The impact of early failures on maintenance costs: an empirical study in Latin America

Rodrigo E. Peimbert-García, Jesús Isaac Vázquez-Serrano*, Jorge Limón-Robles

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: Literature shows that the economics of early failures in maintenance and electric utilities have not been deeply analyzed. This study aims to focus on quantifying the economic impact that early failures in current transformers have on total maintenance costs. The empirical study is conducted in a regional transmission division of an electric utility located in Mexico. Design/methodology/approach: The utility's database was accessed to collect 219 maintenance records. Clustering techniques were used to identify early failures from a bimodal distribution of failures. Confirmatory goodness-of-fit procedures followed the analysis, and finally, direct and opportunity costs were estimated by adapting the cost-of-quality (PAF) Model. Findings: Around 11% of all maintenance activities are triggered by early failures, and they account for up to US$2.2m during the eight-year period under study, which represents 16% of total maintenance costs. Additionally, opportunity costs represent close to two-thirds of the total costs due to early failures. This was obtained after finding and validating a clear-cut border of 3.5 months between early failures and the rest. Originality/value: Failures in energy grids and power transmission can have a large economic impact on the power industry and the society in general. Thus, the maintenance function in equipment such as current transformers is a crucial entry of the budget of any electric utility. This study is one of the very few that highlights the magnitude and importance of direct and opportunity costs derived from early failures.

Original languageEnglish
Number of pages18
JournalJournal of Quality in Maintenance Engineering
Early online date11 Feb 2021
DOIs
Publication statusE-pub ahead of print - 11 Feb 2021

Keywords

  • Early failures
  • Cost-of-quality
  • PAF model
  • Power systems
  • Electric utility

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