By Joel Levitt, Management | Director of Projects, Reliability Leadership Institute, Reliabilityweb.com Is economic analysis in PM worth it? These examinations help determine risks associated with equipment downtime Any activity to extend equipment life or detect failures that is not statutory is subject to these two important questions: • Is it worth it? • Should I spend time doing something else? Th e second question concerns risk. Let’s say we have two heavy trucks. One is a garbage truck and the other is a fi re truck. Both trucks have risks associated with failure to perform their duty. Th e garbage truck is a bit easier to analyze since the crew time and overtime is straightforward to calculate. Th e fi re truck analysis is considerably more complicated. It is diffi - Every type of vehicle has risks associated with failure to perform its duty. While calculating the consequences of having a garbage truck in the shop is straightforward, the analysis for a fi re truck is considerably more complicated. Photo courtesy of Daimler trucks North America cult to say what a downtime incident would cost without knowing the consequences or even the likely consequences. In some worlds, both risks could be evaluated by dollars. In my world, any risk involving a high probability of death or environmental disaster should be rendered as close to a zero chance of happening as possible. Macro View Economics of preventive maintenance (PM) has three levels of view. Th e highest level is oft en referred to as the 30,000’ view or the macro view. In this kind of view, the organization decides if PM approaches make sense for the whole department, given the organization’s goals and the needs and requirements of the business or fi eld. To make that decision, an organization would look at the current costs of operation. It would project the costs of the operation with the proposed changes. Since any change costs money, the analysis would see how many months, or years, the savings – assuming there is one – would take to pay off the investment. Conversely, many organizations would look at return on investment – a measure of the percentage return on a particular investment. If the speed of the return on investment payback of an investment were adequate, then the decision would be made to change from the status quo to the new approach. Once that decision is made, the second level view looks more and more closely at what strategy is most appropriate for individual machines or groups of similar machines. 100’ View I use the term “100’ view” to describe the second level view. Th is view decides what strategy is most appropriate for a particular machine or group of machines. Even if a decision has been made at the corporate or plant level to use PM and/or PdM (predictive maintenance) THREE LEVELS of scrutiny are required. techniques as the dominant strategy, each machine or machine group has factors that infl uence how to handle it specifi cally. In some analyses, letting the equipment run to failure is the best bet. Usually, the most important factor is the cost of having the unit out of service. A low or negligible downtime cost can scuttle a PM decision for that asset (substitute vehicle). As before, the cost of the current operation for that asset or asset group is compared to the cost of running in the new mode. Given the investment level to bring the asset to PM standards, is there enough ROI to make it justifi able? Third View Once a decision is made about strategy for an asset or an asset group, the third level view is: What PM tasks do we perform? In this task view – a micro view, the cost and consequence of each task is compared to the cost and consequence of the failure mode the task is trying to avoid. It is critical to choose the fewest tasks, the least oft en, that will achieve your goals. Th e task view is the engineer’s view. Th e 100’ view could be called the maintenance manager’s view. Th e 30,000’ view is the fi nance manager’s view. All views are valid and contribute to the understanding of what information is needed for the best overall, long-term decisions. Joel Levitt is director of projects for Reliabilityweb.com’s Reliability Leadership Institute. Reliabilityweb.com provides the latest reliability and uptime maintenance news and educational information. He remains president of Springfield Resources (www. maintenancetraining.com), a management consulting firm. MOBILE COLUMN LIFTS 16,500-40,000 lbs. per column SKYLIFT 62,400-156,000 lbs. DIAMOND LIFT 64,000-105,000 lbs. ECOLIFT 60,000-90,000 lbs. FREEDOM LIFT 16,000-30,000 lbs. HEAVY DUTY LIFTING FOR ALL YOUR NEEDS 800-336-6637 VehicleServicePros.com/10095331 www.Stertil-Koni.com VehicleServicePros.com ❚ NOVEMBER/DECEMBER 2016 ❚ FLEET MAINTENANCE 35
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