Economic reasoning for Asset Health Management Systems in volatile markets



Published Jul 3, 2012
Katja Gutsche


With respect to the growing demand in asset reliability, availability, maintainability, safety and productivity (RAMS-LCC) diagnosis and prognostic asset health management (PHM) systems provide more detailed asset health information which allows improved maintenance decision-making. This gives the opportunity for a more efficient, safer system operation (e.g. aircraft, production facilities) and therefore a more competitive enterprise. Of course, the implementation and use of PHM causes recurring and non-recurring costs, which have to be at least covered by the savings due to benefits achieved by cost avoidance through better asset health knowledge. The economic justification is essential for a positive decision upon the installation of PHM. This becomes more complex as the benefits depend on the operation circumstances which then are strongly influenced by the market situation. The market situation is strongly determined by the market demand, number of competitors and speed of technological changes. As these parameters are especially relevant in the producing industry, this shall be the system of choice in this paper. The question to be raised is how much the economical attractiveness of PHM systems correlates with an increase in market impermanence as to be seen globally in most market segments.

How to Cite

Gutsche, K. (2012). Economic reasoning for Asset Health Management Systems in volatile markets. PHM Society European Conference, 1(1).
Abstract 761 | PDF Downloads 149



economics and cost-benefit analysis, Asset health management, volatile markets


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