Merge ROI Into Maintenance
EP Editorial Staff | July 20, 2022
Change your perspective to move maintenance away from a pure expense and enhance overall safety.
Organizations acknowledge that a safety-first approach to plant operations is invariably underpinned by a robust inspection and maintenance plan. But could they take their investment in the associated technology a step further and understand the return it is yielding for them?
Maintenance and operations people will always—rightly—position safety as their top priority and look at their assets from that perspective before anything else. But taking that same risk lens over their operations should also help them to create an overarching, efficiency-focused asset strategy befitting their circumstances.
That’s because it automatically lends itself to the principles of optimization: ensuring they are focusing on the right equipment with the right inspection regimes with the right technology resources.
It enables them to elevate their strategy above the standard OEM checklist-style approach. This is similar to the service schedule for your car. Certainly, you can follow the manufacturer’s guide and have it checked after a certain number of miles or set period of time. But how well have you been driving, and have you been using the car for regular short journeys or longer trips? Those factors should influence maintenance plans.
It’s effectively the same principle with plant assets. Applying a risk view can expose specific behaviors, practices, and trends, and therefore empower operators to develop a bespoke inspection and maintenance plan for each asset and replace the generalist approach that is still widely used.
It’s a direction of travel that takes us toward the concept of a holistic asset strategy and away from the principles of predictive maintenance. Predictive tools and methodologies can certainly tell the operator of the likelihood and potential timeframe of an asset failure, but it doesn’t take inspection and maintenance work far beyond reactive mode. It offers better oversight, but the mindset is essentially the same. The most effective approach is to combine predictive methodologies for your most critical equipment over an effective risk analysis and asset strategy program.
That, in turn, leads us into the return on investment (ROI) arena. It’s reasonable to ask why this is a pertinent topic for operators in the context of inspection and maintenance.
Essentially, it takes the efficiency element of inspection and maintenance investment beyond a question of simply identifying individual cost savings and, instead, looks at it in the context of a structured asset strategy program that has risk at its core. In other words, an approach that is less about ad hoc savings and more about securing long-term efficiencies thanks to strategic oversight.
It creates a value-analysis proposition in which operators who invest in solutions that can demonstrate returns on safety and cost will, at the same time, capitalize further on its technical attributes by strengthening the business case behind their inspection and maintenance efforts.
Introducing an ROI led approach to maintenance enables operators to combine the knowledge of their own operations with trustworthy and demonstrable technical assumptions and overall strategic outlook to create a picture of waste and issues that can be avoided. It also identifies areas in which additional opportunities might be explored.
Targeted investment on the right technical resources enhances ROI. So too does an optimized program of inspections, fewer unplanned maintenance interventions, and reduced, less-frequent, plant turnarounds—all of which stem from that holistic strategy. Remember, too, that it’s resulting in fewer manpower hours at the operational front line for the completion of inspection or repair work, so it’s also supporting the safety agenda.
An ROI model, in effect, takes you to the next level in terms of understanding your plant. It generates an insight into not only how effective the inspection and maintenance program is, in terms of addressing risk and averting issues, but also how well run the program is as a component part of the business. It’s a model we’re keen to advocate because, in some industry quarters, inspection and maintenance are still not regarded as part of the commercial proposition. They’re viewed as a cost to be managed, not an investment to be optimized.
Rather than viewing maintenance as a cost to be minimized, investing in asset optimization, and ensuring that operational focus is centered on the right inspection regimes for the right assets, with the right resources, can lead to major operational efficiencies and cost savings. Adding increased knowledge sharing and communication between different teams into the mix allows a comprehensive and cohesive view of an asset to be built up, eliminating data siloes; enabling teams to work in a centralized, interconnected way; and maximizing asset life, performance, and ROI, while minimizing inefficiencies.
Asset performance is business performance. If businesses measure success in economic terms, shouldn’t the ROI of asset performance be factored into those calculations? EP
Oz Rodriguez is Head of Product GTM Strategy with Lloyd’s Register Software (lr.org), Houston, TX. Rodriguez has more than 15 yr. of experience developing enterprise software and is currently involved in developing cloud-enabled SaaS Asset Performance and Risk Management products.