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Article history:
Received 12 November 2008
Received in revised form
15 January 2009
Accepted 29 January 2009
Available online 14 February 2009
Traditionally, Pareto analysis has been used to select the most critical components and failure modes of
a system. A clear disadvantage of this technique is that it requires preselecting a single criterion to
establish priorities. More recently, a graphical log-scatter diagram technique has been proposed. It
considers three key performance indicators simultaneously: reliability (MTBF), maintainability (MTTR),
and unavailability (D). This technique considers only times and does not include economical effects
explicitly. This article extends both techniques to explicitly consider both direct and indirect costs to
prioritize from the point of view of an asset manager or from a maintenance decision-maker, as
required. Due to the economic-based approach of this article, cost discounting is also considered inside
nancial costs such asbut not limited toreliability-related investments. Also, the results are
displayed on simple and accessible graphs which make them particularly useful for conveying results to
non-technical managers. The methodology is illustrated by analyzing a shovel from the copper mine
industry, and it clearly shows how the proposed technique facilitates business oriented decisions and
how they should change under different market conditions.
& 2009 Elsevier Ltd. All rights reserved.
Keywords:
Prioritization
Physical asset management
Maintenance decision-making
Resource assignment
Criticality
Subset selection
Multicriteria analysis
1. Introduction
To meet the increasing challenges of current industrial reality,
organizations require to continuously enhance their capability to
add value and improve the cost-effectiveness of their decision
processes. The decision process includes the selection of those
systems and actions that may render the highest overall savings,
and then, their associated policy resolutions.
Decision making in physical asset management (PAM) is
generally focused on two levels: strategic and tactic. Strategic
level analysis is of greater interest because it involves: (i)
identifying and ranking of candidate systems for improvements;
(ii) system level budgeting and budget forecasts; (iii) system level
performance evaluation; (iv) forecast of future market and
operational conditions. The tactical level, on the other hand,
concerns more specic technical management decisions for the
individual projects. It includes: (i) assessing the causes of
deterioration and determining/selecting candidate solutions; (ii)
assessing benets of the alternatives by life-cycle costing; (iii)
selecting and designing the desired solutions. The prioritization
technique introduced in this work deals with both strategic and
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value of a KPI only from the most critical elements, i.e., Al-Hajj and
Horner [22] propose a predictive total cost model built only from
the costs of the most critical sub-systems. A problem with Pareto
is that it requires selecting a single classication criterion.
To overcome this, other classication schemes have been
proposed, i.e., risk priority numbers [23,24] and criticality
numbers [25]. Another example of this type of method is the
multicriteria classication of critical equipments proposed by
Gomez and Ruiz [26]. These schemes build polynomials that
assign a single classication number to each subsystem/failure
mode. Beehler [27] proposes a decision matrix which includes a
set of parameters to rank and select the most critical systems.
Labib [28] and Burhanuddin et al. [29] present a decision making
grid and a case study considering both frequency and downtime
as classication criteria. Knights [30] enhances the concept by
adding total downtime isoquantas to the diagram (also known as
JKD and further described below). As a result, we nd a 2D scatter
diagram that concerns three criteria simultaneously: frequency,
downtime, and unavailability. As it only contains time based
information, it is insensitive to economic effects on the business
cycle, something that is known to affect decision-making
priorities. In order to overcome that, we propose the CSD
methodology in the next section.
To be able to assess savings, a cost estimation process is
needed. Consequently, a cost structure is required. In this article
the global cost is used, as dened in Jourden et al. [25]. It is
composed of four terms: intervention costs, holding costs,
reliability related investments, and consequential costs. Intervention costs include the value of spares and labour. Holding costs
represent the nancial cost of having spares available on-site. The
reliability related investments term considers all acquisitions
made to attenuate the effect of maintenance (i.e., redundant
equipment, stock piles, and insurances). The nal term refers to
downtime costs and other costs associated with move from/to a
standard production method for maintenance reasons (Fig. 1).
1.3. Jack knife diagrams
The total downtime MDT j of a system during a given period of
time T, due to an intervention code (or code), is the product of the
number of times nj that this code occurred and the mean time out
of service MTOSj the system:
MDT j T nj T MTOSj T
(1)
Intervention
costs
Holding
costs
Reliability related
investments
Penalty
costs
Fig. 1. Components of the global cost.
(2)
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(3)
(4)
0.2
the line of D 1%. Any code above that line eats more than 1% of
the system availability.
We observe that, in general, codes related to preventive
maintenance affect the position of corrective codes. If this is not
occurring, the preventive action is not being technically effective.
Let us take for example the inspection of a hose of a shovel. If is
not done well or with enough frequency, the failure rate of this
component will probably increase.
A modied version of the JKD is proposed in Karim et al. [31].
In their case, the axes variables are number of defects and cost of
defects in a setting of evaluating construction contractors
performance.
0.18
0.16
Unavailability
0.14
cg
0.12
n
X
ci;j cf ;j csi;j ca;j f j MTOSj
(5)
j1
0.1
cg
0.08
n
X
cgj Dj
(6)
j1
0.06
0.04
0.02
0
1 2 11 3 10 7 12 8 5 15 6 9 4 17 14 16 13
Code
Fig. 2. Pareto analysis for unavailability, taken from the case study. Individual and
aggregate contributions are shown.
where MTOSj is the mean downtime associated to each intervention j, f j corresponds to the frequency of intervention j, ci;j is the
direct cost per unit time of intervention j (spares, labour,
mobilization, planning, and administration), cf ;j corresponds to
the downtime cost per unit time, ca;j is the holding cost due to
spares and its amortizations per unit time, csi;j stands for the cost
for having redundancies and other reliability-related investments,
per unit time.
Notice that there are two terms that acknowledge investments,
ca;j and csi;j . Each of these terms, in order to be considered in one
Table 1
Model parameters.
ID
Description
Qty.
Duration (min)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Electrical inspections
Damaged feeder cable
Change of substation
Coupling repairs or checks
Power cuts to substations
Rope limit protection
Auxiliary motors
Main motors
Lighting system
Overload relay
Motor over temperature
Earth faults
Miscellaneous
Control system
Air compressor
Operator controls
Over current faults
30
15
27
15
21
10
13
12
26
23
36
7
9
7
8
5
6
1015
785
690
225
395
277
600
555
240
685
745
575
115
165
355
155
220
80
300
50
500
40
50
300
400
500
2000
800
50
100
600
700
200
400
0
0
1
0
1
1
1
1
1
1
1
1
1
1
1
1
1
5.5
300
15
7
1.8
1.5
35
80
4
70
1
5
12
23
1
8
3
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R. Pascual et al. / Reliability Engineering and System Safety 94 (2009) 13081313
(7)
where C ij is the mean cost charged for the work order or invoice.
The consequential cost per unit time out of service is expressed as
cfj acf
(8)
10
104
12
11
8 2
7
15
14 6
17
16
5
13
103
4
13
102
100.1
(h
r-o
ut-
0.05
MT
OS
ou
of-
se
rvi
r)
/hou
y (1
ce
10-0.8
nc
que
Fre
0.007
Fig. 3. Cost scatter diagram. 3D version. Points marked with a cross are the most
critical for the global cost.
Let us observe in Eqs. (7) and (8) that JKD and CSD produce the
same results when
acf bci
such situation arises often in the mining industry as the
opportunity costs per unit time are large and no alternative
production method is available: high unavailability means high
global cost.
3. Case study
Table 1 is taken from Knights [30] and lists the unplanned
downtime recorded for electrical failures in a eet of cable shovels
at an open pit copper mine located in northern Chile, over a onemonth period. The cost terms have been added and do not
represent the actual case.
The JKD is shown in Fig. 4(a). The ve most critical
interventions when using the availability criterion are the
following codes: 1, 2, 3, 10, and 11. Fig. 3 shows the 3D version
of the CSD (Eq. (5)). It has been simplied to its 2D version
(Eq. (6)) in Fig. 6(a). There, it can be observed that the intervention
codes most critical for the business are: 2, 7, 8, 10, 11, and 12
(highlighted in both gures). This information can be added to a
standard JKD in order to study the effect of the global cost in the
selection of the most critical components (Fig. 4(b)): it can be
noticed that codes 1 and 3 are important for the availability of the
system, but, they are not as critical for the business, so their
analysis can be postponed in front of components 7 and 2 which
are more critical for the global cost.
The analysis can also be made using only intervention costs
(Fig. 5). In this case the most critical codes are: 4, 9, 10, and 11. Of
course, this approach would leave in a second plane various
components which are critical for the business and not so much
for the maintenance budget. Anyway, this version of CSD can be
very helpful for service-oriented organizations.
Fig. 6(b) shows the inuence of changes in the business cycle.
The product has reduced its price by 75% with respect to the
reference value. Points move to the left as the global cost has been
reduced, depending on the a factor for each intervention.
Fig. 7 shows a sensitivity analysis W.R.T. a. The a values
have been evaluated in the range 0; 1. Accordingly, it generates
lines instead of points in the CSD. They show the impact of
moving from fully opportunistic interventions to fully unplanned
(and without contingency plan) interventions. This information
provides new insight for prioritization. It can be taken as a version
of a Tornado diagram [33].
12
Feeder
Cable 2
Iso 8 7
-u
na
va
ila
bil
ity
6
15
17
16
10-0.4
=2
.3%
Inspections
1
10
3
14
11
10-0.6
4
13
10-0.8
0.007
0.05
Frequency (1/hour)
MTOS (hour-out-of-service)
MTOS (hour-out-of-service)
12
100
10-0.2
1311
100
2
8 7
15
10-0.2
17
16
10
10-0.4
14
11
10-0.6
4
13
10-0.8
0.007
0.05
Frequency (1/hour)
Fig. 4. Jack knife diagrams. Cutting axes have been drawn in the mean value of each criterion. Notice that the enriched JKD corresponds to a special case of Fig. 3 when it is
observed above. Points marked with a cross are the most critical for the global cost. (a) Standard JKD. (b) Enriched JKD.
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10-1
1
Unavailability
2 11
10
127 8
3
10-2
5 15
6
17 9
16 14
13
10-3
102
103
104
Specific global cost (USD/hour-out-of-service)
105
10-1
10-1
64
8'
(U
SD
10
7 8
12
10-2
11
Unavailability
r)
15
17
11'
2'
7'
10-2
10'
14
16
13
10-3
101
10-3
102
103
Intervention Cost (USD/hour-out-of-service)
104
102
103
104
10-1
10-1
15
10
(U
SD
24
/h
r)
(U
SD
/h
r)
10-2
11
12 7 8
5
10
15
6
4
(U
SD
/h
r)
(U
SD
17
Unavailability
49
Unavailability
Unavailability
/h
1
3
/h
r)
12
10-2
11
8
10
15
17 4
16 14
13
10-3
102
103
104
Specific global cost (USD/hour-out-of-service)
14
16
13
10-3 2
10
103
Specific global cost (USD/hour-out-of-service)
Fig. 6. 2D-CSD for different market conditions. (a) Reference consequential cost. (b) 25% of reference consequential cost.
104
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R. Pascual et al. / Reliability Engineering and System Safety 94 (2009) 13081313
Acknowledgements
Thanks are due to the reviewers of the paper for their
constructive criticism, which were useful to improve an earlier
version of this manuscript. The authors wish to acknowledge the
partial nancial support of this study by the FOndo Nacional de
DEsarrollo Cientico Y Tecnologico (FONDECYT) of the Chilean
government (project 1090079).
References
[1] Karydas DM, Gifun JF. A method for the efcient prioritization of
infrastructure renewal projects. Reliability Engineering and System Safety
2006;91:8499.
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