R Pascual IMEC 2005

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R Pascual IMEC 2005

  1. 1. Repair, overhaul and replacement policies with buffers and alternative production methods R. Pascual, Ph.D. Universidad de Chile Santiago, Chile November 2, 2005 Toronto, Ontario, Canada Paper available @: www.ing.uchile.cl/~rpascual
  2. 2. Outline <ul><li>Introduction </li></ul><ul><li>Problem review </li></ul><ul><li>Proposed model </li></ul><ul><li>Example case </li></ul><ul><li>Conclusions and projection </li></ul>
  3. 3. Motivation buffers
  4. 4. Motivation Costs PM level global downtime intervention Budget
  5. 5. Aging equipment after each work: <ul><li>perfect </li></ul><ul><ul><li>as good as new </li></ul></ul><ul><li>imperfect </li></ul><ul><ul><li>age decreases </li></ul></ul><ul><li>minimal </li></ul><ul><ul><li>same age </li></ul></ul><ul><li>worse </li></ul><ul><ul><li>age increases </li></ul></ul><ul><li>worst </li></ul>Pham H, Wang H. Imperfect Maintenance. European Journal of Operational Research 1996; 94:425-438.
  6. 6. Objective <ul><li>to study and improve </li></ul><ul><ul><li>effectiveness of a production system </li></ul></ul><ul><ul><ul><li>w.r.t. expected life-cycle cost rate </li></ul></ul></ul><ul><li>Considering </li></ul><ul><ul><li>the system is protected </li></ul></ul><ul><ul><ul><li>demand fluctuations </li></ul></ul></ul><ul><ul><ul><li>failure occurrence </li></ul></ul></ul><ul><ul><ul><li>With </li></ul></ul></ul><ul><ul><ul><ul><li>stock piles </li></ul></ul></ul></ul><ul><ul><ul><ul><li>line and equipment redundancy </li></ul></ul></ul></ul><ul><ul><ul><ul><li>alternative production methods </li></ul></ul></ul></ul><ul><ul><li>Budget constraint </li></ul></ul><ul><ul><li>Aging </li></ul></ul><ul><ul><ul><li>Imperfect maintenance </li></ul></ul></ul>
  7. 7. Decision-making <ul><li>Overhaul frequency </li></ul><ul><li>Replacement frequency </li></ul><ul><li>Time-to-repair </li></ul><ul><li>Time-to-overhaul </li></ul>
  8. 8. Cost structure <ul><li>Equipment stops </li></ul><ul><ul><li>intervention costs </li></ul></ul><ul><ul><ul><li>labor </li></ul></ul></ul><ul><ul><ul><li>materials </li></ul></ul></ul><ul><ul><li>downtime costs </li></ul></ul><ul><ul><ul><li>cost of lost production </li></ul></ul></ul><ul><ul><ul><li>others </li></ul></ul></ul><ul><ul><ul><ul><li>reconfiguring alternative production lines </li></ul></ul></ul></ul><ul><ul><ul><ul><li>less efficient methods </li></ul></ul></ul></ul><ul><ul><ul><ul><li>reduced product quality </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Lost raw material </li></ul></ul></ul></ul><ul><ul><ul><ul><li>… </li></ul></ul></ul></ul>
  9. 9. Cost estimation <ul><li>Intervention costs </li></ul><ul><ul><ul><li>standard accounting data </li></ul></ul></ul><ul><li>Downtime costs </li></ul><ul><ul><li>possibly hard </li></ul></ul><ul><ul><ul><li>dependent on several exogenous factors </li></ul></ul></ul><ul><ul><ul><ul><li>production rate, </li></ul></ul></ul></ul><ul><ul><ul><ul><li>stock price, </li></ul></ul></ul></ul><ul><ul><ul><ul><li>system design parameters </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Redundant equipment </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>stock piles </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>alternative production methods </li></ul></ul></ul></ul></ul>Komonen K. A cost model of industrial maintenance for profitability analysis and benchmarking. International Journal of Production Economics 2002; 79(1): 15-31. Hot-hot Sexy
  10. 10. Downtime costs estimation Benefits <ul><li>to measure the impact </li></ul><ul><ul><li>of equipment on system efficiency </li></ul></ul><ul><ul><ul><li>priority </li></ul></ul></ul><ul><li>to assess the effectiveness of maintenance policies </li></ul><ul><ul><li>KPI </li></ul></ul><ul><li>to use decision-support models </li></ul><ul><ul><li>replacement policies </li></ul></ul><ul><ul><li>preventive and condition-centered maintenance </li></ul></ul><ul><ul><li>spares stock levels </li></ul></ul><ul><ul><li>… </li></ul></ul>
  11. 11. Traditional cost models <ul><li>assumption </li></ul><ul><ul><li>lost production dominates the downtime cost </li></ul></ul><ul><ul><li>constant production rates and unit prices </li></ul></ul><ul><li>neglect discontinuities </li></ul><ul><ul><li>stock-piles exhaustion </li></ul></ul><ul><ul><li>lost raw material, etc. </li></ul></ul><ul><li>Then, </li></ul><ul><ul><li>Downtime costs rise linearly with maintenance service time </li></ul></ul>Jardine AKS. Maintenance, Replacement and Reliability. Pitman Publishing, Marshfield, MA, 1973.
  12. 12. Estimation of downtime costs <ul><li>Simulation, examples </li></ul><ul><ul><li>Roman and Daneshmend </li></ul></ul><ul><ul><ul><li>effect of contractors on service level in open-pit mines </li></ul></ul></ul><ul><ul><li>Cor </li></ul></ul><ul><ul><ul><li>work operational changes (sequence of work, design, … </li></ul></ul></ul><ul><li>Regression models </li></ul><ul><ul><li>Edwards et al. </li></ul></ul><ul><ul><ul><li>tracked hydraulic excavators in opencast mines </li></ul></ul></ul><ul><ul><ul><li>Operator-induced consequential costs </li></ul></ul></ul>Roman PA, Daneshmend L. Economies of Scale in Mining- Assessing Upper Bounds with Simulation. The Engineering Economist 2000; 45(4):326-338. Cor H. Using Simulation to Quantify the Impacts of Changes in Construction Work. Master’s Thesis. Faculty of the Virginia Polytechnic Institute and State University 1998. Edwards DJ, Holt GD, Harris FC. Predicting downtime costs of tracked hydraulic excavators operating in the UK opencast mining industry. Construction Management and Economics 2002; 20:581-91. Edwards DJ, Holt GD, Harris FC. A model for predicting plant maintenance costs, Construction Management & Economics 2000; 18(1): 65-75.
  13. 13. Budget constraint <ul><li>Example: Loerch and Humpert </li></ul><ul><ul><li>MIP </li></ul></ul><ul><ul><ul><li>Strategic multi-system acquisition and support programs </li></ul></ul></ul><ul><ul><ul><ul><li>subject to budget limitations </li></ul></ul></ul></ul><ul><li>may be used to negotiate </li></ul><ul><ul><li>annual budgets </li></ul></ul>Loerch AG. Incorporating Learning Curve Costs in Acquisition Strategy Optimization. Naval Research Logistics 1999; 46(3):255-271. Humpert DE. Optimization of Procurement Scheduling for Major Defense Acquisition Programs. Master’s Thesis. Naval Postgraduate School, Monterey, 2000.
  14. 15. Problem statement <ul><li>Failures </li></ul><ul><ul><li>Pdf f(t) </li></ul></ul><ul><li>Replacement interval, T l </li></ul><ul><li>Interval between overhauls, T s </li></ul><ul><li>Repair time, T r </li></ul><ul><li>Overhaul time, T o </li></ul><ul><li>Repair intervention cost, C r (T r ) </li></ul><ul><li>Overhaul interventon cost, C o (T o ) </li></ul>
  15. 16. Downtime cost profile Time to repair/overhaul
  16. 17. Intervention cost profile Time to repair/overhaul
  17. 18. Considerations <ul><li>repairs </li></ul><ul><ul><li>minimal </li></ul></ul><ul><li>opportunistic maintenance </li></ul><ul><ul><li>disregarded </li></ul></ul><ul><li>Objective </li></ul><ul><ul><li>to minimize the life-cycle expected global cost rate </li></ul></ul>
  18. 19. Other objectives <ul><li>Maximizing availability </li></ul><ul><ul><li>critical equipment </li></ul></ul><ul><ul><ul><li>downtime costs>>intervention costs </li></ul></ul></ul><ul><ul><ul><li>Constraint </li></ul></ul></ul><ul><ul><ul><ul><li>budget </li></ul></ul></ul></ul><ul><li>Minimizing intervention costs </li></ul><ul><ul><li>Do not take into account downtime costs explicitly </li></ul></ul><ul><ul><ul><li>Constraint </li></ul></ul></ul><ul><ul><ul><ul><li>availability </li></ul></ul></ul></ul>
  19. 20. Variables
  20. 21. Constraints
  21. 22. Failure rate model Jardine AKS, Zhang F. Optimal maintenance models with minimal repair, periodic overhaul and complete renewal. IIE Transactions 1998; 30:1109-1119.
  22. 23. Budget constraint last year time
  23. 24. Numerical example
  24. 25. Example <ul><li>Replacement cycle* </li></ul><ul><ul><li>5.9 years </li></ul></ul><ul><li>Overhaul frequency* </li></ul><ul><ul><li>1.86 overhauls/year </li></ul></ul><ul><li>Intervention times </li></ul><ul><ul><li>Known parameters </li></ul></ul>Jardine AKS, Zhang F. Optimal maintenance models with minimal repair, periodic overhaul and complete renewal. IIE Transactions 1998; 30:1109-1119. mu:money unit
  25. 26. Expected global costs
  26. 27. Constraints on frequencies for overhauls and replacements
  27. 28. Expected global cost (mu/year) for  =6 years,  =2 overhauls/year p=0.7 Overhaul duration (days) Repair duration (days) +
  28. 29. Expected global cost for various budgets levels Overhaul duration (days) +
  29. 30. Effects of budget on costs and times Global cost Overhaul time Replacement cycle Repair time Overhaul frequency
  30. 31. Closure <ul><li>NL-MIP </li></ul><ul><ul><li>Interaction </li></ul></ul><ul><ul><ul><li>Palliative measures </li></ul></ul></ul><ul><ul><ul><li>Available budget </li></ul></ul></ul><ul><ul><ul><li>Imperfect maintenance </li></ul></ul></ul><ul><ul><li>On </li></ul></ul><ul><ul><ul><li>Replacement, overhauls, intervention times </li></ul></ul></ul><ul><li>Budget negotiation </li></ul>
  31. 32. Projection <ul><li>variable intervention times </li></ul><ul><li>time-dependent budgeting </li></ul><ul><li>variable overhaul frequency </li></ul><ul><li>discounted values </li></ul>

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