• Magnelec Expects Savings of $4.6 Million in Five Years with Asset Performance Management


Founded in 1887, Peñoles is a Mexican holding company focused on integrated smelting and refining of non-ferrous metals and chemical manufacturing operations. Peñoles has four divisions: metal, chemical, infrastructure, and mining. Magnelec is a devision of Peñoles, with a chemical plant producing 780,000 tons of sodium sulfate and 90,000 tons of magnesium oxide each year.

In 2014, Magnelec implemented a strategic vision to improve Operational Excellence. Magnelec saw an opportunity to improve data processes and equipment reliability, reduce production losses, and optimize maintenance and capital expenditures.


Magnelec decided to implement Asset Performance Management (APM) from GE Digital (formerly Meridium Enterprise APM) to help manage asset data coming in from multiple sources and mitigate risk.

In the first year of APM implementation, Magnelec focused primarily on strategy and failure elimination work processes to establish an asset taxonomy and hierarchy. This was determined according to industry best practices and standards, event history, and conditioned data quality. Magnelec then updated the criticality metrics and calibrated existing failure analysis to identify bad actors and key metrics to make recommendations for management.


After conducting a root cause analysis (RCA), a capability found within Reliability Management, part of our APM suite, Magnelec ran into one very problematic bad actor. Based on the total cost, availability, and failure count, the bad actor was identified as the system of additive dosing in “Boiler Five” with a total of 123 repairs in one year. The company reviewed event history for the boiler, analyzed the classified data, and concluded that the problem began in 2014 when the boiler design used oil and another additive. The goal was to remove the latent root case. The team created an action plan and generated recommendations in order to mitigate the risk in the boiler.

Magnelec continues creating value for its organization through its APM initiative by developing a clear understanding of company strategy and focusing on business drivers. Magnelec identified potential savings of $4.6 million (10.8% of total maintenance budget) over a period of five years, with the highest potential savings realized from the APM failure elimination work processes. These processes contribute to 46% of the overall expected financial benefits. Asset strategy is the second highest work process, contributing 40% to the overall expected financial benefits. If Magnelec applies the recommendations established within the first year of its APM program, the facility will save around $200,000.


Learn more about our Reliability Management solution. 

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