A systematic approach to prioritising capital replacements

To maintain factory throughput and factory performance, it is necessary to maintain assets. As assets age beyond their useful life, replacement is required. The challenge is to select the right time to replace assets so that capital is not spent earlier than required and that excessive maintenance, degradation and risk costs are not incurred. This paper provides an overview of a systematic procedure that has been developed to determine priorities for capital replacement. The procedure involves the construction of an asset heat map that provides an assessment of the condition of assets in terms of need for capital replacement and an optimisation strategy for determining priorities for replacement given a finite capital budget. The objective of the optimisation strategy is to minimise the total cost of asset care, with this cost being the sum of capital, maintenance, degradation and risk components. To develop the models, the procedure has been applied to the boiler station and the pan station at two factories. Within these stations, the degradation of all assets subject to capital replacement have been modelled and an optimal replacement plan for each asset has been constructed. The methodology prioritises capital replacement options on the basis of minimising cost but needs to be extended to cover the other factory stations. Furthermore, systems to implement the methodology also need to be developed. Key words Asset management, condition-based maintenance, boiler, condition assessment