Risk Management Systems can be as crucial to a company’s profits as to its level of safety. The Dow Chemical Company has cut maintenance costs by $100 million annually with the help of DNV’s risk-based inspection methodology.

Risk-based inspection enabled us to make a $500 million investment in our ethylene production plant, which is now even more profitable. We have adopted practices crucial to a companys survival and continued growth, explains Michael Mendes de Gouveia, who is in charge of all risk-based inspection (RBI) in Dow Chemical. The plants maintenance policy has moved from 45 year periodic inspections to a risk-based approach. Says Mendes de Gouveia, On our company intranet we have all the tools, procedures and software we need to execute RBI. Dow employees can visit plants anywhere in the world and work as efficiently as if they were in our headquarters. A workstation is all they need. This enables us to really work as one company.

Integrating knowledge
Working as one company is especially important to Dow these days. Earlier this year Dow Chemical and Union Carbide merged. Mergers invite the question of which partner has the best practices. And when identified, the transfer of this knowledge is a costly and time-consuming process. A tool that could standardise the best practices, facilitate their use and capture this knowledge within the company would be invaluable. DNV provides that tool. It is called Dialogue Modular Inspection (DMI). DMI generates detailed action lists based on the plant and equipment-specific information and conditions that are provided. It is versatile and may easily be adapted and used for other industries or outside the area of inspection management. This way the user (a company, or even DNV) secures its inspection know-how. Based on best-practice methodology, DMI helps achieve consistency in the quality of the inspection task lists generated. Very useful when two of the biggest chemical companies in the world are merging, says Mendes de Gouveia.

Periodical vs. Risk-Based Inspection
The method is the result of a pioneering effort that had become unavoidable. By 1995, Dows Terneuzen plant in the Netherlands was 32 years old and in need of considerable maintenance. In order to keep safety at an acceptable level, maintenance costs were very high, at 2% of the invested capital. The inspection procedure was periodical and costly. What we really needed was a systematic plan
to prioritise our inspection needs, explains Mendes de Gouveia. Dow maintenance management had to find a totally different approach, and decided to focus on three main goals: increase productivity, eliminate low value work and improve reliability. They attended a conference in Amsterdam where DNV presented the methodology of risk-based inspection. Dow found that DNVs solutions met their needs. By focusing on high-risk units, inspections eliminate much low-value work. The risk-based inspection tools made it possible to carry out surveys on operating units and thus improved reliability. Altogether, this cut Dows inspection costs by 40%, a $100 million saving annually. Dow Chemical now uses DMI at its sites in The Netherlands, Germany, Spain, South Africa and the U.S.A. DMI is used by plant inspectors rather than by the management. It is a very hands-on tool that is useful in many applications and greatly increases the productivity in a large chemical plant, where inspection is an integral part of the work process.

Custom-built for the industry
DMI is an integral part of DNVs ORBIT Onshore, which Dow now uses as its RBI system. At first the methods and software forimplementing RBI were focussed on oil-refining industries and not suited to the chemical industry. DNV therefore built a custom software product to meet Dows needs and then went on to develop ORBIT Onshore. Dow has been a very demanding customer, says Mendes de Gouveia. DNV has delivered what Dow has asked for. This is the worlds first project to use RBI in this application, and such pioneering work is not easy. But the end result speaks for itself. We took the risk of implementing a brand new methodology and approach to risk management. This has now paid off and given us a serious competitive advantage. The merger with Union Carbide has strengthened Dows position particularly in the U.S; the company has always had a solid base in Europe.

Promote as an industry standard
Michael Mendes de Gouveia presents RBI enthusiastically within the Dow system. (Internally in Dow they use the slogan RBI or Die on PowerPoint presentations &) He and Dow now enjoy the benefits of pioneering. This train is now leaving for other companies, he says. If they have not yet benefited from the enormous cost savings of RBI, they enter a vicious circle that effectively prevents growth. Growth and innovation are equally important to secure a companys future. Our hope is that DNV will take a strong lead in promoting the RBI methodology as the industry standard in legislation worldwide. DNV is in the best possible situation to do this, as an independent foundation that has proved it is capable of providing the best solutions for managing risk.