From Cost Guessing to Cost Mastery: Total Ownership Economics
Equipment decisions based on purchase price alone cost organizations millions in hidden ownership expenses. At Knar, we develop and teach the ISO 15663-aligned methodologies that enable organizations to see the full cost picture before commitment—and optimize decisions across the entire asset lifecycle.
"60-80% of total asset costs materialize after purchase—in maintenance, downtime, spare parts, energy consumption, and lost production. The goal is to see these costs before they happen."
Our Life Cycle Cost Capabilities
Cost Breakdown Architecture
Structured cost modeling using three-dimensional frameworks: life-cycle phase, product breakdown, and cost category—transforming vague estimates into auditable, defensible numbers.
- ▸CAPEX/OPEX decomposition
- ▸Data source strategies
- ▸Uncertainty quantification
RAM-to-Revenue Integration
Connecting reliability and availability modeling directly to production loss and revenue impact— the hidden cost driver most analyses miss entirely.
- ▸FMECA-based cost drivers
- ▸Availability-to-revenue translation
- ▸Production regularity modeling
Decision-Ready Economic Analysis
Complete LCC models with discounting, sensitivity analysis, and uncertainty quantification that enable confident capital allocation decisions.
- ▸NPV-based option ranking
- ▸Tornado diagram sensitivity
- ▸Executive-ready recommendations
Professional Development Programs
Knar offers intensive training programs that transfer life cycle cost analysis capabilities directly to your engineering and financial teams. Our courses combine ISO 15663 methodology with hands-on application to real industrial decisions.
From Cost Guessing to Cost Mastery: Life Cycle Cost Analysis for Asset-Intensive Industries
A comprehensive 5-day certification program that builds from scope definition through RAM analysis to complete LCC models with sensitivity analysis. Participants leave with immediately applicable skills and ISO 15663-aligned methodology for their organization.
Why Life Cycle Cost Methods Matter
Traditional equipment evaluation focuses on purchase price comparisons that capture only a fraction of the decision. A pump that costs 15% less to buy may cost 40% more to own. A "reliable" compressor with attractive upfront pricing may hemorrhage revenue through unplanned shutdowns.
These decisions aren't made by negligent people—they're made by capable professionals who lack the methodology to see the full cost picture before commitment.
Life Cycle Cost methodology provides the framework to:
- 1.Define analysis scope, constraints, and decision criteria aligned with organizational objectives
- 2.Build structured cost breakdowns populated with defensible estimates from appropriate data sources
- 3.Execute FMECA to identify cost drivers and connect failure modes to financial consequences
- 4.Calculate system availability and translate downtime into revenue impact using RAM analysis
- 5.Construct auditable LCC models with discounting, sensitivity analysis, and uncertainty quantification
Consider a single major equipment decision—a compressor, turbine, or processing system with a $50M price tag. A 10% error in total ownership cost assessment represents $5M in misallocated capital or unexpected expenses. One properly trained analyst, applying LCC methodology to three such decisions annually, prevents cost surprises that dwarf the training investment by orders of magnitude.