Reliability centered maintenance cost modeling: Lost opportunity cost

Maintenance is the most expensive aspect in the sustainment of a system. All maintenance approaches can be classified under two basic approaches: reactive and proactive maintenance. Which one provides the greatest benefit to the organization? Neither plan will completely eliminate downtime, but proactive maintenance will help minimize it. When management sees the large initial investment required to implement a proactive maintenance plan, it often deters them from making a change because they are concerned with the current year's bottom line. However, a large initial investment is required to implement a successful proactive maintenance plan due to strategic planning and equipment needed to detect condition indicators. Reactive maintenance does not have the large upfront costs, because it does not require a system to monitor the failure modes and mechanisms acting upon the part. Reactive maintenance restores system functionality, while proactive maintenance preserves system functionality. Proactive maintenance can be called many different names. One such proactive maintenance approach is predictive maintenance. It uses statistics to determine the optimal time interval to replace parts to prevent the system from going into a down state. This statistics based approach works for equipment that have well-defined operating conditions so time can be correlated with part failure and is the Time Directed Maintenance (TDM) path of Reliability Centered Maintenance (RCM) [1]. RCM can also lead to the implementation of Condition Based Maintenance (CBM), where condition indicators are used to measure an indicator of the consumed life of a component. To be considered proactive maintenance, one must take measures to be being proactive with how maintenance is being utilized. Proactive and reactive maintenance plans experience the same costs for spares, labor rates for employees, and overhead. The plans begin to differ with the amount of time required to perform the maintenance tasks. A reactive maintenance plan must wait its turn for the maintenance action to be performed. When the system is not in operations the organization incurs lost opportunity costs. Proactive maintenance minimizes the amount of overall downtime a system incurs for a maintenance event. This is due to scheduling of maintenance events to ensure that the right people, tools, facilities and parts are available to quickly perform the maintenance action. The reactive maintenance approach waits for system failure before addressing the issue. This method incurs lengthy downtime because nothing is scheduled causing one to wait until the correct people, parts, tools and facilities become available to perform the repairs. Maximizing profits is key to the cash flow of an organization. When comparing the two alternatives the lost opportunity cost must be included in the cost analysis to get a better understanding of the different approaches to maintenance. This allows management and engineers to determine the optimal maintenance plan to implement for their system. The costs for proactive maintenance are expensive, but the savings it provides makes it a worthwhile investment much sooner if lost opportunity is included in the analysis.