Non-traditional ROIs to improve your maintenance ROI: Part II and III

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

By Ralph W. “Pete” Peters

Part II: Return on information (ROI)

Traditionally, all organizations have more available data than useable information. In most cases, maintenance is facing the same dilemma. Since maintenance is normally viewed as a cost center, maintenance information systems are lacking or even nonexistent. Let us look at some very interesting and thought-provoking “what ifs” that we discussed previously in Part I.

If your current maintenance practices and maintenance information system does not allow you to manage maintenance like a profitable business, then your organization will continue to view you as a “cost center.”

– Ralph W. “Pete” Peters

What if the maintenance operation in your organization or plant was a business? What if your maintenance was a third-party maintenance service that worked out of the same shop area, used the same storeroom and maintained the same equipment? As the maintenance champion, what if your only job was to determine the scope of services needed, develop the plan for maintenance contract service, monitor the services received and approve payment based on quality of service per the contract? What if this scenario came to pass?

Would you have the right information to do your new job? Conversely, what if you owned this in-plant, third-party maintenance service? Could you define and measure your level of service in order to make a profit as a business? Would you get the maintenance contract in your own plant as the third-party contractor with your existing workforce and processes? Always remember that there are many, many service companies that can come in and do just that for your top leaders.

If your current maintenance practices and maintenance information system does not allow you to manage maintenance like a profitable business, then your organization will continue to view you as a “cost center.” This scenario is not a scare tactic that advocates third-party maintenance in total for an organization. 

However, third-party maintenance in specialty areas, or areas where current maintenance skills or capabilities are lacking, is a cost-effective practice that will continue to grow. Greater third-party maintenance will occur in operations where maintenance is not treated as a business and where operations have deteriorated to the point that a third-party service is more effective and less costly than in-house maintenance staff.

Creeping outsourcing often occurs. For manufacturing plants, it may start by outsourcing the facilities maintenance piece. The contractor will wait patiently for the plant maintenance piece. Trends in government maintenance and service operations are rapidly progressing toward privatization with greater performance, service and reduced total costs.

Third-party maintenance will be a common practice in those organizations that have continually gambled with maintenance costs and have lost. There are also many pitfalls to third-party maintenance, and I have seen many of them personally and via Scoreboard assessments. I am personally pulling for the home teams; the in-house maintenance team and the total operations team for may reasons.

Maintenance leaders must demand and welcome adequate systems support to ensure that existing maintenance data becomes real maintenance information for managing maintenance as a “profit center.” Computerized maintenance management systems (CMMS) should be viewed as an important tool to assist in planning, management and administrative procedures required for effective maintenance. Maintenance data is of little value without being in the form to support decision making.

The maintenance database on equipment repair history, work order status/backlog, PM schedules, repair parts inventory, job estimates, performance measures, repair costs, life-cycle costs, etc., must be current, accurate and capable of providing quality information for timely decisions. The integration of actual maintenance labor costs with planned labor costs must be the basis for labor performance measurements. Customer service criteria must be established to evaluate and measure the level of maintenance customer service. The maintenance customer must also be involved in determining quality indicators and be a part of the flow of information. Information to evaluate overall equipment effectiveness should be readily available and used to identify:

  • Causes for breakdown
  • Problems created by setup/adjustments
  • Problems created by idling/minor stoppages
  • Reasons for running below design speed/feed
  • Causes for process defects
  • Reasons for reduced yield during changeover

Information about overall equipment effectiveness, a key TPM concept, provides immediate opportunities for improvement by operators, set-up personnel and maintenance. This type of information gets at the root cause of recurring breakdowns that continuously plague production with uncertainty and maintenance with unplanned breakdown repairs.

It is a good investment to provide maintenance leaders with timely and accurate information to manage and measure maintenance as a business. In turn, the maintenance leader must treat maintenance as a profitable business by providing information to company leaders that clearly shows a return on investment. Craft utilization and performance, preventive maintenance compliance, work backlogs, downtime levels, the effectiveness of planning and scheduling, etc., should be evaluated as part of a broad-based maintenance performance measurement system.

Return on interaction and integration (ROII)

Almost all organizations today must think globally in terms of new markets, products and competition. From the maintenance perspective, we must think globally in terms of the best practices we need to consider, but we must start local at our own unique shop level. The maintenance leader must “think global and act local” to achieve positive interaction with company leaders and staff at all levels. 

Maintenance cannot succeed without positive interaction and support from others in the organization. The process of continuous reliability improvement does not stand alone within an organization. It must be well integrated with the customers of maintenance as well as all other staff sections. Positive interactions promote effective integration of solutions.

Maintenance and operations/operators must interact and work closely to monitor, service and prevent maintenance problems. All must take an integrated approach to improving overall equipment effectiveness as a cooperative team of operations and maintenance. Think of maintenance and operations as members of a racing team with the operator as the driver and maintenance as the pit crew. The pit crew cheers the loudest when their driver wins for the team! All leaders at all levels must interact to instill this spirit of teamwork and pride in ownership into the culture of the total organization. Achieving maintenance excellence requires positive interaction with the players internal and external to the maintenance function.

Maintenance is like the pit crew to operations. Perfect and fast maintenance and effective storeroom and MRO procurement performance is the difference between winning and unscheduled downtime”

Return on imagination, ingenuity and improvement (ROIII)

Maintenance crafts people by nature are ingenious, creative and normally able to do more with less than your average person. This is from my personal observation over 40 years of exposure to plant, facilities, fleet, healthcare and golf course maintenance people. They also take pride in their ability to solve problems and come to the rescue to fix something. However, they are impatient with equipment abuse and continuing problems that could be eliminated if enough time was available to find the real cause. 

They know that preventive/predictive maintenance will work if given the chance and they care about making things better. They are smart and most want to get smarter and they want to be involved. They know that improvements can be made and they need to be a part of the process. For example, the ACE Team Benchmarking Process provides a good way to involve crafts directly in establishing reliable planning times. They are proud of their profession for the most part but can become less positive about it when a reactive, fire fighting strategy puts all the blame on maintenance.

I do believe that most all want to use more their imagination and ingenuity and really become involved in maintenance improvement. Maintenance people know they are capable and that they are capable of doing better. They are the most critical and most important resources we have in the maintenance profession.

These positive statements about maintenance people should apply to your maintenance operation. The maintenance leader that involves maintenance people in the process of team-based continuous improvement becomes a maintenance leader. A leader with vision, insight and confidence knows that maintenance working together as a team can make a difference. This leader knows that interaction and integration with operations staff, engineering and operators all will provide a return on time and resources. This is the leader of maintenance who wants to know all about the current best practices in maintenance and use them.

This leader is one who knows the advantages of good planning and scheduling and serves in the lighthouse, not the firehouse. Just like their subordinates, the real maintenance leader is ingenious but can see the future with a vision for maintenance excellence. This type of leader gains inspiration from the challenges ahead and will make things happen with a team-based approach to maintenance improvement.

The return on imagination, ingenuity and improvement is unlimited. With a real maintenance information system in place, it can be measured in terms of tangible dollars. Unleashing the power of maintenance people is not a fad. It is profitable, practical and a proactively positive approach for going way beyond the bottom line. It is essential to success now and in the future.

Part III: Return on individuals and intelligence (ROII)

Individuals with varying levels of talent and intelligence make up huge armies, large corporations, small companies, maintenance crews and teams. CEOs and CFOs ponder their next investment opportunity in new equipment, facilities, processes or new merger possibilities with a view of how it will improve the bottom line. An investment in people, the most valuable asset is often the most neglected investment opportunity. The maintenance operation that is not investing in continuous maintenance education and development of its people is in danger. 

Today’s maintenance leader must have a current assessment of the skill level of their maintenance work force. They must have a plan and the resources to provide craft skills development that is needed in their specific type of maintenance operations. With a strategy for multi-craft maintenance, it is necessary to be able to develop multi-skilled craftspeople in order to achieve benefits from this approach.

Training provides intangible benefits on top of the direct benefits. Maintenance employees will know that the company cares enough to invest the time and money. Employees will have greater confidence in the long-term future of the company as well as the importance of maintenance. With new skills, the craftspeople will be more confident and perform at a higher level that is safe and more productive. Improved customer service and quality will result.
Your CFO may have a hard time with the previously discussed return on integrity. The return on information that quantifies tangible benefits will be a little easier. 

Your case for an investment to provide return on individuals and intelligence will be hard fought, but remember, if they think education and training is expensive, try ignorance. Those who also think education and good maintenance is expensive should try ignoring today’s best maintenance technology and practices. Intelligent investment decisions are made when key leaders at all levels invest in people, their most valuable asset. 

Maintenance excellence will not be achieved by ignoring today’s best maintenance practices. Continuous maintenance education in areas of need is a requirement for success in maintenance. The maintenance leader must not let craft skill training becomes the weak link in developing maintenance excellence.

Return on innovation and ideas

The maintenance leader is innovative and makes the best use of resources available, yet keeps an eye out for innovations wherever they might be. Real maintenance leaders seek out new equipment processes, technologies, techniques and ideas. They do not chase fads for a quick fix and they realize that maintenance people are a valuable source of good ideas waiting to be unleashed.

Maintenance excellence for the real maintenance leader is more than just a vision. It has taken shape in the form of an action plan that looks first at priority areas. During the process of achieving maintenance excellence, the maintenance leader knows that ideas from within maintenance, as well as from operations, will be a requirement for success. The maintenance leader has developed a partnership for profit with operations that work.

The team-based approach becomes the critical process to ensure that all good ideas are given a chance. Cooperation, coordination, communication and commitments are developed and strengthened. Teamwork changes involvement to commitment. The true maintenance leader is innovative in personal leadership and is able to gain commitment rather than just consensus. 

The maintenance leader going along the path forward to maintenance excellence will take a “no holds barred approach” to the evaluation and audit of the maintenance function. The resulting plan will re-engineer maintenance by looking at a whole new way of doing business. Innovations in new equipment, new technology and new procedures will be included. Real maintenance information will be available to provide valid economic justifications on required purchases and to measure progress.

The investment in innovations will require capital but will provide a positive ROI. The investment in creating an environment which cultivates ideas from the work force is essentially free. Team-based continuous reliability improvement in maintenance takes time and leadership. Remember that your maintenance people are the best in the world. Believe that they are ingenious, have imagination, want to be involved. 

Believe that they want to make the commitment to improve maintenance and they will. With quality leadership, the world’s best maintenance people will get better as a team and as individuals. It has been said many times, “Whatever the mind can conceive, can be achieved.” Your vision for maintenance excellence must be stated in a detailed plan that is reasonable, understandable, measurable, believable and achievable And, if there is a shared commitment to your vision, then it will be achieved.

Return on implementation and impact

Ideas, information, innovation and all the other ROIs do nothing for the bottom line without implementation. The bottom line impact of a plan for maintenance excellence is but an imprint of numbers and letters on the printed page unless the plan is implemented. Successful implementation is the key to making an impact on the bottom line. Maintenance managers, and most people, feel that 90% of the work is done when the plan is complete. 

Some even think the purchase of CMMS is a magical solution. The well-informed maintenance leader knows that 90% of the work is just ahead. They see implementation as the way to give value to a good plan and realizing that implementation is a challenging task. The maintenance leader must become the champion for implementing maintenance improvements.

The maintenance leader faces both technical challenges and people challenges in getting the remaining 90% of the implementation challenge completed. The key to implementation will be people challenges and getting the right type of support from within the organization at the right time. Three kinds of support are vital to the success of implementation: formal approval, buy in and ownership.

The maintenance leader must now become a good communicator and salesperson. Implementation of a maintenance excellence plan requires selling up, across and down the organization. Company leaders must first give the formal approval for making the investment. The maintenance leader must sell the quantitative benefits and related costs along with the qualitative benefits of the plan. Priorities must be clearly defined. 

Company leaders must also clearly understand the requirements of success in maintenance. They must trust the technical knowledge and personal integrity of the maintenance champion who is bringing the message that maintenance needs support. They also expect a traditional ROI that can be identified, measured and validated.

Secondly, the implementation must be sold across the organization. Almost all staff organizations will be impacted by a broad-based strategic maintenance plan. Each must understand its role, the purpose of the change and how the new system or program will work. Each staff group must “buy in” to the plan and understand the importance of maintenance improvement. If the organization has embraced an overall strategy of team-based continuous improvement, this “buy in” will be obvious to the other staff groups and readily accepted.

The final type of support needed for successful implementation also depends on somebody stepping forward to assume ownership. First, the maintenance leader, along with the maintenance operation, must readily accept ownership. With maintenance people who have been involved, provided ideas and developed a team-based commitment to maintenance excellence, this will not be difficult.

For operation managers and supervisors who have had a part in developing the plan for greater maintenance service, fewer breakdowns and greater equipment effectiveness, being part owners will not be a problem. For operators who now are trained to do selected operator-based maintenance services and know how to detect and help prevent maintenance problems, being part owners in the plan for maintenance excellence will not be difficult. The impact from successful implementation will be apparent all across the organizations from the top down to the shop floor and the bottom line. Leadership and the acceptance of ownership at all levels are critical to successful implementation. Successful implementation is the key to creating impact.

Conclusion

We have looked at some new interpretations of ROI, as well as the traditional concept of return on investment. The Maintenance Excellence Institute believes that maintenance operations have a tremendous opportunity to contribute directly to the bottom line with a strategy of continuous reliability improvement across all six maintenance resource areas. Top leaders of today’s companies who want to be a part of the future must look beyond the bottom line with respect to maintenance. Maintenance must be a top priority for success. 

A near-sighted company focused on short-term results is fatal and will fail. Organizations of all types need long-term commitments from top leaders and from true maintenance leaders at all levels in maintenance. We also believe that an even greater awareness must be developed toward the investment opportunities that are available in maintenance. Sound investments in maintenance can impact the bottom line directly. Maintenance leaders must sell their ideas up, across and down the organization. Company leaders must listen, act and do the right things in terms of maintenance. Companies with a vision of long-term survival cannot afford to gamble with maintenance costs.

Achieving maintenance excellence requires an investment in both the traditional and non-traditional ROIs discussed. It requires a strategic maintenance plan for applying today’s best maintenance practices, principles and leadership philosophies to your operation. 

The essence of achieving maintenance excellence goes well beyond the bottom line to a simple, positive affirmation statement...PRIDE in maintenance. 

The real bottom line is PRIDE — People Really Interesting in Developing Excellence...in maintenance. 

This kind of PRIDE is needed at all levels, from bottom to top. If your organization has this kind of PRIDE, then make an investment and achieve a real return from your maintenance operation

Ralph W. “Pete” Peters is the founder/president of the Maintenance Excellence Institute. Contact him at Pete@PRIDE-in-Maintenance.com, (919) 280-1253 or www.PRIDE-in-Maintenance.com.