Jumpstart Maintenance Profitability
EP Editorial Staff | October 13, 2020
These three strategies will help your maintenance department contribute to the company’s bottom line.
By Paul Lachance, Dude Solutions
In many ways, maintenance professionals play a significant role in increasing profitability. Cost-controlling measures such as avoiding downtime, optimizing labor, avoiding stock-outs (missing a critical spare part when needed), and assisting in ensuring compliance and safety, all promote profitability. Manufacturers who implement software, promote best practices, and utilize consulting services have consistently shown even greater profitability potential.
“What do maintenance people do?”
If you asked that question in the 1990s, the initial and typical response was “fix broken assets.” Ask that question now and the answer is to increase production capacity and efficiency. Today, maintenance professionals are known for proactively keeping assets and facilities running smoothly and regularly collaborating with production, finance, engineering, and safety departments. In many ways, they are the unsung heroes of an organization and have serious positive impact on profitability.
Before we can talk about the path to increased profitability, let’s look at some of the profit killers that plague manufacturers, especially as they pertain to maintenance operations. The top four are:
• Labor—overtime, improper balance of work, wrong people for job, ineffectiveness
• Parts—stock-outs, poor ordering, poor management, loss/missing/theft
• Assets—downtime, poor quality (scrap/rework), energy usage, premature retirement
• Compliance—fees/fines, insurance hikes, bad will.
These profit killers can be avoided by optimizing maintenance operations through a combination of well-implemented software and industry best practices that control maintenance operation costs and ultimately drive profitability. A steady dose of continuous improvement driving lean and efficient maintenance operations is key. Implementing the following three tools will help drive increased profitability.
CMMS software: In today’s manufacturing maintenance environment, software is essential. In many compliance cases, it is mandatory. It is critical that you have CMMS (computerized maintenance management system) software that can optimize your maintenance operations around asset management, work orders, parts and procurement, safety and compliance, reporting, and analysis.
Many implement a CMMS to simply automate manual tasks without realizing the cost savings and profitability benefits. Besides the immediate benefits of reducing downtime and optimizing maintenance planning, a CMMS will also extend the life of your assets, help your production lines produce better quality and more consistent products, and consume less energy.
Still not convinced? According to the Federal Energy Management Program, Washington, organizations that use a CMMS experience:
• 28.3% increase in maintenance productivity
• 20.1% reduction in equipment downtime
• 19.4% savings in material costs
• 17.8% reduction in maintenance, repairs, operation (MRO) inventory.
Rely on best practices: Lean manufacturing (including maintenance operations) helps organizations optimize efficiency and control costs, all while creating quality products. There are numerous best practices, methodologies, and other toolsets that have shown great progress in the drive to be lean and efficient. Each of these ultimately help a manufacturer operate efficiently through continuous-improvement processes.
The 5S system is a simple but excellent example. Each of the 5S elements (Sort, Set in Order, Shine, Sustain, and Standardize) are foundational to many other methodologies. In fact, 5S sits “under” the pillars of TPM (see below). 5S makes our factories better organized, allowing much more efficient maintenance management.
The 5S system translates to all aspects of maintenance from the tool-crib, spare-parts room to making assets cleaner and to helping identify chronic problems. Like many of these methodologies, 5S should become a way of life for all team members.
There are many other continuous-improvement tools that can benefit manufacturers, including Six Sigma and Total Productive Maintenance (TPM). In all cases, the goals are to increase operational efficiencies, remove variability from the manufacturing process, and control costs. A CMMS can help with each of these methodologies. Providing root-cause-analysis from work orders, identifying sources of downtime, flagging bad-actor assets, and other analytics are helpful functions. You can also use standard CMMS capabilities such as basic PMs for operators. The results of these efforts will make your organization more profitable.
Turn on services: Software is important, but real return on your CMMS investment requires quality implementation and training for your team. The most common root cause of an unhappy customer is related to poor implementation, poor quality data, and/or lack of training. Yes, quality software with appropriate features is important, but that won’t help you if your organization isn’t set up properly.
Controlling costs to avoid the dreaded profit killers requires that your CMMS be properly configured with solid workflows that match your operational needs. This all follows a deep dive into your goals, objectives, and problems. The data (often migrated from a legacy system) needs to match this process. It’s essential that the entire team is properly trained on their respective use of the solution. You may require an integration to another system (think sending a requisition of low spare parts to your purchasing system). You’ll also need a readily available help desk.
The time-to-value ratio of organizations that properly use services can speed up implementation by 50%. The services should be tailored to match your initial needs and budget. You can always expand. Proper services are well worth the cost and effort as they quickly deliver a positive ROI and resulting profitability.
Combining your CMMS software with implementation services and industry best practices will help you battle profit killers and get your organization on the path to greater profitability. Don’t be intimidated. Rely on your CMMS vendor to walk you through the continuous-improvement process. Start with small goals and resulting profitability will help you make big leaps and drive away profit killers.
Lean manufacturing/maintenance is always in fashion. Continuous improvement and doing more with less are critical in all times. Those who take advantage of CMMS efficiencies, amplify solid best practices and methodologies, and leverage services move well ahead of the competition. EP
Paul Lachance wrote his first CMMS system in 2004 and has since spent his professional career designing and directing CMMS and EAM systems. He has been a featured at IMTS, Fabtech, and SMRP events and has authored articles for several industry magazines. He currently serves as the Senior Manufacturing Advisor for Dude Solutions, Cary, NC (dudesolutions.com).