Why you should do more than pay it lip service
June 27, 2002
Why do we pay lip service to preventative maintenance but seldom practice it?
Why do we pay lip service to preventive maintenance but seldom practice it? Performing routine maintenance tasks on a predetermined schedule can maintain maximum productivity, minimize the number of unplanned outages, minimize the need for outside contractors, and minimize after-hours emergency maintenance. It reduces inventories, ensures higher-quality production, forces organization in a company, and reduces business delays.
The old adage "An ounce of prevention is worth a pound of cure" is true for all types of maintenance, but it is especially true for machine maintenance. That's why preventive maintenance (PM) is so often discussed and recommended.
A true PM program includes nondestructive testing, periodic testing, preplanned maintenance activities, and corrective maintenance to address deficiencies found during previous activities. PM requirements differ for every organization. They can range from a walk-through to an actual line shutdown for a specified number of hours.
Performing routine maintenance tasks on a predetermined schedule can maximize productivity, minimize the number of unplanned outages, reduce the need for outside contractors, and minimize after-hours emergency maintenance. It reduces inventories, ensures higher-quality production, forces organization in a company, and reduces business delays.
However, no matter how often we hear that PM saves time and money, the normal mode typically is reactive. Why do we pay lip service to PM but seldom practice it?
Many studies suggest that consistent PM can result in a 5 to 10 percent productivity improvement, which can reduce costs by up to 20 percent. You can use the following metrics to analyze production:
Using these values, you can assess a plant's performance and not only benchmark current production but also understand the impact of higher production levels.
While measuring productivity is important, you can actually make this data even more meaningful. Using the dollar value per unit, you can compare the average daily production value with the maximum daily production value.
This information alone is not always useful, because no plant continually runs at maximum production. However, you can derive savings for each percentage point of production improvement. The result is a methodology for constantly evaluating productivity. Moreover, you can measure the impact on production of any new PM activity.
Following are statistics for an example production analysis. This example uses a manufacturing company that is a supplier to the appliance industry:
A quick calculation (2,688/3,840) shows that production is at 70 percent.
What does this mean in financial terms? First, you must know the value of each part as it leaves the line. In this case it is $20. The total daily value of parts at 100 percent then is $76,800. At 70 percent, the value is $53,760.
After some analysis, you can find that for every 1 percent improvement in productivity, the company produces an additional $768 worth of parts each day. Over a year's time, the total value of 1 percent improvement is $153,600. Imagine the impact of additional gains in productivity.
PM impacts other areas as well. Using the same type of analysis, you can evaluate labor gains and losses using:
Labor issues include not only the hours for internal and external personnel but also the type of work. In a perfect world, most maintenance occurs on a routine basis and during the standard workday. Unfortunately, in reality, maintenance occurs somewhat randomly and often after regular business hours, resulting in substantial overtime.
Unplanned downtime is another area of concern. In most cases unplanned downtime causes a crisis. While addressing the emergency, internal and external personnel are unable to perform their regular duties, further increasing the total number of hours on the job.
When calculating the savings from PM, you must incorporate the financial effects of spare-parts inventory. To evaluate true inventory costs, you need to use:
With this information, you can judge the true cost of managing the inventory, as well as the time used to obtain parts. A managed system ensures an efficient issuing, ordering, and reordering of parts. The system also is likely to reduce the number of zero-balance items in the inventory.
On the other hand, a properly operating machine will use fewer parts, allowing the technician to spend more time maintaining and less time getting parts.
You can improve production uptime and part quality by reducing machine breakdowns and improving machine condition. You can extend the lifetime of the equipment through regular upkeep and reduce the costs associated with managing and maintaining spare-parts inventories.How can you manage all of these activities? The answer is a formal system to manage maintenance. Regardless of a company's size, any PM system, whether computerized or paper-based, is better than no system.
Even with a formal system, buy-in from all employees at all levels is crucial, from implementation to the day-to-day use of the system. Everyone, including the actual users, must be fully committed to the project. Thorough training also is required to ensure long-term success.
In any economic climate, profits are of paramount importance. They keep people employed and help a company grow. A rigorously planned preventive maintenance program can provide the financial and operational benefits to help keep profits growing.