Pedro Robredo, Senior Vice President, Americas Region, ABB Electrification Service, offers three OpEx hacks to modernize US manufacturing.
A new wave of manufacturing growth in the US may be on the horizon. Be it the need for more reliable, resilient supply chains post-pandemic or shifting political and economic priorities, the manufacturing sector is set to see a resurgence in growth.
Businesses now have to rethink the way they spend and invest in their existing assets.
And, as technological life cycles get shorter, the traditional capital expenditure (CapEx) strategy of making longer-term asset investments is simply no longer viable.
Balancing the benefits of maximizing output and minimizing operating costs, the operational expenditure (OpEx) strategy is growing in popularity.
By prioritizing high quality maintenance and repair, an OpEx strategy defers capital costs and limits operational disruptions by ensuring the reliability of equipment, thus increasing a long-term return on existing assets.
Ultimately, this recent shift reflects the industry’s desire to move towards a more efficient and sustainable operating model.
To get ahead, here are three vital ways that industry can embrace this transformation:
Scrub away the idea of sunset industries
Terms like “sunset industries” and “rust belt” to describe traditional manufacturing segments are highly unconstructive. They played a huge role in America’s manufacturing history and they still do today. Times have changed, however, and that gives rise to an opportunity for heavy industry to adapt and stay relevant.
To do so, making strategic OpEx investments through asset modernization can help such industries evolve in line with new stakeholder demands. By upgrading and retrofitting outdated equipment, companies can extend the lifespan of critical assets by 30 years or more. Simultaneously, such programs can help reduce energy consumption by up to a third, replacing older assets with more energy efficient ones. This not only saves on maintenance and replacement costs, but also helps reduce a company’s carbon footprint in the long term.
For example, Finkl Steel, a leading American steel manufacturer, saw this firsthand when they approached us to upgrade their electrical cabinet, halving the number of circuit breakers and cutting their carbon waste.
The upgrade solution also brought about 24/7 predictive health indication and accurate synchronization with network voltage to control the accuracy and precision of the electrical current passing through the furnace – while reducing the risk of component failure.
Ultimately, technological enhancements that can bring about predictive capabilities enhance reliability and safety standards that serve as a competitive advantage.
Practice what you preach when it comes to digital transformation
Our ‘Better Decisions’ report uncovered an ironic trend among American industrial leaders: while 96% of decision-makers recognize the critical importance of digitalization, only 35% have successfully scaled their industrial IoT implementations.
This disparity between awareness and action could be characterized as “all talk and no follow-through.”
However, I see this as a significant untapped opportunity for US companies. By embracing and scaling their industrial IoT initiatives, organizations have the potential to generate actionable insights, streamline operations, and boost productivity – all while enhancing sustainability across their enterprises.
For example, the use of a digital energy management system that trends voltage and current power energy can enable businesses to monitor disturbances on their electrical networks. This would enable them to obtain real-time insights into the energy efficiency of their equipment, enabling a more data-driven approach to energy management.
In my view, the key is translating the widespread recognition of digitalization’s value into concrete, company-wide deployments of industrial digital technologies. Bridging this gap could unlock a new era of efficiency and innovation.
Collaborate, but make it count
At the heart of every OpEx strategy is an inherent emphasis on shared success in recognition of an increasingly fragmented landscape of assets, partners,and technologies. Strategic service partnerships that make room for innovative business models and collaborative approaches are ultimately those that will be poised for success.
When we worked with INPEX, one of the world’s largest offshore LNG plants, one thing their shutdown coordinator, Jason Hicks, said will always stay with me: “You really want to know that the vendor you partner with supports you.”
His words echo a shared sentiment expressed by many of our longtime clients – that finding the right collaborative partners to support industrial operations makes all the difference.
The key to project success is finding the right partner who can seamlessly integrate with the firm’s operations, providing the necessary support and innovative approaches to tackle complex operational challenges. A partnership-driven model stands to empower companies to focus on their core competencies while relying on their trusted service partner to deliver specialized capabilities that maximize the firm’s operational excellence.
Electrifying for a modern tomorrow
Future-proofing our assets is becoming more important as industries across the country recognize the need to transition towards more sustainable and efficient operating models. The shift towards an OpEx strategy, characterized by high-quality maintenance, repair and asset modernization, is allowing companies to defer capital costs and prevent operational disruptions.
As firms scrub away the idea of sunset industries, embrace digital transformation and foster collaborative partnerships, they will find themselves better equipped to stay competitive and positioned for long-term success.
Ultimately, the OpEx strategy is a win-win proposition to a better electrified tomorrow.
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