Preempt High Repair Costs

Sept. 28, 2010

There are many reasons why equipment owners do not repair their equipment before failure. Production schedules are extremely tight, and the contractor cannot afford the necessary downtime. Some equipment owners contend that if a machine is made well enough, it does not need preemptive repairs. Often, it is simply a case of not wanting to fix what is not broken.

There are many reasons why equipment owners do not repair their equipment before failure. Production schedules are extremely tight, and the contractor cannot afford the necessary downtime. Some equipment owners contend that if a machine is made well enough, it does not need preemptive repairs. Often, it is simply a case of not wanting to fix what is not broken.

Reasons like these are understandable, but if you do the math, you will find that repair before failure is the best choice in any situation. To better understand the economics of repair timing, it is helpful to be familiar with two concepts: Three-Level Parts Engineering and the Failure Probability Curve.

Three-Level Parts Engineering

Each manufacturer employs different engineering practices, but the basic principles of tiered parts engineering apply to almost any machine. Caterpillar designs its parts in three categories.

Level 1 – These are generally the least expensive parts – the ones intended to wear out and be replaced rather than reused. Examples of Level 1 parts in an engine include piston rings, main rod bearings, valve guides, and turbo seals. Level 1 parts in a drive train include antifriction bearings and seals.

Level 2 – These parts are slower wearing and more costly to replace than Level 1 parts. They include pistons, liners, valves, camshafts, friction plates, discs, ring gears, and final drive gears.

Level 3 – Level 3 parts have the longest life. In other words, they wear at the slowest rate. They are designed to last the entire life of the equipment. But they cost, by far, the most to replace. Level 3 parts in the drive train include transmission cases, shafts, carriers and gears, as well as final drive cases, hubs and shafts. Level 3 parts in the engine include blocks, cylinder heads, crankshafts, and connecting rods.

If all goes according to plan, Level 2 parts should be replaced at the end of the machine's second useful life. Level 1 parts will typically have to be replaced at least three times per overhaul interval.

The purpose of the Level 1 parts is to protect the more important and costly Level 2 and 3 parts, but if Level 1 parts are allowed to fail they can actually damage the Level 2 and 3 parts, necessitating a more extensive repair. In that case, any money an equipment owner may have saved by putting off a repair would be outweighed by the increase in costs for parts and labor

The trick is to get the most useful life possible out of the system without risking a failure. To better understand how you go about doing that, consider the Failure Probability Curve.

The Failure Probability Curve

Picture the cross section of a bathtub. The overall curvature of the inside represents the likelihood of a failure over one complete overhaul interval. The left slope represents the beginning of the machine's life, a time when the likelihood of a failure is actually near its highest. But the probability of a failure drops quickly and remains level until the first major interval approaches. At that point, the likelihood of a failure increases rapidly.

Ideally, you want to perform the repair just before the probability of failure begins to rise, when you will only need to replace wear parts (valves, bearings, washers, etc.) and consumable (fluids and filters). But if you want to know at what point that likelihood of failure for a specific machine begins to rise, you will not find the answer in your owner's manual. To project the time of failure, you or your dealer will have to implement a comprehensive, ongoing program to monitor your machine's health.

Accurate Failure Forecasting

Numerous factors play into the wear life of any given system: severity of application, climate, soil conditions, operator technique, maintenance practices, and the quality of fluids used, among others. In other words, the same model and year of machine might last a couple thousands hours longer in one contractor's fleet than it does in another's.

To predict and preempt failures requires diligent tracking of two kinds of repair indicators.

Problem indicators: Any number of factors can cause sudden, often unexpected, failures – for example, operator abuse, contamination and worn parts. Still, there are ways of detecting such problems and preempting them before they result in failure.

Typical problem indicators include decreased power, unusual noise, vibration, overheating, consumption of oil, leaks, transmission slippage, debris in filters, brake chatter, black smoke, and metal filings on drain plug. These signs indicate that some part or component is approaching failure or has already failed. Fluid analysis and other advanced diagnostics methods can help you pinpoint the problem and determine just how imminent the failure is.

Planned indicators: When the system is running as it should and all maintenance is performed as prescribed by the manufacturer, wear should occur in a gradual, steady manner. Factors like severity of application can accelerate or decelerate wear overall, but usually in a consistent, predictable way.

Among the indicators used to project planned failure are fluid analysis; electronic monitoring systems like Cat VIMS and Product Link; work site and maintenance analysis; inspections – visual or technical; and service history. These indicators can be used to monitor normal wear and project the optimal time for repair, but as mentioned earlier they also can assist in early discovery and diagnosis of problems. Armed with this kind of information, your dealer can assist you in scheduling the repair at the time that is most convenient for you, thus minimizing any loss of productivity for your operation.

The Bottom Line

To put it in terms of dollars and cents, the average cost of a repair after failure is generally about double that of a repair before failure. Even if you average those costs over the longer interval you achieved by running a machine to failure, you will discover that your cost per hour goes up significantly.

To help illustrate the difference, consider this hypothetical example. Imaging you have been running a large wheel loader and are approaching an engine failure. Your dealer recommends you overhaul the engine at 10,000 hours, but you decide to squeeze the most life you can out of the engine as is.

Your machine does better than average and continues running up to 11,500 hours before it fails, and to help reduce costs you decide to use remanufactured parts. The cost of the repair before failure using new parts is estimated at $18,300. The cost of the after-failure repair – even with less expensive remanufactured parts – is about $4,000 higher: $22,300.

Average the cost in both scenarios over the pre-overhaul life of the machine, and you will learn that you did not save money by running the machine to failure. You increased your cost per hour by about 6 percent. Or, if you calculate the cost per hour for the extra 1,500 hours you ran the machine, you will find that those hours cost you about 46 percent more than the first 10,000.

Besides reducing costs, repair before failure has numerous benefits. You can plan and schedule repairs to reduce downtime. You can budget appropriately because you know up front what will be included in the procedure. You gain in terms of productivity, equipment availability and resale value. All these advantages add up to one very important result: increased profitability.