Cost Benefit Analysis for Asset Health Management Technology

Abstract

Individuals who work in the field of prognostics and health management (PHM) technology have come to understand that PHM can provide the ability to effectively manage the operation, maintenance and logistic support of individual assets or groups of assets through the availability of regularly updated and detailed health information. Naturally, prospective customers of PHM technology ask, 'how will the implementation of PHM benefit my organization?' Typically, the response by individuals in the field is, 'anecdotal evidence indicates that PHM decreases maintenance costs, increases operational availability and improves safety'. This information helps the prospective customer understand the practical benefits of the technology but that customer stills needs more information to justify their investment into the technology. The information that is most useful to the customer is a calculated return on investment (ROI) figure for their particular asset that provides financial assessment of the benefit of the investment. The purpose of this paper is to show the advantages of using trade space analysis software to conduct a cost benefit analysis (CBA) for the implementation of PHM technology. The trade space software was designed to graphically display the results of multi-variant problems in a 3-D space made up of discrete solutions. This format provides the ability to evaluate many variables simultaneously, which facilitates data analysis and the ability to detect trends and complex relationships between multiple parameters. Using this tool, we can examine the correlations between several PHM variables including: technology cost, component failure rate, and logistic delay time and their effect on ROI. A CBA model was developed for estimating the benefits of implementing battery prognostics on military ground combat vehicles which was then analyzed using the trade space tool