Spend to save measures: their financial justification

A decade or so ago, interest in life cycle costs was revived by the realisation that, for many types of equipment, in-service costs could be many times acquisition cost. Expectation of reducing the former now motivates much work towards improved reliability, maintainability and logistics. In consequence, proposals are often made for 'spend to save' measures in which extra initial expenditure is shown to result subsequently in large net savings as the benefits of reduced running costs accumulate over the years. However, these proposals frequently receive less than enthusiastic receptions from those who hold the purse strings. Their constant call may be for savings; but when proffered specific opportunities for these they then seem to adopt an inconsistent attitude-appearing to have concern only for initial expenditures when disregarding much greater subsequent benefits. This paper reviews common difficulties in the way of financial justification of spend to save measures, analyses them and suggests how they may best be overcome.<>