Life cycle costing in engineering asset management: A study in the steel fabrication industry

Abstract

Maintenance and operations costs are a major cost-saving factor in engineering assets management. However, achieving sustained growth in terms of the return on investment (ROI) is a challenge. Engineering asset management (EAM) is experiencing a new era of productivity improvement that may lead to this growth. Due to its complexity, EAM is seldom considered to be a solution for optimising cost savings in a competitive global economy. When commencing a design and implementation project, EAM must consider the overall life cycle of physical assets, including commissioning, operational and end-of-life phases. Life Cycle Costing (LCC) was recently utilised to optimise the selection and operation of engineering assets to achieve optimum asset selection and utilisation. This paper highlights the gap in utilising LCC in engineering assets, specifically targeting the steel fabrication industry. Results and analysis of a structured industry survey is presented resented, which lead to a conclusion driven by LCC's significance and its potential for utilisation in the steel fabrication industry. The study concludes that there is minimum knowledge of LCC in the industry and no implementation for the approach is found.