Manutenção Corretiva e Preventiva

Cost/benefit analysis: should you repair or replace your equipment?

Maintenance performance is the result of an efficient use of resources to maintain or restore an asset so that it fulfills its required function.

 

To reach the maximum level of performance it is necessary to implement a maintenance model that combines corrective and preventive maintenance, combining the different factors involved in the process: labor, materials, organization methodologies, tools and execution techniques.

 

The cost/benefit analysis evaluates the costs and benefits related to an activity or project developed by the company. This analysis is important to evaluate the net economic impact: it is used with the purpose of understanding the viability of a new project or activity and its purpose is to help managers in the decision-making process.

In the area of industrial maintenance, the goal of the cost/benefit analysis is to determine if the equipment maintenance is viable, considering the difference between the sums of its costs and benefits. It is necessary to predict its effects, quantify them and calculate its profitability using Maintenance Key Performance Indicators (KPIs).

There are several categories of performance indicators – strategic, financial, efficiency and functional – and to define them, it is necessary to consider several factors.

 

External factors

 

Unpredictable variable conditions that business management cannot control.

 

Internal factors

 

Actions that are under the control of corporate management, but that the maintenance management cannot control.

 

Denominator and numerator

 

The indicators should refer to the same activity and time period (year, semester, month, etc.).

 

Compliance with standard NP EN15341

 

The indicators can be used at different levels to evaluate the performance of an equipment as referred to in NP EN15341 standard.

 

Financial indicators

 

They consider the different maintenance costs and can be compared with the equipment reliability or availability indicators. Through the latter, the benefits are calculated through the growth of the values generated due to a greater availability of the equipment.

 

Object of the evaluation

 

Define the unit of analysis to which the cost/benefit study will be applied.

 

Maintenance levels

 

It is necessary to consider the alternative of “doing nothing” for each piece of equipment, the palliative alternative (very common, at a micro scale, in curative/palliative maintenance) of doing “the minimum” and the alternative of doing “something”, including innovation and expansion.

 

The 5 levels of Maintenance according to AFNOR standards

 

  • Level 1 – Simple adjustments provided by the manufacturer without disassembling the equipment or replacing parts.
  • Level 2 – Repairs through replacement of standard elements provided for this purpose or minor preventive maintenance operations (rounds).
  • Level 3 – Identification and diagnosis of malfunctions, repair by replacement of functional components and minor mechanical repairs.
  • Level 4 – Important corrective or preventive maintenance work.
  • Level 5 – Major renovation, construction or repair work.

 

Financial analysis is the starting point for subsequent economic analysis, providing all necessary data in terms of inputs, outputs, their relative costs and how these are predicted to be distributed over the asset’s lifetime.

 

Using this analysis, it is possible to build the data tables for cost analysis, evaluate financial viability and financial benefits (project and capital financial return).

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