Page 73 - An Introduction To Predictive Maintenance

Benefits of Predictive Maintenance 63

including fringe benefits, overhead, taxes, and other nonpayroll costs—of labor varies
depending on the location and type of plant. For example, the annual cost of an entry-
level predictive analyst in a Chicago steel mill is about $70,000 per employee. The
same analyst in a small food processing plant located in the South may be as low as
$30,000.

In the survey, the full range of predictive maintenance program costs varied from
a low of $72,318 to a high of almost $4 million ($3.98 million) and included plants
with total maintenance budgets from less than $100,000 to more than $100 million
annually. This range of costs is to be expected because the survey included a variety
of industries, ranging from food and kindred products that would tend to have fewer
personnel assigned to predictive maintenance to large, integrated process plants
that require substantially more personnel.

The real message this measurement provides is that the recurring cost associated with
data collection and analyses of a predictive maintenance program can be substantial
and that the savings or improvements generated by the program must, at a minimum,
offset these costs.

Contract Predictive Maintenance Costs
The survey indicates that most programs use a combination of in-house and contract
personnel to sustain their predictive maintenance program. A series of questions
designed to quantify the use of outside contractors was included in the survey and
provided the following results.

The average plant spends $386,500 each year for contract predictive maintenance
services. Obviously, the actual expenditure varies with size and management com-
mitment of each individual plant. According to the survey, annual expenditures
ranged from nothing to more than $1 million. The types of contract services include
the following:

Vibration Monitoring. The results of our survey shows that 67.4 percent of the vibra-
tion monitoring programs are staffed with in-house personnel, and an additional 10.4
percent use a combination of plant personnel and outside contractors. The remaining
22.2 percent of these programs are outsourced to contract vibration-monitoring
vendors.

In part, the decision to outsource may be justified. In smaller plants the labor require-
ments for a full-plant predictive maintenance program may not be enough to warrant
a full-time, in-house analyst. In this situation outsourcing is often a viable option.
Other plants that can justify full-time, in-house personnel elect to use outside con-
tractors in the belief that a cost saving is gained by this approach. Although the plant
can eliminate the burden, such as retirement benefits, taxes, and overhead, associated
with in-house labor, this approach is questionable. If the contractual agreement with
the vendor guarantees the same quality, commitment, and continuity that is typical of