Life Cycle Costing with Fred Schenkelberg
There are a lot of organizations who buy systems that cost less initially because of limited budget or due to a number of other reasons. They never even bother to bring in the financial or operations experts to get more information from the suppliers about the equipment they are going to purchase. Does it perform all the functions we need? Does it have that built-in reliability mechanism? Will it serve the purpose even? They don’t ask these questions because the initial buying cost is less or fits in with the budget. This is a mistake that leads to expensive maintenance later on.
The initial purchase price is only a small fraction of what the equipment is going to cost you in the long run. You can’t make a decision only on the basis of that single factor. The total cost of the equipment extends till the full ownership of the equipment during its life cycle. That is why you can never make the decisions for a short-term benefit because it’s a poor reliability practice. It costs you a lot when the equipment starts to fail and maintenance, repairs, and replacements kick in.
These things cost a lot and then you can’t do much about it if your design and installing processes were poorly carried out. There is not much left to maintain and improve after you choose a cheap piece of equipment to save little and then lose a lot more when downtime is causing you halt your production completely. Your goal should be to get the operations department in a room and ask them about the specifications, efficiency, and quality of the product you are buying. If there are budget problems, ask your finance officer to help you with that. If the equipment doesn’t operate as it should, you can hardly redesign, maintain, and enhance its performance.
Not every failure is worth this much effort but you have to have a good asset criticality model to make better decisions to achieve your reliability goals here. If it’s not critical, there is no need to work on repairs and replacement that hard. But when it gets critical, you need to check your designs for that planned downtime it can cause because if that wasn’t considered in the design process, you won’t be able to keep your equipment running for much longer. And this is just for simpler systems to plan for these problems in design and development.
When you have complex systems, there are whole teams of experts who take each factor involved in long-term maintenance of the equipment, get all the information about it from any source they can find and then run different reliability analysis to increase the uptime of the systems. Still, for smart decisions, you need to work with design, finance, and operations departments to make assumptions, determine failure rate, and test the durability of new systems to minimize the life-cycle cost of the equipment. You can make better trade-offs when your design process allows it.
Eruditio Links:
- Eruditio, LLC
- A Smarter Way of Preventative Maintenance – Free eBook
- Maintenance Planning & Scheduling: Planning for Profitability Video Course
Fred Schenkelberg Links:
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