Decision Trees Based on Exponential Bifurcations in the Maintenance Process

1. Decision Trees Based on Exponential Bifurcations in the Maintenance Process The Geaslin GroupDavid Tod Geaslin, PrincipalHouston Phone: (832) 524-8214Web Page: www.geaslin.comE-Mail: david@geaslin.com

2. Bifurcation • bi·fur·cate :  to divide into two branches or parts • Key Bifurcation Decisions • Repair or Defer Maintenance • Recognizing Exponential Dynamic Nonlinearity in Maintenance Decision-Making • Applying This Knowledge to Operational and Budgeting Decisions

3. Geaslin’s Inverse-Square Rule for Deferred Maintenance When an organization attempts to reduce maintenance costs by reducing maintenance spending, maintenance costs will be reduced until spending falls below the minimum needs of the machines. When maintenance spending falls below this minimum level and the machine is operated to failure, the Inverse-Square Rule for Deferred Maintenance Effort will be triggered and the result will be an exponential cost increase that is INVERSE to the expected savings. The Rule - If a part is known to be failing but operated to failure (OTF), the resultant expense to the entire organization will be the square of the primary failure part and costs will square again with each successive cascading level of failure.

4. Exponential Bifurcations • Premise: • Allowing a deferred maintenance event to progress to failure will create an exponential expense to the whole organization. • Proof: • Use your historical information for a breakdown in your process and enter the data in my spreadsheet “Computing the True Risk/Reward Ratio for Deferred Maintenance” & “Inverse-Square Rule for Deferred Maintenance”

5. Dynamic & Nonlinear Systems • Graph is NOTa mathematical result of any numbers I have computed. (Dr. Mitchell Jay Feigenbaum’s constants are two mathematical constants which both express ratios in a bifurcation diagram for a non-linear map.) • Good Bifurcation Tool • Dr. Edward Lorenz • Extreme Sensitivity to Small Changes in Initial Conditions • Feedback Loops • Strange Attractors • Computing all the possible futures with nonlinear equations • See Appendix A for References

6. Bifurcations Caused by Maintenance Spending Management Evaluation of Needed Maintenance Action in Repair Money, Lost Production, and Sales Defer Or Repair? Decision Made to Defer Maintenance Need for Maintenance Action Detected Early Intervention Maintenance Cost Normal Wear Maintenance Cost Breakdown Event Maintenance Cost! Machine Demands Action! New Machine

7. Exponential Progressions Breakdown Event Maintenance Cost! Need for Maintenance Action Detected Need for Maintenance Action Detected Management Evaluation of Needed Maintenance Action in Repair Money, Lost Production, and Sales Defer Or Repair? Decision Made to Defer Maintenance Early Intervention Maintenance Cost Normal Wear Maintenance Cost Early Intervention Maintenance Cost Machine Demands Action! New Machine Breakdown Event Maintenance Cost!

8. Exponential Examples (1st Level of Failure) • The breakdown event did not escalate further because the right choice was made. • Reasons: • Excess Production Capacity • Parallel or Redundant Systems • Spare Parts on the Shelf • No Safety or Accident Issues • So… OTF $10,000 Rewind Deferred (OTF) Or Repair Parts & Labor $750 $100 Bearing Known to be Failing

9. Exponential Brake Failure (2nd Level of Failure) Breakdown Event Cost If the truck breaks down on the road, and the core value of the shoe is lost, the drum is ruined, a second truck has to be dispatched, the load has to be transferred, the truck towed back with a deadhead driver, the Breakdown Event cost will be square of the cost of the brake block $1,600 Personal Injury or Death Squares again to $2,560,000 Operate to Failure (Breakdown Event $40 Brake Shoe Block Known to Need Replacing

10. Refinery Explosion (3rd Level of Failure) $46,000 Cost to Stop the Startup and Repair the High Level Gauge, Idled Workers, Lost Production, Ruined Materials, Etc.? Explosion Mortalities Repairs & Lost Production, EPA, Legal, Etc. $2.13 Billion Operate to Failure (Breakdown Event) $214? High Level Sensor

11. Next • Now we will offer how to use the worksheet to verify this concept and compute the… • True Risk/Reward Ratio for Deferred Maintenance • Inverse-Square Rule for Deferred Maintenance