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

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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. 

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