Overview

It is almost self-evident that the entire subject of maximizing machinery uptime should start by asking what will be the cost of buying, installing, commissioning, operating, maintaining, and even ultimate disposing of the machine. While capital costs of new projects attract the most attention of management and vendors, we recognize that operating and maintenance (O&M) expenses are also recognized as significant. Unfortunately, evaluating the cost of running a plant on a common basis with the capital cost is difficult, so managers tend to give priority to the initial cost. Consequently, poor reliability and performance do not show up until the job is actually up and running.

Inexpensive systems are likely to have inferior materials, poor workmanship, and weaker designs. System designers frequently do not opt for redundant equipment because it is "too expensive," even though averted, lost production may pay for the initial cost many times over. Decisions based on a short-term outlook are ineffective for minimizing total long-term process and product expenses.

Today, shutting down a process costs tens of thousands of dollars for large plants. With predictive and preventive maintenance methods, processes are not shutdown as frequently often for years. Sometimes, even batch processes are not idle for periods long enough to perform maintenance.

Life-cycle costing is a promising evaluation tool that makes it possible to quantify the long-term outlook. We are defining life-cycle costs and describe current calculation methods. Since LCC is not just an issue for financial management, the following also provides a model...