Page 296 - Improving Machinery Reliability

L$e Cycle Cost Studies 267

Figure 5-1. INPRO RMS-700 magnetic seal.

[ + (ir (-!) + (i)’r, years.
+
2.93
or
The monetary value of this improvement could again be determined from a life
cycle cost computation, or it could be stipulated in even simpler terms as a benefit-
to-cost calculation.

Benefit-to-Cost Calculations

Perhaps the oldest form of cost justification practiced on a wide scale consists of
comparing the cost of an upgrade option with the direct yearly value of maintenance
cost avoidance. If we assume that a particular upgrade option, say a set of magnetic
bearing housing seals, would cost us $800 and result in shifting the pump MTBF
from previously 2.1 1 years to now 2.93 years, and assuming further that a pump
repair costs $7.000 by the time materials, labor, overhead, benefits, spare parts pro-
curement, shop supervision, planning, vibration monitoring, and reliability engineer-
ing involvement have all been factored in, our yearly pump repair cost will have
dropped from $3.3 I8 ($7.OO0/2.11) to $2,389 ($7,000/2.93). The ensuing cost sav-
ings of $929/year will go on for years, while the one-time outlay of $800 will have a
payback of (800B29) 12. or 10.3 months. There is a very important additional bene-
fit to the systematic extension of equipment life that we have not even considered.
Instead of getting bogged down in frequent breakdown maintenance tasks, reliability
engineers will be able to devote their attention to other reliability improvement
opportunities, making money for their employer.

Making Better Use of Published Failure Data
More often than we might think. there have been and will continue to be pub-
lished, important reliability-related data that we could apply in cost justification and
projected life cycle cost studies for our own plant.