Building a Zero Based Budget Using RCM Strategies

This morning I received and email with a link to a white-paper on building a budget using RCM strategies. I am familiar with the company. ARMS Reliability Engineers, LLC and have seen a demonstration of their software.

While I found their software to be extremely detailed (in a good way), the detail doesn't seem to offer much benefit for our industry because the water/wastewater industry has so much redundancy.

However, the outline laid out in the paper
is an excellent summary of the approach I would take to doing an RCM based budget:

1.) Develop a system/function based hierarchy
2.) Review/update the Asset Register
2.) Rank criticality (not clearly identified in the paper, but part of RCM)
3.) Do the RCM/FMEA
4.) Identify the tasks to do PM.
5.) Run a simulation on the reliability impact of those tasks (monte carlo)
6.) Select the lowest life-cycle cost approach
7.) Budget for maintenance (parts and labor), repair/replacement(RR), and capital.

The ARMS software makes step 5 easy once you can select the expected failure frequency for an asset, but without the sophisticated Monte Carlo analysis, you can pretty simply look at the cost and frequency of doing your maintenance actions and compare them with the change in expected life and RR costs to develop a more direct assessment of the value of doing certain actions. The RCM II book by John Moubray outlines several ways of evaluating the required frequencies for PM actions.

If you are considering changing your PM strategy to improve reliability, this paper provides a good strategy outline. You can find it at: http://www.reliability.com.au/dynamicdata/data/docs/zero%20based%20approach.pdf