SPECIAL REPORTS 40 HYDRAULICS & PNEUMATICS March 2026 www.hpmag.co.uk As production plants push existing assets harder and rely on machines that were once considered redundant, reliability has become a direct financial concern. With limited backup capacity, equipment failures now lead immediately to lost production, higher maintenance costs and increased operational risk. In this environment, condition monitoring is no longer justified primarily on technical grounds, but on its ability to deliver a measurable return on investment (ROI). The business case for condition monitoring is strongest when framed around financial impact rather than technology. Its value lies in reducing both the likelihood of failure and the severity of its consequences. In many cases, avoiding a single major failure is enough to recover the full cost of the monitoring system. A practical way to understand this value is through risk, which can be expressed as the product of consequence and likelihood. If a compressor failure results in £500,000 of combined production loss, labour and spare parts, and it occurs once every ten years, the annualised risk is £50,000. If the same failure occurs every two years, the annual risk increases to £250,000. When a condition monitoring system detects early signs of failure and allows corrective action before damage occurs, that risk is either reduced or eliminated. The resulting financial benefit translates directly into ROI. Assessing ROI ROI is typically assessed using two measures: the payback period, which describes how quickly the investment is recovered, and the ROI ratio or percentage, which compares the benefits achieved over a defined period against the total cost of ownership. To produce a credible ROI calculation, both benefits and limitations of condition monitoring must be considered. Failure consequences vary significantly in severity and must be evaluated accordingly. At the lowest level are normal losses, which include production losses and maintenance costs during planned shutdowns. More severe are probable maximum losses, such as major repairs or full machine replacement combined with extended downtime. At the extreme are maximum possible losses, which may involve catastrophic equipment damage, safety or environmental incidents, fires, or prolonged business interruption. Condition monitoring delivers value by reducing the frequency of these events and by limiting their escalation. The largest contributor to ROI is typically reduced lost production. Preventing unplanned downtime improves availability, which often accounts for the majority of financial savings. For example, avoiding five hours of downtime on a machine producing £10,000 per hour results in £50,000 of preserved output. Alongside availability, labour savings are achieved through fewer emergency repairs, reduced overtime and more efficient maintenance planning. Maintenance records provide a reliable baseline for estimating these savings. Spare parts costs also decline as maintenance becomes more targeted. Early fault detection prevents secondary damage and avoids replacing components that are still in good condition. Energy consumption, while more difficult to quantify, can also be reduced. Machines operating in poor mechanical condition often consume more power, and improvements in alignment, balance and lubrication can translate into meaningful energy savings over time. Benefits, despite limitations It is important to recognise that condition monitoring systems are not perfect. Missed detections and false alarms can generate additional inspections, unnecessary interventions, or unplanned stops. These costs must be included in any realistic ROI model. Ignoring them may shorten the apparent payback period on paper, but it weakens the credibility of the business case. Despite these limitations, real-world experience consistently shows strong financial returns. Many organisations report significant reductions in unplanned downtime, lower maintenance costs, extended asset life and ROI ratios of Making condition monitoring pay From compressors and hydraulic power units to critical rotating machinery, unexpected failures can disrupt production and drive-up maintenance costs. Condition monitoring technologies allow operators to detect developing faults early, helping organisations improve reliability while demonstrating clear financial returns on their investment. James Donnelly* reports. several times the original investment, often within the first year. In some cases, the prevention of a single catastrophic failure covers the entire cost of the system within weeks or months. The speed at which ROI is achieved depends on asset criticality, downtime costs and how effectively the system is implemented and used. Early stages may reveal previously undetected problems, temporarily increasing maintenance activity and cost. Once these issues are resolved, maintenance costs typically fall sharply and remain low. A realistic ROI roadmap must account for this initial correction phase. Total cost of ownership should be included in the ROI calculation, encompassing not only hardware and software, but also engineering, installation, training, external support and ongoing maintenance. Failing to account for these elements can distort expectations and undermine long-term success. Asset criticality plays a central role in maximising ROI. Highly critical machines justify more advanced and continuous monitoring because the financial and operational consequences of failure are severe. Assessing criticality requires consideration of production impact, redundancy, repair time, failure history, and safety or environmental risk. When approached through a clear ROI framework, condition monitoring becomes a strategic investment rather than a maintenance expense. By quantifying failure risk, focusing on highimpact assets, and tracking measurable improvements in production, maintenance and energy efficiency, organisations can build a compelling and defensible business case. Done correctly, condition monitoring delivers fast payback, sustained financial returns, and a stronger foundation for reliable and competitive operations. For further information please visit: www.Emerson.com/conditionmonitoring *James Donnelly is UK sales manager for reliability solutions at Emerson
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