The Fundamentals: 5 Ways To Cut Costs While Shooting Your Maintenance Effort In The Foot
EP Editorial Staff | May 12, 2010
You may not have asked for it, but here’s a list of some sure-fire ways to do in your program.
It is quite an achievement to attain lasting success in plant maintenance. So much so, that once a modicum of reliability has been reached in a production facility, the maintenance organization responsible for this achievement would want to solidify its gains. It wouldn’t want to mess with success. It would be loathe to “fix” that which “ain’t broke.” It would be inclined to leave well enough alone. You can bet that if the maintenance manager were in the budgetary decision loop, this is exactly what would occur. As we all know, maintenance reliability doesn’t just happen. Despite the old saw to the contrary, for anybody in our line of work, it is NOT better to be lucky than good.
Unfortunately, the maintenance manager frequently is not the only person involved in the maintenance budgeting equation. Consequently, when the economy slows down and times get hard, the reward for a successful maintenance effort can sometimes be expressed as budget cuts. The irony here, of course, is that when a maintenance organization has truly found its stride, it may not seem busy enough to suit upper management. Historic measures of maintenance efficacy—heroic last-minute saves, quick turnarounds on emergency breakdowns and manly all-nighters—are not visible to others in the organization, who may begin to wonder what “those maintenance people” are doing with their time. After all, everything is running along smoothly and quietly, just as it should. “Do we really need all of them?”
As another old saying goes, the squeaky wheel gets the grease. By the same token, if that wheel isn’t squeaking, it can be lost in the economic shuffle once the word comes down from corporate to cut costs. If the wheel is rolling as designed; if it is aligned properly; if its PMs are current; if it has been properly maintained by competent maintenance professionals to ensure against surprises and runtime failures; and if it was properly engineered to begin with, installed by a capable contractor and is being supported by a committed staff of professionals who know the process and the equipment, the keepers of the purse might decide that maintenance is as good a place as any to cut costs. When a company is under economic duress, however, financial decisions that look promising in the near term can have long-term negative impact on the health of the process.
Such is the case with the following five sure-fire methodologies—they’re guaranteed to trim dollars from your maintenance budget immediately. Remember, though, that each of these tactics has a hidden cost for your organization in reliability and efficiency, as well as a real cost in dollars that will have to be repaid with interest down the road.
#1: Suspend training
One of the best methods to employ if you want to have an immediate short-term positive impact on your maintenance budget is to suspend or cancel your training program. Since it’s often difficult to see instant results from training programs, they are often put at risk during economic downturns.
Assuming that you’re currently devoting 5% of paid maintenance time to training, that you work a 40-hour week, that you have a workforce of 20 technicians and that your technicians are paid an average of $15 per hour, you can save over $600 per week beginning the very first week, not counting the actual costs associated with training modules, materials and teachers. If your backlog requires attention, these man-hours can be scheduled to other tasks. Or you can simply have your technicians work shorter weeks and take the savings all the way to the bottom line. On the other hand, the first time that a $10,000 bearing goes out because it was not installed properly—due to lack of training—the cost of the replacement part plus production downtime and maintenance overtime will wipe out these savings and more.
#2: Reduce staff
This popular cost-cutting tactic—aka “Slash and Burn”—is the hands-down favorite in many organizations. While not the approach typically taken by surgical teams, flight crews or fire departments (thankfully), it’s a method that most other industries and enterprises turn to at one time or another.
Depending on the geographic location of the facility and the type of industry involved, huge short-term savings can be reaped using this approach, and real money can go straight to the bottom line. If you choose this approach, the tricky part is trying to select which of the current roles and responsibilities on your maintenance team are not actually necessary to the organization’s continued success. To do so, you must assume that you’ve been overstaffed all along, or that you have some unnecessary roles in your organizational structure. Upon making these types of assumptions, you also must acknowledge that you somehow didn’t notice such conditions existed within your organization until the economy slowed and you were faced with reducing your budget. Finding yourself in this situation, incidentally, begs speculation about what you have been doing with your time (but that’s a question for another day). Luckily, the decision to eliminate personnel will probably be made for the maintenance manager by someone who is not actually acquainted with the organizational structure—with just a flick of the pen, based on dollars, not sense. Therefore, the cut won’t really be the maintenance manager’s fault. It will, however, be his/her problem when the plant grinds to a halt and ceases to make product.
#3: Postpone or cancel PMs
In any well-run maintenance organization, 50 – 70% of the technicians’ time is spent on PMs and inspections. This represents a deep well from which you can draw buckets upon buckets of savings, the dollar amounts of which can be quite large.
Say your equipment is humming along nicely, and you have a total of 300 hours of PMs coming up for the next week. If you can somehow suspend the laws of maintenance and convince yourself that the reason your operations are running so well has nothing whatsoever to do with your current PM program, you can, with impunity, cut some or all of these hours from the schedule from time to time, particularly on those machines that aren’t giving you any trouble. It’s like finding thousands of dollars of free money just lying on the plant floor! Think about it: If you don’t do 150 hours of next week’s PMs—again assuming an average wage of $15 per hour—you can save well over $2000 that week in maintenance salaries alone. That’s without even considering the other costs associated with your PM program, such as parts and materials. If you continue doing this week after week—picking machines that are running well and skipping their PMs—you’ll be into real savings in no time flat. Great! You’ll need that money when it comes time to pay the piper: Sooner than you might imagine, there won’t be any well-running equipment to skip.
# 4: Only fix what you have to fix
Also known as the “Baling Wire & Duct Tape Method,” this cost-cutting avenue is based on the principle that a machine center—or even an entire process—will continue to run long after it has ceased to run well.
This method assumes that the business gets paid on uptime, not throughput or quality, and relies heavily on the fervent hope that if the maintenance department somehow can just keep things patched together until the economy gets better, “then we’ll be able to afford to fix it right.” It also assumes equipment systems do not wear or break, and even if they somehow did, that replacement parts and components would be free. The problem with this methodology is clear to the maintenance professional—when robbing Peter to pay Paul, that guy Peter will, at some point, want to get his money back.
Any machine or process that is not well-maintained will run less and less efficiently over time. It will cease to do what it was designed to do in the manner it was designed to do it in. As it is patched and re-patched, the reliability issues compound, and the machine becomes less and less able to do what it is supposed to do. Eventually, it becomes so out of spec that nothing short of a major overhaul and refit will salvage it.
#5: Practice reactive maintenance
Best described as the “Laissez Faire Method,” this technique is based on the theory that your maintenance department will spend less money in the short run if it simply sits around waiting for something bad to happen. Oddly enough, if you’ve had any success at all in building an effective maintenance organization over time, you’ll actually spend a good deal less money using this particular strategy—well, at least for a while.
The reactive maintenance technique is exceptionally easy to employ. Just hunker down out of sight somewhere and wait to see what happens. The savings associated with this approach have to do with the “don’ts.” When you base your maintenance strategy on running to failure each and every time:
- You don’t plan.
- You don’t schedule.
- You don’t hold high expectations.
- You don’t follow up.
- You don’t write SMPs.
- You don’t lube.
- You don’t perform failure analysis.
- You don’t perform PdM inspections.
- You don’t track KPIs.
- You don’t review safety.
Basically, you don’t do anything at all except hope that the plant doesn’t suddenly get quiet. The problem with this approach is that, sooner or later, the plant will—suddenly get quiet, that is—and the longer you employ this method, the more likely this becomes.
Stop the shooting
There you have the five best methods available for doing in your maintenance program. Each will have a positive short-term effect on the maintenance budget—and each will have a negative long-term effect on your process. The use of just several, or all of them at once, is a guaranteed recipe for failure.
Granted, these are extreme examples of poor maintenance management. They were written that way to make a point. Still, as you read back over them, you should ask yourself if you are as removed from these practices as you think. In tough economic times, maintenance managers are under intense pressure to deliver reliability on time and under budget. In your daily search for ways to accomplish this, be sure you don’t end up shooting yourself in the foot! MT
Ray Atkins is a retired maintenance pro (and award-winning author) based in Rome, GA. He spent his last five years in industry as a maintenance superintendent with Temple-Inland. Web: www.raymondlatkins.com; E-mail: firstname.lastname@example.org