Article

A Methodology for Determining the Return on Investment Associated With Prognostics and Health Management

Dept. of Mech. Eng., Univ. of Maryland, College Park, MD
IEEE Transactions on Reliability (Impact Factor: 2.29). 07/2009; DOI: 10.1109/TR.2009.2020133
Source: IEEE Xplore

ABSTRACT Prognostics and Health Management (PHM) provides opportunities for lowering sustainment costs, improving maintenance decision-making, and providing product usage feedback into the product design and validation process. However, support for PHM is predicated on the articulation of clear business cases that quantify the expected cost and benefits of its implementation. The realization of PHM requires implementation at different levels of scale, and complexity. The maturity, robustness, and applicability of the underlying predictive algorithms impact the overall efficacy of PHM within an enterprise. The utility of PHM to inform decision-makers within tight scheduling constraints, and under different operational profiles likewise affects the cost avoidance that can be realized. This paper discusses the calculation of Return on Investment (ROI) for PHM activities, and presents a study conducted using a stochastic discrete event simulation model to determine the potential ROI offered by electronics PHM. The case study of a multifunctional display in a Boeing 737 compares the life cycle costs of a system employing unscheduled maintenance to the same system using a precursor to failure PHM approach.

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