit—isn’t the ONLY way to achieve it.

There are other, complementary ways to reach your profitability goals, perhaps exceed them, by optimizing financial performance. Efficiency is the cornerstone of what our founder, Ray Hardee, calls the Five Tenets of Profitability:

1. Establish an environment that produces the greatest efficiency.

2. Make the most effective use of capital assets and operating budget.

3. Respond to expectations and fulfill input and/or output demand.

4. Operate within safety standards (band widths).

5. Respond to regulatory authorities.

Pipes and pumps impact profits

Piping systems, like all business-critical aspects of any facility, have a financial dimension. For owners or operators, the predictive analytics of modeling solutions like PIPE-FLO can help them optimize the management and performance of, and their investment in, these systems for their entire lifecycle, from design/build to operate/maintain. Let’s look at that through the lens of those five tenets.

(1)    Efficiency

Two of the main drivers of inefficiencies are high energy consumption and costs, and excessive labor costs caused by having to constantly attend to a system as it operates. PIPE-FLO helps operators in two ways. First, it gives mechanical and electrical engineers and managers—who traditionally used their own units of measurement (e.g., horsepower, Kilowatts or kW/hour)—a common efficiency metric: dollars spent per item per year. Second, using this common language, they can model potential changes to the system, and make an informed decision that leads to greater efficiency.

(2)    Optimization of assets and budget

Systems should deliver maximum levels of productivity while experiencing minimum wear-and-tear. But they’re in a constant state of change, and a change to one element has a knock-on effect on the others. Expected changes can be designed into a system’s specs, but unanticipated events often go undetected—and maintenance crises result. PIPE-FLO takes real-time information and compares the operation of the physical system to its design, uncovers hidden problems, and improves preventive maintenance. Avoiding unplanned downtime leads to revenue enhancement, and superior productivity can lead to revenue generation.

(3)    Fulfillment of expectations and I/O demand

Input and output demand variances aren’t uncommon, but they can significantly impact productivity. Here’s another revenue capture example. Seeking to boost capacity of its cooling water system, a customer in Texas used PIPE-FLO to model the impact of a new pump it planned to order. It learned that it could achieve its goal by installing a new and wider pipe, not a new pump; as a result, the company not only increased its cooling water capacity, it saved capital costs (the pipe was cheaper than the pump), operations costs (it removed an existing pump), and maintenance costs—and reduced the downtime from preventive maintenance.

(4)    Operation within safety standards

The ability to model the introduction of system changes, and assess safety-related factors, is essential across most fluid process environments. Resources required to oversee safety—such as added labor costs—can impact profitability. One PIPE-FLO customer used it to increase the capacity of the cleaning water system in an expanding poultry processing plant with minimal disruption—and to demonstrate to food safety authorities that the new system met all hygiene-related requirements.

(5)    Regulatory response

“Guard rails” established by regulatory authorities can significantly influence target efficiency, system effectiveness, and demand fulfillment objectives, and impact profitability. The utility industry, where electric companies with nuclear power generation assets are heavily regulated by the NRC, is a prominent example. Another is pharma, where the FDA has stringent requirements for ultra-clean water systems. PIPE-FLO customers in these industries use our testing documentation to self-validate their results and ensure their compliance using specific NRC and FDA guidelines. 

Building on the cornerstone

Reducing waste and streamlining operations and manufacturing and business processes are go-to weapons in almost every successful manager’s arsenal, especially in industries that use fluids processing to provide their signature products or services. For anyone responsible for the business performance of a system, department, or company, there’s no disregarding the criticality of efficiency in the quest for profit. It’s truly a cornerstone: a fundamental support within a larger structure. Operators of fluid systems assets need to build on this cornerstone of efficiency with the five tenets in mind.

Fluid system modeling and analysis solutions like PIPE-FLO support a full arsenal of profitability strategies. With the many insights they provide, they’re vastly more intelligent than traditional tools, like simple spreadsheets. What’s more, they’re a bridge to a Digital Twin environment that empowers operators to make decisions over the entire project lifecycle that positively impact both top and bottom lines.

Tom Suter is CEO of PIPE-FLO.