Identifying a Power Plant Problem

Baldur Agricultural Chemicals (BAC) is concerned about the possibility of there being technical problems with its Gordontown manufacturing plant’s hot water and power generating system. After hiring an independent, external consultant to inspect the plant, BAC has identified technical problems that are primarily due to inadequate maintenance and the continued use of equipment that is rapidly becoming obsolete (by industry standards). Adequate resolution to this problem requires the immediate development and implementation of a management plan, as well as the overall system’s modernization.

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Baldur Agricultural Chemicals (BAC) is a well-established company that has manufacturing plants operating throughout Canada. The company’s manufacturing operations rely heavily on hot water and steam. Due to this the efficient operation of the powerhouses in each of its plants is quintessential for costs to be minimized, while revenues are maximized at the same time.

BAC has recently identified with the manufacturing plant that it possess in Gordontown. It appears that the company’s powerhouse is underperforming; this is hinted by the fact that fuel consumption has increased by 18% over the past two years. Furthermore, production has been interrupted numerous times due to machinery malfunctions/breakdowns. The plant’s increasing operational costs are also aggravated by the fact that world fertilizer prices are following a downwards trend, thus rendering BAC uncompetitive (both domestically and internationally).

Senior executives have made numerous visits to the Gordontown manufacturing plant, but no evident operations problems have been identified. In other words, everything appears to be functioning perfectly. This has prompted BAC vice-president for operations to solicit an independent consultancy.

Study Plan

The proposed plan for the independent (technical) consultancy is as follows. First, the manufacturing plant’s management will be contacted and informed about the intention to study the plant’s powerhouse (specifically the hot water and power generating system). A tour will be conducted throughout the entire plant and key staff will be interviewed in order to get a good idea of any technical problems that might be hindering the plant’s overall performance (and output).


After having the manufacturing plan’s tour, and after having interviewed key staff, the first thing that must be noted is that the excellent housekeeping seen throughout the entire plant does not appear to truly reflect the plant’s real conditions. This find is consistent with the fact that maintenance logs have been inadequately kept. There is no evidence of regular maintenance being made on any of the plant’s machinery, including the hot water and power generating system. Second, it was found that the system’s boiler has been inadequately cleaned.

Continuing with the technical inspection, it was found that the system’s flow meters appear to be inadequately calibrated. During the last three years, there has been no maintenance service on the flow meters, which leads to believe that they may be over reading. Another technical problem that was identified has to due with the system’s pumps and vacuum equipment.

Finally, upon completion of the inspection tour, some shift engineers were consulted about a new power panel, the microprocessor-controlled CORLAND 200. This system was perceived as a major technical enhancement to the plant’s operations, but there has been no indication of such (modern) equipment to be procured, which also implies that the plant’s installed systems are starting to become obsolete.

Evaluation Criteria

After completing the inspection and respective interviews on the Gordontown plant, the proposed technical analysis focused primarily on the system’s overall conditions. There was interest in determining whether or not the system received proper maintenance. Secondly, there was interest in determining whether or not the plant’s systems had been adequately modernized, so as to keep up with changing times and industry standards.


First, it becomes clear that the management team has not properly serviced the Gordontown plant’s hot water and power generating system. There is no adequate record of maintenance services, nor any indication of regular maintenance services on any of the system’s equipment. Problems were identified with the pumps, vacuum system, boiler, and flow meters. There is no question that these technical problems are hindering the manufacturing plant’s overall performance, therefore making it uncompetitive (both domestically and internationally). Finally, it appears to be clear that the system is rapidly becoming obsolete, since market trends push fore newer, more sophisticated (and efficient) systems.


Having finalized the inspection and analysis of the Gordontown manufacturing plant’s technical conditions, it becomes clear that its underperformance is a direct consequence of improperly serviced, and obsolete equipment. The plant’s management needs to focus more on developing a proper equipment maintenance plan, and less on pristine housekeeping (as housekeeping will not improve the plant’s output).


In order to overcome the technical problems that have been identified, the first thing that BAC needs to do is ensure that a proper maintenance plan is developed (and adequately implemented). Systems that are not properly, and regularly, serviced cannot perform to expectations. Therefore, the boiler needs to be regularly cleaned, the flow meters regularly recalibrated, and the pumps and vacuum system need to receive preventive maintenance (as opposed to waiting until they definitely break down and replacing them altogether). Doing this will allow the plant to minimize costs and once again become competitive, especially if such maintenance measures are accompanied by an overall system modernization.

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