Engineering Life-Cycle Cost for Professional

by M. Rifaldi

1. Introduction

The engineering people think how to make a useful system that can be creates functionally for people to use and safe for the environmental. From the beginning of the idea to help people doing their activities engineer think technically to embody the idea. They will meet a success to creates what people desire by provide the tools. Unfortunately they more fail to meet the cost criterion as one of a good engineering design.

Good materials that use to create the tool/ the design may have met the requirement of design as the properties of material should support it. The engineers often use the properties table and graphics to select some of material as the alternative material for design by using quantitative methods. The methods were use over the years, and will make a successful materials selection. The properties and the cost of material are important factor to get the initial cost of materials. Ashby’s method3 is useful for initial screening selection of the materials, yield strength, density and cost prices are the important factors, but in Ashby’s chart cost factor is excluded. Many methods are describes to get the optimum solution on material selection because there are many prospective candidates. After the selections the engineer will face the cost of each candidate, which one is more effective on budgeting and other cost.

Consider the engineer as the only engineer who think about the design until the production and maintenance, they will search for the best material (meet the criterion for design), the best detail design from the drawing to be a contract book for bidding, the best method of installation all equipment and the best maintenance method. The maximum design may be applied to all aspect of engineering but mostly it will meet the excessive budget for the design. It would be very strong for the engineering side because all maximum effort is granted to meet maximum design. Meanwhile the budget seems to be limited to embody engineering design.

From the budgeting side all engineering decisions should filtered by the cost consideration. To avoid the conflict between the engineering and financial on budgeting the design/ project, engineer should learn about the cost of design process. They should consider about the cost of the materials, machine parts and spare part, the method, installation cost, maintenance and disposal cost. The whole cost from the early birth until the disposal of the designs/ machines. So the engineering will meet the good and successful engineering design by considering the economical value2.

2. Engineering Design Life-Cycle

Life cycle engineering (LCE)9 is concerned with the total product life, from raw material acquisition through material processing, manufacturing, use, and disposal. (Further study is available in the reference [9])

Fig. 1 Life phases of a product[9]

At the flowchart above is the life cycle of a product, beginning from needs or an idea to disposed product. If compared with the life of human, start from the initial birth goes to growing stage and then buried because has pass away. Let’s make it simple to be like this;

Design Steps;

  1. Idea
  2. Decisions / Selection
  3. Detail design and manufacturing
  4. Installation
  5. Driving, maintenance, repair, management.

2.1. Idea,

The engineering steps usually start from the Idea that comes from many factors, the idea present to solve the problems. People always think to get easier to do something and sometimes to get faster, see the figure below.

Fig 2, Idea in Engineering

Fig. 3, sources of idea
Fig. 3, sources of idea

People can use their imagination to build something from many ideas. The idea itself comes from different background as shown in fig. 2. Educated people would prefer to see from the knowledge eyes, they will gather all information to make a new idea. As the engineer student study about math, physic, chemistry, drawing, concept and management environment protection, firstly they will think from the literature. In the other side, sometime people cannot find the way of any idea literately; doing something that maybe there is no sureness of any result, but it will give better contribution to experiment and produce many ideas after failures.

The Idea could be configured from the survey, for example a company has produced a product and to get more satisfied the costumer, the company performs a survey. The data could be used as a quality control measurement, improve the product performance and of course to summon up ideas from the costumer.

2.2. Decision/ Selection

In engineering steps, problems often appear at the selection of support component (materials, devices, or machines part). Engineer should make appropriates decisions that could satisfied the requirement some of limitation from shareholder or budgeting department and basic design.

As mentioned in the introduction, there are some method or analysis that should be proceed to get a real understanding to recognize the subjects/ components. Engineer should know and gather all the requirement of technical requirements. Some general requirement would response as following;

  1. Lifetime
  2. The availability of spare part
  3. After sales service
  4. Guarantee
  5. Capital turnover (Break Even Point)
  6. etc

These requirement are often used as the questions to fabricant who sales their machines and often used as the consideration on make decisions. But these are general technical requirement, sometimes engineer need more detail for technical consideration.

2.3. Detail Design and Manufacturing

At detail design stage, it usually involves three general scopes; there are analysis, parts and material list, and drafting11.

²  Mathematical analysis of parts to determine their size, reduction ratio, shear strength, cable capacity, output torque, service factor, material, etc., or other analysis such as Failure Modes and Effects Analysis (FMEA) that describes each part of the system if failure are happen could makes effect to the system.

The generation of a parts and materials list detailing every part number or type of raw material needed to build the machine, engineer must confident with the different part number has a different purpose, and

The completion of a drafting showing a fully detailed model of the machine to be built, ready to be converted into shop construction drawings, engineer have to understand how to draw either by hands or computer but for more speed computer is a must.

Machine design cannot be done without knowledge of manufacturing processes and assembly techniques because much of the design itself is driven by the realities of construction. This would include consideration of the properties of the materials involved, their method of fabrication into basic components, and the assembly of those components into the finished machine. While on the surface this seems obvious, there are many less well known details of construction that if considered during design will improve resulting machine.

Design for Fabrication, Optimizing the process of making each component part of a machine from some form of raw material is the concern of design for fabrication.

Design for assembly, or DFA (design for assembly), is concerned with optimizing a machine’s design in relation to how it will be assembled.

2.4. Installation

In some project for mechanical works, the installation would be complicated if from the beginning of design not analyze for the failure of placing the machines part. The principle is the balance of system, for example, if a water tank put on top of tower it should placed in the center to avoid bending on leg of tower. Installation should consider the vibration of other rotating machine that has high frequency and it would disturb other parts if installed close to rotating machine.

The installation for mechanical machine has budget for the labor and other instrument use to support the installation. For the budgeting problems, when the times for installation begin, engineer has to choose method to install the equipment. Which one is cheaper and has more reliable.

2.5. Driving, Reparation, Maintenance Management

While the all design and installation are finish, then turn to roll the machine to give production. When it is start produce there are cost for production, such as electricity, fuel, labor, and many more. So it is necessary to think about the cost spend in production and choose the best method to give efficiency and more profitability.

There are three types of maintenance tasks: (1) breakdown, (2) corrective, and (3) preventive. The principal difference in these occurs at the point when the repair or maintenance task is implemented. In breakdown maintenance, repairs do not occur until the machine fails to function. Preventive maintenance tasks are implemented before a problem is evident and corrective tasks are scheduled to correct specific problems that have been identified in plant systems

A comprehensive maintenance program should use a combination of all three. However, most domestic plants rely almost exclusively on breakdown maintenance to maintain their critical production systems

Repairs must be complete and properly implemented. In many cases, poor maintenance or repair practices result in more damage to critical plant machinery than the observed failure mode. A fundamental requirement of corrective maintenance is proper, complete repair of each incipient problem. To meet this requirement, all repairs must be made by craftsmen who have the necessary skills, repair parts, and tools required to return the machine or system to as-new condition.

One factor that limits the effective management of plants is the lack of timely, factual data that defines operating condition of critical production systems and the effectiveness of critical plant functions, such as purchasing, engineering, and production. Properly used, predictive maintenance can provide the means to eliminate all factors that limit plant performance. Many of these problems are outside the purview of maintenance and must be corrected by the appropriate plant function

3. LCCA (Life-Cycle Cost Analysis)

Life-cycle cost analysis (LCCA)8 is an economic method of project evaluation in which all costs arising from owning, operating, maintaining, and ultimately disposing of a project are considered to be potentially important to that decision. LCCA provides a significant better assessment of long-term cost effectiveness of a project than alternative economic methods that focus only on first cost or on operating-related costs in the short run.

LCCA is a powerful tool of economic analysis. As such, it requires more information than do analysis based on first-cost or short-term considerations. it also requires additional understanding on the part of the analyst of concepts such as discounted cash flow, constant versus dollars, and price escalation rates. The alternative, however, is to ignore the long-run cost consequences of investment decisions, to reject profitable investment, and to accept higher-than-necessary utility costs

3.1. Preliminary considerations

Life-Cycle cost analysis can range widely in complexity. Therefore, it is useful to give some thought to planning the study before the data acquisition and computation phases.

timing of life-cycle cost analysis

The planning, design, and installation process of a machine system comprise a myriad of decision. Some of these decisions are economic in nature; others involve political, social, or aesthetic considerations. Design decisions usually have the greatest impact on total cost early in this process. With each successive set of decisions, there tends to be less opportunity to make cost-saving changes in the design of a machines system. Therefore, the earlier LCC considerations are included in the planning and design process, the greater the potential cost saving than can be expected.

Level of effort

Since economic analysis itself requires resources -time and money- the effort should be tailored to the need of the project. The scope of an analysis might vary from a simple study to a detailed analysis with thoroughly research input data, supplementary measures of economic evaluation, complex uncertainty assessment, and extensive documentation. the greater the potential savings, the greater the visibility of the project, and the greater the pressure to make a choice based on criteria other than economics, the more important it is to have a thoroughly researched, carefully performed, and well documented study

Level or documentation

LCC studies, whether small or large, need to be carefully documented in order to keep track of the evaluation process, to create a decision-supporting record, and to have information easily accessible for future studies. The format should be simple and easy to understand.

3.2. Type of investment decisions

In order to define and delineate the requiremnet of the economic analysis, it is helpful to identify the type of investment to be made for the making of a machine. The following list identifies the five promary types of investment-related decisions related to build a machince system;

  1. Accept or reject system option
  2. Select an optimal efficiency level machine system
  3. Select an optimal system type from competing alternatives
  4. Select an optimal combination of interdependent system
  5. Rank competing machine to allocate a limited budget

4. Engineering Life-Cycle coherence with LCCA

Now let us see the coherence between the engineering and cost in a life-cycle from the above descriptions. Engineering think how to produce a useful product begin from the idea or the need, planning, after producing then maintaining and finally disposing. From each of engineering life-cycle will be followed by cost, therefore cost has cycled in engineering steps. Costing as one of factor that influence in every the engineering decisions.

Operation costs that are not directly related to the machine system should usually be excluded from the LCCA. An example of a cost that should be excluded is the cost of safety goggle. While it is an annual operating expense, it has nothing to do with the operation of the machines but is rather, a function of the machine user

Maintenance costs are scheduled costs associated with the upkeep of the facility. An example of a maintenance cost is the cost of an annual main machine inspection and spare part inspection to keep the availability when need. This task is a scheduled event that is intended to keep the machines in good condition.

Repair costs are unanticipated expenditures that are required to prolong the life of a machine system without replacing the system. An example is the repair of a broken chain or pulley from conveyor. This is an unscheduled event that does not entail replacement of the entire conveyor unit, merely the replacement of the broken chain. Some maintenance costs are incurred annually and others less frequently. Repair costs are by definition unforeseen so it is impossible to predict when they will occur. For simplicity, maintenance and repair costs should be treated as annual costs. All maintenance and repair costs are to be discounted to their present value prior to addition to the LCCA total


Engineer has to consider the costing for each project of making machine system to bring good decision on selecting components and methods, good design and successful proposal, efficient production and effective maintenance management.


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  2. Barringer, H.Paul. (2003). A Life Cycle Cost Summary. Int. Conf. of Maintenance Societies – ICOMS. May 20-23, 2003. Australia.
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  4. John Bird and Carl Ross. (2002). Mechanical Engineering Principles. Butterworth-Heinemann. Oxford.
  5. Mahendra S. Hundal. (2001). Mechanical Life Cycle Handbook, Good Environmental Design and Manufacturing. Marcel Dekker, Inc. New York.
  6. R. Gentle., W. Bolton., P. Edward. (2001). Mechanical Engineering System. Butterworth-Heinemann. Oxford.
  7. Sherif, Yosef S. and Kolarik, William J. (1981). Life Cycle Costing: Concept and Practice. OMEGA the Int. Journal of Mgmt Sci. vol. 9, No. 3, pp. 287–296.
  8. U.S. Dept. of Commerce. (1996). Life-Cycle Costing Manual. NIST Handbook 135-1995. Washington, DC.
  9. Walt Scacchi and Peiwei Mi. (1997). Process Life Cycle Engineering: A Knowledge-Based Approach and Environment. Intell. Sys. Acc. Fin. Mgmt. (6), pp.83–107.
  10. 10.  Zhe Shen and Shana Smith. (2006). Optimizing the functional design and life cycle cost of mechanical systems using genetic algorithms. Int. J Adv Manuf. Technol. (27), pp.1051–1057
  11. 11.  Hendrickson, Alan and Colin Buckhurst. (2008).Mechanical design for the stage. Focal Press is an imprint of Elsevier. Oxford.

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