BRUSSELS, Jan 1, 2015 (PPI Magazine) - Terotechnology, life cycle cost, asset management and reliability and maintenance management
The world I still call reliability and maintenance management has over the years been called many things. An old proverb says: "A loved child will be called many names". I am not so sure this is true for maintenance though.
I like to include the term "reliability" because I see the equipment reliability part as the major result of good maintenance management. Other results from good reliability and maintenance management include better safety, longer technical equipment life, less energy consumption and lower costs.
In addition to new names reliability and maintenance management is still mixed up by many other approaches and tools that all are very good, but when mixed up with the holistic reliability and maintenance management system it often leads to confusion. To limit this confusion it is very important to describe the holistic system and then explain where tools such as Reliability Centered Maintenance (RCM), Six Sigma, and the Computerized Maintenance Management System (CMMS). etc. fits in to support the execution of the holistic system.
Other concepts that are also good include Total Productive Maintenance (TPM) and Lean Maintenance. To me they are not much different than the holistic reliability and maintenance management system. For example, to become lean you just execute this system better and better and you will achieve lean maintenance.
Not much is new in how to manage reliability and maintenance since I started working in this field many, many years ago. The only thing that has changed is the focus on the consequences in safety and environmental and legal implications if we do not maintain assets.
The only thing I have seen change is the technology in predictive maintenance such as the use of computers and electronic media. We seem to continue to invent new concepts and names to describe the same things.
In the late 1960s, Dennis Parks, then manager at Eutectic Castolin introduced the term terotechnology and the term was later added to the British Encyclopedia.
The definition of terotechnology is the maintenance of assets in optimal manner. It is the combination of management, financial, engineering, and other practices applied to physical assets such as plant, machinery, equipment, buildings and structures in pursuit of economic life cycle costs.
It is concerned with the reliability and maintainability of physical assets and also takes into account the processes of installation, commissioning, operation, maintenance, modification, and replacement.
Decisions are influenced by feedback on design, performance and costs information throughout the life cycle of a project.
Life Cycle Cost (Lcc)
In 1978 Benjamin S. Blanchard published the book: Design, and manage to life cycle cost. It made the term Life Cycle Cost (LCC) popular and that is the term I have always used in my teachings.
In short LCC is defined as the total cost of ownership over the life of an asset.
Today we talk about asset management which is broadly defined as it refers to any system that monitors and maintains things of value to an entity or group. It may apply to both tangible assets such as buildings and to intangible concepts such as intellectual property and goodwill. Asset management is a systematic process of deploying, operating, maintaining, upgrading, and disposing of assets cost-effectively.
The term is most commonly used in the financial world to describe people and companies that manage investments on behalf of others. These include, for example, investment managers that manage the assets of a pension fund.
Alternative views of asset management in the engineering environment are: the practice of managing assets to achieve the greatest return (particularly useful for productive assets such as plant and equipment), and the process of monitoring and maintaining facilities systems, with the objective of providing the best possible service to users (appropriate for public infrastructure assets).
As the term relates to maintenance I think it is important to clarify and call it physical asset management as it is described in the previous section.
Today we have ISO 55000 as a standard for Physical Asset Management. Hopefully that will stop the confusion.
Figure 1 summarizes the concepts of Terotechnology, Life Cycle Cost, Asset Management or whatever you like to call it.
Fig. 1 - Terotechnology - Life Cycle Cost - Asset Management
As a rule of thumb, when you have spent about 50% of the time in the design, specification phase of a project you have locked in about 85% of future life cycle cost (LCC) for a piece of equipment. LCC includes operating and maintaining as well as energy, keeping spare parts and to dispose equipment. To make a change in design in the late phase of the design/specification phase will cost 10 times more than if you had thought of this change from the beginning. If you already signed a contract to proceed it will cost about 100 times more to make a change. After equipment has been operating a number of years the cost to modify can be 1,000 times higher.
This relates not only to technical changes, another example can be a bill of material. If requested and received with the original manufacturers definitions of parts and material in the first phase it would cost very little compared to documenting this information for old equipment.
Operational as well as reliability and maintainability designs must be included very early in the LCC phases.
In my opinion this concept can only be justified for long-term investments where we can expect use of a long technical life of equipment.
The major problem is how we reward project managers with on time and under budget. Any problems taken with this reward system will show up much later in the manufacturing and maintenance budgets.
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