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A Business Rebound is Not All Positive for Startups

Martin Zwilling


As the business economy rebounds, many entrepreneurs are thinking that life will soon get easier, and their opportunity can only grow. In reality, the business world gets tougher every day, with new entrants, new technology, and competitors more easily entering the fray from around the globe.

Way back in 1979, Michael E. Porter proposed his Five Forces framework for analyzing the competitive environment which I think makes even more sense today. Every existing business, as well as every startup, needs to reassess their product or service in the context of these five forces:

  1. Intensity of competitive rivalry. This is where most current business plan analyses focus today. These plans just list a few key competitors out there now, compare feature richness, quality considerations, and pricing. This is an important first step, but it’s only the beginning.

  2. Threat of new competitors entry. Startups that target profitable and growing markets with high returns should realize that these will draw many new entrants. It will certainly also decrease profitability over time, as well as test your sustainable competitive advantage. That leads to switching costs, sunk costs, brand equity, and a host of other considerations, commonly called “barriers to entry.”

  3. Utility of alternative solutions. You are never the only alternative, hopefully just the best, in price, utility, and satisfaction. If you new vehicle costs too much, people take the bus. At some level of function, availability, and price performance, customers jump ship away from you. These elements are referred to as “barriers to exit.”

  4. Bargaining power of customers. This is the degree to which customers can put your company under pressure, or leverage prices, delivery, features, and quality (market of outputs). A key is your differential advantage from alternatives. Small differentials and more competitors give customers higher leverage.

  5. Bargaining power of suppliers. Suppliers of raw materials, components, labor, and services to you can be a source of power over your ability to compete (market of inputs). You need to identify substitute inputs, supplier concentrations, and employee solidarity (labor unions), which can limit you or give you the advantage.

A few years ago, Andrew Grove is credited with postulating a sixth force in the marketplace – government, pressure groups, and the public. This force adds the concept of “complementors,” and has led to the growth of partners and strategic alliances to balance the competitive environment.

These forces make up the micro environment of a company, which affect its ability to serve its customers and make a profit. A change in any of them should be your cue to re-assess the marketplace. All startups need to remember their core competences, business model, or network, which are the factors that allow them to maintain a competitive advantage.

One of the key sections of every entrepreneur’s business plan is the analysis of the competition. I especially love the ones that start and end by saying “We don’t have any competitors.” Investors take that to mean either 1) there is no market for your product, or 2) you don’t understand the concept of business and competition. Either way you lose.

I always remind startups that this section of the business plan should not be a negative one, merely listing competitors, with their advantages and head start. It’s your opportunity to highlight and emphasize your relative advantages, whether they be price, features, bargaining power, or any of the six forces outlined above.

On the other hand, there is more at stake for startups than enterprises because startups do not have the same financial capital of their bigger rivals. But with a clear understanding of where the power lies, you can take advantage of a position of strength, improve a situation of weakness, and avoid stepping into a pack of wolves with no protection. It’s a painful end.

Marty Zwilling

Read more posts on Startup Professionals Musings »

Article source: http://www.businessinsider.com/a-business-rebound-is-not-all-positive-for-startups-2013-5

A Business Rebound is Not All Positive for Startups

Martin Zwilling


As the business economy rebounds, many entrepreneurs are thinking that life will soon get easier, and their opportunity can only grow. In reality, the business world gets tougher every day, with new entrants, new technology, and competitors more easily entering the fray from around the globe.

Way back in 1979, Michael E. Porter proposed his Five Forces framework for analyzing the competitive environment which I think makes even more sense today. Every existing business, as well as every startup, needs to reassess their product or service in the context of these five forces:

  1. Intensity of competitive rivalry. This is where most current business plan analyses focus today. These plans just list a few key competitors out there now, compare feature richness, quality considerations, and pricing. This is an important first step, but it’s only the beginning.

  2. Threat of new competitors entry. Startups that target profitable and growing markets with high returns should realize that these will draw many new entrants. It will certainly also decrease profitability over time, as well as test your sustainable competitive advantage. That leads to switching costs, sunk costs, brand equity, and a host of other considerations, commonly called “barriers to entry.”

  3. Utility of alternative solutions. You are never the only alternative, hopefully just the best, in price, utility, and satisfaction. If you new vehicle costs too much, people take the bus. At some level of function, availability, and price performance, customers jump ship away from you. These elements are referred to as “barriers to exit.”

  4. Bargaining power of customers. This is the degree to which customers can put your company under pressure, or leverage prices, delivery, features, and quality (market of outputs). A key is your differential advantage from alternatives. Small differentials and more competitors give customers higher leverage.

  5. Bargaining power of suppliers. Suppliers of raw materials, components, labor, and services to you can be a source of power over your ability to compete (market of inputs). You need to identify substitute inputs, supplier concentrations, and employee solidarity (labor unions), which can limit you or give you the advantage.

A few years ago, Andrew Grove is credited with postulating a sixth force in the marketplace – government, pressure groups, and the public. This force adds the concept of “complementors,” and has led to the growth of partners and strategic alliances to balance the competitive environment.

These forces make up the micro environment of a company, which affect its ability to serve its customers and make a profit. A change in any of them should be your cue to re-assess the marketplace. All startups need to remember their core competences, business model, or network, which are the factors that allow them to maintain a competitive advantage.

One of the key sections of every entrepreneur’s business plan is the analysis of the competition. I especially love the ones that start and end by saying “We don’t have any competitors.” Investors take that to mean either 1) there is no market for your product, or 2) you don’t understand the concept of business and competition. Either way you lose.

I always remind startups that this section of the business plan should not be a negative one, merely listing competitors, with their advantages and head start. It’s your opportunity to highlight and emphasize your relative advantages, whether they be price, features, bargaining power, or any of the six forces outlined above.

On the other hand, there is more at stake for startups than enterprises because startups do not have the same financial capital of their bigger rivals. But with a clear understanding of where the power lies, you can take advantage of a position of strength, improve a situation of weakness, and avoid stepping into a pack of wolves with no protection. It’s a painful end.

Marty Zwilling

Read more posts on Startup Professionals Musings »

Article source: http://www.businessinsider.com/a-business-rebound-is-not-all-positive-for-startups-2013-5

How to Make Money Online with Business Opportunities Revealed by …

How to Make Money Online with Business Opportunities Revealed by WebTrafficToolkit.com


London, UK — Making money online with business opportunities is one of the most popular ways for beginners to get started in their work from home ventures.

To help these entrepreneurial hopefuls get started, WebTrafficToolkit.com has released their tips for how to find the best business opportunities to join and make money with.

Generating leads as part of the opportunity was identified as a key aspect to focus on.

“The focus of making money online should always evolve around sending tons of traffic to a high converting lead capture page. So when you join an online opportunity make sure that they have a range of professionally designed lead capture pages (aka squeeze pages) for you to plug your affiliate ID into and start generating leads from,” said WebTrafficToolkit.com. “New online opportunities such as Empower Network and Pure Leverage give members these pages right out of the box.”

The importance of a solid company culture and community was also highlighted as a key attribute to look out for when researching home based business opportunities to join.

“The best opportunities to join are not the ones with the flashiest sales page, but the ones that are open and honest and reveal themselves on video and with regular live audio and webinar trainings. When you create a community and culture around the place then people stick around and it is much easier to make sales when your prospects can see this credibility and atmosphere for themselves,” said WebTrafficToolkit.com.

To access what WebTrafficToolkit.com believes to be one of the best online business opportunities for making money online, visit http://webtraffictoolkit.com/bestbiz.html

About WebTrafficToolkit.com:

WebTrafficToolkit.com is an online marketing tips blog that helps entrepreneurs generate more leads, traffic and sales for their business opportunities. The website has just revealed what they consider to be the best online business opportunities to join and have identified GVO, DotComSecrets and 7 Minute Workout among their top picks.

Company: WebTrafficToolkit.com
Contact: Press Officer
Phone: 7186189705
Email: press[@]productpress.info

Article source: http://onvideogames.net/pressreleases/530/how-to-make-money-online-with-business-opportunities-revealed-by-webtraffictoolkit-com/

How to Make Money Online with Business Opportunities Revealed by …

How to Make Money Online with Business Opportunities Revealed by WebTrafficToolkit.com


London, UK — Making money online with business opportunities is one of the most popular ways for beginners to get started in their work from home ventures.

To help these entrepreneurial hopefuls get started, WebTrafficToolkit.com has released their tips for how to find the best business opportunities to join and make money with.

Generating leads as part of the opportunity was identified as a key aspect to focus on.

“The focus of making money online should always evolve around sending tons of traffic to a high converting lead capture page. So when you join an online opportunity make sure that they have a range of professionally designed lead capture pages (aka squeeze pages) for you to plug your affiliate ID into and start generating leads from,” said WebTrafficToolkit.com. “New online opportunities such as Empower Network and Pure Leverage give members these pages right out of the box.”

The importance of a solid company culture and community was also highlighted as a key attribute to look out for when researching home based business opportunities to join.

“The best opportunities to join are not the ones with the flashiest sales page, but the ones that are open and honest and reveal themselves on video and with regular live audio and webinar trainings. When you create a community and culture around the place then people stick around and it is much easier to make sales when your prospects can see this credibility and atmosphere for themselves,” said WebTrafficToolkit.com.

To access what WebTrafficToolkit.com believes to be one of the best online business opportunities for making money online, visit http://webtraffictoolkit.com/bestbiz.html

About WebTrafficToolkit.com:

WebTrafficToolkit.com is an online marketing tips blog that helps entrepreneurs generate more leads, traffic and sales for their business opportunities. The website has just revealed what they consider to be the best online business opportunities to join and have identified GVO, DotComSecrets and 7 Minute Workout among their top picks.

Company: WebTrafficToolkit.com
Contact: Press Officer
Phone: 7186189705
Email: press[@]productpress.info

Article source: http://onvideogames.net/pressreleases/530/how-to-make-money-online-with-business-opportunities-revealed-by-webtraffictoolkit-com/

The Giving Organisation for charities is gone network marketing.

The Current South African economic environment is beset with major challenges on both economical and social front. South Africa has not been able to side step these issues even though we are an emerging economy. The unemployment rate is the highest in the industrial world. The job losses place significant strain on the social service providers in South Africa, many of whom are charities and reliant on the goodwill of corporate and individual contributors. The same charities have also been on the receiving and economic downturn in the form of a substantial reduction in the funds it has been able to obtain.

The Giving Organisation initiative Good Card business opportunity that was initiated to help raise funds for charities using network marketing system in South Africa and is going viral. All for a good course.

In excess of R60 million has already been raised for the benefit of the TGO charities.

Other projects include E-Bay Auctions with Nelson Mandela and Charlize Theron, Projects with Richard Branson and other celebrities such as Big Brother.

Good Card is the latest TGO project to invite every South African to become a Social Entrepreneur.

Even if you are unemployed all you need is borrow R150 from your family or friends and make sure you return it back by the end of the month because you should have earned over R500 minimum from you R150 start-up kit.

Check this up: You get paid R100 on start-up sold, R100 end of the month after every successful debit orders and residual payment on your 1st level starting the following month after you joined.

Join now by SMS “0715593813′ to 34131 (SMS cost R2 and is not subscription).

Then once you receive SMS back continue to complete the form on Good Card link below and then click “Already registered” then complete the electronic form or download one and fax it back with your ID or Passport.

Check the work of Good Card below.

There are also many possibilities to benefit yourself and others by being a Good Card Social Entrepreneur – by empowering and motivating other members – especially those looking for work, or helping a social responsibility project, and keeping up to date with openings in the world of work, business and learning.

Good Card is gone viral with members continuing to grow every day. We’re proud of the contribution our members make towards a successful future and changing lives of many in South Africa.

Article source: http://goodcard.pressdoc.com/46893-the-giving-organisation-for-charities-is-gone-network-marketing

NASCAR Charlotte 2013: Drivers oppose moving Charlotte race to Las Vegas

With the majority of NASCAR teams located within close proximity to Charlotte Motor Speedway, any race at the 1.5.-mile oval is considered a home race of sorts.

And with the Sprint Cup Series schedule stretching from February to November, the All-Star Race and Coca-Cola 600 are a welcome reprieve that allow drivers and teams to have consecutive weeks at home and off the road.

This could change though if Speedway Motorsports, Inc., President Bruton Smith follows through and moves the October Charlotte race to Las Vegas Motor Speedway.

While he has said nothing is finalized — and he has neither sought nor received permission from NASCAR to switch dates — the possibility does exist that for the first time since opening its doors in 1960, the track could host just one points race annually.

The notion that Charlotte could lose one of its three events is not a popular idea within the garage.

“I can’t imagine not racing here three times a year, or certainly two points races,” said Jeff Gordon Thursday at Charlotte. “I love racing here. It’s nice to be home and this is such a special race track.

“I feel like people flock from all over the country to come here not just because of the facility, but what else there is to offer with the Hall of Fame, the city (of Charlotte), the team shops and all those things. I would hate to see that.”

The mile-and-a-half oval has special memories for Gordon, whose first Cup victory came at Charlotte in 1994.

Although he understands from a business-sense why adding a second race at Las Vegas would be beneficial, he does not want that date to come at the expense of Charlotte.

“Las Vegas makes great sense from a marketing standpoint,” he said. “When we look at the sport and where we’re at and how to grow it and get those seats filled, you would certainly think that a race in Las Vegas in October would do pretty well.

“I think Las Vegas deserves to have two races. I would not want to see us take away a race from here.”

Gordon wasn’t alone in not wanting to see Charlotte lose a race. Among those echoing his comments was Greg Biffle.

The Roush Fenway Racing driver believes Smith’s comments shifting a date to Las Vegas is more bluster than reality, as the outspoken track owner is in a legal dispute with city and county officials over numerous issues pertaining to infrastructure improvements and tax breaks.

“I highly doubt whether we see that race move to a different location,” Biffle said during a Wednesday teleconference. “There’s a lot of people that come to that race. Let’s face it, it’s a business decision a lot of times. You make business decisions on the amount of people or fans or people you can attract to a particular race.

“If your race is well-attended, I don’t see any reason for moving it. … That’s the way I perceive it. I’m an entrepreneur, business type of guy. I see the grandstands fairly full when it comes to our two Charlotte races, a lot of attendance.”

Nationwide Series points leader and part-time Cup driver Regan Smith has a rather straight-forward reason why he doesn’t want to see another at Las Vegas.

“When (Smith, no relation) made that comment, my wallet was crying because I don’t want to go to Vegas any more than I have to, because it costs too much money in the casinos,” Smith said.

“In all seriousness, I would hate to see a race leave Charlotte.”

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Article source: http://www.sbnation.com/2013/5/23/4360558/2013-nascar-charlotte-motor-speedway-jeff-gordon-bruton-smith-las-vegas

Star Entrepreneur’s Business Advice: Don’t Listen to Me



Laurie Burkitt/The Wall Street Journal
Hot-pot king Zhang Yong, keeping things clean

Zhang Yong, the creator of the wildly popular Chinese hot-pot chain Hai Di Lao, may not have the global cult following of Apple founder Steve Jobs, but in China’s food and beverage industry, he isn’t far behind. In 2011, bookstores stocked the shelves with “Learn from Hai Di Lao.” Media outlets are clawing for an opportunity to interview him, a spokeswoman said.

The question for the entrepreneur—who has built a growing empire of 75 restaurants that serve sliced lamb, beef and vegetables to be boiled in spicy broth—is always, What’s next? And how did he come up with the idea to distinguish his chain with service perks like manicures, board games and noodle performances?

Mr. Zhang, who confesses that after 20 years of eating hot pot he doesn’t particularly like it, said he plans to take Hai Di Lao public, but isn’t sure in which market. The timing isn’t optimal right now, he adds, noting that other Chinese companies have listed and flopped almost instantaneously.

“I’m from the countryside, where rural people believe that if you take money from other people and you don’t bring benefit to them, then you are a liar,” Mr. Zhang said, saying he’ll list Hai Di Lao when the business model can be profitable and more easily replicated.

Hai Di Lao pulled in a 10% profit on 3.127 billion yuan ($510 million) in revenue in 2012, up 54% from a year earlier.

The native of China’s southwestern Sichuan province is eager to expand overseas—and has already begun, opening an outlet in Singapore last year. This September, it’ll be the U.S.

But Mr. Zhang said not to expect a sweeping overseas effort: He’s opening just the one restaurant in Los Angeles and at the moment doesn’t have plans to for more in Singapore.

“It’s not about expanding quickly,” he said, adding, “I want to understand the market.”

Back in China, Mr. Zhang, who says he detests reading management books, said one of the most important aspects of his job is letting employees run the business. Many of the service ideas that have made Hai Di Lao so popular in China, like providing plastic bags for phones (lest they land unprotected in the broth) and hair bands to long-haired girls (lest their hair do likewise), actually came from his employees, he said.

“Not all of these ideas were mine,” Mr. Zhang said. “If you want creativity, you have to let your workers invent and use their creations.”

Still, the 43-year-old entrepreneur has his own brainstorms and has a sincere passion for technology, which is part of the reason that last year he rolled out cyber dining, connecting diners in Shanghai and Beijing through the Internet and flat screens. “I’d put robots in every restaurant if I could,” he said.

But ask Mr. Zhang how others can follow in his success as one of China’s most renowned restaurant owners and he will say, “Don’t study me; learn from Steve Jobs.”

—Laurie Burkitt

Like China Real Time on Facebook and follow us Twitter for the latest updates.

Article source: http://blogs.wsj.com/chinarealtime/2013/05/24/star-entrepreneurs-business-advice-dont-listen-to-me/

Shape Magazine Sparks Explosive Interest in Limitless Worldwide(TM), LLC


SALT LAKE CITY, May 22, 2013 /PRNewswire via COMTEX/ –
Limitless Worldwide(TM), LLC, only made its official debut three months ago, yet it’s already becoming one of the most talked about network marketing companies in the world. The latest to add fuel to the Limitless frenzy is Shape magazine, which ran a feature on how Limitless is helping women find their dream job… and make serious money doing it. The article, called “Opportunity Knocks,” hits newsstands tomorrow in Shape’s June issue, and it’s already generating a huge amount of buzz.

“Although Limitless can provide everyone with a fantastic opportunity to own their own business and be their own boss, Shape was especially interested in our company for what it offers women,” says Melyn Campbell, veteran network marketer and co-founder of Limitless Worldwide. “Shape is helping spread the word that not only does Limitless offer highly specialized, scientifically validated health and beauty products that get real results, but we can help women have a chance to become truly successful business owners.”

The Shape article tells the story of Lizz Perkins, one woman who is finding serious success with Limitless Worldwide. Perkins had been a business owner and clothing store manager, but she grew tired of working 14-hour days to support herself. She’d tried network marketing in the past, but never found a company she really believed in… until she met Steve and Melyn Campbell. The Campbells, who have over twenty years of experience in the network marketing industry and who are ranked in the top twenty all-time network marketing earners, told Perkins about their newest venture, Limitless Worldwide. Perkins tells Shape, “I was skeptical, but as soon as I met with the founders, I realized the company could have staggering growth potential.”

The article goes on, “What was different this time? For starters, science: There were clinical studies backing up the efficacy of everything in the line, from supplements to facial serums. And even though Limitless was in its infancy, it was piggybacking off another company with decades of experience.” Perkins decided to give it a go, and within three months she was making enough money to quit her day job and start focusing exclusively on Limitless.

With all the media attention Limitless has been enjoying, it’s quickly becoming one of the fastest-growing network marketing companies in history. It seems people everywhere are tired of the daily grind traditional nine to five jobs can bring. Steve Campbell says, “People are turning to network marketing because they’re tired of traditional jobs that put them at the mercy of the economy. They want to improve their lives on their own terms, and Limitless is giving them the chance to do just that.” And for distributors like Perkins, Limitless truly is a game changer. She tells Shape: “To have such flexibility while making money for myself and helping the hundreds of people I lead reap the financial rewards has been life-changing.”

Limitless Worldwide goes beyond testimonials to offer revolutionary, science-backed products that get real results, and its patent-pending TriBrid Overlay Compensation Plan(TM) is unlike anything the industry has ever seen, because it gives distributors a real opportunity to make money by creating multiple income streams off the same downline. To learn more about Limitless Worldwide, LLC, its unparalleled products and its patent-pending compensation plan, visit www.LimitlessWorldwide.com or call 1-800-429-4290.

SOURCE Limitless Worldwide, LLC

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Article source: http://www.marketwatch.com/story/shape-magazine-sparks-explosive-interest-in-limitless-worldwidetm-llc-2013-05-22

Power Engineering International

For existing and new plants to meet the requirements of tomorrow’s networks, their maintenance and operation must be realigned. Hans Christian Schröder and Achim Foos of TÜV SÜD Industrie Service GmbH explain what this will mean in practice.

Can there be a more exciting task than keeping existing large-scale fossil-fuelled power stations fit for future energy grids? As networks will increasingly include higher shares of intermittent renewables, new and existing power plants will have to operate more flexibly, with many changes to load, to ensure a secure power supply.

Power stations will run more often in load ranges for which they were not designed. Improvements can be made to plants to make this possible, but stakeholders tend to overlook just what this involves.

Strategies must be designed that ensure an optimum mode of operation, and associated maintenance programmes must be aligned. Economic considerations must also include the costs of the technical governance implemented to optimise the mode of operation and lifecycle costs.

So what will the future energy mix look like? Transmission network operators will increasingly have to control power plants to keep the grid stable. Closed-down plants will have to be reconnected to provide reserve capacity. What will be productive for future grid strategies is to ensure that base, medium and peak loads match demand? The focus will not be primarily on the thermal efficiency of plants but on their capacity utilisation.

Choices

Old-style power stations have already been amortised and often offer generous design margins that can accommodate variations in the mode of operation. There is still a lot of untapped potential to make existing power stations that run at base, medium and peak load more flexible – lowering minimum loads, improving the speed of load changes and improving startup and shutdown operations.

Further options include using different types of coal mills, reducing minimum loads without assistant fuel, changing load management and maximising use up to the design margins.

Another possibility is to raise the live steam temperature to within 1 K (272oC) of the design limit rather than the relevant standard’s 5 K requirement. Optimised sensors would help here – provided the experts can ensure that there have been no peculiar changes in the microstructure of the material.

The sensors must also permit measurement of the actual service parameters to ensure that service temperature can be reduced should changes in the material’s microstructure occur.

Special demands

Flexible grid-focused operation makes special demands on plants. The original designs and service parameters of plants will have to be reconsidered, and maintenance strategies aligned. As the new flexibility will reduce the estimated service life of components, accurate information will be needed about a plant’s current condition.

Experts must ask which incidents in the plant may cause special defects, and what assessments and measures are needed to allow reliable operation of the plant.

These questions mainly concern plant components. Some are vulnerable to unscheduled startups and shutdowns, and stresses caused by vibration, overloads or changes in the mode of operation.

The solution is a comprehensive analysis of the total system and its current operating conditions, based on years of experience. Such an analysis can also identify specific events to ensure that suitable inspection and calculation methods will be put to best use on selected components in the future. This prevents the need for cost-intensive general diagnosis. Isolated tests and inspections and individual random measures without reference to the total system are not very helpful, especially for plants with long service lives (Figure 1).

Figure 1

So qualified statements on the condition of a plant and its components depend on understanding its real mode of operation, knowing which defects have been detected in the system, and being aware of the condition identified in system analysis, while accounting for possible unidentified defects.

The only solution to determining whether a plant is operable is through an integrated system analysis that considers all possible acceptable faults or defects, or the fault status (Figure 2).

Figure 2

One fundamental criterion for such an analysis is to link the operational loads with their effects on individual areas. For this purpose, plant experts perform inspections and tests. Statements can then be made about the continued operation of a plant under changed framework conditions, and future service scenarios can be developed.

Process control

Improving flexibility can be a good starting-point for implementing retrofit measures at a plant or a site. However, greater flexibility requires many things to be considered, especially in low-load ranges. For coal-fired plants, ways must be found to reduce the required assistant fuel, and cut emissions through further primary measures. Modernised process control systems can play a big part.

More complex process control systems offer the opportunity for timely, integrated and event-focused monitoring of processes and procedures. Improved safety is ensured not least through the definition of uniform safety integrity levels for a plant. For cost reasons, experts are also considering centralising process control systems, to save manpower and thus costs. However, adapting control systems to the new operating conditions will not be enough on its own. There must also be a change in maintenance efforts, particularly at the periphery of the system.

Pooling operations, and monitoring and detecting events in individual plant areas becomes more difficult, which increases operational risks. The optimum registration of hazards and risks so far identified by staff on site may no longer be ensured. Additional technological and automated measures may become necessary.

Hardware in the system’s periphery would have to be modernised, necessary sensors installed and IC systems added to provide for on-line transmission of their signals and information to control centres.

Whether existing standard requirements and available approvals cover these measures is under debate. The term ‘monitored operation’ has been reliably defined in the presently applicable codes, and must be differentiated from the term ‘permanently monitored operation’. The following question must be asked: is it possible to reliably determine potential ‘faults’, and the risks that they involve in terms of response time, in order to describe possible effects and risks in the system’s periphery?

Another issue concerns existing process control systems that have been operated for long periods, or for which suppliers will discontinue support.

Can these systems continue to operate against the backdrop of regulations such as EU Directives?

Can old equipment be used, and how can plant owners and operators evaluate whether third-party suppliers are acceptable to carry out repairs and provide services?

Do devices and systems already in operation require new certificates or do they fall under the grandfathering principle?

Standard EN 61511 provides a good basis for assessing this type of modernisation and for making necessary adjustments. It is applicable to the process industry, and defines quantitative or qualitative safety objectives for electrical, electronic and programmable electronic systems (E/E/PESs) in the form of safety integrity levels (SILs). The focus in power plants should be on assessing the overall function of the system, so the application of the standard requires the assessment and implementation of requirements related to procedure and process within a system context.

The process descriptions included in the standard make it imperative to adopt an integrated approach that covers all requirements related to procedures and safety in a plant. The standard also focuses on cost-efficient plant operation, which is intended to prevent over-engineering.

Further questions within the scope of such changes concern the necessary requirements, including SILs and performance levels (PLs) for proven-in-use existing plants and systems. A pragmatic approach and willingness on the part of all stakeholders to take on more responsibility are essential in maintenance.

Solutions

The efficient operation of power stations with better flexibility must be ensured throughout their lifecycles. Here, lifecycle costs (LCCs) are among the key elements of the plant’s total cost of ownership. Reliable determination and optimisation of these is crucial to cost planning. This particularly covers warranty costs and calculations of subsequent service contracts or replacement investments.

Even though engineering and business requirements imposed on the conceptual design of a plant may differ when seen in terms of the entire service life, they must still be harmonised well. Decision-makers in business and engineering must co-operate from as early as the assessment process.

Assessment starts by analysing how much total energy in a plant can be cost-effectively converted into useable form. This requires an integrated system approach, optimised inspection schemes and collection of additional data, including measuring the quality of new components. The results permit an informative assessment to be made of the efficiency with which the set targets can be attained under the planned measures.

To ensure profitable energy generation, the procedural and operational concept must be aligned to the individual technical processes of the more flexible plant operation. This requires strategic integrated maintenance, which is regarded as value-adding rather than as a cost factor.

Strategic maintenance

Vital for flexible power station solutions is an integrated maintenance strategy, which only considers as relevant those measures that improve availability, reliability and safety, so the engineer’s striving for perfection is complemented by an entrepreneur’s business perspective.

In step one of four, strategic maintenance sees consultants, the client and the operator working together to identify what has to be assessed. Their focus is on components that will be most affected by the flexibility. Synthesis then links the strain imposed on the plant with its actual condition. This produces an overall picture of the system that presents the current operability of the plant and the derived risks. Optimum operation can only be ensured when process, plant, operational and control solutions are interconnected.

Step two involves fracture mechanics testing and components analysis. Knowing the interactions between materials, loads and fault status is critical to ensure safety and maximum availability.

In step three, probabilistic methods assess the acceptability of faults and risks by assessing the results of non-destructive or other test methods. First, there is only a certain probability that faults that are basically identifiable will be detected. Second, once a fault has been identified, the resulting risk and its consequences for the operation of the component must be responded to.

The first aspect can be addressed by applying known methods of mathematical statistics and probabilistic models. The second requires a more differentiated approach. The plant or component can be taken out of service and repaired, or operation can be continued at the same or reduced load until the next scheduled turnaround, until a defined limit risk is reached.

To weigh all these options, all risks and costs must be determined and their interrelationships determined. Here the focus is on the safe and profitable continued operation of the overall system. If component failure involves little risk, the above issue is reduced to its economic aspects. Otherwise the two aspects cannot be regarded as separate, and may lead to conflicts of interest.

In each case, quantitative assessment criteria, such as acceptable risks, must be available. The risk resulting from the failure of a component is the frequency of occurrence of an event multiplied by its possible consequences (Figures 3 and 4).

Figure 3

Figure 4

In step four, experts develop measures to ensure flexible plant management, which is largely influenced by the type, structure, function and condition of a plant. Assessment is restricted to non-conformities that can result in operational or process failure.

The objective is to supply operators, investors or manufacturers with the information they need for decision-making, including cost-benefit analyses, computer simulations and forecasts, and tailored proposals for maintenance strategies.

Limits of maintenance

For existing power plants, maintenance tools have been tried and tested over the years. But recent years have seen a trend towards incident-oriented maintenance. Component failure can be due to the end of service life or to obsolete practices.

Spontaneous failure of old components can be due to failure to make use of probabilistic methods to determine possible failure scenarios and calculate the expected service life.

Plausibility checks – such as in a piping system – are important, to assess geometrical data such as wall thickness. This calls for visual inspection and verification by measurement. Maintenance staff may wrongly assume that degradations occur primarily on complex geometries such as fittings.

Figure 5 illustrates the initial assessment of a straight pipe section, showing noticeable differences in wall thickness depending on pipe circumference. This example shows that different localised reductions in service life must be anticipated depending on the nominal wall thickness on which the calculation of service life has been based. A power station in which a straight section of a pipe made from 14 MoV 6 3 failed spontaneously after around 30 years of operation provides a dramatic example.

Experts found that the failure was caused by a unique feature of the material. Our analyses revealed the same differences in wall thickness as those in Figure 5. Component failure occurred at the end of the expected service life, which amounted to roughly 200,000 hours.

Figure 5

Efficiency and flexibility in energy generation will come with an optimum plant scheme and an aligned operational strategy. An integrated profitability analysis done in the run-up, and a maintenance programme customised to specific plants make good economic sense. This also includes optimum planning of maintenance costs, which includes possible investments with foresight.

It may be necessary to whether plants can be operated with permissible imperfections. This, requires a high level of know-how to assess risks and realise safe, profitable operation while ensuring availability.

Hans Christian Schröder is head of Power Station and Energy Services and Achim Foos is part of his team at TÜV SÜD Industrie Service GmbH, Mannheim, Germany. For more information, visit www.tuev-sued.de/home_en

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