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Asset Condition Management

​The Cost of Improper Motor Storage​

by Terre n c e O'Hanlon

Figure 1:
The cost of improper electric motor storage

Someone recently sent me a message urgently asking what the cost of installing a replacement electric
motor in a manufacturing production line, that was already failed due to improper storage. Here is my
attempt at costing.

Monetary Cost:

1) The failed motor in storage cost 30% per year of purchase price in carrying cost since the date of
addition to inventory. That means in three years you paid approximately 2X for the motor.

2) Cost of the parts and consumables for replacing the failed original motor and to replace the failed
motor from improper storage

3) Cost of labor kitting the parts and consumables

4) Cost of the maintenance labor to remove and dispose of the original failed motor

5) Cost of the maintenance labor to remove and dispose of the stored failed motor

6) Cost of the amount of time that the production stopped until the time that production is running at a
steady state

7) Cost of production quality of yield reduction as lines was slowed to stop for maintenance
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9) Cost of lost production due to whatever the motor powered

Human Cost:

An intangible cost of transient "abnormal" operation [shut-down, start-up, emergency work] is:

1) 5 to 1 increase in physical safety risk of fatality or serious injury for experience workforce ,

2) 20 to 1 increase in physical safety risk of fatality or serious injury with inexperienced workforce in a
reactive environment

Environmental Cost:
1) 100% waste

Reliability Journey Cultural Cost:

1) Priceless

This is an approximation based on a guess and is not to be used with any implied warranty

Please post your feedback and comments at LinkedIn here so we all learn together.

Terrence O'Hanlon

Terrence O’Hanlon, CMRP, and CEO of Reliabilityweb.com® and Publisher for

Uptime® Magazine, is an asset management leader, specializing in reliability
and operational excellence. He is a popular keynote presenter and is the
coauthor of the book, 10 Rights of Asset Management: Achieve Reliability,
Asset Performance and Operational Excellence. www.reliabilityweb.com

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