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...
Each year, a panel of Control Engineering editors and industry expert judges select the System Integrator of the Year Award winners.
Control Engineering Leaders Under 40 identifies and gives recognition to young engineers who...
Learn more about methods used to ensure that the integration between the safety system and the process control...
Adding industrial toughness and reliability to Ethernet eGuide
Technological advances like multiple-in-multiple-out (MIMO) transmitting and receiving
Virtualization advice: 4 ways splitting servers can help manufacturing; Efficient motion controls; Fill the brain drain; Learn from the HART Plant of the Year
Two sides to process safety: Combining human and technical factors in your program; Preparing HMI graphics for migrations; Mechatronics and safety; Engineers' Choice Awards
Detecting security breaches: Forensic invenstigations depend on knowing your networks inside and out; Wireless workers; Opening robotic control; Product exclusive: Robust encoders
The Ask Control Engineering blog covers all aspects of automation, including motors, drives, sensors, motion control, machine control, and embedded systems.
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
News and comments from Control Engineering process industries editor, Peter Welander.
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
This is a blog from the trenches – written by engineers who are implementing and upgrading control systems every day across every industry.
Anthony Baker is a fictitious aggregation of experts from Callisto Integration, providing manufacturing consulting and systems integration.
Integrator Guide

Integrator Guide

Search the online Automation Integrator Guide
 

Create New Listing

Visit the System Integrators page to view past winners of Control Engineering's System Integrator of the Year Award and learn how to enter the competition. You will also find more information on system integrators and Control System Integrators Association.

Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Control Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.