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商务文章 - 设备故障和失败成本。

By Mike Sondalini

the cost of failure in business operations management

(上面的图表从Mike Sondalini的书借来'Defect and Failure True Costing- 2006')


The Huge Instantaneous Impact on Your Business of equipment failure cost and defect cost .When an equipment failure incident occurs there is a consequential loss of profits and amassing of costs.设备故障的成本includes lost profit, the cost of the equipment repair, the fixed and variable operating costs wasted during the equipment downtime and a myriad of consequential costs that reverberate and surge through the business. These are all paid for by the organization and seen as poor financial performance by business operations management. The costs of equipment failure cannot be escaped and are counted in millions of dollars of lost profit per year. Total defect and failure true costs are not normally recognized by managers, yet they can send businesses bankrupt. In the instance of a failure all its costs and losses are automatically incurred on the business. These costs can only be prevented by precluding the failure in the first place. This article explains the 'instantaneous cost of failure'(ICOF) and introduces a proactive technique, 'Defect and Failure True Costing', that adds economics toRCMFMEA.to help companies recognize and prevent this tremendous waste of money.

失败的成本to a Business




We can take the same analogy of normal business operations management down to normal equipment operation. When plant and equipment are running each item has a fixed cost, a variable cost and generates a contribution to the overall business profit. It is reasonable to look at every machine and various equipment in the plant operation, as contributing their share to the total profit of the business - their 'profit contribution'. When equipment in the plant cannot be used for production it cannot contribute to profit. If the reason it is not operating is because it has failed, then not only is it not contributing profit, it also imposes added equipment repair costs on the business.


cost of failure

When a equipment failure happens many people suddenly get involved in solving it. Meetings are held, overtime is worked, subcontractors are brought-in, engineers investigate, parts and spares are purchased to get back in operation. Instead of the variable costs being a proportion of production, as intended, they instead rise and take on a life of their own in response to the failure. The losses grow proportionally bigger the longer the equipment repair takes or the greater the consequences of the equipment failure.

You can see from the shaded areas in Figure 2 that when an equipment failure happens the cost to the business is lost future profits, plus immediately wasted fixed costs, plus immediately wasted variable costs, plus the added variable costs needed to get the operation back in production. There are many other consequential costs too.

When equipment fails, operators stop normal duties that make money and start doing duties that cost money. The production supervisors and operators, the maintenance supervisors, planners, purchasers and repairmen start spending time and money addressing the stoppage.

If it escalates managers from several departments get involved - production, maintenance, sales, dispatch, finance - wanting to know what is being done to fix the stoppage. Meetings are held formally in meeting rooms and impromptu in corridors. Parts are purchased and specialists may be brought in. Customers do not get deliveries and liability clauses may be invoked. Word can spread that the company does not meet its schedules and future business is lost. A rushed work-around is developed that puts people at higher risk of injury. Items are brought, men are moved, materials and equipment are transported in an effort to get production going. Time and money better used on business-building activities is drawn into the 'black hole of equipment failure'.

On and upward the costs build, and on and on people throughout the company waste time because of the equipment failure and non-procedural business operations management. The company pays for all of it from its profits, which is then reflected in poor financial performance. The reactive costs and the resulting wastes start immediately upon equipment failure and continue until the last cent is paid on the final invoice. Some consequential costs may continue for years after the equipment failure.


The money to fix equipment failures and to carry wasted costs is paid by the business from profits. This explains why having many equipment failures, or a few big equipment failures close in time, can cause a business to become unprofitable. Figure 3 shows the situation of a business suffering repeated equipment failures (although the failures do not need to be equipment failures)。在生产中积累的损失和浪费成本,维护成本,攀升,跨越企业秋季业务崛起和利润的浪费时间。

repeated equipment failure cost



The total和true costsincurred by a business from a failure event reverberate and surge throughout the business organization. The 60 consequential costs listed below reflect a good number of them, though there are others specific to each organization and you will need to identify and record them.








Product waste


replacement production




lost spot sales







utility repairs

temporary accommodation


replacement parts

fabricated parts



workshop hire






design changes


quality control



energy waste






damaged items

Additional capital


new insurance spares



penalty payments



loss of future contracts

environmental clean-up

death and injury

safety rectification


Documents and reports

purchase orders


meeting rooms


planning, schedule changes

investigations and audits

invoicing and matching

The sum totals of the organization-wide 'instantaneous costs of failure' (ICOF) are not usually considered when the cost of a failure incident is determined. This means that most companies (商业运营管理) do not fully appreciate the huge consequential costs they incur from every failure incident. Few companies would cost the time spent by the accounts clerk in matching invoices to purchase orders raised because of a failure. But the truth is the clerk would not be doing the work if there had been no failure. The cost was incurred only because the failure happened.

The same logic applies for all the costs due to a failure - if there had been no failure there would have been no costs and no waste. Prevent failures and you will make a lot more money.

所有的瞬时损失的全部费用failure incident can be calculated in a spreadsheet. Simply trace all the departments and people affected by an incident, identify all the expenditures and costs incurred throughout the company, determine the fixed and variable costs wasted, discover the consequential costs, find-out the profit from sales lost and tally them all up. It will astound people when you show them how much money was destroyed by one small equipment failure.

It is not important to know how many times a failure incident happens to justify calculating the instantaneous cost of failure. It is only important to ask what would be the cost if it did happen. An extraordinary example was when a 150-mm diameter PVC pipe carrying softened, de-mineralised water for a major power station failed at a glued joint and began starving the water supply for three boilers supplying steam to six steam turbines. It was only by supplementing the water supply with raw mains water that the power plant remained in operation until the failure was repaired.

Had the failure progressed to its disastrous conclusion an entire city of 1.5 million people, and its industry, would have lost power as each turbine progressively stopped from loss of steam. The repair of the pipe was done for several thousand dollars, but the consequence of the failure was in the hundreds of millions of dollars. Had the instantaneous cost of failure been calculated first, far greater precautions would have been put into place to control the hidden risks inherent in the job.

Preventing the Consequences of Failure


By finding the Defect and Failure True Cost of defects and failures you highlight to everyone that many risks to the business previously considered minor are actually high and they require a strong proactive management plan be put into place to address those risks. The frequency of occurrence maybe low but the cost consequences are massive and so the real risk for the organization is actually high (风险=频率x后果)。

愚蠢的成本价钱provides a means to rate the consequences of decisions and failure incidents using real money. The cost outcomes can be clearly and truly identified and priced. Those that are unfavorable can be analyzed and modified to reduce the risk. This means the methodology can be used to analyze its consequences and associated costs before a decision is made.

Because DAFT Cost is a means to indicate the real costs of knock-on consequences (TDC.) from a decision it can be used to make good decisions in any situation where understanding the right financial consequences are critical to its success.


identifying total defect cost and failure cost using 'instantaneous cost of failure' shows how vast amounts of money are wasted throughout an organization when a failure happens. the bigger the failure, or the more often one happens; the more resources and money are lost. the profits that could have been made are gone, wasted, and they can never be recouped.

the next time your operation has a failure do an icof on it - what did it really cost your company? if someone designs or selects equipment ask them for its 'instantaneous cost of failure'? ask them what is its 'instantaneous cost of maintenance'? what are the cost consequences to the profitability of the business from its failure?

it is critical to your company's profitability that failures are prevented. failures can be stopped when companies understand the size of the losses and introduce systems, training and behaviors to prevent them. the 'instantaneous cost of failure' method shows people the instantaneous losses from failure, and the great profit in doing the right things rightly.

mike sondalini

'defect and failure true costing', that adds economics toRCMFMEA.to help companies recognize and prevent this tremendous waste of money.

要了解更多关于此信息,请务必和下载Mike Sondalini的电子书'Defect and Failure True Costing'athttp://www.trade-school.education/defect_failure_waste_cost.htm.

您也可能对他的电子书感兴趣,由Don Fitchett共同撰写;'True Downtime Cost Analysis - 2nd Edition'which can be downloaded athttp://www.trade-school.education/downtime_costing_activity_based.htm