Cost Modelling to Support Optimum Selection of Life Extension Strategy for Industrial Equipment in Smart Manufacturing

Abstract

Industrial equipment/machinery is an important element of manufacturing. They are used for producing objects that people need for everyday use. Therefore, there is a challenge to adopt effective maintenance strategies to keep them well-functioning and well-maintained in production lines. This will save energy and materials and contribute genuinely to the circular economy and creating value. Remanufacturing or refurbishment is one of the strategies to extend life of such industrial equipment. The paper presents an initial framework of cost estimation model based on combination of activity-based costing (ABC) and human expertise to assist the decision-making on best life extension strategy (e.g. remanufacturing, refurbishment, repair) for industrial equipment. Firstly, ABC cost model is developed to calculate cost of life extension strategy to be used as a benchmark strategy. Next, expert opinions are employed to modify data of benchmark strategy, which is then used to estimate costs of other life extension strategies. The developed cost model has been implemented in VBA-based Excel® platform. A case study with application examples has been used to demonstrate the results of the initial cost model developed and its applicability in estimating and analysing cost of applying life extension strategy for industrial equipment. Finally, conclusions on the developed cost model have been reported.

DSF Core: Integrated Decision Support for Optimal Scheduling of Lifetime Extension Strategies for Industrial Equipment

“…Cost input: This stop-related input must be either defined manually or computed by a third-party algorithm. The detailed methodology of estimating the various cost elements during stops is described in [ 15 ]. The cost elements required by the DSF Core are the following: One-off strategy costs: These costs are defined per machine, component and strategy combination.…”

“…Thanks to extensive cost information, directly provided as input or computed based on [ 15 ] or by the DSF Core itself, the algorithm is able to perform short-term as well as long-term (using Monte Carlo simulation) assessment of the economic KPI, considering costs and profit both during production and during voluntary (strategies) and involuntary stops (failures).…”

“…Since the economic KPI is the most important one, a cost modelling and financial analysis methodology should definitely be embedded into a decision support framework for sustainable refurbishment and remanufacturing of used industrial equipment. The DSF Core relies on [ 15 ] to estimate the costs during stops and calculates on its own the cost and profit during production. Based on the above, using a Monte Carlo simulation including discrete event simulation, it is able to further estimate economic KPI.…”

“…Most of these references are related to additive manufacturing. A more extensive bibliographic study on cost modelling and analysis is included in [ 15 ].…”

Sustainable framework for a geostationary satellite control earth station system using parallel configuration

“…This was due to the exponential graph generated from the cost value that resulted in high error percentage. Then, these reliability and operational cost model values were compared with the models that were previously generated by [4] and [28] in Table 2 for validation. The calculated RMS value for the newly generated reliability model was 20.84%, whereas the RMS value for the operational cost model was 22.82%.…”