Asset Management and Design for Maintainability and Reliability

Task 1
ASSET MANAGEMENT AND
DESIGN FOR MAINTAINABILITY
AND RELIABILITY
Introduction
Asset management is defined as controlling, maintaining and supervising investments on behalf
of another person or institution. This constitutes of determining the type of investments to
venture into or avoid, which will have a positive impact on the client’s portfolio. To come up
with such an investment, intensive research must be conducted making use of macro and micro
analytical tools (John D. Campbell, 2016). This encompasses statistical analysis of the current
market trends, seeking views from company’s top management and performing any other tasks
that will push forward the company towards achieving its goals and objectives (Austerberry,
2012).
For any operations to be reliable and efficient in any organization, proper maintenance must be
conducted on regular basis. Maintenance ensures that safety is maintained, systems and
equipment operate normally and return on the investment is maximized. There is a great variance
in the maintenance issues faced during the three life cycle phases. Three life cycle phases in this
case are design and construction, sustainment and operations and disposal (Stark, 2015). The
aspect of decision making plays an important role in determining the safety, efficiency and
maintainability of the machines and equipment. Proper maintenance also plays a role in the
overall cost of maintaining the equipment and machines.
The life cycle of the organization of my choice identification of the need, creation, utilizing and
maintaining, acquiring and disposing. The stakeholders of the organization wanted the premises
to be refurbished on a regular basis, computers to be replaced regularly and the office furniture to
be occasionally restructured (Diego Galar, 2017). The maintenance was to involve software
engineers, civil engineers and carpenters. This was to ensure that the aesthetic value of the
premises is maintained, efficiency of the computer systems used in operations of the organization
and comfort ability of the furniture is maintained.
Scope of maintenance
In order to achieve the stakeholders’ expectation, three skilled workers were to be contracted. A
software professional with experience in software installation and management, civil engineer
with experience in building construction and a carpenter were to be added to the organization
work force. The software engineer’s role were to update the computer system with the current
software programs, replace worn out computers and repair broken ones. The civil engineer was
tasked with checking the structural integrity of the premises and ensuring the premise maintains

its structural integrity. The carpenter was tasked to deal with repairing furniture and replacing
old ones.
All this processes of maintenance were to be managed through Quality Management System
(QMS). QMS utilised PDCA (Plan, Do, Check, Act).
Life-cycle cost analysis
Life-cycle cost analysis was conducted to estimate the total cost of possessing the organization.
This too into account all the expenses incurred in acquiring, possessing and disposing off the
organization.
Costs
The following costs were analysed;
i) Capital costs C
It was composed of cost of land acquisition, building the structure, renovations and
the equipment and machines used in the organization. The capital cost for the
organization was $450,000.
ii) Lifetime Operating Costs O
It is the estimated total expenses in terms of running the organization related to the
organization throughout its life. The organization valued their life operating costs at
$156,237
iii) Lifetime maintenance costs M
This constituted all the expenses related to repair, replacement and purchases of
machines and equipment throughout the life of the organization. The estimated
maintenance cost was $67,549.
iv) Lifetime plant losses L
These are the decrease in net income accrued outer the customary operations of the
business. The organization predicted lifetime plant losses of $23,569.
v) Plant disposal cost D
The future value of the organisation at the end of its life was valued at $124,897
Note that the costs were estimated as present worth by factoring in the projected inflation rates
within its life period of 25 years.
From these costs we estimate the life-cycle cost LCC of the organization as follows;
LCC = C + O + M + L + D
Substituting the values of the costs into the formula;
LCC=$ 450,000+$ 156,237+$ 67,549+ $ 23,569+$ 124,897
¿ $ 798,683
Analysis

The life-cycle cost was $798,683. The maintenance cost was $67,549. The maintenance cost was
relatively high and the organization would rather consider replacement as a better option when
the equipment is worn out. Replacing ensures that the system is more durable and efficient. It
also enhanced up to date maintenance of technological advancements.
Conclusion
The organization should purchase new equipment for the organization when the ones in use are
worn out. The maintenance costs were high and the organization should avoid them as much as
possible.
References
Austerberry, D., 2012. Digital Asset Management. In: s.l.:Taylor & Francis, pp. 54-76.
John D. Campbell, A. K. J. J. M., 2016. Asset Management Excellence: Optimizing Equipment Life-Cycle
Decisions, Second Edition. In: Mechanical Engineering. s.l.:CRC Press, pp. 4-9.
Stark, J., 2015. Product Lifecycle Management (Volume 1): 21st Century Paradigm for Product
Realisation. In: Decision Engineering. s.l.:Springer, pp. 125-154.