Abstract
The paper proposes a model for the life cycle of physical assets that includes the maintenance policy, because it has direct implications on the equipment’s Return On Investment (ROI) and Life Cycle Cost; the developed model can be applied to any type of physical asset. The model is called Life Cycle Investment (LCI) instead of the traditional Life Cycle Cost (LCC). The paper proposes a new methodology based on the modified economic life cycle and lifespan methods by including the maintenance policy using maintenance Key Performance Indicators (KPI), namely Availability, based on the Mean Time Between Failures (MTBF) and the Mean Time To Repair (MTTR). The benefits (profits) that result from the asset’s Availability must be balanced with the initial investment and the variable maintenance investment along its life, which has relation with the maintenance policy and the ROI.
Highlights
IntroductionWith the accelerated growth of the implementation of ISO5500X standards, as well as the maintenance norms, the importance of analysing carefully the asset’s life cycle becomes a very relevant issue
This paper presents a global approach to the life cycle of physical assets structured in two parts: The first one analyses the management of assets’ global life cycle, from acquisition to withdrawal, usually called Life Cycle Cost (LCC); The second presents a new approach to assets’ financial life cycle, based on econometric models, called Life Cycle Investment (LCI)
The author shows the relations between the life cycle of physical assets, ISO 5500X standards (55000, 55001, 55002) and some maintenance standards, for example, NP4492 and others associated norms [9]
Summary
With the accelerated growth of the implementation of ISO5500X standards, as well as the maintenance norms, the importance of analysing carefully the asset’s life cycle becomes a very relevant issue. About this subject Farinha [9] presents an integrated approach of physical asset management emphasizing tools to manage the entire life cycle, comprising the following times and steps: t1 - Decision for acquisition; t2 - Terms of reference; t3 - Market consultation; t4 – Acquisition; t5 – Commissioning; t6 - Starting production / starting maintenance; t7 - Economic / lifespan; t8 - Renewal / withdrawal.
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