CPD 30103

PLANT
MAINTENANCE &
INSPECTION
KARTE 2.c
MAINTENAN
CE COST

INCOME
-Sales
- Investment
EXPENSE

-Emolument
-MRO
-Consumable

INCOME
-Sales
- Investment
EXPENSE

-Emolument
-MRO
-Consumable

INCOME
-Sales
- Investment
EXPENSE

-Emolument
-MRO
-Consumable

INCOME
-Sales
- Investment
EXPENSE

-Emolument
-MRO
-Consumable

INTRODUCTION
The maintenance budget (estimation of income and
revenue) are necessary for running the maintenance
department.
Since facilities become automated and equipment more
complicated, maintenance costs become a larger part of
the costs of operations.
Budgets comprise of cost centers, profit centers, single or
combined programs, new technology applications,
selected customer sector activities and other specialized
budgets.

THE CHART OF ACCOUNT

The costs of goods and services listed in the
budget under a number of categories called the
chart of accounts.
Each categories is called a line account, a line
item or simply an account.
Each account defines an individual type of
expense such as labor, salaries, fringe benefits,
fuels, electricity, repair parts , lubricants and so
on.

THE EXPENSE BUDGET

It is detailed financial plan shows expected
costs for the goods and services that will be
needed.
The amount represents the labor, parts, utility
service, tool, overhead and other items;
including project planning.
The budget also influenced by
increasing/decreasing production or service
demand, growth and situations.
Consists of: operating expense statement and
value of the expense budget.

THE OPERATING EXPENSE STATEMENT

A report that produced each month or accounting
period.
The report are useful as a tool to monitor and control
costs of selected line items.

BENEFITS OF THE EXPENSE BUDGET

Detailed plan for financial activities over the budget
planning period.
Factors affecting maintenance budgeting: expected level of
productions, new product or services and introduction of
new equipment.
Other consideration: new management program, major
overhaul or remodeling projects, expected overtime
required, new tools and equipment, additional management
responsibilities and expected cost reduction program.

THE CAPITAL BUDGET

Usually compiled and administrated by senior management
office.
Provides a funds for non-recurring projects such as major
renovations, construction, additional space, installations of
major equipment.
Capital budget consists mainly of defined projects, their
priority and estimated cost and expected start and
completion dates.

PREPARATION OF THE BUDGET

Reviewed variances from year-to-date and monthly budget
amounts.
Reviewed the effect of variables (such as special projects)
on each line item.
Aware the fluctuations of economy trends
Reviewed between expense and capital budgets.

MAINTENANCE COST
[Oxford] - an amount that has to be paid or spent
to buy or obtain something
Maintenance cost refers to he costs incurred to
keep an item in good condition and/or good
working order.
Therefore, maintenance budget should be tied with
the overall organizational objectives.
Maintenance budget can avoid maintenance
shortfalls that might impact production or service
costs.

 Typically, maintenance cost can be divided into two

main categories.
The first referred as direct costs are easy to justify
and to report.
The other group of maintenance costs is hidden
costs or indirect costs which are harder to
measure.

DIRECT MAINTENANCE COSTS

Direct maintenance costs are easy to justify and to
report, it is the costs of the labor, materials and
outsourced required to perform servicing, repair,
modification, restoration, inspection, test, and
troubleshooting tasks during on-airplane and shop
maintenance activities.
Maintenance overhead costs are unallocated
labor costs and the expenses for maintenance
supervision, training, and planning; equipment
rental; and utilities.

INDIRECT MAINTENANCE COSTS

Conversely, indirect costs is the cost that are
not directly associated with a single activity,
event, or other cost object. For example;
Excessive inventory
Emergency purchases
Start-up (unexpected changes and
machine breakdown)
Indirect maintenance can create loss of
revenue or other losses as a result of
interruption to production.

COST CONTROL
Maintenance cost control is accomplished by the following means:
1. Understanding the number of equipment sets
2. Defining criticality, so that non-critical or low-cost equipment
will not be maintained and only critical and high-value
equipment will be maintained
3. Proper scheduling of activities
4. Using predictive technologies appropriately
5. Collecting data for statistical process control (SPC) to evaluate
mean time between failures (MTBF), cost of maintenance,
failure rates, and so on
6. Performing root-cause analysis on failures to develop various
approaches to maintaining the equipment, or providing training
as required to improve skills based on new technologies, or
identifying poorly designed equipment to be replaced.

Bath Tub Curve

The bath tub curve describes the cost
of equipment over its lifespan. From
commissioning to winding up.
bathtub curve indicates that a new
machine has a high probability of
failure, because of installation
problems, during the first few weeks
of operation.

Root-Cause Analysis (RCA)

a class of problem solving methods aimed at
identifying the root causes of problems
Example:

Failure mode and effects analysis (FMEA)

Fault tree analysis
5 Whys
Ishikawa diagram

Basic element of RCA

Materials

Defective raw material

Wrong type for job
Lack of raw material

Machine / Equipment

Incorrect tool selection

Poor maintenance or design
Poor equipment or tool placement
Defective equipment or tool

Environment

Orderly workplace
Job design or layout of work
Surfaces poorly maintained

Root-cause analysis
Methods
No or poor procedures
Practices are not the same as written procedures
Poor communication

Management system

Training or education lacking

Poor employee involvement
Poor recognition of hazard
Previously identified hazards were not eliminated

Ishikawa diagram