How much does a $5 part cost? If you’re only looking at price, the answer is simple: It costs $5. But to effectively manage your maintenance budget, it’s better to think of product price as just one piece of a larger picture. So, instead of only focusing on how much something costs, it makes more sense to zoom out and also look at what it costs you to repair or replace that part when it fails. With level of repair analysis (LORA), you can systematically determine the overall effects of different costs on your budget, helping you make decisions backed by reliable data.
What is level of repair analysis (LORA)?
Level of repair analysis helps you determine the right level and the right amount of maintenance to invest in an asset for the longest life cycle at the lowest cost. It’s how you decide if you need to repair or replace assets and equipment, and when you do repairs, where to do them.
The goal is to match the smallest amount of maintenance investment to each asset, so you spend the least while still meeting operational goals for availability and reliability. LORA is one way to get the biggest bang for your maintenance buck.
Although some organizations might already have systems in place for looking at overall repair-or-replace decisions when larger assets reach the end of their life cycle, you can use LORA for all the assemblies, sub-assemblies, components, and parts in your assets and equipment.
What do you include in LORA calculations?
It helps to go back to the original question about that $5 part. When it fails, you have several different maintenance options, but to find the best one, you need to build different cost models.
So, for each option, you need to know the required resources, including people, tools, and testing equipment. In some cases, a lot can go into a repair. For example, depending on the part and the type of maintenance, you might need someone with specialized skills, working with specific tools. And once they’re done, they might then also need expensive diagnostic equipment to make sure they’ve done the work properly.
You also need to look at where your techs complete their work because that can also affect the costs for each model. Are they able to do the repairs on site? Or do they need to remove some of the assembly so they can then take it back to the maintenance shop? What if they can’t complete the work onsite, so it needs to be sent out to a third party?
What are the levels of repair you need to analyze?
Depending on the organization, you have either two or three repair levels, which are different from one another in terms of types of repairs and locations.
Organizational level maintenance
Here, techs are doing the work onsite. A lot of the time, it’s straight remove-and-replace work with modular components. Did the motor die on a fan? The team needs to swap in a new one. At this level, there’s also a lot of repair-in-place work. It might be the case that the fan blades were pumped out of alignment. Now all the team needs to do is safely reseat the blades. Regardless of the specific tasks, the goal is always to get the work completed as quickly as possible to avoid unscheduled downtime.
Intermediate level maintenance
Instead of working on site, techs take parts and components to back shops to work on them there. Often, this level of maintenance focuses on rotating assets, which can include:
- Fire extinguishers
- Control boards
The advantage of working in a backstop is that because they have more space and access to more tools, techs can complete more difficult repairs there.
Depot level maintenance
When the required work is more specialized, the maintenance department can send it out to repair depots or back to the original manufacturers. Here, the jobs are either more complex, extensive, or both. D-level locations tend to have a lot of diagnostic equipment as well as manufacturing capabilities.
It’s helpful to think of maintenance as medicine for your machines. So, the first level of maintenance is when you only lightly skin your knee, so you just quickly brush off the dirt. The second level is when you skin your knee bad enough to need a trip to the first-aid kit for some antiseptic and a bandage. The third level is when you’ve injured yourself enough to need a trip to the hospital.
What are the benefits of level of repair analysis?
You can see the benefits in your maintenance budget. You can save money by making the move that gives you the best support for your operational goals for the smallest amount of money. Instead of spending a lot on a perfect result, you can spend a lot less on a good one.
And you’re saving money faster because every time a maintenance question comes up, it’s a lot more likely you already have an answer. Instead of trying to decide what to do and how best to do it each time, using LORA means you’ve already run a lot of the numbers.
How does a CMMS help with LORA?
Just like most everything else in maintenance, to do it right, you need the right data. Before you can build out your cost models for different maintenance decisions, you need to know what everything costs.
And getting a handle on costs always starts with clean, reliable data. It might be easy to look at a parts list for prices, but you need equipment maintenance software to reliably track data and generate maintenance metrics and KPIs for things like failure rates. From there, you can accurately calculate the costs of different maintenance options.
Level of repair analysis (LORA) helps you determine the best maintenance option for assemblies, components, and parts so you get the best return on investment over an asset’s useful life.
The goal is to determine the total cost of a series of maintenance options, and then choose the one that best supports operational goals related to availability and reliability for the lowest cost. Departments need to look at the physical requirements of providing each maintenance option, including staffing, supplies, and workspace.
You need to know who needs to be on the team, what tools they need to get the job done, and where they can complete the work. In most analyses, organizations consider three possible levels: organizational, intermediate, and depot. For the first, the team does the work on site, at the asset.
For the second, it’s in a dedicated back shop, while for the third, the team sends work out to specialized shops or to the original manufacturers. Modern equipment maintenance software makes it easier to capture data and then crunch it into reports, giving the maintenance department the insights into overall costs they need to then implement LORA.