1. Money / Effort / Downtime / Safety Time 1 Decision Trees Based on Exponential Bifurcations in the Maintenance Process The Geaslin Group David Tod Geaslin, Principal Houston Phone: (832) 524-8214 Web Page: www.geaslin.com E-Mail: david@geaslin.com 1/26/2014

2. Money / Effort / Downtime / Safety Time 2Bifurcation bi·fur·cate bi·fur·cate : to divide into two branches or parts Key Bifurcation Decisions Key Bifurcation Decisions – Repair or Defer Maintenance – Recognizing Exponential Dynamic Nonlinearity in Maintenance Decision-Making – Applying This Knowledge to Operational and Budgeting Decisions 1/26/2014

3. Money / Effort / Downtime / Safety Time 3 Geaslin’s Inverse-Square Rule for Deferred Maintenance When an organization attempts to reduce maintenance costs by reducing maintenance spending, maintenance costs will be reduced until spending falls below the minimum needs of the machines. The Rule - If a part is known to be failing but operated to failure (OTF), the resultant expense to the entire organization will be the square of the primary failure part and costs will square again with each successive cascading level of failure. When maintenance spending falls below this minimum level and the machine is operated to failure, the Inverse-Square Rule for Deferred Maintenance Effort will be triggered and the result will be an exponential cost increase that is INVERSE to the expected savings. Inverse-Square Rule for Deferred Maintenance Effort Inverse-Square Rule for Deferred Maintenance Effort

4. Money / Effort / Downtime / Safety Time 4 Exponential Bifurcations Premise: Premise: Allowing a deferred maintenance event to progress to failure will create an exponential expense to the whole organization. Allowing a deferred maintenance event to progress to failure will create an exponential expense to the whole organization. Proof: Proof: Use your historical information for a breakdown in your process and enter the data in my spreadsheet “Computing the True Risk/Reward Ratio for Deferred Maintenance” & “Inverse-Square Rule for Deferred Maintenance” Use your historical information for a breakdown in your process and enter the data in my spreadsheet “Computing the True Risk/Reward Ratio for Deferred Maintenance” & “Inverse-Square Rule for Deferred Maintenance” 1/26/2014

5. Money / Effort / Downtime / Safety Time 5 Dynamic & Nonlinear Systems Graph is NOT a mathematical result of any numbers I have computed. (Dr. Mitchell Jay Feigenbaum’s constants are two mathematical constants which both express ratios in a bifurcation diagram for a non-linear map.) Graph is NOT a mathematical result of any numbers I have computed. (Dr. Mitchell Jay Feigenbaum’s constants are two mathematical constants which both express ratios in a bifurcation diagram for a non-linear map.)bifurcation diagrambifurcation diagram Good Bifurcation Tool Good Bifurcation Tool Dr. Edward Lorenz Dr. Edward Lorenz – Extreme Sensitivity to Small Changes in Initial Conditions – Feedback Loops – Strange Attractors – Computing all the possible futures with nonlinear equations See Appendix A for References See Appendix A for References 1/26/2014

6. Money / Effort / Downtime / Safety Time 6 Bifurcations Caused by Maintenance Spending New Machine Normal Wear Maintenance Cost Need for Maintenance Action Detected Management Evaluation of Needed Maintenance Action in Repair Money, Lost Production, and Sales DeferOrRepair? Decision Made to Defer Maintenance Machine Demands Action! Breakdown Event Maintenance Cost! Early Intervention Maintenance Cost 1/26/2014

7. Money / Effort / Downtime / Safety Time 7 Exponential Progressions New Machine Normal Wear Maintenance Cost Need for Maintenance Action Detected Management Evaluation of Needed Maintenance Action in Repair Money, Lost Production, and Sales DeferOrRepair? Decision Made to Defer Maintenance Machine Demands Action! Breakdown Event Maintenance Cost! Early Intervention Maintenance Cost Need for Maintenance Action Detected Breakdown Event Maintenance Cost! Early Intervention Maintenance Cost 1/26/2014

8. Money / Effort / Downtime / Safety Time 8 Exponential Examples (1st Level of Failure) Deferred (OTF) OrRepair Parts & Labor $750 $100 Bearing Known to be Failing OTF $10,000 Rewind 1/26/2014 The breakdown event did not escalate further because the right choice was made. Reasons: Excess Production Capacity Excess Production Capacity Parallel or Redundant Systems Parallel or Redundant Systems Spare Parts on the Shelf Spare Parts on the Shelf No Safety or Accident Issues No Safety or Accident Issues So… So…

9. Money / Effort / Downtime / Safety Time 9 Exponential Brake Failure (2nd Level of Failure) $40 Brake Shoe Block Known to Need Replacing OperatetoFailure(BreakdownEvent Breakdown Event Cost If the truck breaks down on the road, and the core value of the shoe is lost, the drum is ruined, a second truck has to be dispatched, the load has to be transferred, the truck towed back with a deadhead driver, the Breakdown Event cost will be square of the cost of the brake block $1,600 Personal Injury or Death Squares again to $2,560,000 1/26/2014

10. Money / Effort / Downtime / Safety Time 10 Refinery Explosion (3rd Level of Failure) $214? High Level Sensor OperatetoFailure(BreakdownEvent) ExplosionMortalities Repairs & Lost Production, EPA, Legal, Etc. $2.13 Billion $46,000 Cost to Stop the Startup and Repair the High Level Gauge, Idled Workers, Lost Production, Ruined Materials, Etc.? 1/26/2014

11. Money / Effort / Downtime / Safety Time 11Next Now we will offer how to use the worksheet to verify this concept and compute the… Now we will offer how to use the worksheet to verify this concept and compute the… True Risk/Reward Ratio for Deferred Maintenance True Risk/Reward Ratio for Deferred Maintenance Inverse-Square Rule for Deferred Maintenance Inverse-Square Rule for Deferred Maintenance 1/26/2014