Saving money in maintenance is easy in slow markets. Like your competitors you can cut maintenance, eliminate training and get rid of outside help. But those will leave you weakened when business picks back up. An overall savings of maybe 2% of operating costs now, could easily set your productive capacity way back when markets rebound, and equipment breaks down far more frequently because it was not cared for properly. Each week of downtime is 4% of your annual output. Each breakdown disrupts more than just the loss for repair time and it can easily add up. Cutting costs in maintenance can backfire. You simply cannot cut your way to prosperity!
Maintenance improvements are most easily made when your maintainers have the capacity to actually catch up. That’s when demand for your products is low, or when you are shutdown. That extra care comes at a minimal cost and can provide massive payback when you ramp back up. “Plan for what is difficult, while it is easy; do what is great, while it is small” (Sun Tzu, around 300 BCE in “The Art of War”). If your maintenance program was delivering disappointing results before things slowed down, now is a great time to fix that. Investing in capacity is never a bad idea.
Companies and people, the world over, are in a storm and struggling. Chaos is growing with:
- geopolitical risks, and even a threat of nuclear war from a deranged dictator,
- spiraling inflation due to post covid runaway costs,
- 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,
- strong populist movements that threaten peace even in peaceful nations, and
- prolonged economic uncertainty – with no end in sight.
Early in my career, I was a ship’s engineer, and experienced some really nasty weather at sea, on several occasions. Things could get chaotic with all the movement of the ship. Things move around and our ability to function normally is severely challenged. We knew it was dangerous, so we didn’t just continue as if everything was normal. Each of us brought our “A” game to the situation.
Today’s economy is like a storm at sea. You need your “A” game to survive, let alone thrive. Yet, companies are cutting back wherever they can. They want to reduce spending, while continuing to produce. In the short term it may help profits, but in the long term it will hurt. Many have stopped trying to make improvements. They say that they want to focus on what they do best. But are they really achieving that? Or, are they simply battening down the hatches and waiting for the storm to pass?
Hunkering down and staying the course can work in mild weather, but in really bad storms, you can get swamped.
To do what you do best (producing what you produce and doing it well) requires your plant and equipment operating at peak. But, is it?
Many companies were struggling with breakdowns and disappointing performance before the storm. Most are good at producing their “product” but they were not so good at maintenance and reliability, and they couldn’t produce as much as they could sell. Maintainers could fix things, but they couldn’t avoid the breakdowns. That won’t change if you continue to do what you did before. Chaos grows naturally, and it will expand more rapidly if you are trimming costs in the wrong areas. If these were problems before the current storm, they’ll worsen:
- Are you still struggling to find skilled workers while laying off staff?
- Are you deferring maintenance?
- Are your planners planning any better than before?
- Do you have your supply of spare parts under control, or are those hordes of parts around the plant growing?
- Can your maintainers produce a realistic schedule of when work will be done and then stick to it?
- Are unexpected breakdowns disrupting your operations?
Most maintainers are not business persons. They are quite happy to fix things when they break and be the hero for doing it. They can be quick to defer proactive maintenance because of those breakdowns. Despite their best intentions to satisfy production and keep things running, they are actually allowing more to break down.
Most maintainers have never had to up their game. In fact few, including those outside of maintenance, really know what “good” looks like. They don’t know what they don’t know, and no one else knows what they should be able to expect.
Transforming performance isn’t what companies are good at. In a storm, most are loathe to tackle a program of change. With maintenance, what are they missing?
- Maintenance costs are often much higher than they could be. Savings of 20 to 30% are often quite realistic to achieve.
- That reduces pressure on finding those skilled workers who are so rare these days.
- Spares inventories can often be reduced by up to 30% – producing an immediate savings and lowered spending with far less chaos for purchasing.
- Figuring out the “right maintenance” to do can reduce proactive programs substantially. We’ve seen upwards of 60% of PMs eliminated because they were actually causing problems, not solving them.
- That leads to cost savings and increased plant reliability – it can run longer at peak rates and produce more.
Yes, this requires effort, but the time to achieve payback doesn’t need to be long. A strategically constructed program will tackle the low hanging fruit early . Payback beings almost immediately. The costs are a fraction of the benefits, and can usually be paid fully within the first year, and sometimes within months.
My 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 finance or operational leadership roles.
Bring your “A” game, don’t hunker down and spiral further into chaos. Let’s talk.
