One client increased output by 22% for an equivalent of $600 million in revenue within 8 months. They began with poor performance and a low level of “maturity” in maintenance and reliability. Quick wins implemented in that first 8 months resulted in a dramatic drop in operational breakdowns that were crippling production capacity. The combined effect of additional improvements brought the total benefit to nearly $2.4 billion over 5 years.
To identify quick wins, you will need to know just where you are wasting effort. Along with that effort will be parts and downtime that results in loss of production. So, first look at what “good” maintenance would be. You want both low cost of maintenance execution, and effective results through the elimination of as much downtime as possible.
Productive “uptime” is important if you can sell everything you can produce. It translates into additional revenue and that can be substantially more valuable than what you spend on maintenance. It may also be used to reduce the need for production time and effort if markets constrain your outputs.
While there are usually some quick wins, they are often just a part of a bigger play. Some will tell you that maintenance improvements can take 2 or 3 years, and they are right, but the payback can start much sooner. If planned right, payback can be well within the first year!
You are spending on labor (your own crews, overtime, shift premiums, and contractors). When it comes to labor, you can’t just cut back without sacrificing something. Less will get done with fewer people, or hours. Look at what you can afford to give up.
Can you give up repair work? Not likely – without running equipment you can’t really produce, so if you have breakdowns, you need repairs. If those repairs are done without adequate planning and preparation, then they are very likely costing you much more than they should – 3 times more, or worse.
Can you give up your PMs? PM stands for proactive maintenance – it is discretionary, so you could stop doing it, But, is that a wise choice?
PMs are intended to either prevent failures (repairs) or to predict when they will be needed, so that you have a chance of minimizing their impact on the business. Preventing means fewer repairs. Predicting provides opportunity to plan and prepare for repairs. Both lower your costs substantially, but doing the PMs is essential, and they better be the right PMs. Yes, it is possible to over maintain, and actually increase costs needlessly.
It is tempting to forego PMs if you can’t sell everything you can produce. In fact, you can tolerate downtime, but that repair work, especially if unplanned and executed in a rush, is usually the most expensive type of work you could be doing, so it can actually drive your costs up. Can your business afford that luxury?
You might consider reducing costs directly by reducing overtime and contractors, but that reduces your capacity to get work done. That is not always a great option, especially if you have too many breakdowns already. But you can reduce demand for that capacity by reducing breakdowns.
Reducing breakdowns means having the right PM program, both effective at prevention and predicting. If you have too many breakdowns, or you believe that you are spending too much on overtime and contractors, then there is room to improve it.
These days, it’s very difficult to find and hire skilled trades, so you might even be short of staff. If that’s the case it is even more important to do the right PM program because it can reduce demand for extra staff.
Identification of the right PMs is critical, and execution of maintenance the right way is needed to make sure they are as effective as possible.
If you are not sure about your PM program, then you may need help to optimize it. Chances are that if you are not getting the results you want from it, then your maintainers don’t understand it enough to optimize it. These are a few signs of that …
You might hear complaints that they are understaffed (which is possible), but if it is the major reason, then it is really an excuse, and it hides that they may not know enough to improve the situation. When a lack of staff is the reason for not optimizing it tells me that they are already at their wits end.
If they are complaining about parts unavailability and blaming that for excessively long repairs, then they don’t really have a good handle on work execution. Most parts problems are a result of planning mistakes, and not necessarily on the part of the planner. There are many people and departments involved in this and fixing it is usually quite challenging, but not impossible.
If any work gets completed, and you have breakdowns at re-start, or soon afterwards, then they are doing the wrong work, too much work that isn’t needed, doing it the wrong way (lack of precision), and possibly rushing far too much (that makes room for lots of mistakes).
Correcting problems with PM programs can provide a very high payback. Correcting work management problems usually provides a longer-term payback, but won’t help much at all if the PM program isn’t right. Get both right and you can achieve some very high performance and payback.
Let’s talk about your situation and see what can be done. Contact us.
