There is not such a thing as a unplanned failure…

Special levies, deferred maintenance, repeat pattern breakages

Sounds familiar….*the consequences*

**We will show you how to transform the unknown into an opportunity in 4 steps**.

*Gate motors is often a headache due to its tendency to randomly break.*

*Scenario: Gate motor : Current replacement cost R6600 . Expected useful life 7 years, actual age 4 years. No specific maintenance cycle. 1 failure in past 3 years. How do you plan?**By doing a few calculations can we change the issue completely.*

*Rather than be stuck with the unknown, how about this:*

*Using the method below gives you the following insight:*

*the***probability of a failure**this year is 75.4%. Risk provision R4950.*If your maintenance & repair cost for the year**+**Risk cost :**Exceed replacement cost —replace rather than to repair.**Less than the replacement cost —better to repair.*

*If you implement a***maintenance cycle**the probability drops to 27% and risk provision to R1782. See how that change the situation : less provision required and extend the useful life of the item. The 20/80 principle*.*

#### 80/20

If you are a property manager then you will agree that 80% of your time is spent on resolving unplanned failures and 20% on doing your actual job . Big picture perspective on this is that you are **wasting at least 60% of you time, your resources, funding** on the wrong things…That could have been prevented or at least foreseen 80% of the time.

Unplanned failures are a product of planning, not an event.

There is proven methods to determine the probability of a failure and provision for the event in advance, with a high degree of accuracy. These methods are typically used within the formulation of a LTMP. If you want to read more on LTMP click here. We will use those methods but in a more practical way here.

**Here is the steps you follow to transform unplanned to planned events (failures)**

**Step1. Calculate the item’s effective condition age**

Understand your structural item. It specifications, its life cycle and associated events. Give an age rating given its current condition.

- Determine its expected useful life(EUL). Eg timber window 40 years
- Will it’s still be in a functional working condition by the end of the year, if you do nothing and you don’t have factual information to indicates that it will fail in this year. So you expect it to last. Be realistic. If it looks old then it is, If it looks new, then it is. If it looks neglected..then it is.
- Calculate its effective age
- Old = 75% * EUL
- New = 100% * EUL
- Neglected = 50% * EUL

**Step 2. Create a health index.**

This matrix is a generic view(index) of the factors that underpin the property. The Iso standard is the following variables: Item **quality**, **design**, **Workforce**, **Internal** and **external **environmental factors, **usage** and **maintenance** adherence .

- Give each a rating (.8 for negative, 1 for neutral, 1.2 for positive)
- Index ratio = product of rating

#### Step 3. Create a Density ratio.

This ratio is a factor of historical events.

- 1.2 = more that 1 failure in the past 3 years
- 1 = at least 1 Failure in the past 3 years
- 0.8 = Less 1 failure in the past 3 years

**Step 4. Calculate the Failure probability**

For this you will need MS excel and the above calculations

Calculate the cumulative normal distribution.

- x factor = is your items actual age
- Mean = Condition EUL * Index ratio / density ratio
- Distribution = Original EUL *25%

*You failure probability % is the probability that you will have at least 1 breakage in the next year. More that 100 indicates more than 1 failure*

## That’s it. Now you must just use the information

**Step 5. Create a plan for the failure**

Consider pre-emptive measures to prevent the failure such as planned maintenance/renewal or replacement

- If preventable consider consequence minimizing measures and provision for funding ..
*See our publication on risk cost calculation*

- Risk cost provision is a discounted financial provision for a failure , irrespective of it happening or not.