Dependability management - Part 3-3: Application guide - Life cycle costing (IEC 60300-3-3:2017)

Provides a general introduction to the concept of life cycle costing, covers all applications and particularly highlights the costs associated with dependability of the product. Explains the purpose and value of life cycle costing and outlines the general approaches involved. Identifies typical life cycle cost elements to facilitate project and programme planning. General guidance is provided for conducting a life cycle cost analysis, including life cycle cost model development. Illustrative examples are provided to explain the concepts.

Zuverlässigkeitsmanagement - Teil 3-3: Anwendungsleitfaden - Lebenszykluskosten (IEC 60300-3-3:2017)

Gestion de la sûreté de fonctionnement - Partie 3-3: Guide d'application - Evaluation du coût de vie (IEC 60300-3-3:2017)

Provides a general introduction to the concept of life cycle costing, covers all applications and particularly highlights the costs associated with dependability of the product. Explains the purpose and value of life cycle costing and outlines the general approaches involved. Identifies typical life cycle cost elements to facilitate project and programme planning. General guidance is provided for conducting a life cycle cost analysis, including life cycle cost model development. Illustrative examples are provided to explain the concepts.

Upravljanje zagotovljivosti - 3-3. del: Vodilo za uporabo - Izračun stroškov v življenjskem ciklu (IEC 60300-3-3:2017)

Podaja splošni uvod v koncept izračuna stroškov v življenjskem ciklu, zajema vse načine uporabe in posebej izpostavlja stroške, povezane z zanesljivostjo izdelka. Pojasnjuje namen in vrednost izračuna stroškov v življenjskem ciklu ter opisuje vključene splošne pristope. Določa tipične elemente stroškov v življenjskem ciklu za lažje načrtovanje projektov in programov. Podano je splošno vodilo za izvajanje analize stroškov v življenjskem ciklusu, vključno z razvojem modela stroškov v življenjskem ciklusu. Za pojasnilo konceptov so podani slikovni primeri.

General Information

Status
Published
Publication Date
01-Jun-2017
Technical Committee
Current Stage
6060 - National Implementation/Publication (Adopted Project)
Start Date
24-May-2017
Due Date
29-Jul-2017
Completion Date
02-Jun-2017

RELATIONS

Buy Standard

Standard
SIST EN 60300-3-3:2017 - BARVE na PDF-str 23,43
English language
46 pages
sale 10% off
Preview
sale 10% off
Preview

e-Library read for
1 day

Standards Content (sample)

SLOVENSKI STANDARD
SIST EN 60300-3-3:2017
01-julij-2017
1DGRPHãþD
SIST EN 60300-3-3:2007
8SUDYOMDQMH]DJRWRYOMLYRVWLGHO9RGLOR]DXSRUDER,]UDþXQVWURãNRYY
åLYOMHQMVNHPFLNOX ,(&

Dependability management - Part 3-3: Application guide - Life cycle costing (IEC 60300-

3-3:2017)
Zuverlässigkeitsmanagement - Teil 3-3: Anwendungsleitfaden - Lebenszykluskosten
(IEC 60300-3-3:2017)

Gestion de la sûreté de fonctionnement - Partie 3-3: Guide d'application - Evaluation du

coût de vie (IEC 60300-3-3:2017)
Ta slovenski standard je istoveten z: EN 60300-3-3:2017
ICS:
03.120.01 Kakovost na splošno Quality in general
21.020 =QDþLOQRVWLLQQDþUWRYDQMH Characteristics and design of
VWURMHYDSDUDWRYRSUHPH machines, apparatus,
equipment
SIST EN 60300-3-3:2017 en

2003-01.Slovenski inštitut za standardizacijo. Razmnoževanje celote ali delov tega standarda ni dovoljeno.

---------------------- Page: 1 ----------------------
SIST EN 60300-3-3:2017
---------------------- Page: 2 ----------------------
SIST EN 60300-3-3:2017
EUROPEAN STANDARD EN 60300-3-3
NORME EUROPÉENNE
EUROPÄISCHE NORM
May 2017
ICS 21.020 Supersedes EN 60300-3-3:2004
English Version
Dependability management -
Part 3-3: Application guide - Life cycle costing
(IEC 60300-3-3:2017)

Gestion de la sûreté de fonctionnement - Partie 3-3: Guide Zuverlässigkeitsmanagement - Teil 3-3:

d'application - Évaluation du coût du cycle de vie Anwendungsleitfaden - Lebenszykluskosten

(IEC 60300-3-3:2017) (IEC 60300-3-3:2017)

This European Standard was approved by CENELEC on 2017-03-03. CENELEC members are bound to comply with the CEN/CENELEC

Internal Regulations which stipulate the conditions for giving this European Standard the status of a national standard without any alteration.

Up-to-date lists and bibliographical references concerning such national standards may be obtained on application to the CEN-CENELEC

Management Centre or to any CENELEC member.

This European Standard exists in three official versions (English, French, German). A version in any other language made by translation

under the responsibility of a CENELEC member into its own language and notified to the CEN-CENELEC Management Centre has the

same status as the official versions.

CENELEC members are the national electrotechnical committees of Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic,

Denmark, Estonia, Finland, Former Yugoslav Republic of Macedonia, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia,

Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden,

Switzerland, Turkey and the United Kingdom.
European Committee for Electrotechnical Standardization
Comité Européen de Normalisation Electrotechnique
Europäisches Komitee für Elektrotechnische Normung
CEN-CENELEC Management Centre: Avenue Marnix 17, B-1000 Brussels

© 2017 CENELEC All rights of exploitation in any form and by any means reserved worldwide for CENELEC Members.

Ref. No. EN 60300-3-3:2017 E
---------------------- Page: 3 ----------------------
SIST EN 60300-3-3:2017
EN 60300-3-3:2017
European foreword

The text of document 56/1713/FDIS, future edition 3 of IEC 60300-3-3, prepared by IEC/TC 56

"Dependability" was submitted to the IEC-CENELEC parallel vote and approved by CENELEC as

EN 60300-3-3:2017.
The following dates are fixed:
(dop) 2017-12-03
• latest date by which the document has to be implemented at
national level by publication of an identical national
standard or by endorsement
(dow) 2020-03-03
• latest date by which the national standards conflicting with
the document have to be withdrawn
This document supersedes EN 60300-3-3:2004.

Attention is drawn to the possibility that some of the elements of this document may be the subject of

patent rights. CENELEC shall not be held responsible for identifying any or all such patent rights.

Endorsement notice

The text of the International Standard IEC 60300-3-3:2017 was approved by CENELEC as a

European Standard without any modification.

In the official version, for Bibliography, the following notes have to be added for the standards indicated:

IEC 60300-1:2014 NOTE Harmonized as EN 60300-1:2014 (not modified).
IEC 62402 NOTE Harmonized as EN 62402.
IEC 62508 NOTE Harmonized as EN 62508.
IEC 62198 NOTE Harmonized as EN 62198.
IEC 61014 NOTE Harmonized as EN 61014.
IEC/ISO 31010 NOTE Harmonized as EN 31010.
---------------------- Page: 4 ----------------------
SIST EN 60300-3-3:2017
IEC 60300-3-3
Edition 3.0 2017-01
INTERNATIONAL
STANDARD
NORME
INTERNATIONALE
colour
inside
Dependability management –
Part 3-3: Application guide – Life cycle costing
Gestion de la sûreté de fonctionnement –
Partie 3-3: Guide d’application – Évaluation du coût du cycle de vie
INTERNATIONAL
ELECTROTECHNICAL
COMMISSION
COMMISSION
ELECTROTECHNIQUE
INTERNATIONALE
ICS 21.020 ISBN 978-2-8322-3886-8

Warning! Make sure that you obtained this publication from an authorized distributor.

Attention! Veuillez vous assurer que vous avez obtenu cette publication via un distributeur agréé.

® Registered trademark of the International Electrotechnical Commission
Marque déposée de la Commission Electrotechnique Internationale
---------------------- Page: 5 ----------------------
SIST EN 60300-3-3:2017
– 2 – IEC 60300-3-3:2017 © IEC 2017
CONTENTS

FOREWORD ........................................................................................................................... 5

INTRODUCTION ..................................................................................................................... 7

1 Scope .............................................................................................................................. 8

2 Normative references ...................................................................................................... 8

3 Terms, definitions and abbreviated terms ........................................................................ 8

3.1 Terms and definitions .............................................................................................. 8

3.2 Abbreviated terms ................................................................................................. 11

4 Concepts of life cycle costing ........................................................................................ 11

4.1 Objectives of life cycle costing .............................................................................. 11

4.2 Application of life cycle costing ............................................................................. 12

4.3 Factors influencing LCC ........................................................................................ 13

4.4 Factors related to dependability ............................................................................ 13

5 Life cycle costing process .............................................................................................. 14

5.1 General ................................................................................................................. 14

5.2 Establish the organizational context ...................................................................... 14

5.2.1 Formulate the context .................................................................................... 14

5.2.2 Identify alternatives ....................................................................................... 16

5.3 Plan the analysis .................................................................................................. 16

5.3.1 Define scope and objectives of the analysis ................................................... 16

5.3.2 Define analysis tasks and identify contributing personnel .............................. 16

5.3.3 Identify constraints ........................................................................................ 17

5.3.4 Identify relevant financial parameters ............................................................ 17

5.4 Define the analysis approach ................................................................................ 18

5.4.1 Establish rules/methodology .......................................................................... 18

5.4.2 Select or develop an LCC model .................................................................... 18

5.4.3 Define the cost breakdown structure .............................................................. 19

5.4.4 Identify areas of uncertainty ........................................................................... 20

5.5 Perform the analysis ............................................................................................. 21

5.5.1 Establish methods for estimating cost elements ............................................. 21

5.5.2 Collect cost data ............................................................................................ 21

5.5.3 Aggregate cost per item for each stage or time period ................................... 22

5.5.4 Perform LCC and sensitivity analysis ............................................................. 22

5.5.5 Review analysis ............................................................................................. 22

5.5.6 Assess achievement of analysis objectives .................................................... 22

6 Finalize the analysis ...................................................................................................... 23

6.1 Identify follow-up actions ...................................................................................... 23

6.2 Document analysis ................................................................................................ 23

Annex A (informative) Life cycle costing and the life cycle ................................................... 24

A.1 General ................................................................................................................. 24

A.2 Typical LCC analyses ........................................................................................... 25

A.3 Committed versus actual costs .............................................................................. 25

Annex B (informative) Financial concepts ............................................................................ 27

B.1 General ................................................................................................................. 27

B.2 Consequential costs .............................................................................................. 27

B.3 Warranty costs ...................................................................................................... 28

B.4 Liability costs ........................................................................................................ 28

---------------------- Page: 6 ----------------------
SIST EN 60300-3-3:2017
IEC 60300-3-3:2017 © IEC 2017 – 3 –

B.5 Opportunity costs, discounting, inflation and taxation ............................................ 29

B.5.1 General ......................................................................................................... 29

B.5.2 Opportunity costs........................................................................................... 29

B.5.3 Taxation ........................................................................................................ 29

B.5.4 Exchange rate ............................................................................................... 29

B.5.5 Generally accepted accounting principles ...................................................... 29

Annex C (informative) Application of financial evaluation techniques ................................... 30

C.1 General ................................................................................................................. 30

C.2 Discounted cash flow (DCF) .................................................................................. 30

C.3 Internal rate of return (IRR) ................................................................................... 30

C.4 Depreciation and amortization ............................................................................... 30

C.5 Cost-benefit analysis ............................................................................................ 30

C.6 Time value of money ............................................................................................. 31

Annex D (informative) Cost breakdown structures by life cycle stage ................................... 32

D.1 General ................................................................................................................. 32

D.2 Life cycle stage cost element ................................................................................ 32

D.2.1 General ......................................................................................................... 32

D.2.2 Concept ......................................................................................................... 32

D.2.3 Development ................................................................................................. 32

D.2.4 Realization .................................................................................................... 33

D.2.5 Utilization ...................................................................................................... 33

D.2.6 Enhancement ................................................................................................ 34

D.2.7 Retirement ..................................................................................................... 34

D.3 Cost element explanation ...................................................................................... 34

D.3.1 General ......................................................................................................... 34

D.3.2 Project management ...................................................................................... 35

D.3.3 Engineering ................................................................................................... 35

D.3.4 Producibility engineering and planning ........................................................... 35

D.3.5 Manufacturing ................................................................................................ 35

D.3.6 Facilities ........................................................................................................ 35

D.3.7 Support and test equipment ........................................................................... 35

D.3.8 Initial training ................................................................................................. 35

D.3.9 Initial spares and repair parts ........................................................................ 35

D.3.10 Consumables ................................................................................................. 35

D.3.11 Contractor services ........................................................................................ 35

Annex E (informative) Evaluating intangibles ....................................................................... 36

E.1 General ................................................................................................................. 36

E.2 Intangibles ............................................................................................................ 36

E.3 Valuing methods ................................................................................................... 37

Annex F (informative) Methods for estimating cost elements ................................................ 38

F.1 General ................................................................................................................. 38

F.2 Parametric cost method ........................................................................................ 38

F.3 Analogous cost method ......................................................................................... 40

F.4 Engineering cost method ...................................................................................... 40

Annex G (informative) Example of LCC comparison ............................................................. 42

G.1 General ................................................................................................................. 42

G.2 Simple example of LCC comparison ...................................................................... 42

G.2.1 General ......................................................................................................... 42

---------------------- Page: 7 ----------------------
SIST EN 60300-3-3:2017
– 4 – IEC 60300-3-3:2017 © IEC 2017

G.2.2 Configuration option 1 ................................................................................... 42

G.2.3 Configuration option 2 ................................................................................... 42

G.2.4 Configuration option 3 ................................................................................... 42

G.2.5 Configuration option 4 ................................................................................... 43

G.2.6 LCC calculation ............................................................................................. 43

Bibliography .......................................................................................................................... 44

Figure 1 – Life cycle costing process .................................................................................... 15

Figure 2 – Cost breakdown structure concept ....................................................................... 19

Figure A.1 – Typical analyses across the life cycle ............................................................... 25

Figure A.2 – Example of committed and actual costs ............................................................ 26

Figure F.1 – Potential sources of costs ................................................................................. 38

Figure F.2 – Example of cost elements used in a parametric cost analysis ............................ 39

Table G.1 – Summary of LCC comparison ............................................................................ 43

---------------------- Page: 8 ----------------------
SIST EN 60300-3-3:2017
IEC 60300-3-3:2017 © IEC 2017 – 5 –
INTERNATIONAL ELECTROTECHNICAL COMMISSION
____________
DEPENDABILITY MANAGEMENT –
Part 3-3: Application guide – Life cycle costing
FOREWORD

1) The International Electrotechnical Commission (IEC) is a worldwide organization for standardization comprising

all national electrotechnical committees (IEC National Committees). The object of IEC is to promote

international co-operation on all questions concerning standardization in the electrical and electronic fields. To

this end and in addition to other activities, IEC publishes International Standards, Technical Specifications,

Technical Reports, Publicly Available Specifications (PAS) and Guides (hereafter referred to as “IEC

Publication(s)”). Their preparation is entrusted to technical committees; any IEC National Committee interested

in the subject dealt with may participate in this preparatory work. International, governmental and non-

governmental organizations liaising with the IEC also participate in this preparation. IEC collaborates closely

with the International Organization for Standardization (ISO) in accordance with conditions determined by

agreement between the two organizations.

2) The formal decisions or agreements of IEC on technical matters express, as nearly as possible, an international

consensus of opinion on the relevant subjects since each technical committee has representation from all

interested IEC National Committees.

3) IEC Publications have the form of recommendations for international use and are accepted by IEC National

Committees in that sense. While all reasonable efforts are made to ensure that the technical content of IEC

Publications is accurate, IEC cannot be held responsible for the way in which they are used or for any

misinterpretation by any end user.

4) In order to promote international uniformity, IEC National Committees undertake to apply IEC Publications

transparently to the maximum extent possible in their national and regional publications. Any divergence

between any IEC Publication and the corresponding national or regional publication shall be clearly indicated in

the latter.

5) IEC itself does not provide any attestation of conformity. Independent certification bodies provide conformity

assessment services and, in some areas, access to IEC marks of conformity. IEC is not responsible for any

services carried out by independent certification bodies.

6) All users should ensure that they have the latest edition of this publication.

7) No liability shall attach to IEC or its directors, employees, servants or agents including individual experts and

members of its technical committees and IEC National Committees for any personal injury, property damage or

other damage of any nature whatsoever, whether direct or indirect, or for costs (including legal fees) and

expenses arising out of the publication, use of, or reliance upon, this IEC Publication or any other IEC

Publications.

8) Attention is drawn to the Normative references cited in this publication. Use of the referenced publications is

indispensable for the correct application of this publication.

9) Attention is drawn to the possibility that some of the elements of this IEC Publication may be the subject of

patent rights. IEC shall not be held responsible for identifying any or all such patent rights.

International Standard IEC 60300-3-3 has been prepared by the IEC technical committee 56:

Dependability.

This third edition cancels and replaces the second edition published in 2004. This edition

constitutes a technical revision.

This edition includes the following significant technical changes with respect to the previous

edition:
a) addition of a complete analysis process;
b) greater reference to international accounting practices;
c) increased discussion of financial concepts.
---------------------- Page: 9 ----------------------
SIST EN 60300-3-3:2017
– 6 – IEC 60300-3-3:2017 © IEC 2017
The text of this standard is based on the following documents:
FDIS Report on voting
56/1713/FDIS 56/1720/RVD

Full information on the voting for the approval of this standard can be found in the report on

voting indicated in the above table.

This publication has been drafted in accordance with the ISO/IEC Directives, Part 2.

A list of all parts in the IEC 60300 series, published under the general title Dependability

management, can be found on the IEC website.

The committee has decided that the contents of this publication will remain unchanged until

the stability date indicated on the IEC web site under "http://webstore.iec.ch" in the data

related to the specific publication. At this date, the publication will be
• reconfirmed,
• withdrawn,
• replaced by a revised edition, or
• amended.

IMPORTANT – The 'colour inside' logo on the cover page of this publication indicates

that it contains colours which are considered to be useful for the correct

understanding of its contents. Users should therefore print this document using a

colour printer.
---------------------- Page: 10 ----------------------
SIST EN 60300-3-3:2017
IEC 60300-3-3:2017 © IEC 2017 – 7 –
INTRODUCTION

Life cycle costing is the process of performing an economic analysis to assess the cost of an

item over a portion, or all, of its life cycle in order to make decisions that will minimize the

total cost of ownership while still meeting stakeholder requirements. Generally, an

organization may only be able to, or need to, evaluate cost for a portion of the total life of an

item. Across the life of any item, decisions involving a trade-off between current and future

costs will be necessary. This trade-off process will be enhanced by defining the short and

long term implications of feasible expenditure decisions.

The principal use of this document is to compare one alternative system solution to another

where future cost of ownership comprising maintenance, operations, enhancement and

disposal actions is significant and require a balance between the cost of acquisition and the

residual unrealized risk of ownership. Such a balance is achieved by technical and monetary

assessments that take into account varying outcomes of availability, reliability, maintainability

and supportability. Life cycle costing can also provide essential data to develop budgetary

estimates.

This document is also intended to assist those who may be required to specify, commission

and manage such activities when undertaken by others.

The highest value from life cycle costing is achieved early in the life of an item when many

configuration options are possible and influence on future costs the greatest. Studies have

shown that life cycle costs are mostly committed and the opportunity for affordable change is

progressively reduced as item detailed design is approached.

Life cycle costing comprises only expense elements, which may be tangible or intangible;

revenue or value outcomes are not included. Costs comprise all expected future expenditure

including financial allowance for residual risk. Value outcomes, such as revenue, are analysed

in the subsequent financial or economic trade-off analysis that use the results of the life cycle

cost analysis.

Analysis outcomes are often presented as a single figure representing all future expenditures

at a single point in time. The analysis may also be presented as a future cost profile without

inclusion of the time value of money. However, as future costs are uncertain in both

approaches, the analysis may also be presented as a probability distribution to highlight any

potential sensitivity of the outcome to that uncertainty.

When assessing the impacts of potential options, analysts may need to cost intangible

outcomes such as safety exposure, loss of public amenity or damage to corporate image. The

use of multi-attribute rank ordering or semi-quantitative matrixes are not applicable for

assessing these impacts as life cycle costing has a quantitative outcome of cost, namely: life

cycle cost (LCC). Many quantitative techniques, such as “willingness to pay” or “choice

modelling” have been developed and are often applied to assure all direct consequences are

included in the analysis.

The approach defined in this document recognizes that life cycle costing has been applied for

many decades across many industries, some of which have developed their own set of terms

and language. An organization may adapt the terms used in this document to their context of

use to ensure that the intent of this document is achieved.
---------------------- Page: 11 ----------------------
SIST EN 60300-3-3:2017
– 8 – IEC 60300-3-3:2017 © IEC 2017
DEPENDABILITY MANAGEMENT –
Part 3-3: Application guide – Life cycle costing
1 Scope

This part of IEC 60300 establishes a general introduction to the concept of life cycle costing

and covers all applications. Although costs incurred over the life cycle consist of many

contributing elements, this document particularly highlights the costs associated with the

dependability of an item. This forms part of an overall dependability management programme

as described in IEC 60300-1 [1] .

Guidance is provided on life cycle costing for use by managers, engineers, finance staff, and

contractors; it is also intended to assist those who may be required to specify and commission

such activities when undertaken by others.
2 Normative references
There are no normative references in this document.
3 Terms, definitions and abbreviated terms
3.1 Terms and definitions
For the purposes of this document, the following terms and definitions apply.

ISO and IEC maintain terminological databases for use in standardization at the following

addresses:
• IEC Electropedia: available at http://www.electropedia.org/
• ISO Online browsing platform: available at http://www.iso.org/obp
3.1.1
acquisition cost

initial cost of developing and realizing an item so it can be utilized and placed into service

3.1.2
amortization

paying off of debt with a fixed repayment schedule in regular instalments over a period of time

Note 1 to entry: Amortization is also defined as the spreading out of capital expenses for intangible assets over a

specific period of time (usually over the asset's useful life) for accounting and tax purposes.

3.1.3
base date
fixed point in time set as the common cost reference
3.1.4
cost breakdown structure
framework of cost elements so that they can be distinctly defined and estimated
_____________
Numbers in square brackets refer to the Bibliography.
---------------------- Page: 12 ----------------------
SIST EN 60300-3-3:2017
IEC 60300-3-3:2017 © IEC 2017 – 9 –
3.1.5
cost driver
cost element that has a major influence on the life cycle cost
3.1.6
cost element
component of life cycle cost for which cost data are, or can be, collected
3.1.7
depreciation
method of allocating the cost of a tangible asset over its useful life
3.1.8
discount rate
factor or rate reflecting the time value of money that is used to
...

Questions, Comments and Discussion

Ask us and Technical Secretary will try to provide an answer. You can facilitate discussion about the standard in here.