Reliability ROI: How to implement a zero-sum maintenance strategy

Maintain support for your reliability program by showing payback from your efforts.

By Phil Beelendorf, Roquette America Inc.

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So you’ve bought into the reliability-based maintenance concept lock, stock, and barrel and have developed a program that includes all of the key elements: planning and scheduling, predictive maintenance, and root-cause failure analysis. But that mountain of cash that all of the leading reliability pundits promised has yet to materialize. Worse, you’re spending more money than when you first started down the road to reliability.

Many organizations, disillusioned by the lack of progress toward their financial targets, end up cutting their fledgling reliability programs and go back to the reactive maintenance model. This ultimately keeps them from reaching best-in-class status in their marketplace. If you find your program in this situation, it might be because you made one crucial mistake: You didn’t follow the money.

Many reliability programs are what I’ll call technology-driven versus money-driven. Reliability leaders focus a great deal of their time and energy searching for the latest breakthrough technology and spend less time crunching numbers. We’ve all been guilty of looking for the “better-built mousetrap.” The problem with this approach is that no matter how technologically advanced the mousetrap is, you still have to place the trap in the right place to catch the mouse. And the mouse in our story is money.

The deck is stacked against the reliability leader, as an ever-growing number of better-built mousetraps are entering the marketplace. An ever-growing army of salespeople is working hard to convince you that their company has the answer to your problem. I’ve got a news flash for you: I have yet to meet an executive who cared one iota about the latest technology, but all of them seem to care a whole lot about money. So if you want to get the type of support that will make your program successful, show them the money.

Don’t get me wrong; there are certain program elements such as planning and scheduling and full utilization of your CMMS that are foundational to successful reliability programs. The payback for these program elements usually lags the initial investment period by anywhere from several months to years. And you need to invest in these foundational elements to be successful. But many other program elements can give you immediate returns on your investment, bringing much-needed cash (i.e., credibility) to your effort. And you can find these hidden gems by following the money and using what I call a zero-sum maintenance strategy. 

The principle of employing a zero-sum maintenance strategy is quite simple. It relies on the reliability leader’s ability to recognize that time and money are limited resources. The most-successful leaders learn to focus on the opportunities that present the greatest potential return on their investment. Understanding the cost in both time and money, calculating the potential return on that investment, and then pursuing only the program elements that promise a reasonably high return will ensure that your efforts generate rather than consume cash.

How to get there? The following principles are a starting point.

  1. Learn to do the math.
  2. All maintenance tasks should address a specific failure mode. Use the least-expensive and most-effective task to do the job.
  3. Start with centrifugal pumps.
  4. Use life-cycle cost (LCC) analysis to make decisions.
  5. Look at your PMs.
  6. Don’t forget to explore initiatives that have little or no maintenance payback.

Learn to do the math

First and foremost, teach yourself to always think like an accountant instead of a maintenance professional. This is difficult for most of us; we are hard-wired to solve problems, not crunch numbers. But how many of your decisions actually generate a hard dollar payback? Take your vibration program. Most everyone would agree that a vibration analysis program is essential to any reliability excellence strategy. But ask yourself the following: How much money does your vibration program save? What does it cost to operate? How much equipment should you cover with this technology to maximize the return on investment (ROI)?

I have worked in the corn-milling industry my whole career. A well-known predictive maintenance company developed a benchmark study for the chemical industry that compared profitability with the percentage of equipment covered by a number of the most-widely used predictive maintenance technologies. Early in my career, the company shared with me its study, and insinuated that the chemical industry was a good benchmark for the corn wet-milling industry. The service provider recommended that best-practice companies employ first-quartile equipment coverage levels. Figure 1 shows the percentage of equipment coverage levels by quartile for vibration analysis.

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