Plant Maintenance: the Cost/Risk Confusion

In the process industry, our manufacturing plants are often capital intensive. Maintenance of these physical assets can be a significant part of the operating budget leading to the inevitable question of "how much do we really need to spend on maintenance?" There is a widespread belief that there is an optimum level of maintenance spending that balances cost and a company's risk. We believe there is no such thing as a generic cost/risk trade off for all industries. The level of maintenance spending is more a function of the level of consequences of failure.

Industries, or even individual manufacturing sites, with an extremely high consequence of failure need to manage risk to the lowest practicable level - maintenance costs may not even be a subject for discussion - ie nuclear power, etc. In the chemical industry the consequences of failure can be extreme when plants are close to highly populated areas. In the general process industry the risk of failure can be managed by plant design initiatives such as redundancy, and surge capacity.

There is not always a direct link between the cost of plant maintenance and the level of risk. There is almost always an opportunity to reduce maintenance costs while increasing the level of risk management. This effort depends on the sophistication of the maintenance effort when this initiative commences.

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