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Total cost of maintenance

Cost of maintenance 
It's inevitable that every machine can malfunction. However, there are failures that can have very serious repercussions on production, on the machinery itself and unfortunately also injure the operators. Good maintenance can help to significantly reduce these risks and a good practice is to allocate a dedicated maintenance budget annually.  This budget should cover the costs incurred for materials, spare parts, labour and services. Therefore, if proper maintenance is planned and carried out, fewer failures will occur, a better Mean Time Between Failure (MTBF) can be achieved and overheads on production costs can be reduced. Production overheads that have to take into account are both the above mentioned maintenance costs, and also the cost of production loss, which in the end is the highest price a process line pays when it is breakdown for a failure. In production lines for commodity production it is estimated that one hour of downtime can cost several thousand euros. What if the line had stopped for a component of a few tens of euros not replaced due to poor maintenance?
Elements involved in calculation of maintenance budget (remember that a budget is an estimation) are:
  • Spares – spare parts for maintenance includes those that are regularly consumed and those that will be required as per preventive or predictive maintenance planned for that equipment.
  • Materials – As above materials regularly consumed and for planned maintenance has to be estimated. 
  • Labour - Regular maintenance may require the plant maintenance team and preventive or predictive planned maintenance may require additional reinforcements from external services.
  • Documentation – office materials, administrative data, logistics required for carrying out maintenance has to be incorporated into estimate.
Apart from this contingency fund is also to be allotted for extreme unexpected breakdowns or emergencies.
For the above cost estimation by experience in general the maintenance team arrive at the regular maintenance cost and for the planned maintenance the cost can be estimated. With this an ideal estimate maintenance cost can be arrived for the annual plan. More accurate cost of maintenance are done across industry by investing in software’s and tools that analysis the equipment history of operation, working hours, materials and spares consumed till date, the quality of spares and materials and their effect on equipment operation, past intermittent breakdown and frequency. The criteria for accuracy or approximate cost of maintenance calculation is derived based on the final productivity cost and the percentage of maintenance cost which goes into it.
Across industries various tools give a near exact estimate for an annual maintenance budget. SAP PM gives historical prices of materials, spares, labour services to arrive at the cost and CMMS are also used widely across industries to plan for the maintenance cost.

Issue of having unpredictable breakdown
Breakdowns as it sounds itself is an unpredictable occurrence if no strategy planned to avoid breakdowns. So, is it avoidable? Yes, with proper maintenance planning it can be done. But there’s always a probability of an occurrence. And when it occurs then arises the case of sword of Damocles hanging over your head. It’s a serious situation for anybody to be caught in an unpredictable breakdown. 
There can be various reasons for an unpredicted breakdown. It could be due to:
  • Lack of proper maintenance - Regular preventive/planned maintenance are ignored resulting in wear and tear of equipment. The maintenance part can be taken care of by following different types of maintenance procedures like, preventive maintenance and condition monitoring. 
  • Equipment not suitable for the process - To optimise cost equipment’s may be overloaded or used for process that it is not designed.   Equipment designed and suitable for that process only will minimise failures.
  • Operator errors  - not trained on the equipment or have read the operation manuals. Due to the operator’s error equipment limitations and capabilities are overlooked causing unwanted breakdowns. Operator errors can be eliminated by proper trainings and discipline in usage of equipment.
  • End of life of particular parts of the equipment - All equipment’s are designed with safety systems and warnings for the parts. Not following these recommendations over a long period of operation leads to abrupt failure of parts and causing breakdown. Adequate inspection, monitoring can minimise the critical parts failure.
  • External factors - such as interruption in power supply to equipment or a labour strike or equipment’s that are in the open environment are exposed to rain, dust, harsh weather can fail.
All these possible causes that lead to the breakdown and stoppage of machinery have serious and expensive effects on the cost of maintenance and therefore on the cost of non-production.
Below we list the most evident negative effects caused by unpredictable breakdowns:
  • At the instant of breakdown not in a position to take immediate action depending on the nature or level of breakdown
  • The production process in manufacturing industry is affected
  • Chances of safety issues to personal and other equipments around
  • In continuous running process industry, there is manufacturing waste created due to break in the process caused to quality issues
  • Cost of procuring spares that have failed will be high 
  • Finding the root cause for the unpredicted breakdown will be a difficult task, which will also impact the breakdown maintenance or corrective maintenance job to get back the equipment to operation.
The cost of production loss and the cost to bring the system back to operation cannot be calculated with a standard formula due to the various elements involved for an unpredicted unplanned breakdown. The unpredictable breakdown has a bearing on additional maintenance cost of spares, material, resources and equipment down time. This impacts revenue, production loss thereby customer relation. Industry following a Just in Time system will be the most effected due to unpredictable breakdown.
Planned Preventive and Predictive maintenance methods can effectively mitigate the occurrence of unpredicted breakdowns. Condition monitoring maintenance if done can predict the status of parts wear and tear, damages thus ensuring timely maintenance to avoid any unpredictive breakdowns. 

Run to failure strategy
Disadvantages of Run to failure strategy and the need to move away from this
Run to failure method has its own advantages and disadvantages. Whether this method is ideal or not can be decided by the operations requirement and the effect on production. Not on all occasions does a run to failure breakdown affect production or add to additional cost of breakdown. But to decide and determine if to continue with the RUN TO FAILURE requires analysis of the process or operation, effect on production, cost of breakdown.
For example, take the case of an inline bottling line and an offline bottling equipment. A breakdown in the final bottling equipment of an inline system will have drastic effect. Production has to be stopped; breakdown has to be resolved. The time taken to get back to production, effect on quality and its cost, spares, labour involved are additional cost. At the same time the offline bottling plant will have less breakdown cost and it’s not affecting the production line and hence that negative cost is removed. And if you have a redundant offline equipment the second equipment can be started instantly and bottling continued and hence saving in delivery time.
RUN TO FAILURE strategy is practised when the cost of maintenance planning and scheduling is higher compared to performing corrective action after failure. Even the run to failure strategy also requires planning. Planning for the actions when the breakdown occurs as otherwise the downtime will be high as there will be delay in arranging the failed spares, materials, arranging the right skilled labour all of which adds to cost. As for critical equipment’s this strategy is not suggested as to bring back to operation the downtime cost would be very high compared to planned maintenance.
If we look from an ideal point of best working and maintenance procedures in an industry the RUN TO FAILURE strategy is not recommended. With today automation and IIOT based technologies, RUN TO FAILURE strategy can be done away, thereby reducing the investment on redundant or offline equipment which in today’s perspective will be considered as work around technology. Advantages of doing away with RUN TO FAILURE is also increased productivity, reduced labour, spares, inventory. All of this results in reduced cost which can be utilised for planned or predictive maintenance. The RUN TO FAILURE method also has an inherent risk of operator injuries, equipment damages, fire & safety hazards.

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