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This Life Cycle Asset Management article series introduces and discusses life cycle asset management strategies, systems and processes for optimizing operating asset economics, reliability, performance, and return on investment.
Life Cycle Asset Management, Enterprise Asset Management (EAM), Engineering Asset Management, and Physical Asset Management (and their linguistic variations) are considered to be synonymous names. Life Cycle Asset Management is used to title this series, as it has the correct connotation of what is intended when the applicable strategies are adopted by organisations.
‘ISO 55001 Asset Management – Management systems – Requirements’ is an international standard for certification of life cycle asset management systems and posts about the ISO 55000 asset management suite of documents are included in this series.
The purpose of this Life Cycle Asset Management series is to provide reputed, useful content that brings value and improves asset performance when used in operations and organisations.
The Life Cycle Asset Management series of articles are provided with permission of Plant Wellness Way EAM and Lifetime Reliability Solutions.
NOTE: The series does not include coverage of related commercial or vendor software or database management applications.
Adopting the business strategy of intentionally tightening process and work quality standards will drive operating profits higher. You get most operating profits when process and work quality variables are sitting on their optimal cost points. The Taguchi Loss Functions of your operation show the connection between your operating costs and your process and work quality.
Keywords: Taguchi Loss Function, quality verses cost, Quality Cost Function
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Companies end rat-race problems fast and get world class reliability by using the simple Plant Wellness Way EAM methodology to slash operational risk and make your plant and equipment world class reliable
How to get a Plant Wellness Way EAM system-of-reliability that ends your Production and Maintenance rat race is shown in the image below. It’s a simple strategy and plan for building a truly effective life cycle asset management system that purposely replaces old production and maintenance rat-race causing systems.
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When calculating the replacement asset value fo items brought overseas, factor the effect of the difference in exchange rate into the calculation.
[Read more…]Ahmed asks:
How can we calculate replacement asset value (RAV) of a plant? We have 100’s of equipment in our three plants and we cannot contact 100’s of Vendors to tell us today’s equipment value. We have only the Capitalization Cost or installed historic value of assets.
The oldest plant was installed 6 yrs back (Aug 2015) for a total plant or asset value in our accounting record of 10 MMPKR. When the plant was installed 1 USD = 100 PKR and now after 6 yrs the exchange rate is 1 USD = 172 PKR. We took the capitalization cost of 10 MMPKR and calculated replacement asset value at today’s worth as 10 * 172/100 MMPKR.
The Plant and Equipment Wellness Way lets organizations make their operating assets world class reliable so they can enjoy operational excellence success. A Plant Wellness Way EAM System- of-Reliability puts the reliability processes, skills, paradigm, and culture into companies that creates world class reliability and operational excellence.
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Written by Mike Sondalini as a memo to his younger self, the content has been adapted into an article format. Given the depth of detailed information contained, this article is better considered a technical document. It summarizes Mike’s key learnings from decades of research, consulting, and training in the Plant Wellness Way EAM methodology.
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The prime role of Maintenance is to reduce operating risk. Maintenance serves a business well when its use leads to lower production costs than using other choices that could have been taken. Too many managers think that they must maintain plant and equipment. Maybe you do and maybe you don’t. Maintenance is expensive and, as far as it is safe, use less costly answers. But if you do choose to do maintenance, then you ought to pick an operation’s maintenance strategy mix based totally on its effectiveness in delivering the least operating costs for the least maintenance cost.
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Making great choices that get world class reliability for your company is what you do with Plant Wellness Way Enterprise Asset Management methodology.