As shared in our last post, starting a new CBM program is tough. In our experience, the most successful teams tend to put in more work on the front end. This usually leads to the development of a business case. In this post we will explore the process to build the case, and how to solicit the help of key stakeholders along the way.
Any CBM program, especially a new one, usually requires some form of approval and ongoing justification. This is where a business case is critical. The objective of the business case is to drive a decision, educating all parties and serving as a means of reference.
The business case should include several key points:
- Financial summary of the problem or opportunity (what is at stake)?
- The recommended action and associated costs.
- Projected benefits that will accrue, such as cost savings or greater availability.
- An objective statement defining success and how results will be measured.
- A projection, comparing costs to realized benefits over a multiyear period.
The business case for Condition-Based Maintenance
The process of building the business case requires commitment and the assistance of multiple parties from areas like production, accounting, maintenance, management and others. It is a lot of work, and many failed programs can be traced back to a poor business case (or its absence). Ricky Smith and Keith Mobley present several suggestions when building a reliability business case, which has been condensed below to reflect steps specific to a motor program.
- Get management involved in sourcing data for your business case. This will lend more credibility to the data, and get key people involved early in the process.
- Take time to educate them on the basics, such as how equipment fails, how to monitor equipment health, and case examples of how recommended methods improve results.
- Gather as much cost and performance data as possible. Much of this may be in a CMMS system, and the comptroller I typically is a great source. The cost data should answer questions, such as what is the cost of maintenance labor per hour, and how much does overtime cost? How much overtime is occurring as a result of breakdowns? How long do motor related outages last (examples), and what is the impact on availability? Look for cost metrics in areas to be impacted. This will provide means to measure and evaluate the opportunity in hard terms. Some examples of cost categories include:
- Outsourced services and repair
- Considering the intent of the program, begin analyzing the potential impact of improvements regarding both loss and prevention. Specific costs should be associated with failures as well as the benefits of failure prevention of critical assets. This is a great application for a process driven spreadsheet. It is important to conduct this analysis with management and stakeholders involved in the commitment or the decision. Plan to review the analysis with everyone involved, obtaining multiple perspectives and building alignment through the process.
- Compile the analysis, matching methods of improvement to specific modes of failure and project the savings in each area. A Pareto analysis of known failures, together with ranking critical assets, will define the areas of priority to act on. As the data is compiled, groups and patterns of required action begin to form, providing the foundation for program requirements. The fully compiled analysis will result in a means of projecting the total costs versus benefits.
- Prepare a plan of action, together with your cost/benefit. The plan should clearly define the required support of multiple parties and key roles. The project may require additional personnel, and so HR support may be needed for recruiting, onboarding and training. New equipment may require capital budget and approvals. Multiple departments may need to share in the expense, requiring budget alignment. Documenting these steps and associated milestones will help communicate the requirements to win the necessary support.
- Prepare to present the business case to key stakeholders. Many should have helped during the process, which will lend insight to potential hurdles, such as plant politics. Send out drafts for feedback ahead of time, and encourage others to help present your case where possible. If you use a PowerPoint presentation be sure to keep it short, leaning more on graphics and less on the text. Vendors may also be a good source of help to consider as they would have presented similar material many times over.
As stated before, the business case is a lot of work. Getting down to the impact you intend to make requires data. In the next post we will provide some examples from our worksheet and share some insight on conducting the analysis. You may also be interested in our complete guide in e-book format.
 Smith, Ricky; Mobley, R. Keith; (2011-03-31). Rules of Thumb for Maintenance and Reliability Engineers