Benefits
In 2005, Honeywell entered into an 18-year Lifecycle Management contract with Delesto B.V., a Dutch combined heat and power producer and supplier. The agreement includes Honeywell’s Experion® Process Knowledge System (PKS) and Operator Training Simulator (OTS), as well as service support and maintenance to Delesto until 2022. The contract delivers predictable maintenance costs on Delesto’s process automation system and guaranteed lifetime support, enabling Delesto to cut maintenance costs by 20 percent over 18 years. Other benefits of the Lifecycle Management contract include:
- Guaranteed functionality over the contract period
- Upgrades are planned ahead, avoiding capital expenditures and long approval cycles
- Preventive and corrective maintenance
- Guaranteed spare parts availability
- Performance contract with bonus and penalty calculation
- Fixed annual fee provides predictability
Background
Delesto B.V, jointly owned by Akzo Nobel and Essent, supplies steam and electrical power to 10 chemical manufacturing plants based on its Delfzijl site in the Netherlands and to the Dutch national grid. Its operation depends on its mission critical technology functioning smoothly to ensure that its plant runs efficiently and supplies power without downtime. Delesto’s process control system has a fundamental role in this by ensuring the temperature, pressure and flow of the steam remains at the right levels to create the required power and steam for the nearby chemical plants and national grid.
Challenges
Delesto’s major process challenge was to implement a long-term evolutionary Lifecycle Management program that would enable it to replace parts of the process control system before they became obsolete. Delesto needed a solution that could minimize downtime and reduce long-term lifecycle costs. The Lifecycle Management agreement with Honeywell addressed several of Delesto’s challenges:
- Reliability and availability: By adding performance clauses on availability and reliability, Honeywell became very much involved and invested in keeping Delesto’s system performing at a very high level
- Spare parts: Unlimited spare parts usage and guaranteed spare parts availability are covered in the Lifecycle Management contract
- Complex maintenance management: Long-term Lifecycle Management agreement eliminated need for annual renewal of service contract
- Focus on upgrade functionality, not on improvements: Clear upgrade path has been defined in Lifecycle Management agreement
- Service contract now based on evolution of installed equipment, instead of being based on installed equipment
Solution
In 2005, Honeywell entered into an 18-year Lifecycle Management contract with Delesto. The agreement includes Honeywell’s PKS and Operator Training System, as well as service support and maintenance to Delesto until 2022. Under the agreement Honeywell charges Delesto a fixed fee per year to maintain and replace obsolete parts and deliver services to maintain and guarantee the availability of the plant’s process systems. As a result, Delesto is able to control and reduce costs and accurately plan its financial outlay over the period of the contract.
Delesto has several objectives for its Lifecycle Management agreement with Honeywell including:
- Optimizing the maintenance effort and schedule replacements needed to maintain and improve reliability and availability
- Minimizing the lifecycle cost of the control system
- Optimizing the control system in order to minimize operational cost
- Stimulating an active working relationship of mutual feel of ownership
“We selected Honeywell over competitive offerings because of its strong track record with us over a number of years and because the contract will enable us to generate significant cost savings,” said Marcel Bartelink, Managing Director of Delesto. “A major benefit of Honeywell’s technology is that it’s completely interoperable with previous versions of its platforms as well as other vendors’ systems. It means interconnectivity isn’t an issue and it prevents existing systems from becoming obsolete.”
