Carl Byington with PHM Design, LLC reviews some of the elements of CBM Cost Benefit Analysis. The analysis consider implementation and non recurring engineering cost as well as deferred, eliminated scheduled maintenance, reduced unscheduled maintenance, and operational cost savings drivers. Specific examples from aircraft, ground vehicle, and industrial applications are provided. #phmdesign https://phmdesign.com

2. Corrective Preventive CBM Proactive
§ Small Items
§ Non-critical
§ Unlikely to fail
§ Redundant
§ Predictable
Wear
§ Consumables
§ Known Failure
Patterns
§ ‘Random’
Failures
§ Minimal Wear
§ Critical Items
§ PM Induced
§ Inspection and
MMH drivers
§ Accurate Usage
Prognostics
§ Incipient Fault
Detection/Diagnos
is
§ Health & Adaptive
Prognostics
Evolving Maintenance Approach
Condition-Based
Corrective
Preventive
Percentage of Maintenance Actions
100%
Present Future
Eliminated
CBM+ Implementations

3. • Sustainment costs represent over 65% of the total Life Cycle Costs
• Sustainment is the largest and fastest growing segment in DoD Budget
• Sustainment can be most directly affected with CBM+ policies and
improved diagnostics, prognostics and IVHM technologies

4. PHM System Non-Recurring and Recurring Costs
• Non-recurring engineering costs incurred during the
development phase of the program.
• Recurring cost of PHM hardware added to each
operational unit
• Recurring engineering costs relative to operational units
(PHM software maintenance on and offboard) and
hardware engineering to provide product improvement
as new technology is developed.
• Recurring cost of maintaining the sensors providing a
PHM input (but not including the sensors that will be on
the system for control purposes).
• Recurring cost of potential false alarms and mis-detects
• Recurring cost of potential availability reduction due to
prognostics

5. Diagnostic Capability Impacting Unscheduled
Maintenance
• Reduce Unjustified Repair/Removal rates and
Increase Justified rates
• Reduced Can Not Duplicate (CND) rates
• Reduced O-level man-hours
• Reduced maintenance induced failures
• Reduced LRU repair costs
• Reduced numbers of tests to isolate failures
• Reduced repair times (enhanced availability)

6. Diagnostic Benefits Impacting Scheduled Maintenance
• Reduced O-level maintenance man-hours
• Reduced maintenance induced failures
• Elimination/reduction in the scheduled maintenance activities
resulting in increased availability and improved sortie generation
rate.
Prognostic Capabilities Impacting Operational Metrics
• Reduction in in-mission shutdowns, mission aborts and lost sorties
• Reductions in secondary damage.
• Opportunistic maintenance scheduling
• Advanced logistics triggering
• Decision support and contingency management

7. • Operational decision support (mission readiness, asset allocation)
• Reduced maintenance induced errors
• Increased effectiveness and responsiveness of logistics
• Reduction in logistics tail (ripple effect benefits)
• Reduction in weight and space requirements for parts and equipment
• Contribution to mandated maintenance/logistics shift
• Increased safety for operations and passengers

11. PHM Development Costs
• Includes software development, sensors, cables, data acquisition,
storage and processing for the 680 production vehicles.
• Installation costs are also included, based on 32 hours of installation
per vehicle at $50 per labor hour
• Initial training and life cycle repair cost for the PHM system included
Operational Benefits
• Reduction in catastrophic failures. 3 (15%) of 20 were determined by
failure analysis experts to be detectable early and entirely preventable
through PHM.
• Operational Availability Opportunity Benefit impacted by the predictive
time horizon provided by the prognostics
– Reduce MLDT by 50%, given its ability to detect failures early, order
supplies, and organize the maintenance activity before the component fails
– + 15% increase in MTBF, results in the ten-year LCC estimate increased in
operational availability from 91.08% to 95.29 % or a 4.21 %
Total Life Cycle Acq + Operations & Support Cost
Total Quantity of Vehicles Fielded

12. Maintenance Benefits
• Preventive (PM) task review revealed that 65% can be eliminated with
PHM system information and commensurate shift to Condition-based
Maintenance
• Cost avoidance of almost 2/3 of the labor hours normally required to
perform each PM. Benefit totaled nearly $6.8M over a 10 years.
Logistics/Spares Benefits
• Savings in initial spares totals $1.3M over the ten-year service life
• Same 15% reduction was used for operational corrective maintenance,
depot repair, and depot overhaul costs.
• Benefits were derived from parts and labor but not transportation costs,
since it was assumed that vehicle was shipped to and from Depot
regardless of prognostics
• $20M for each the corrective and depot overhaul costs accumulated for
the ten-year life cycle.
Banks, J., et al., “A Cost-Benefits Analysis of the Effect of Condition-Based Maintenance Strategies
for Military Ground Vehicles”, 2003 IEEE Aerospace Conference, Paper Z11-0601, March 2003.

13. 680 Ground Vehicles over a 10 year period
Banks, J., et al., “A Cost-Benefits Analysis of the Effect of Condition-Based Maintenance
Strategies for Military Ground Vehicles” with permission granted on July 2004.

14. • 10-year service life
– OA Benefit = $27.9M
– Total Benefit = $83.9
– ROI = 3.7
• 15-year service life
– OA Benefit = $30.8M
– Total benefit = $278M
– ROI = 12.1
• 20-year service life
– OA Benefit is $40.0M
– Total Benefit = $327M
– ROI = 14.3
Remaining Years of Service
Return
on
Investment

15. CBM+ DoD
Guidebook,
available at:
https://acc.da
u.mil/cbm-
guidebook