Budget time is around the corner. Is your maintenance department still viewed as a cost center, or do people value the safety, reliability, and productivity contributions you made in 2013? We talked about this a little over a year ago, when it was time to put together the numbers for the 2013 budget.
Since that time you have undoubtedly worked hard and contributed a lot to your plant’s operations. It’s almost a certainty that you have burned some midnight oil. If you have used that time wisely, your hourly staff members have probably worked less OT than they did last year, due to improved maintenance planning. If your reliability and maintenance troops have conducted a program to finally solve the problems of your worst-performing two or three assets, there is probably a reduction in emergency work and an improvement in OEE across your facility. This would mean that you have increased corporate output and profitability. What’s more, you’ve done it without major investment in people and equipment. What better use of company resources could anybody make?
So where is your share of the credit and budgetary incentives? What are your plans for next year? How will you use your current resources to take the next step toward precision maintenance and new levels of productivity? Are you earning the assets that the company has trusted to you and your production partners?
Most of us didn’t go into maintenance and reliability because we are show boaters. Most of us like machines at least as well as we like people. Most of us enjoy making equipment run well. We figure that if we do our jobs successfully, the results will speak for themselves and we’ll be left alone to keep up the good work. After all, keeping the machines running should be the hard part, right? Credit should come automatically.
In a perfect world this would be true. And just to be sure I wasn’t missing something, I Googled “perfect world.” It’s a fantasy game of Chinese origin. You can buy time to play it at 7-Eleven, Target, and Game Stop. When I last checked, Perfect World included no paid openings for maintenance and reliability practitioners. There was nothing for editors, either, so I think that brings us all back to the third rock.
Here on Earth, our top managers deal with constant pressure to do more with less. If you have improved their capacity by 5 or 10%, then you have equipped them to accomplish what their managers already expected. If they are not sure how it happened, it’s still a lifesaver. It just won’t be attributed to your team, the ones who made it happen.
Even that may not bother a real machine person, but here’s what will — those same managers now have the job of predicting how they will do the same kind of hat trick next year. If they don’t know how it happened this year, they don’t know whom to thank and they don’t know where to invest the money to buy next year’s magic. You may think it should be obvious, but to a manager with a bone-crushing schedule and a sales or accounting background, it isn’t. And to his boss on the mother ship, it’s a complete mystery.
The kindest thing you can do for your manager, not to mention your team, is to equip him or her to say, “We addressed our three biggest downtime causes from the last year, and fixed them. That resulted in a 10% improvement in OEE and a 15% improvement in capacity. Our salespeople sold out the new capacity and the resulting increase hit the bottom line at material cost, since we didn’t have to increase staffing. The overall result was an X% increase in profit. We would like to invest $XX,XXX of the new profit this year in an overhaul of our next two problem machines. We expect a net X% increase in profitability from that effort, providing an X% ROI from the reliability program.”
Most of us will need the help of a good controller or CFO to fill in all those blanks. But financial people are under the same kind of pressure to show improved results that the boss is. If you did what we talked about last July, you’re in a position to show them the results and explain last year’s improvement. If not, you’re still in a position to show what the results can be if you fix their biggest maintenance headaches in 2014. They will be all ears. Remember, they have two ways to create financial improvements from maintenance and reliability: They can cut your budget or they can forecast results. The choice is yours.
If you made your 2013 improvements, they probably didn’t come on-line until the third quarter. This means you probably have more production increases up your sleeve. They will help you to cover the investment required to fix the next set of assets during 2014. Try to bring the new set of improvements on-line by midyear. That way, you’ll improve OEE for the second half and keep playing with house money. A good controller can help you with this, as well.
Remember back in school when you had a few annoying classmates who actually looked forward to report cards? They got good grades, so their allowances went up. Budgets are a lot like that. If maintenance, reliability, and production are working together to boost OEE and if they push the salespeople to sell the resulting output, budget time can be a celebration. Personally I never pulled it off with report cards; but I have had some great budget sessions. They’re worth all the effort.
Whether you’re getting into strategic maintenance this year or cashing in your winnings from 2013, last year’s advice still applies.
Keep it strategic: Make a contract with your in-house customers to improve plant performance, and then deliver on it. Work with your financial people to build a realistic forecast. They’ll love working with something more substantial than smoke and mirrors. Your skill set can provide it.
Eliminate the maintenance squirrel stores: They contain the material you need to do the old repairs. Hopefully they can provide hints for what you need to improve. If you use them and don’t have to replace them because the equipment problems have been fixed, they’re free money. They give you parts that you’ve already bought and don’t have to replace.
Insist on work orders: It is essential to know where your time and money went. Without work orders to tie costs to assets and to projects, you’re flying blind. This is the data you will need to prove your effectiveness and make next year’s projections.
Keep the KPIs coming: Financial measurements are essential, but you need the forward-looking measures we’ve discussed in last year’s budget column and this year’s “Management Measures” KPI columns. They will tell you how well your department is working and give you control over expenses like contractors, overtime, and materials. If you know how you are spending your budget, you can tie it to benefits and defend it.
If you began strategic maintenance last year, congratulations. This budget season should be rewarding. If this is your year to start strategic maintenance, the rewards will come next year. Either way, you’ll be equipped to explain what you’re trying to do and show a business case. That has to make life better.