Non-traditional ROIs to improve your maintenance ROI

Consider the value of these ROIs and go beyond the bottom line with your maintenance investment.

By Ralph W. “Pete” Peters

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The top leadership of many organizations, both large and small, must gain a greater awareness and personal understanding of the importance of maintenance. I have mentioned this many, many times in my book from McGraw-Hill — Maintenance Benchmarking and Best Practices. Top leaders must be aware of their total maintenance requirements. They must be aware of best practice needs and take advantage of the investment opportunities within maintenance.

Top leaders that have experienced the results of a Scoreboard for Maintenance Excellence assessment, along with projected benefits and gained value, will take notice. In addition, when they see that you have implemented The Reliable Maintenance Excellence Index that will validate those projected results, all top leaders will take an even closer look. Unfortunately, many organizations simply continue to gamble with maintenance costs and do nothing. Total maintenance requirements continue to grow with the status quo.

The core requirements for maintenance will never, never go away because maintenance is forever. Top leaders might exclaim that “our core competency is assembling cars or educating college students and it is not maintenance.” The truth is that maintenance remains forever as a core requirement for auto assembly success, as well as a core requirement for large and small college facilities. So when I read or hear about a top leader saying that “we are outsourcing maintenance because maintenance is not a core competency” I cringe and think to myself, here is one more top leader that just does not get it. Maintenance is a core requirement for success.

A near-sighted company vision focused on short-term results is fatal and will fail.

– Ralph W. “Pete” Peters

Maintenance is a core requirement in everything; body, soul, mind, car, house, factory and the roads to the factories. The core competency for doing maintenance and managing the business of maintenance is strictly another issue. The core competencies to perform in house maintenance can slip away gradually or very abruptly by key crafts retiring or changing companies.

Sound investments that affect the bottom line are still available in almost all existing maintenance operations. You can bet heavily on the fact that profit-centered contract maintenance providers are continuously looking to improve their profit picture and customer service as providers of maintenance. I personally know many from this growing business sector, and some are relentless in their pursuit of profit optimization and quality customer service. Takeover targets emerge as plant maintenance or facilities management operations continue to maintain the status quo too long. Then it becomes too late to turn around the in house operation and a takeover occurs. Many times this results from a new top leader that comes in wanting to make an immediate impact. It may be a new top leader that is impatient and a reader of all the literature on outsourcing and says, “Just do it."

Traditional ROI

We have focused on creating a greater awareness of the traditional return on investment (ROI). I think you will agree that much more is possible by applying today’s best maintenance practices, principles and leadership philosophies. Technology of the future will open up even greater maintenance improvement options. Real maintenance ROI is available to the organization that successfully converts the thinking of top leader into a complete awareness maintenance improvement is a profitable action they must take.

Maintenance operations that have committed to continuous reliability improvement and are applying today’s best maintenance practices, principles and leadership philosophies have achieved significant improvements. Investments in maintenance that successfully implement the practices from this book and other on the market can achieve results that are comparable to the following:

  • 15 to 25% increase in equipment uptime
  • 20 to 30% increase in maintenance productivity
  • 25 to 30% increase in planned maintenance work
  • 10 to 25% reduction in emergency repairs
  • 20 to 30% reduction in excess and obsolete inventory
  • 10 to 20% reduction in maintenance repair costs
  • Improved product quality
  • Improved utilization of equipment operators; greater production productivity
  • Improved equipment effectiveness and capacity
  • Improved equipment life
  • Improved productivity of the total operation

Beyond the bottom line and non-traditional ROIs

Investments in maintenance improvement will provide significant tangible results based on the traditional concept of ROI. Successful improvements in maintenance will impact the bottom line directly while providing both tangible and intangible benefits throughout the organization. Today’s leaders must also adopt some non-traditional interpretations of ROI that will provide significant additional benefits.

Non-traditional ROIs for improving maintenance return on investment 

There are nine non-traditional ROIs that I have listed on the previous graphic. Some include multiple ROIs As Part I in this series, we will review three non traditional ROIs. In the complete series we will review them all in Part II and Part III. The following three non-traditional ROIs will be important contributors to your success in gaining commitment to action by top leaders, action by maintenance leaders and to action from your craft leaders. In addition, if your organization has not really, really begun that critical first step on the journey toward maintenance excellence, these non-traditional ROIs will help with that important first step.

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