Should one continue improving maintenance strategy or renew the asset? Which of these two choices is the most cost effective? We don’t want to spend money on improving maintenance strategy when efficiency and safety could be improved by renewing the asset – but then on the other hand, is it not more cost effective to improve the maintenance strategy to improve the reliability and availability of the present asset?
The choice between these two alternatives needs to be addressed jointly by Maintenance, Operations, Safety, Quality and Finance, to ensure a common vision, strategy and cost effective investment. The only way to take a sensible decision with regard to continuing with the existing asset or changing for a new one, and then choosing which new one, is to turn each of these aspects and considerations into $ values. And this where the concept of life cycle costing and whole like costing come in play. ‘Whole Life Costing’ and ‘Life Cycle Costing’ enable assets to be compared in order to choose the most cost effective long term investment. However, they do not address the ‘Optimal total life cycle costing’ and this is the areas and skills that maintenance managers should equip themselves with.
The Maintenance Manager normally has a number of projects that he wishes to motivate with the organization on an annual basis. They are modifications to plant and process, design changes, abnormal maintenance, major maintenance work etc. However, some of these projects may be paid for within the constraints of the maintenance budget, while others need to be motivated for additional expenditure. The latter projects need to join projects motivated by other departments such as Operations, Safety and Quality etc. Therefore, maintenance managers shall learn to compare and prioritize all projects to give the best payback or profitability to the organization.