Cost Justification: Repair or replace??

The ideal time to replace equipment is right before it enters into that period of irreversible decline. But up until now, no one had any good way of identifying exactly when that window of opportunity would occur.

Researchers at the University of Arkansas hope to change that by developing new techniques for modeling the reliability of materials handling systems.

"Most production equipment such as lift trucks are repairable, but few users track the failure patterns and even fewer use analysis methods best suited for repairable systems," explains Dr. Tom Landers, director of the University's Logistics Institute and head of the research effort.

Time-to-failure models are sometimes used to judge the reliability of equipment and the effectiveness of repair and maintenance activities. However, these methods rarely account for the wearout pattern typical of repairable equipment.

Some users monitor maintenance costs, but cost increases can be due to equipment wearout, economic inflation, or both. Landers suggests that the best approach is to consider the failure and maintenance cost trends together.

By analyzing the maintenance history of approximately 100 lift trucks in a variety of applications, Landers' team has gained a better understanding of equipment wear patterns and how they affect equipment life.

The researchers stress the importance of keeping good records. Landers' colleague, Dr. John English, says that users should record the date, hour meter reading, and corrective maintenance action for every failure.

"With the fleets we've analyzed, a lot of early life failure data was missing and we had to develop models that compensate for the missing data," says English. "If you change record systems, try to carry forward all the data from the old systems."

The next step for the researchers is to combine their results with cost models so that economics can be included in the repair/replace decision.

That should be good news for operating personnel. Forced to deal with the frustrations associated with aging equipment, they often have trouble convincing management to spend the money to replace it.

"The fact is that managers don't base their decisions on anecdotal information," notes Landers. "So our goal is to create a simple tool that presents objective infor- mation in a graphical form. When it comes to justifying a new system, showing someone a curve and pointing to where they are on it is a great sales tool."

August 1, 1996 Modern Materials Handling