Would a 20% reduction in maintenance costs be helpful? If you are operating around $500m per year in sales, your maintenance costs could easily be $15 million or more. Could you use $3 million per year? If you are operating below capacity maybe an additional $30 million in revenue would be nice.
But right now, the world is unstable with a lot of chaos. Improved financial performance makes it much more stable for you. So let me ask … do you want to keep the chaos going? Or do you want to inject stability where you truly do have control? Some of today’s challenges are quite scary:
- geopolitical risks, and even a threat of nuclear war from a deranged Russian dictator and his North Korean chum,
- spiraling inflation due to post covid runaway costs and out of control corporate greed,
- slow wage growth and a lot of economic misery at a personal level exacerbated by governments attempting to slow inflation by tackling symptoms, not causes,
- elections in at least 64 countries (growth on the right, wins on the left),
- strong populist movements that threaten peace even in peaceful nations (just look at what’s happening in the USA), and
- prolonged economic uncertainty – with no end in sight.
That’s all frightening for all of us, and when fearful we respond in one of three ways: fight, flight, or freeze.
Fight – entrepreneurs and leaders, believe in themselves and find solutions.
Flight – those who are out of their depth often can’t just run (unless they can retire or jump to another job). They keep low, effectively freezing.
Freeze – most managers. They don’t like instability, so they stop any effort to change and revert to what they know best.
Today, many companies are freezing. They are managed, not lead. They stop spending, lay off, and cut back. Ongoing or planned attempts to improve are side-lined. Financial and operational managers revert to what they know – cost cutting and continue to run without disruption. There is a belief in that operations will stabilize if nothing changes. But they are wrong about that. Instability results from unreliable asset performance and it shows up as chaos.
- Struggling to find skilled workers, and an increased dependency on overtime and contractors.
- Deferring maintenance that is already overdue.
- Proactive maintenance schedules are not being met.
- Maintenance schedules are unrealistic and cannot be achieved.
- To many breakdowns that require urgent attention.
- Inability to meet production targets due to equipment problems.
- Complaining about lack of spare parts when needed.
- Repairs are taking longer than anyone forecasts – operators don’t believe maintenance promises.
- Frustration with the state of affairs.
- Despondency and resignation to the chaotic state of affairs.
Those are all symptoms. Tackling them requires leadership, not freezing or fleeing. If you are up for it, then the benefits can be huge. They go a long way to achieving stability and predictability in your operations:
- Maintenance cost reductions of 20 to 30%.
- Reduced contracting, overtime, and pressure on finding those skilled workers who are so rare these days.
- Spares inventories can often be reduced by up to 30%, and quickly. Far less direct and emergency purchasing for repairs.
- Upwards of 60% of PMs eliminated because they are causing problems, not solving them.
- Increased “uptime” in your operation, with more stability and predictability of outputs.
Freezing and fleeing do nothing to achieve that. You need leadership, not managers.
Reliable asset performance is one area where many companies do badly. While most maintainers genuinely strive do their best, the assets they look after just don’t get more reliable and performance remains unstable. There is a long list of reasons why and most are not entirely in the hands of the maintainers to fix. Those who can help, very often don’t realize what they can do.
Getting there requires a journey that need not be long, but it will be challenging. Companies are structured for steady-state, and not to transform themselves. Arguably, most are structured to stall in the face of needed change. The problems and their fixes are all well known, but few are able or willing to tackle them. Lack of leadership holds them back. We’ve got some answers if you are willing to listen and more importantly, willing to act.
Our new book, “Uptime for Executives” (in English, Español and Français) is written for executives. It’s a quick read (about an hour) and it will give insights you can’t afford to ignore, especially if you are in an executive role.
