When technology goes beyond its useful life cycle, it becomes a business risk for a multitude of reasons including:
While technology obsolescence alone isn’t normally enough to justify a large capital upgrade, two drivers that typically kick off an obsolescence upgrade initiative are improved reliability and increased performance. Let’s explore this more.
The goals of reliability-focused upgrades are to reduce unplanned downtime and maintenance costs. The added benefits of the upgrades often include driving process optimization, increasing operation rates, reducing equipment downtime, minimizing changeover time, or improving product quality.
Reliability-focused upgrades can be justified through a risk evaluation designed to identify where the risks are and the impact to productivity. Some questions to consider when trying to identify if it is time to upgrade your obsolete technology include:
Examples of how additional benefits of upgrades can be justified include the following:
If new projects are planned for the line or facility, it might also be a good time to include the cost of the technology upgrade as a part of this planned capital expenditure since the upgrade will provide additional line improvements.
Once you know it is time for an upgrade, the next step is to identify the scope challenges of the upgrade and the risks associated with the work. This analysis should be prepared to help identify what type of mitigation is required to minimize or eliminate the risks and should be a recurring process as you progress through the project.
The resulting document might look like this Challenges and Risks sample:
| Upgrade Challenge | Description | Risk |
| Record set versus as built | Obtaining accurate records of all old hardware and wiring | Using out-of-date documentation that leads to field troubleshooting and maintenance that is less reliable and/or takes longer to perform. |
| Equipment panels and wiring | Remove old equipment hardware; remove all wiring; install new equipment; re-wiring of all cables | Extended downtime due to hardware change-out and high-risk wiring problems |
| Complex production setup | Interdependencies: Multiple lines with shared equipment | Upgrading one line risks impacting other processes |
| Integration of new hardware with existing equipment | Installing new hardware systems that are not compatible with existing equipment | Improper data exchange from one system to another |
| Ensure that program conversions are executed correctly | Converting the old code from the old hardware to the new hardware | Out of spec products; equipment not functioning as designed |
Once risks are defined, you can decide the best approach to mitigate each one. The result would look something like the sample chart below. Note that a risk assessment and analysis is most effective when conducted by the in-house engineering team, engineering partner, and technology partner.
| Defined Risk | Risk Mitigation |
| What new parts are available to upgrade the existing? | Ensure Partner with vendor |
| How do we test configuration prior to installation? | Assembly on a back-plane and off-site testing or the use of program simulation |
| Manual recipe versus automated product recipe programming | Setup recipe format and test prior to installation |
| Integration with existing systems | Partner with system integrator |
| Wiring | Detailed diagram of old wiring to new configuration |
The highest risk of all is performing an obsolete technology upgrade for the first time with a lack of resources, not enough time available, or inadequate experience. In-house engineers already have the challenge of supporting daily operations and working on improvement projects; plus, not many have been fully trained on performing systems upgrades. By working with a system integrator with technical expertise and experience in doing these types of projects, you help further minimize project risk.
Developing a relationship with a system integrator will help provide opportunities to train and develop in-house resources for future upgrades or other phases of the project. To develop the appropriate approach, you should estimate the direct costs and indirect benefits for engaging a systems integrator, including system knowledge, installation sequences, and vertical startup. Factors and benefits that can affect these costs include:
Once the scope, cost, and assessment are compiled, the next step is to present to management for approval.
If you would like help developing a risk evaluation Contact Us today. Or see how we can help you capitalize on planned downtime to manage obsolescence.