An Operations and Maintenance Information Open System Alliance

Financial Justification for CBM - is EVA the right answer?

So how do you justify your Condition Monitoring (CM) program? Number of saves? Less downtime than last year, or do you use more sophisticated terms like Return on Investment (ROI). If you`re looking at this article to provide another way to calculate savings based on an event that might never have happened, then I suggest you stop reading now.

So how do we financially justify CM? What role does it play in the 'enterprise'? The detailed answers to these and a thorough review of the solution are beyond the space allotted here. However, back in May of 1998, John Mitchell, President of MIMOSA wrote a paper focusing on EVA; (Producer Value Model as he describes the term) as a model for optimizing equipment asset management. This article simply tries to summarize some of his points and I encourage you to download the entire article.

Chris Staller
Wednesday, 19 May 1999