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Nov
15

Calculating Risk Avoidance with Online Monitoring Systems

Calculating Risk Avoidance with Online Monitoring Systems 

Industry-4

Risk is typically the product of two factors, Consequence and probability. These factors are often combined to develop a financial justification in monetary units. Risk avoidance is the process of reducing risk based on reducing the cost of consequence and likelihood of occurrence.

The role of an online monitoring system is to ensure that the risk is avoided as much as practicable. This is achieved by reducing the cost of consequence, i.e. avoiding a catastrophic failure and consequential costs associated with lost productivity, labour and spare parts and reducing the likelihood through

For example: If a high criticality pump fails catastrophically, a potential consequence is $200,000 in lost productivity, labour and spare parts and other incidentals.

Consider this event occurring at a frequency of once every ten years. This represents an annual risk of $20,000 per annum. Now consider the same failure with the probability of one failure every two (2) years. The annual risk has now increased to $50,000 per annum.

$200,000 Failure Costs

Failure Every 10 Years             = $200,000 / 10 years             = $20,000 / annum

Failure Every 2 Years              = $200,000 / 2 years               = $100,000 / annum Read More


Oct
10

IoT CM Systems – A worthwhile investment?

Do IoT CM Systems provide a worthwhile ROI?

iot cm systems

Do IoT CM Systems provide a worthwhile ROI?

The majority of IoT based online condition monitoring (CM) systems are vibration based. These IoT CM Systems are focused on components with long periods of downtimes per failure. When it comes to the financial justification of IoT CM investments, many uninformed analysts assume that the system is perfect and will always inform the user ahead of any impending failure. However, this is not always the case and false alarms as well as missed failures will produce costs that may mean the investment is not, or maybe more incentivized then it appears.
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Oct
14

Project Management Done Right

Pakenham, Victoria (october 14, 2015) – Nothing’s better than having the reliability of a support team behind your business. M-innovation Business has initiated the Local Government Support Team (LGST) as a means of aiding local business clients and working with their councils. Read More