The value of RCM

This article looks at the value of RCM and introduces the Value Quadrant. This approach to measuring, communicating and representing the value of reliability initiatives has been used throughout the world and is part of Daryl Mather’s new book.

By Daryl Mather

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As a cornerstone of the maintenance discipline, reliability-centered maintenance (RCM) can achieve benefits in a vast number of areas depending on where and how it is applied.

When properly implemented, RCM provides companies with a tool for achieving lowest asset Net Present Costs (NPC) for a given level of performance and risk.

This implies a cashable effect across a multitude of economic activities, covering both OPEX1 and CAPEX2 .

However, RCM will also provide companies with a range of non-cashable advantages that will have a positive effect throughout the enterprise.

This document contains a brief list of potential areas of benefit only, and not the entire range of potential uses of RCM. Along with these areas, the author has previously used RCM for

  • Capital submissions in regulated industries
  • To reduce the risk of legal ramifications in management of environmental integrity
  • To establish a tool for contract negotiations related to outsourced maintenance
  • To reduce of a company's carbon footprint
  • As a means of developing troubleshooting guides

The information in this module is to alleviate some of the benefit anxiety that often surfaces in the early implementation stages of large-scale RCM projects, and to provide guidelines for trainee RCM analysts.

The cashable results of RCM

Direct cashable benefits from implementing RCM can emerge in every area where maintenance and operations have an effect.

This can include such disparate areas as increased uptime, decreasing energy usage, reductions in chemical utilization or reductions in inventory holdings and routine maintenance spending.

Instead of trying to cover all the potential areas where the method can deliver financial results, this section will focus more on how RCM influences the profits and losses of an enterprise.

This is evident in two principal areas:

  • Increases in potential revenue
  • Direct cost reductions

Direct cost reductions

The main, noticeable result of RCM is a dramatic change to the maintenance regimes that are in place.

John Moubray, a pioneer in this field until his recent passing, regularly stated that RCM would achieve “a reduction of between 20% and 70% in routine maintenance where there is an existing scheduled maintenance program.”

Based on the experience of the author, this leads primarily to an increased level of cost-effectiveness of maintenance, particularly in industries that are very asset intensive.3

The team is able to claim benefits in these areas where there is a calculable reduction in the cost of labor, materials or consumables to perform maintenance4 during a reasonable amount of time (usually a year).

Logically, these are only potential benefits at the completion of the analysis, because it will take until the first omitted routine, or the first breakdown requiring reduced resources, before savings begin to accrue.

However, once implemented, they can easily be counted through direct calculation. For this to be accurate, there is a need to quantify both the routine maintenance costs as well as the corrective maintenance costs.

There are some real-world limitations on attempting to forecast cost reductions purely through accumulated data.

The first issue the team can face is that current maintenance regimes often do not exist in the company’s ERP or CMMS program, or they group them at a high level.

Data losses, poor ERP management and distrust of technology means that experienced technicians often keep the knowledge of existing maintenance outside of corporate systems.

Further compounding the issue is the disparate way that maintenance routines are stored. At times, they are at an asset level, a maintainable item level, and still other times they can be at higher system or unit levels.

A second limitation is that on the occasions when RCM proposes a more rigorous policy, there is a tendency to overlook the change in reactive and corrective maintenance.i

Still, some direct cost-reduction cases are obvious and do not require a detailed activity analysis.

Every task in an RCM analysis must be both applicable, meaning it is physically possible to do the task, and effective, worthwhile doing in terms of cost and/or risk, before selection as an adequate failure-management strategy.

When maintenance is developed using an unstructured method, there are common errors that can occur.

1)  Ineffective Maintenance

One of the great misleading statistics in asset maintenance today is the calculation of the average life of bearings. This supports the outdated and almost mystical belief that there is a link between age and failure.

Based on this way of thinking, it is still common to find maintenance departments carrying out hard-time bearing replacement programs as a means of managing risk.

However, it has been the experience of the author that hard time bearing replacement policies can increase, rather than decrease, the likelihood of failure, while, at the same time, increasing direct maintenance costs.

This flies in the face of popular beliefs and is an example of how RCM thinking can drive reductions in routine maintenance levels.

The original Nowlan and Heap reportii specifically spoke about bearings when addressing failure in complex assets.

A complex item, as opposed to a simple item, is one that is subject to many failure modes. As a result, the failure processes might involve a dozen different stress and resistance considerations.

Even with complex items, failures related to age will concentrate about an average age for that mode. However, bearings have many failure modes.

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