Predictive maintenance is a common value proposition cited for IoT analytics. We will walk through an example as a way to highlight how to think financially about when it makes sense and when it does not.
The economics of predictive maintenance example
Situation
The economics of predictive maintenance may not be entirely obvious. Believe it or not, it does not always make sense, even if you can predict early failures accurately. It many cases, you will actually lose money by doing it. Even when it can save you money, there is an optimal point for when it should be used. The optimal point depends on the costs and the accuracy of the predictive model.
