A model for lifecycle cost calculation based on asset health index

Abstract

During many years, asset management methodologies used in industry were focused on knowing and analysing the operational control of the daily work and the impact of the maintenance on the availability. Later, the costs turn into the priority, and strategies were focused on assessing a longer lifecycle and optimizing processes and contracts. Finally, recent normative have included concepts as "knowing and managing the risks" and the target is to prioritize the maintenance tasks to the critical assets. However, taking a balanced asset management model for the operational environment, quite a lot of facilities of Oil&Gas sector are reaching the end of their initially estimated lifecycle. New challenges are related to extend the life of the main items of the facilities or at least, to find the optimal replacement moment that guarantees that the total expenditure (TOTEX) is being optimized. Asset Health Index (AHI) methodology considers a theoretical lifecycle of an item, in which depending on the proximity to the end of the useful life, the probability of failure increases. But taking this theoretical lifecycle as a base, different operation location factors or operation and maintenance (O&M) aspects can modify this period. All these factors can be quantified and permit us to calculate a new theoretical profile. This paper is case study based on the theoretical procedure and methodology proposed in previous literature (i.e. De la Fuente, Candon et al., 2018) to assess the impact of future failure probabilities of assets on lifecycle cost. The paper shows the impact of the AHI into a profitability calculation. AHI has enabled to compare future alternative cost profiles and assess the impact in the failure probability of the item. As a result, we have been able to change the maintenance strategy and optimise the TOTEX of an industrial equipment.