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How much does a $5 part cost? It's not a trick question. A $5 part costs $5. 

But there is a trick, and it's knowing that purchase price is only a small part of the equation, and that you should be also asking how much it costs to repair or replace that part when it fails, and that you should be using these total costs to decide which maintenance activates work best for you. 

Level of repair analysis (LORA) is how you determine these costs so you can make more cost-effective decisions. 

What is level of repair analysis (LORA)? 

Level of repair analysis is a method for finding the right level and amount of maintenance you invest in an asset, so you have the smallest possible life cycle costs. It's how you decide if you need to repair or replace things, and when you do repairs, where you 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. Basically, LORA is one way to get the biggest bangs for your maintenance bucks. 

Although some organizations might already have system in place for looking at overall repair-or-replace decisions when assets reach the end of their life cycle, you can use LORA for each assembly, sub-assembly, component, and part that makes up your assets and equipment. 

What do you include in LORA calculations? 

Back to the question of that $5 part. When it fails, you have several different maintenance options, and 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. Depending on the part and the type of maintenance, you might need someone with specialized skills to work with a specific tool. And once they're done, they then need diagnostic equipment to make sure they did the work properly. 

You also need to look at where your techs do their work, because that also affects costs for each model. 

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 based on 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. There's also a lot of repair-in-place work. The goal is getting the work completed as quickly as possible to avoid unscheduled downtime. 

Intermediate level maintenance 

Instead of working onsite, techs take parts and components to backshops to work on them there. Because they have more space and access to more tools, they can complete more difficult repairs. Here, techs often work on rotating assets. 

Depot-level maintenance 

When the required work is more specialized, the maintenance department can send it out to repair depots or 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 often helpful to think of maintenance as medicine for your machines. So, the first level of maintenance is when you skin your knee, and your mom kisses it better. The second level is when you really skin your knee, and she takes you to the bathroom and gets out the band aides. The third level is a broken leg and a trip to the hospital. 

Why are the benefits of level of repair analysis? 

You save money by always 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. 

Next steps 

Hippo's here to help you get the solution that works best for you, from answering your questions about everything related to maintenance to helping you book a live software demo.

Summary 

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 the course of 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 spaces. You need to know how needs to be on the team, what tools they need, 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 onsite, at the asset. For the second, it's in a dedicated backshop, while for the third, the team sends work out to specialized shops or back 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.

About The Author

Jonathan Davis

Jonathan has been covering asset management, maintenance software, and SaaS solutions since joining Hippo CMMS. Prior to that, he wrote for textbooks and video games.
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