Abstract

In the context of production machinery, references to

"asset management" are quite frequent in the literature. Although there appears to be no precise definition, the term generally refers to maximizing the economic performance of the machinery. By implication, design, operation, maintenance and even revamps should be executed so as to maximize the lifetime profit.

This paper attempts to clarify the concept of machinery asset management through discussion, illustrations and examples involving reciprocating compressors.

At the design stage, it is important to use a life cycle cost approach rather than a lowest initial cost approach. Cost factors should include opportunity cost. Reducing opportunity cost is discussed in terms of risk management at the design stage.

During the running life, asset management involves much more than simply implementing a predictive maintenance program. However, machinery condition monitoring and predictive maintenance programs play a key part.

The role of condition monitoring is to develop the measures that are required for best profit driven decisions and actions. Required are quantitative measures of attributes such as capacity utilization, efficiency and mechanical condition. To the degree practical, these measures need to be extended to the cost of any deviations from baseline or optimum performance.

Introduction

References to " asset management" in the context of production machinery are now quite frequent in the literature. The Society for Maintenance &Reliability Professionals (1) even proposes a " physical asset management" profession. There does not appear to be a precise definition, but the term generally refers to maximizing the economic performance of machinery over its lifetime.

According to Bradley Peterson (2,3) we are not referring to "fixing the maintenance function" or to "starting a reliability program". In fact, he claims that attempts to improve maintenance alone are seldom worth the efforts involved.

For purposes of this paper we will take asset management to mean selecting, designing, commissioning, operating, maintaining and revamping with the objective of making as much money as possible over the life of the machine. We will discuss certain aspects of this challenge using some real examples and illustrations involving reciprocating compressors, but the principles apply broadly.

It is important to emphasize that asset management is profit driven. The traditional approach to asset maintenance is cost driven; adhere to some rather arbitrary budget or else!

EQUIPMENT SELECTION

Asset management should start with equipment specification and selection. Generally there appears to be too much emphasis on initial equipment cost. Some attempt should be made to specify and select equipment that will deliver lowest life cycle cost, not just lowest initial cost.

A study of life cycle cost components was presented by Duggan and Locke (4); their results are summarized in Table 1. Note that in both cases the initial cost is a small factor and that energy costs are by far the major component. In addition to the cost factors in Table 1, they point out that " opportunity cost" can be the largest cost of all; see Figure 1. This is the cost or, more accurately, lost revenue, associated with lost production.

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