Downtime interrupts production, delays shipments, raises costs and reduces revenue. In the worst case, market share is lost and, in today's competitive environment, may never be recovered. The key to reducing downtime is equipment maintenance. But maintenance isn't easy. Worse yet, maintenance often gets no respect from management!
Many managers wrongly believe that maintenance is only pumping grease into bearings or filling oil cups. Although the importance of maintenance varies based on the type of production operation, to be effective in any setting it must be considered a skill-based, professional undertaking that requires knowledge, experience, good judgment and wisdom.
A good start in professionalizing the maintenance function is to establish and utilize appropriately defined metrics related directly to the function. The goal of maintenance is to reduce production downtime, and there are only two central metrics:
- The amount of downtime, measured in hours of interrupted production everywhere in the process it occurs.
- The cost of downtime, taking into account factors such as lost margin, unutilized direct and indirect labor, and unabsorbed overhead.
The cost of downtime depends on the nature of the manufacturing operation. For example, downtime costs in a continuous flow operation are almost always higher than in traditional batch manufacturing. If downtime costs are low, investment in the maintenance infrastructure-such as spare parts-can also be low. But when downtime costs are high, and downtime is increased by not having the critical spares on hand, the cost of carrying the spare parts is insignificant compared to the cost of equipment being out of service for an extended period of time.
The turnover of spare parts inventory cannot be measured the way one measures turnover of production inventory-for example, 10 to 12 turns per year-even though some so-called experts have used this approach. What you want is zero turns per year, indicating no failures of critical parts. In this case, the investment in spare parts inventory becomes, strictly and properly, a form of insurance.
Three steps must be taken to benefit from the opportunity that a maintenance program offers to yield real cost reduction by slashing downtime. First, the enterprise must calculate the cost of downtime based on cost factors specific to the operation. In my experience, this is not easy to do. As a result, very few organizations have gone through this exercise on a serious basis or with any degree of success.
Second, complete and timely histories must be maintained on all critical equipment. These histories must capture every failure and breakdown, the nature of the failure or breakdown, hours of downtime, corrective action taken, and the cost of that corrective action.
Third, an effective maintenance team must be established with the goal of minimizing failures and reducing out-of-service time. The team must include both skilled trades and professional plant engineers. Downtime hours and costs must continue to be tracked, plotted and reported on a regular basis.
If maintenance were easy, everyone would do it. It isn't easy, so everyone doesn't do it, and that can give the companies that do take maintenance seriously a competitive advantage!
What's your opinion? Whether you agree or disagree, Fred Kessler will welcome your com- ments. You can contact him via the Bourton Group's Web site. Just point your browser to www.bourtongroup.com and click on "Contact Us."