Asset Excellence: Optimize Operational Value through Proactive Asset Excellence

2. Asset Excellence: Optimize Operational Value through Proactive Asset Excellence Session ID: OXAX224 Presented by: Tom Kinney Trevor Cusworth Brett Gold (Vectren) 11/09/11 Invensys proprietary & confidential

3. Introduction & Objectives • Delivering optimum plant performance requires a fine balance between utilization of the critical production assets, production risk and environment and safety considerations. • This session will provide you with an understanding of Invensys' unique Asset Health approach that fully supports Operational Risk Management while delivering the maximum value from your production assets.

4. Invensys Enterprise Control Offerings Corporate Systems Industry Solutions Services: Consulting, Project Execution, Learning, Operational Improvement, Maintenance & Support Partner Ecosystem Corporate Software Applications Invensys and Third Party Manufacturing / Production Operations Automation Invensys and Third Party Enterprise Control System IT Platform Integration and Collaboration Platform

5. Where The Offerings We Will Discuss Fit Within TheInFusion Enterprise Control System Execution Integration & Collaboration Platform Enterprise Asset Management Mobile Workforce Management Manufacturing Execution Systems Batch Performance Software Applications Enterprise Manufacturing Intelligence Asset Performance Performance Measurement and Reporting Enterprise Integration Visualization Quality Optimization Workflow Advanced Process Control Simulation / Optimization Design Operator Training Third-Party Offerings Open Device Integration Web Portal Control Automation Software Applications DCS PAC SCADA HMI Application Toolkit Safety Turbomachinery Control Safety Instrumented Systems General Purpose Safety Historian Measurement & Instrumentation Recorders Instrumentation Controllers

6. Pillars of Operational Excellence and Focus of This Discussion Operational Excellence Level 3 (Multi-plant/Multi-site) Environment And Safety People Level 2 (Plant Floor/Area) Asset Level 1 (Resource/Asset) Control

7. Maximizing the profitability from industrial assets • Increased demand to better manage all the assets in an organization • Strong push to increase production capacity, at a reduced cost, and with a positive effect on safety and the environment • …despite aging assets and shrinking workforce Asset Excellence

8. Maximizing the profitability from industrial assets • Invensys’ strength is our ability to combine our experience and broad range of offerings to transform diverse sources of asset data into a single, real-time view of overall asset health to enable support of production goals • Increase visibility of actionable information, not just data but contextualized information • Improve timeliness of actionable information: Last month, last week not good enough Asset Excellence

9. Maintenance Organizational Maturity Computerized maintenance management systems  By Terry Wireman

10. Maintenance Organizational Maturity • Reactive • Predictive • TPM • Preventive • Operator Based Total Productive Maintenance in America  By Society of Manufacturing Engineers

11. Typical PM Routines

12. Asset Excellence Offerings Overview

13. Instrument Asset Management System (IAMS) Heat Map Visualization • Field device management with uniform and integrated functions for simultaneous competing fieldbusses • Proactive management and visualization • Sustainability: • Integrated and automated install • Scale-up • Synchronized license, support, version, security/permissions • Differentiation: Unified and Proactive Instrument Asset Management Workflow Logbook Forecasting Visualization Integrated Automated Install, Security Scale Up Applications Integration Synch License, Support, Version

14. Mobility Overview • Templated proactive and rules-based governance of mobile activities • Includes mobile, workflow, logbook • Sustainability: • Integrated and automated install • Scale-up • Synchronized license, support, version, security/permissions • Differentiation: Most Trustworthy Mobility Workflow Logbook Work Instruction Integrated Automated Install, Security Scale Up Applications Integration Synch License, Support, Version

15. Predictive Pattern Recognition Alarm Mgt Forecast Visualization • Predicts asset performance and drift/changes • IAMS cannot identify instrument calibration drift • Sustainability: • Integrated and automated install • Scale-up • Synchronized license, support, version, security/permissions • Differentiation: Most Trustworthy Material Mass Balance Workflow Condition Monitoring Data Reconciliation Integrated Automated Install, Security Scale Up Applications Integration Synch License, Support, Version

16. Enterprise Heat Map Visualization Forecast Visualization • Combines enterprise asset management, real-time finance, advanced visualization • Templated, proactive and rules-based management • Sustainability: • Integrated and automated install • Scale-up • Synchronized license, support, version, security/permissions • Differentiation: Most Trustworthy Enterprise Asset Management Workflow Real-time Finance Maintenance Management Integrated Automated Install, Security Scale Up Applications Integration Synch License, Support, Version

17. Optimization Process Optimization Forecast Visualization • Combines maintenance and production management • Proactive (future view) • Balances targets, constraints, risks and actual • Sustainability: • Integrated and automated install • Scale-up • Synchronized license, support, version, security/permissions • Differentiation: Most Trustworthy Maintenance Optimization Advanced Process Control Real-time Finance Risk Modeling & Monitoring Integrated Automated Install, Security Scale Up Applications Integration Synch License, Support, Version

18. Wireless Workflow • Extends other asset excellence offerings • Much more than wireless field devices • Integrates most wireless standards • Sustainability: • Integrated and automated install • Scale-up • Synchronized license, support, version, security/permissions • Differentiation: Most Trustworthy Mobility Logbook Wireless Devices Wireless Integration Integrated Automated Install, Security Scale Up Applications Integration Synch License, Support, Version

19. Asset Excellence: Real-Time Management of Large Mobile Assets Trevor Cusworth Business Value Solutions Invensys Operations Management Invensys proprietary & confidential

20. Case Study - Agenda • Introduction • Asset Management Strategy • Asset Performance Management • Typical Operations • Solution Approach • Current Activities • Next Steps

21. Introduction • Large provider of services to the Steel and Metals Manufacturing Industry • Operated over 170 sites worldwide • Provides all services related to material movements, metal recovery and logistics at each site • Operates a large fleet of mobile assets, mainly Caterpillar, but also non-Caterpillar equipment • Also operates a large fleet of fixed assets e.g. metal recovery plants

22. Typical Mobile Assets Kress Pot Carrier Dump Truck Front Wheel Loader

23. Asset Management Strategy • Focused in three areas: • Sharing of maintenance best practices across all sites • Total cost of ownership (TCO) reduction – lease or own • Asset excellence

24. Asset Excellence – Challenges • Large fleet of mobile assets that are expensive to operate and maintain • e.g. a single tire costs around $15,000 • Drivers/operators are free to operate the equipment as they wish • No feedback is given to the operators on their performance or the cost of operations • Customers are increasingly interested in the cost of operations Invensys proprietary & confidential

25. The Asset Excellence Challenge AVAILABILITY UTILIZATION Asset Excellence requires a balance between Maintenance and Operations Invensys proprietary & confidential

26. We can’t maximize profit by focusing only on maintenance practices? • Optimum asset performance is a balance between maintained state and utilization • Focusing on either aspect alone does not drive maximum value creation The Win! Primary focus today Improve maint best practices Maintained State Improve asset utilization Need to optimize both maintained state and asset utilization Effective Utilization

27. How can we know if our assets are performing optimally without real time information and feedback? Asset Operational Performance Asset Model Ideal Asset Analysis Trend Actual Asset Financial Performance Asset/Asset Set Lack of real time data is severely inhibiting ability to optimize asset economic performance

28. Optimization Predictive Advanced Control Preventive Control Reactive How can we align operations and maintenance activities to maximize economic performance? Maximum Profit Asset Management Operations Management Maintenance KPIs Production KPIs Business Performance Measures Operations and Maintenance must have common performance measures

29. Typical Process Slag Poring/ Digging Scrap Sorting Blast Furnace Charging Iron Making Metal Recovery Slab Shipping Slab Storage Steel Making Casting Viewing the operations as a process versus discrete activities exposes potential economic opportunities

30. Project Approach • Executed a site feasibility study • Interviewed all of the key stakeholders from drivers up to senior management • Reviewed the financial performance of the business • Developed understanding of the site’s strategic objectives, actions and performance measures from management to frontline personnel • Reviewed the technology infrastructure and capabilities of Caterpillar’s on-board monitoring systems

31. Initial Opportunities Identified • Operational improvements are possible through • Real time operational and financial performance measures • Activity level performance measures • EVA metrics for management • Opportunity to provide ongoing asset condition information to Maintenance • Need to focus on change management to ensure active engagement by all relevant stakeholders • Further benefits are possible through higher coordination/interoperation with customer

32. Identified Opportunity Areas for Savings Inputs Measures Outputs Improvement Benefits EVA Contribution Corporate Asset Value Cost of Capital Activity Costs per Asset Activity Revenue per Asset Weekly EVA Contribution per Asset EVA Improvement per Asset Stronger Organizational Alignment 9 – 12% Management Hourly/Daily Cost per Activity Cycle Times Hours per Activity Invoiced Tons per SMU Invoices Ton per Total Tons Fuel Use per Activity Maintained State Tons Moved Labor Usage Fuel Use Maintenance Costs Spare Part Costs Real Time Measures Activity Costs • Activity Improvements • Efficiency • Utilization • Availability • Labor • Fuel Supervisors Cost per Ton Cost per Hour Tons per SMU Hour Fuel Use per Ton Maintained State Real Time Payload Fuel Use Maintained State SMU Hours Real Time Visibility and Feedback Operators Real Time Costs 3 – 5% These measures will be used to drive operational improvements

33. Work Hours Fuel Burn Engine Start/Stop Times Idle Time Idle Time Fuel Consumption Payload Machine Health Information Geographic Location Measurements needed to Drive Real-Time Asset Excellence Business Information Vehicle Information • Maintenance Costs by Asset • Spare Parts Costs by Asset • Labor Use by Asset Driver/Operator Information • Activity Type – invoiced/non-invoiced movement • Material being moved • Driver Identification These measures are available from a variety of sources

34. Proposed Architecture Drivers/ Operators Mobile Assets Real Time Database and Historian Maintenance Fixed Assets Supervisors Operator Information Management Customer Data Global Operations Network

35. Change Management • Effective change management is critical to the success of these projects: • Need to build an integrated HR strategy • Need to include all stakeholders in the process • Need to involve human factors/change management expertise • Need to consider the impact of how this new system will affect each function of the business • Who needs to see this information • How will it be presented to them • How will they use it to drive improvements

36. Current Activities • Implementing a pilot project at a site in UK • Includes the performance monitoring of 21 different mobile assets • Slag Pot Carriers, Front Wheel Loaders, Drop Balling Cranes & Dump Trucks • Working with Caterpillar to identify data feeds and asset capabilities • Investigating data communication methods – wireless vs. cellular • Working with HR to develop a communication plan and change management approach

37. How do we use the Performance Measures? • Measures alone do not deliver performance improvement • Need to empower operations/maintenance to use the performance measures • Need to put a management system in place to review and take action based on the measures

38. Business Value Creation Process Visibility is Essential to Profitability Empower Real-Time Business Empowerment Measure Real Time Business Measurements Improve Real Time Business Improvement Manufacturing Asset Base

39. How do we Prioritize the Problems we Need to Work On?

40. How do We Identify and Fix Root Cause Problems?

41. Next Steps • Complete pilot project and use the performance measures to drive improvements in operator performance and efficiency • Review the results of the pilot • Expand the system to encompass other assets at current site and across other sites globally • Provide view to all assets globally

42. Avantis Case Study : Condition Based Maintenance Strategy at Vectren Presented by Bret Gold Invensys proprietary & confidential

43. About Vectren • Vectren is an energy holding company headquartered in Evansville, Indiana • Provide energy to customers in Indiana and Ohio • 996,000 natural gas customers • 141,000 electric customers • 1,000 MW - coal-fired units • 295 MW - gas-fired turbines • 30 MW - purchased wind power • 3.2 MW - renewable landfill gas turbine • Brown and Culley power plants provide 1,176 MW of generating capacity

44. Scheduled Maintenance • Over 15,000 distinct equipment readings archiving in Honeywell PhD data historians at two power plants Vibrations Hours Temperature RPMs Temperature Gallons Honeywell PhD Data Historian

45. Scheduled Maintenance • Plant personnel examined readings with Process Trend software and spreadsheets looking for failing assets Readings Honeywell PhD Data Historian

46. Scheduled Maintenance

47. Scheduled Maintenance Maintenance Procedures Process Trend software monitored constantly for evolving problems Performed when assets broken or not running efficiently Alarms indicated problems needed immediate attention Drawbacks Dangerous conditions could quickly evolve undetected Unplanned outages were costly Monitoring procedures were time consuming Problems could not be immediately determined Alarms were repetitive, could not be triggered by combination of conditions

48. Scheduled Maintenance Preventative Maintenance Procedures Preventative maintenance was scheduled Proactive work was done to assure reliability but didn’t have a good methodology for determining the right time Drawbacks Proactive maintenance may have be performed more often than was really required, costing time and money Trouble and breakdown would result if maintenance intervals were too long, costing even more in terms of production loss

49. Why Condition Manager? Features Monitors the performance of assets to determine when maintenance should be performed Page and e-mail alerts can be sent when conditions are triggered Integration to Avantis allows generation of work requests or work orders Real-time statistics on asset efficiency are generated Users can view documents containing pertinent information about the asset, including specifications, pending work and work history

50. Why Condition Manager? Advantages Early warning philosophy issues warnings when movement to degraded conditions Perform maintenance when needed, not when scheduled Reduce unplanned downtime Enable a predictive / proactive maintenance strategy Automatically record operation statistics Establish maintenance programs based on equipment performance