Principles Of Industrial Maintenance PDF

Course materials provided for personal study only and subject to the disclaimer on the ECU website http://www.ecu.edu.au/supplemental/disclaimer Principles of Industrial Maintenance...

Course materials provided for personal study only and subject to the disclaimer on the ECU website http://www.ecu.edu.au/supplemental/disclaimer Principles of Industrial Maintenance Lecturer: Dr Ana Vafadar [email protected]  This lecture Coverage in this lecture will be largely derived from … Stephens, M. P. (2010) Productivity and reliability-based maintenance management. New Jersey: Pearson Education, Inc. (ISBN 9781557535924). Brown, M. V. (2004) Managing maintenance planning & scheduling. Indianapolis: Wiley Publishing, Inc. (ISBN 0-7645-5765-3) Mobley, R.K., Higgins, L. R., & Wikoff, D. J. (Eds.) (2008) Maintenance engineering handbook (7th ed.). New-York: The McGraw-Hill Companies, Inc. (ISBN 978-0-07- 154646-1). Content from other sources will be indicated where applicable  This lecture – the plan This lecture material is largely based on … Defining the Level of Maintenance (CHP 1) (Brown, 2004) The Maintenance Budget Setting Goals Based on Budget The Purpose of a Work Order System Estimating Repair and Maintenance Costs (CHP 5) (Mobley, 2008) Prerequisites for Estimating Maintenance Cost Classifying the Job How the Estimates will be Used Who will Prepare the Estimates Estimating Techniques for Labor Cost Estimating Techniques for Material Cost Estimating Techniques for Overhead Cost Training Estimators Preventive Maintenance (CHP 3) (Stephens, 2010) 3.6 Cost of Preventive Maintenance  This lecture in a nutshell This lecture will basically … Identify some of the cost components that contribute to the maintenance budget Discuss maintenance work orders: Highlight the significant role these play (whether manual or electronic) in the management and costing of operations Identify what typical information goes into work orders Introduce methods for estimating maintenance cost components: Materials Labour Overheads Give examples of maintenance calculations Corrective (CM) and Preventive (PM) maintenance  Maintenance Costing Slide 5 Maintenance Budgets (Brown, 2004) Setting maintenance budgets is an important step in the process of formulating a maintenance programme. Maintenance budgets are not unlimited An initial breakdown of maintenance costs may be done based on how they feature in an overall ‘custody plan’ for the equipment. Custody Plan: “This plan identifies the custody of the equipment required by the operations department to manufacture a quality product and to attain the onstream-time needed to meet sales. It also defines the custody of equipment required by the maintenance department to build capacity back into the operation” (Brown, 2004, pg 5) In more basic terms, you may think of the custody plan as a breakdown of ownership for pieces of infrastructure within two departments: Maintenance works that are done whilst equipment is in maintenance dept. custody Maintenance works that are done whilst equipment is in production dept. custody Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 6 Maintenance Budgets (Brown, 2004) Custody plans help accurately identify equipment cost incurred during maintenance shutdowns (where equipment is not productive). Examples of works costed during periods of maintenance department custody: Preventive maintenance “… takes the form of manufacturer-recommended rebuilds, or rebuilds required because of predictable wear. Compressor and pump rebuilds, along with instrument calibration, are in this category …. The job can be planned far in advance of the shutdown and should be the most efficient effort by the maintenance department” (Brown, 2004, pg 7) Corrective work “… to replace worn parts, adjust loose equipment, prevent a major failure, and return equipment to nameplate condition. As with PM, this work can be planned in advance of the shutdown…” (Brown, 2004, pg 7) Emergency repair “This is the occasional and unavoidable shutdown of equipment because of unforseen circumstances requiring unplanned repairs …” (Brown, 2004, pg 8) Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 7 Maintenance Budgets (Brown, 2004) Examples of works costed during periods of production department custody: Preventive maintenance “adjustments, lubrication, tests, inspections, and calibrations performed on equipment while it’s running are in this category….” (Brown, 2004, pg 8) Corrective work “Plannable repairs on installed spares fall in this category” (Brown, 2004, pg 8) Prefabrication work “prefab work includes (but is not limited to) rebuilding equipment in the shop, laying out pipe for future replacement, and setting up equipment prior to a planned shutdown” (Brown, 2004, pg 8) Predictive maintenance “This includes nondestructive tests performed on the equipment to determine its condition....” (Brown, 2004, pg 8) General work “This is the non-production-related work (such as work performed on real estate, lawns, roofs, and so on)” (Brown, 2004, pg 8) Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 8 Maintenance Budgets (Brown, 2004) Labour (hrs) Material Cost Other Cost Totals CUSTODY WORK (SHUTDOWN) Preventive maintenance 4,840 $ 100,000 $ 120,000 Corrective work 2,290 $ 40,000 $ 110,000 Emergencies 2,220 $ 40,000 $ 110,000 Total shutdown (labour x hourly work rate) 9,350hrs @ $25/hr Total cost - shutdown $ 233,750 $ 180,000 $ 340,000 $ 753,750 NON-CUSTODY WORK (NO SHUTDOWN) Prefab work (for shutdowns) 7,700 $ 206,000 $ 47,000 Preventive maintenance (defined inspections) 12,100 $ 558,000 $ 101,000 Corrective work 14,600 $ 396,000 $ 78,000 Predictive Maintenance 6,900 $ 74,000 $ 14,000 General Maintenance 6,550 $ 16,000 $ 6,000 Total non-shutdown (labour x hourly work rate) 47,850hrs @ $25/hr Total cost – non-shutdown $ 1,196,250 $ 1,250,000 $ 246,000 $ 2,692,250 TOTAL COST $ 1,430,000 $ 1,430,000 $ 586,000 $ 3,446,000 Adapted / Modified from Figure 1-3. Brown, M. V. (2004) Managing maintenance planning & scheduling. Indianapolis: Wiley Publishing, Inc. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 9 Maintenance Budgets (Brown, 2004) In the example above, it is apparent how equipment custody by the maintenance department amounted to some 9,350 hours. Such data can be used to establish a breakdown of maintenance activity goals for subsequent budgets. hrs Approx % Emergency work 2,220 4 Corrective (shutdown + non-shutdown) 16,890 30 PM + PDM (shutdown + non-shutdown) 23,840 42 Prefab work 7,700 13 General Maintenance 6,550 11 TOTAL 57,200 100 Adapted / Modified from Figure 1-3. Brown, M. V. (2004) Managing maintenance planning & scheduling. Indianapolis: Wiley Publishing, Inc. Principles of Industrial Maintenance Edith Cowan University 2018 Quiz Slide 10  Which of the following item(s) is incorrect? o One of the main TPM pillars is cost management. o Plannable repairs on installed spares fall in the production custody plan category. o Minor PM such as cleaning and minor adjustments fall in the maintenance custody plan category. oA breakdown of maintenance costs helps to evaluate the maintenance program. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 11 Maintenance Budgets (Brown, 2004) Custody plans are also useful because they allow the maintenance department to identify when equipment (infrastructure) is likely to be free for the next shutdown. This allows timely planning of maintenance operations. Preventive Corrective Predictive Maintenance Maintenance Maintenance *equipment rebuilds as per manufacturer specs *replacement of worn tasks done during *calibration out components maintenance dept custody *adjustments to loose (use operating history (equipment is shutdown) to establish periods parts between successive shutdowns) *thermography *vibration analysis tasks done during *lubrication work *lubricant analysis production dept custody *repairs on spares *periodic calibration already installed (ongoing monitoring (equipment is operational) processes to help identify when to plan shutdown) Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 12 The Role of Work Orders (Brown, 2004) Systems for administering formal work orders are essential for costing maintenance operations. Work orders serve the following functions … Work Order #12345 A systematic and formal approach to maintenance work not based on verbal or mere e-mail communication Provides a process to assess (approve, reject) individual jobs what, why, how, when? Allow for scheduling and prioritization of maintenance work Facilitates maintenance planning tooling needs, spare parts availability, resource allocation Helps establish costs for maintenance work (by linking different cost components to specific works) labour hours, personnel, materials, tooling, service comments/diagnosis Tracking of work start to finish Constitutes documentation for the maintenance implementer. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 13 The Role of Work Orders (Brown, 2004) Work orders will typically contain three areas of information. Data in these may include: work order number planner name supervisor name Request + Authorization data originator name job to be done comments Planning + Scheduling data approver name steps needed to do (implementer, Execution + Closure data date request initiated job supervisor) downtime needs crafts required work hours used date/time/shift work hours (estimate) work (failure) codes (if targeted (or available) requirements (parts, needed by some CMMS) priority of job materials, tools, equipment) costs class of job safety needs requirements required completion data drawings/schematics contractor equipment to be estimated costs maintained labour (identification, material location) contractor account code for job hire description of job requested Principles of Industrial Maintenance Edith Cowan University 2018  The Role of Work Orders Sample Work Order forms/Job Tickets. Courtesy: ECU Facilities & Services Division  The Role of Work Orders Sample Work Order forms/Job Tickets. Courtesy: ECU Facilities & Services Division  Maintenance Costing Store Withdrawal Slide Ref: WO 4321 16 Item Description Cost/pc The Role of Work Orders (Brown, 2004) ……. ……….. …….. C1-2 Coupling $230 Purchase Order #: PO 673 B2-457 BBearing(h) $230 Ref: WO 4321 Equipment Storeroom Inventory History Items Needed: Coupling, x1 789P Item Description Cost/pc _______________________ C1-2 Coupling $230 B2-457 BBearing(h) $230 Purchase Order #: PO 672 Company Payroll Data B2-458 RBearing $200 Ref: WO 4321 Name id Pay Work Order #: WO 4321 ……. ……….. … Priority: A B2-459 BBearing(l) $150 Items Needed: BBearing(h) Mr Someone 234 $25x8 ……. ……….. …….. , x1 Ms Jones 238 $50x4 Equipment #: 789P Work Needed: pump does not allow max pressure to be Purchase Order #: PO 671 attained. Work Time Sheet Work Time Sheet Name: Mr A. B. Someone Name: Ms X. Y. Jones Ref: WO 4321 Service Personnel Id: Maint 234 Id: Maint 238 Comments: pump was Items Needed: Fork-lift overhauled, couplings Date W/O# Hrs Date W/O# Hrs rental, 1 day changed, new bearing(h) ……. ……….. … ……. ……….. … installed. 1/Feb/2003 4321 8 1/Feb/2003 4321 4 2/Feb/2003 4324 8 3/Feb/2003 4327 4 3/Feb/2003 4356 2 3/Feb/2003 4460 3 Adapted / Modified from Figure 1-5. Brown, M. V. (2004) Managing maintenance planning & scheduling. Indianapolis, USA: Wiley Publishing, Inc. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 17 Cost Estimation (Mobley, Higgins & Wikoff, 2008) Predicting costs associated with maintenance work is an important step that may precede the formal lodgement of a Work Order. These costs are obtained through estimates. Important considerations in forming cost estimates are … the accuracy of estimates obtained (largely dependant on judgement of the estimator) the timelines needed to obtain these estimates Estimates may be needed for activities such as … relocation of plant equipment machinery replacement machine cleaning oiling, lubricating adjustments repairs The informed decisions made by estimators are affected by their … level of training size of experience Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 18 Cost Estimation (Mobley, Higgins & Wikoff, 2008) Two of the areas (of information) which affect cost estimates for maintenance are: maintenance job classification priority amount of work needed largely dependant on familiarity with job general conditions for implementing the work the intended usage of these estimate this will affect the time and accuracy invested into establishing the estimate Such classification and usage information will have a bearing on … who will largely be responsible for developing the estimate foremen (quick, easy estimates), engineers (big construction projects, equipment design/selection) … etc. the way in which the estimate is made Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 19 Cost Estimation (Mobley, Higgins & Wikoff, 2008) A sample listing of intended uses for a cost estimate are provided below. The extent of the data sought to establish an estimate (and the costs associated with drafting the estimate itself) however change from one situation to another. 1. Determination of the extent of approvals required (example: over or under $500?) 2. Evaluation of work-order backlog 3. Long-range forecasting 4. Evaluation of equipment-purchase recommendations 5. Evaluation of method proposals 6. Make-or-buy decisions – limited annual dollar volume 7. Critical-path scheduling 8. Monthly schedules and work-load forecasts 9. Plantwide cost-control reports of work performance 10. Weekly schedules and manpower assignments 11. Departmental cost-control reports 12. Plantwide group incentive 13. Individual cost-control reports 14. Daily manpower assignments and work schedules 15. Make-or-Buy decisions – high annual volume 16. Departmental group weekly incentives 17. Small-group daily incentive 18. Individual weekly incentive This list is quoted from Mobley, 19. Individual daily incentive Higgins and Wikoff (2008, pg 3.109) Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 20 Cost Estimation (Mobley, Higgins & Wikoff, 2008) Estimating Labour Costs Judgement depends on personal experience/training (judgement). potentially subject to lack of proof, consistency. would probably result in rounded figure estimates (a job is estimated to take 300hrs rather than specifying it as 287.3hrs). Standards per unit where (personal) judgement is a strong contributing factor in estimates, comparisons between different costing periods or departments becomes unreliable or inconsistent. benchmarked standards may then be used (repetitively) in estimates. They include: construction cost / meter square of floor painting time / meter square of wall overall estimates will depend on the accuracy of the standards per unit used. Slotting involves setting ranges (brackets) for time and cost estimates. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 21 Cost Estimation (Mobley, Higgins & Wikoff, 2008) Estimating Material Cost Are generally more accurate compared to estimates for labour time. Such estimates can be used for gaining approvals from managers or supervisors: They may relate to capital expenditures such as purchasing machines or construction materials. Quotations may be used for basing these estimates. Materials needs may also be predicted in some instances by using labour-to- material estimates (labour/material). This requires: establishing an archive of data for work (hours) and material usage in a large range of work. This data can then be used for future guidance. dividing work done based on job classifications (related to specific material types). establishing the ratio’s of (average material usage) to (labour cost) for different job classifications. revising the job classifications (more finely, getting more subdivisions) if individual jobs in a certain classification are found to deviate substantially from the average ratio’s that had been previously established. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 22 Cost Estimation (Mobley, Higgins & Wikoff, 2008) Estimating Overhead Cost Overhead Cost: “An overhead cost is one which is not directly attributable to a specific job or project. In maintenance this means such items as salary supervision, storeroom operation, shop equipment and facilities, and miscellaneous supplies. Fringe benefits such as vacation and holiday pay and group insurance are also overhead costs” (Mobley, Higgins and Wikoff, 2004, pg 3.119) Estimates for overhead costs will require pro-rating the overhead cost to individual jobs. This can, for example, be achieved by establishing (total overhead cost / total maintenance hours for period). This is a general cost ratio. If work hours were to reduce (due to outsourcing of some of the work), only the components of overhead that are work hour based will vary (e.g., supervision costs). Some overhead costs are fixed (independent of work hours). Principles of Industrial Maintenance Edith Cowan University 2018 Quiz Slide 23  Which of the following item(s) is correct? o Establishing an archive of data for work (hours) and material usage in a large range of work is useful for material cost estimation. o Labour cost estimation is not accurate as judgement is potentially subject to lack of proof, consistency. o Work order is a formal approach to maintenance work and it’s based on verbal and/or e-mail communication. o In the Planning + Scheduling data phase of the work order system, the malignance job is partially done. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 24 An Introduction to Preventive Maintenance (Stephens, 2010) The relationship between the cost of implementing PM and level of CM (tolerated) has been presented during the review of the three fundamental maintenance approaches. The more CM activities (and breakdowns) which are tolerated, the lower the investment in PM can be. PM programmes occupy some 50% of total costs (invested) in maintenance activities (compared to less than 20% for CM). total cost **The relationship trend1 between cost and optimal level PM may take on different trends. There can be different “optimal” Preventive levels for the total maintenance cost of combined cost CM+PM programme. cost trend2 breakdown maintenance cost maintenance level Adapted from Fig 3-2: Stephens (2010) Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 25 Corrective Maintenance Costs: Basic Analyses (Stephens, 2010) Equipment breakdowns (CM) can be reduced through effective PM activity. Applying major PM activities, or substantive routine ones, needs cost justifications. Are there simplified methods for helping justify the costs associated with a PM programme? Lets take an example. EXAMPLE Adapted from Stephens (2010) Given An ongoing CM program is applied to a piece of plant equipment. Well documented service history for this equipment exists over a 24 month period. For each breakdown, the total cost incurred by the company (for the breakdown to be remedied) is found to be $750. This total amount includes … cost of equipment downtime + cost of equipment repair. The number of breakdowns varies between months and is indicated in a table given below. Task What is the expected average monthly cost if CM were continued? Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 26 Corrective Maintenance Costs: Basic Analyses (Stephens, 2010) Given: The following table shows the number of breakdowns in any single month (left column) versus the number of months over which such (multiple) breakdowns occur (right column). The total reporting period is 24months. Frequency of Number of months for this failure/breakdown in any occurrence single month (CM is needed) 0 5 1 6 2 7 3 4 4 2 =40 breakdowns =24 months Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 27 Corrective Maintenance Costs: Basic Analyses (Stephens, 2010) Solution: The first step is to identify the average number of breakdowns per month (over the 24 month period ). Average Monthly Breakdowns   number of monthly breakdowns  frequency of repitition  total months Average Monthly Breakdowns  0  5  1 6  2  7   3  4  4  2 24 40 Average Monthly Breakdowns   1.67 breakdowns per month 24 The next step is to identify the average (monthly) cost associated with remedying these breakdowns … Average Breakdown Cost  1.67  $750  $1,252.50/ month This calculation shows that if the current CM strategy is continued (beyond the initial 24 months), the average monthly cost associated with CM is expected to be ~$1,252. This estimate is based on data collected over the previous 24month period. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 28 Preventive Maintenance Costs: Basic Analyses (Stephens, 2010) How can we exemplify the impact of adding some PM, alongside the occasional need for CM, on total maintenance costs? Lets take an example. EXAMPLE Adapted from Stephens (2010) Given Refer to the previous example. Assume a PM program had started at the end of the 24 month period (recall that for the initial 24months only CM had been applied). The costs associated with this (new) PM program were found to be $900/month. The new PM strategy was continued for an additional 12 months. Although the PM program over these other 12 months significantly reduced the occurrence of breakdown (CM), it did not eliminate it (PM only reduces the probability of having CM). With the PM program running, any breakdowns still incur a total cost of $750. Task Based on the data available for the additional 12 month period, decide whether it remains feasible to continue the PM program despite the occasional breakdown and its associated CM costs. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 29 Preventive Maintenance Costs: Basic Analyses (Stephens, 2010) Given: Table (below) shows count of monthly breakdowns (left column) against the number of months over which these breakdowns occur (right column) for CM+PM. Frequency of Number of months for this Note failure/breakdown in any occurrence single month (CM is needed) PM also 0 10 runs during 1 2 this time =12 months Solution: The first step is to identify what the average number of (monthly) breakdowns is (over the additional 12 month period). Total Failures (over 12 months)   number of monthly breakdowns  frequency of repitition Total Failures (over 12 months)  0 10  1 2  2 2 Average Monthly Breakdowns   0.17 breakdowns per month 12 Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 30 Preventive Maintenance Costs: Basic Analyses (Stephens, 2010) The next step is to calculate the average (monthly) cost of remedying breakdowns. Average Monthly Breakdown Cost  0.17  $750 Average Monthly Breakdown Cost  $127.50 The total cost of running the PM program on a monthly basis (alongside the CM) will be the sum of … Costs associated with the PM program Costs associated with the occasional CM activity … despite running the PM alongside Total Cost (monthly)  Fixed PM cost (monthly)  Current Failure Cost (monthly) Total Cost (monthly)  $900.00  $127.50 Total Cost (monthly)  $1027.50 Recall that the cost to run (only) the CM program was initially $1,252.50/month. In this example we see that running a PM program (with the occasional CM) is beneficial from a monetary point of view. The monthly savings associated are … Savings (monthly)  $1,252.50  $1,027.50  $225 Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 31 PreventiveMaintenance Costs: Linkage to Desired Reliability Levels (Stephens, 2010) The degree of reliability desired in a system is inherently linked to the level of breakdown that can be endured or tolerated by management. This might be based on a cost point of view (see the examples given previously). Another case is exemplified by the following data (see table). Cost of acceptable ‘failure risk’ in equipment are tabled against desired ‘reliability’, where … Failure Risk  1  Reliabilit y Targeting a lower ‘Failure Risk’ entails a greater level of PM. Greater levels of PM require a larger cost investment in the PM programme. Greater levels of cost in investment into PM can mean a higher ‘PM Frequency’, or in other words … the time between PM activities is relatively short so that you can have more of these per annum/month/week. Principles of Industrial Maintenance Edith Cowan University 2018 Preventive Maintenance Costs: Linkage to Desired Reliability Levels (Stephens, 2010) Preventive 140,000 Risk of Maintenance Maintenance Failure Frequency Cost Reliability Preventive Total costMaintenance Cost of including PM (with($) CM) Endured (hrs, rounded) ($) Desired 120,000 5% 8 126,000 95% 10% 16 108,000 90% 15% 24 102,000 85% 100,000 PM Cost ($) 20% 33 96,000 80% 25% 43 90,418 75% 30% 54 85,333 70% 80,000 35% 65 81,969 65% 40% 77 78,545 60% 60,000 45% 90 75,200 55% 50% 104 71,999 50% 55% 120 68,400 45% Costs rises 40,000 60% 137 65,168 40% with 65% 157 61,452 35% desired % Practice by 20,000 70% 181 57,282 30% reliability calculating 75% 208 53,308 25% these 80% 241 48,996 values. 20% 0 85% 285 43,958 15% 90% 345 38,400 10% 95% 449 31,109 5% Available work hours per year= 2,400 Reliability MTBF= 150hrs Failure cost (associated with CM)= $6,000 Annual CM cost= $96,000 PM cost= $120  Maintenance Costing Slide 33 Preventive Maintenance Costs: Linkage to Desired Reliability Levels (Stephens, 2010) The cost of not applying a PM strategy can be calculated: This entails that CM will solely be relied upon to remedy any failures/breakdowns. CM Cost (annual)  Failure cost  Number of expected failures (annual) The number of expected failures (annual) will be dependant on … the frequency of failures occurring which can be characterised by the MTBF the total hours available over the period Number of available work hours (annual) Number of Expected Failures (annual, CM needed)  Mean Time Between Failures 2400hrs Number of Expected Failures (annual, CM needed)   16 150hrs Hence, the annual cost associated with no PM activity is predicted to be… Annual CM Cost  $6,000 16  $96,000 Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 34 PreventiveMaintenance Costs: Linkage to Desired Reliability Levels (Stephens, 2010) Let us now compare this cost ($96,000) with the total ‘PM program cost (annual)’ at a given level of desired reliability. Lets consider a reliability level of 95% (for example). In this scenario, PM might need to be applied every 8hrs (see data in table). Number of PM activities (annual) is first calculated Available work hours (annual) Number of PM activities (annual)  Frequency of PM activities 2400hrs Number of PM activities (annual)  8hrs (assuming 95% reliabilit y is desired) Number of PM activities (annual)  300 The costs associated with these activities is then established: PM Program Cost (annual)  Number of PM activities (annual)  Cost per single PM activity PM Program Cost (annual)  300  $120  $36,000 Note that this cost ($36,000) for running the PM (at 95% reliability) occurs on top of the CM activity (occasionally needed to take care of the expected 5% failure rate). The next task is to find the costs associated with resorting to applying CM at 5%. Principles of Industrial Maintenance Edith Cowan University 2018  Maintenance Costing Slide 35 Preventive Maintenance Costs: Linkage to Desired Reliability Levels (Stephens, 2010) We can now establish the total cost of an ongoing PM program (with the occasional CM remedial activity in the background). Cost of Failure Events (annual)  Number of PM(annual)  Failure Probabilit y Cost per Failure This cost represents the cost associated with CM actions This bracketed term represents the number of expected failure events being needed despite (on top of) having the PM strategy. (annual) that will require corrective action. Cost of Failure Events (annual)  300  0.05 $6,000  $90,000 Therefore, the total cost of having the PM strategy (including the costs associated with the occasional CM) is … (at the 95% reliability level) … Total cost (PM  CM, annual)  PM cost (annual)  Cost of Failures (depsite having PM) Total cost (PM  CM, annual)  $36,000  $90,000 Total cost (PM  CM, annual)  $126,000 Compare to the value in row #1 of the table (slide 32) … Principles of Industrial Maintenance Edith Cowan University 2018 Quiz Slide 36  The number of expected failures will be dependant on 2 items: Principles of Industrial Maintenance Edith Cowan University 2018 Component Life Time Slide 37 Thank you Principles of Industrial Maintenance Edith Cowan University 2018