Life Cycle Cost & Reliability For Process Equipment (Page 20 of 22) in pdf

One issue often hidden, but clearly identified in Figures 6 and 7, is the cost of electrical power to drive

the pump.

Power consumed is a direct result of work performed, energy lost in inefficient

motors/bearing, and energy lost in pump dynamics. Energy savings by use of high efficiency motors can

save 2-5% of the total power cost. Choosing high efficiency internals for the pumps can save another

5-10% of the total power cost. In short, purchase high efficiency motors and high efficiency pump

internals carefully matched to the task can achieve a short payback period. If pump internals were

selected for 80% pump efficiency rather than the 70% efficiency used for the calculations, the lower

power consumed would be US$16500*(70%/80%) = $14438 which results in a savings of US$2062

each year. The LCC point is this: examining cost reduction possibilities by use of cost details can be

productive for discovering real savings opportunities.

Step 10: Study risks of high cost items and occurrences.

Figures 6 and 7 show two out of three vital elements are associated with failures of seals and bearings

(remember the failure costs are driven by gross margin losses associated with the failures), while the

third item is the high cost of electrical power. The real issue here is to conserve NPV values but the old

nemesis of maintenance costs always raises its head.

One gnawing problem is: What are the costs if lost gross margins are not included so that true

maintenance costs are highlighted? Avoiding loss of gross margins is often accomplished by use of

redundant equipment. Setting gross margin losses to zero in Table 1 and Table 7, produces different

costs. Then lesser motivation exists for reducing the number of failures—thus fix when broken becomes

a very slightly better strategy as failures are not penalized by the loss of gross margin.

Step 11: Select preferred course of action using LCC.

Purchase pumping equipment which is electrical power efficient and correctly sized with high hydraulic

efficiency to make substantial reductions in electrical power consumption. The electrical costs are

usually a hidden cost item but clearly identified by LCC as a vital element. Use good maintenance

practices to reduce failure costs and to provide more reliable equipment.

SUMMARY

Life cycle costs include cradle-to-grave costs. LCC provides the tools to engineer maintenance budgets

and costs. When failure costs are included, the quantity of manpower required can be engineered which

avoids the use of antique rules of thumb about how maintenance budgets are established as a

percentage of installed capital.

LCC techniques provide methods to consider trade-off ideas with visualization techniques as described

above which are helpful for engineers. Likewise LCC analysis provides NPV techniques of importance

for financial organizations, and LCC details give both groups common ground for communication. With

LCC details the financial organizations can complete DCF calculations.

Each example described above can be made more accurate by using more complicated models. For

one example, in the Monte Carlo model, repair time can be changed from a fixed interval to a statistical

Life Cycle Cost & Reliability For Process Equipment Page 20