Financial Returns  
   
 

 
  Measuring cost reductions, revenue and performance improvements and extension of equipment life.

Finding the “Cost Opportunities”

Cost Opportunities” Approach

Evaluating the Cost/Benefit relationship of the PdM System begins with identifying all the “Cost Opportunities”, i.e. the costs that could be eliminated through the PdM System. Calculating and accumulating these costs are the basis for determining the Return on Investment (ROI).

Reduce Unscheduled Downtime – Improve Uptime

Unplanned incidents are reduced through the early warning indicators from the PdM System. Monitoring and trending the condition of the components and the lubricants reduces or eliminates unplanned failure events.

Reduce Materials and Workload

Changing workloads from calendar based to condition based reduces costs of materials, parts and labor for certain tasks, e.g. equipment overhauls, bearing replacements, oil changes, and frequency of bearing re-greasing.

Reduce Cost of Replacement Parts

Reducing or eliminating component failures through predictive analysis produces a high return on investment. e.g. Sensors and Lubrication indicators show problems leading to failure of bearings. By fixing the balance or lubrication problems at a minor cost, the major cost of a failed bearing set is saved.

Extend Life of Equipment and Components

The PdM System is designed to provide information to optimize the maintenance and extend the life of the equipment and the major components.

Soft Cost/Revenue Improvements

Increased uptime and improved performance of equipment creates an improvement in the market position enabling higher utilization and increased day rates. Improved maintenance practice can contribute to reduced insurance costs and improved safety.

Direct Reduction of Overall Maintenance Costs

The benefit of combining several Cost Opportunities will yield an overall reduction in total maintenance costs. The cost reductions may include: parts, materials, labor (direct, idle and potential workforce reduction), outside services, direct downtime costs, maintenance practice improvements, equipment performance improvements, life of equipment improvement, insurance and safety.

Calculating Return on Investment (ROI)

Calculating the total Return on Investment (ROI) and estimating payback of the PdM System is an ongoing process using the monetary values and financial methodologies established by the Driller’s accounting system. Many variables are used in measuring the cost/value relationship to the PdM System.

Projecting the Dollar Value of the Cost Opportunities

Financial values for the cost opportunities are established considering:
  • The cost of a day of non-productive charged time (downtime)
  • The costs of major equipment/parts replacement
  • The value of reduction in spare parts replacements
  • The cost of unnecessary maintenance actions
  • The value of reduced unplanned events
  • Average cost per work order – planned versus unplanned
  • Dollar value of each “cost opportunity” saved

TIdata’s Remote Condition System significantly extends the life of equipment, improves its performance, increases uptime, reduces maintenance costs and eliminates critical failures. It optimizes the use of valuable personnel, supports collaboration and shared expertise, and centralizes IT based information sharing.
 

 
   
 
 
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