ControlTrader

ControlTrader - Automation and Control, DCS and PLC Asset Recovery Guide

1. What is asset recovery, DCS and PLC?

Asset Recovery, also referred to as investment recovery or resource recovery, is the process of maximizing the value of unused or end of life assets through effective reuse or divestment. Automation systems are continuously, upgraded, migrated and replaced resulting in many unused systems and components, these assets should be recovered. The longer you wait the closer you are to not recovering the asset.
DCS (Distributed Control System) and PLC (Programmable Logic Controller) systems are specialized electronic systems used for Automation, Control and Safety in Industrial plants, Factories and Manufacturing industries.

2. What happens to unused DCS and PLC Systems at present?

2.1. Storage

The Control System has just been upgraded and no one seems to know what to do with the old system, until we can figure out what to do with it we will just put it in storage. Storage could be done in two ways correctly and incorrectly. Correctly means properly packaged, handled and stored in the correct environmental conditions. Not being correctly stored refers to improper packaging, handling and stored in a non suitable environment; I have seen cubicles standing outside under a shelter gathering dust and few drops of rain occasionally. Warehouse conditions suitable for valves and pipes are not suitable for suitable electronic components.

I have seen cards where the surface mount resistors were covered with a few micron thick layer of silver and an unnoticeable amount of exhaust gas from a combustion process in the vicinity of the warehouse caused the silver to be attacked thus changing the resistance of the resistors and all cards had to be repaired.

The equipment normally remains stored for many years until it is forgotten, out of sight = out of mind. A slight staff turnover and who ever had possible plans for the equipment is now no longer in the company. A few weeks ago I visited a large Industrial company on request of a warehouse management company, here I saw 1 000's of computers and printers, 15 years worth of upgrades and replacements. My first question was what is the status of the equipment, no one was sure. Closer inspection revealed printers with parts missing and some computers with misaligned covers indicating that they have been opened and opened means someone probably stripped parts. If these items were properly marked, catalogued and packaged there would not have 1 000's of PC's with a unknown status. Needles to say the last few years dust and bird droppings was unbelievably thick on everything, this could have easily been prevented.

Storage option for unused DCS and PLC assets would probably result in

Equipment Losing value
Damage due to handling or environment
Components failing due to old age, e.g. capacitors leaking
Equipment Lost, Misplaced, Theft etc

2.2. Landfill

Some months after one of my DCS replacement projects I had a potential buyer for the replaced system. I immediately phoned the customer to enquire about the old system; they told me that they eventually got rid of all the old equipment because it was permanently in the way and taking too much workshop space. Their asset disposal option - they dug a hole and buried all the equipment. This is a financial and environmental crime.

2.3. Sell

Some systems get sold but that doesn’t mean much as these actual examples will demonstrate

2.3.1. Equipment is sold on Auction or by Public Tender, but who is invited, mostly the local businesses and community, this might be fine if you are selling unused pipes, metal, office furniture etc. You will probably not get much of a response or price for Automation Systems, often it is a clever employee who buys the equipment for nothing and then resells it for a huge profit to someone else who he knows is in need of the equipment. This happens because the wrong market was targeted and the asset disposal department had no idea what a control system is, for them it is just another computer or something similar.

2.3.2. Sold as scrap, so the original auction or selling process didn’t go well and the Asset Disposal Dept is still stuck with the equipment. Now it is over to plan B, we look at the equipment and determine the main composition like steel, aluminum, plastic etc and once determined we weigh the equipment and get the scrap dealers to buy it by weight. Sometimes DCS and PLC components are by default sold by weight as history has shown there is no buyers so why go through all the hassles.

Imagine you buy a new car and then you sell your old car by weight as scrap metal, you don’t because you know its value and where the buyers are. Properly maintained DCS and PLC systems is not junk and should be treated accordingly.

2.3.3. Sold at a very low price, luckily you found a buyer and he is the only one offering you a price so he gets it for a steal. Once again there is a market but you just do not know where it is.

2.4. Who knows, it is just missing
Projects says ask Maintenance, Maintenance says ask Stores or Asset Disposal and just no one knows where the equipment has gone.

2.5. Sponsor or Donate

This is a good option if you are sure that the equipment will actually be used. I have seen systems sponsored to educational institutions and some of these systems never get up and running.
A customer once told me that it is everyone's moral duty to make unused equipment available to the rest of the Automation community.
Not sure who to sponsor or donate to then we will gladly accept your equipment and unsure it is re-used to the maximum.

2.6 Return to OEM
Some OEM's will buy back or exchange unused DCS and PLC components. Buy back could be subject to or part of a maintenance or sales contract. These contracts forms part of a long term strategy with the OEM and would probably not exist when you replace your Automation System with one from another OEM.

2.7 Destroy Equipment

This is another somewhat senseless option that I have seen at some companies. Some OEM's would also request you to destroy certain components when hardware is replaced during upgrades. From a OEM point of view destroy is a good option, it removes surplus equipment from the market which increases the spares business. If I can't use it no-one else should.

3. DCS and PLC Asset Recovery and Divestment

Lets assume you are replacing your DCS or PLC, this results in a large amount of unused equipment and you are planning to sell the equipment.

3.1 The Selling process starts long before decommissioning
Once the equipment is decommissioned you should already have your buyer

3.2 System Documenting and Photos

3.3 Decommissioning and Removing it is not switch off and ripp out
Planning
Labeling
Documenting
Packaging
Storage or Dispatch

DCS and PLC Asset Disposal the right way

4. Why use a DCS and PLC asset recovery company?

Our main aim:

bridge the gap between technical and commercial departments and to keep everyone in the loop
give you the best solution for your DCS and PLC assets be it recycling, re-use or divestment

All too often I have the following:

4.1. Form Engineers, Technicians and Technical Manager (and all these had unused assets)

We don’t know how or where to get rid of it
Asset disposal is too complex, ton's of paper work for what
Why should we, the proceeds from the sale doesn’t go to me or my departments budget
We do not have time we are struggling just to cope with our normal jobs It’s not my job

4.2. From the Commercial side I hear the following

Of course we do asset recovery; next to the mechanical workshop we have bins for different types of metal of cuts. And this response I got after telling them that I am there to discuss the Asset Recovery for the recently replaced DCS.
All the spares go into a public disposal yard where anyone can come in and make a price on a piece of equipment, we have a budget and if we think the price is good then we sell it. Here I found Automation equipment, telephones, drawing boards, Explosion proof torches, Analyzers, VAX machines etc.
What is a DCS?
OK now I understand, it is computer equipment, so it is easy, we give it to the IT Department to dispose of. Honestly what does the IT department understand about a DCS or PLC systems.

5. The risks of Buying and Selling Used DCS and PLC Components
Since these systems and components are used for control and safety in Industrial plants and factories you do not want to be taking any chances with suspect components.

	Typical risks and issues	How to overcome these risks and issues	Detail
5.1	Equipment is stolen from workplaces and sold from home	Openness and Traceability	Ban Freemail accounts Seller Verification Interview and Approval
5.2	Faulty Equipment sold	Traceability	Equipment Background Check
		Reputation Rating and Feedback System	Already implemented in www.ControlTrader.com
5.3	Component bought and Faulty component returned	Traceability Return and Dispute policies Tamperproof Equipment Marking Reputation Rating and Feedback System	Seller and Equipment Verification Apply secret and/or visible markings on Equipment, Photograph and Document markings Already implemented in www.ControlTrader.com
5.4	Unknown Equipment Status	Test and Verify Equipment Status	Establish a world wide network of equipment test and repair partners

DCS and PLC Asset Divestment could yield a good return on the initial capital outlay, in some older obsolete legacy systems the OEM can still sell you a component but at ten times the original price. You should be able to sell certain components at minimum double the original price.
Where it is done it is mostly done wrong.
DCS and PLC equipment is highly specialised and high value assets.