We set up several systems for General Motors in the US and we all had to go through the business plan and cost savings route.
The bottom line is that you have to show that application of PdM in your organization can save money by achieving one or more of the following:
1) Reduce unplanned downtime by avoiding unforseen failures.
2) Significantly reduce repair costs.
3) Reduce maintenance & production manpower costs.
To go through points one at a time:
1 - The major cash gain to most industries is avoiding unplanned production outages. Find out the cost to lost production on major lines per hour. Then estimate how much down time you can avoid. Multiply one by the other and extrapolate it for one year and you will probably be shocked and amazed by just how much you really can save.
2 - Go back through your records and look at the major nmachinery crashes you had last year. Go to the industrial engineers and try to get a cash value of how much each one cost in terms of replacement/refurbishment. Then estimate how many of these you could have avoided if you had been doing PdM properly. Convert this into a cash sum. Don't forget to deduct the likely cost if you HAD found the problem. An example would be a motor bearing failure. If left to deteriorate the bearings would have collapsed and the rotor may well have fallen into the stator needaing a complete rewind or a new motor. If you had found it you would only have had to pay for new bearings.
3 - Some people don't like to do this one for obvious and political reasons. If you want to go ahead with this one, you need to estimate just how much extra manpower (including overtime) was spent on last years failures and use that as a direct cost. From your calcs in 1 and 2 (above) then figure out how much of that extra manpower would NOT have been used if you had been doing PdM properly.
It is important that in your business case you do not overstate what PdM can do for your company. We tend to make a PFA (potential failure analysis) for each machine type that we analyze. In the PFA we critically examine all the potential failure modes and show how we can predict that failure using various PdM techniques. This way you show the bean counters that you are working within achievable boundaries. How many sales men have come to your plant and told you "Sure - our equipment is the best there is and it will make you the best PdM system in the world!!!" without giving you any clear guidelines on how to do the politics.
As a rough guide, you should look at your first years budget being about 10% to 25% of the savings estimate you made in 1 2 and 3 above. This should include manpower costs for the PdM team, equipment purchase and external engineeering support. If it's going to cost you much more than that it might not be worth the effort.
We took joint first at the P/PM System of the Year for a system we set up for "a major auto manufacturer" in the mid-west. In the first year we made over $4,000,000 in cost avoidance and had a budget of just under $500,000. That was a large plant and we set up vibration analysis, thermography, ultrasound and motor current analysis.
If you need more detailed information let me know.
Good luck
Ron Frend
ron.frend@predicon.net
