Asset analysis: The forgotten ROI from your CMMS

It’s one thing to use CMMS to manage everyday work orders and preventive maintenance schedules of assets/equipment.

02/19/2012



It’s one thing to use CMMS to manage everyday work orders and preventive maintenance schedules of assets/equipment. CMMS can also help better plan for capital expenditures as upcoming budget cycles approach.

That’s where asset life cycle analysis (ALCA) comes into play. ACLA is a macro approach to examining critical data for all assets to help grade each asset and make informed “replace vs. repair” decisions. An “A” is the top grade and an “F” is failing, just like in school.

By capturing day-to-day operation information for predictive maintenance, work orders, and other sources, and crunching the data using ALCA, CMMS users are also better equipped to differentiate good vendors from bad and evaluate PM effectiveness, which contributes to a better ROI.

Consider the following example:

The general manager of a recycling plant asks her directors to submit capital budgets by month end closing. The director of operations starts filling a spreadsheet with equipment he projects will need to be replaced primarily due to the age of each asset. He enters air conditioning unit two because it’s the oldest AC in the building. But identifying equipment that may be taking up more repair time is harder to track and requires more research.

Under the same scenario, the director of operations uses ALCA to grade equipment in question. A boiler unit that has been in use for only 5 years regularly fails because of short-term overheating. However, the antique AC unit on the roof has had only routine maintenance repairs despite its age, and can go another year without replacement.

Using ACLA, key performance indicators derived from PM and WO processing, labor, outsourcing repairs, and other data can help shift capital spending from replacing older assets to replacing frequently malfunctioning assets that incur heavy repair costs. And the director submits a budget that saves significantly on capital expenditures.

ACLA typically “grades” maintained equipment on three critical factors: age, frequency of failure, and rising/falling costs factors. The AC, although 8 years past its expected life, shows a steady or even decreasing frequency of failure, with a steady or decreasing maintenance cost. The boiler unit, although newer, shows more frequent failures and high maintenance costs.

Asset evaluation (including possible replacement) based on age alone is not a fair assessment. By taking into account frequency of failure as well as associated maintenance costs, selecting the most critical assets to replace or repair is much more reliable. With people and dollar resources so precious in today’s world, ALCA can make for a quick ROI in an area often overlooked when implementing a CMMS solution.



No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Additive manufacturing advancements; Machine vision enhances robotics; Fieldbus evolution; Process safety; Advice from System Integrators of the Year; Road to IANA
Salary and career survey: Benchmarks and advice; Designing controls; Remote data collection, historians; Control valve advances; Hannover Messe; Control Engineering International
System integration: Best practices and technologies to help; Virtualization virtues; Cyber security advice; Motor system efficiency, savings; Product exclusives; Road to Hannover
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
PLCs, robots, and the quest for a single controller; how OEE is key to automation solutions.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
click me