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7 Steps to Reduce Maintenance Fixed Costs

7 Steps to Reduce Maintenance Fixed Costs

12th February, 2019

Very few maintenance staff can describe a coherent and structured methodology for reducing maintenance fixed costs without undermining performance. It is unfortunate that there is no recognised methodology for one of the most common maintenance challenges. To tackle this issue, we have looked at how those that have succeeded have done this and developed a methodology to help.

Here are 7 useful steps to tackle the maintenance fixed cost challenge:

1. Define the business strategy and share this with maintenance

The goal of any business is to make profit. We might do this by different ways, but ultimately all businesses need to make a profit to exist. Of course, this has to be done safely and ethically, but all companies were founded to make profit and usually to make long term profits. As a consequence, everyone in the company needs to understand their role in this.

In the case of maintenance, this is essential. We need to move the focus away from just cost and on to profit. All maintenance should be seen as an investment with the cost weighed against its contribution to the business goals. Some maintenance will have a big contribution to reliability, product quality or long-term performance so may be worth spending more on since the returns are high and some maintenance will clearly be less valuable, so can be reduced or even eliminated. However, if you cannot weigh up the value of work, you end up distributing effort evenly or against other measure that may not be so important to the business.

2. Take the initiative and make this a positive process

Why is this important? Because so long as you wait for someone else to inflict cost reduction demands on you, you will always feel and behave like a victim. By taking the initiative you now own the process, you can change the view others have of maintenance and you can set your own programme.

Another thing to consider is that the things you need to do to reduce costs (better planning, clearer focus, less distractions and better teamwork) are things most people will sign up to happily. This is not just about reducing costs, it is about doing things well and improving profit.

3. Do less work!!!

I’ve mentioned earlier that focusing on profit and viewing maintenance as an investment will lead to cancelling some work because they are bad investments. However, there is more to go after.

Even if a job is clearly making a big contribution to profitability or safety goals, there may be parts of the scope that are less important than others, some that people are doing because it’s interesting or because “we’ve always done it this way.” Sometimes we use equipment policies, methods and tooling that force us to do more work than ideal and sometimes we do jobs too often.

Every single part of a job should be challenged with the simple questions:

  • What is the purpose of the overall task?
  • Will this part of the job contribute to this?
    • Do we need to do all of it?
    • Do we need to do it this often?

The great thing about removing work is that it permanently reduces bad maintenance investment and also risk – you can’t get hurt, cause a quality problem or extra costs if you are not doing the work at all!

4. Use better planning to do work smarter

Most people accept this but not everyone does it effectively. Good planning should provide a clear method that will be both effective and efficient. It should also include a continuous improvement loop (very few people do this effectively) that asks:

  • Was the method effective and did the job run smoothly?
    • What could be done better next time?
  • What did we find when we did the maintenance?
    • What do we know about the failure mode, what is causing it and rate of degradation?
    • Can we change the maintenance policy to deal with this better?
    • Can operations do something to reduce the problem?
    • Do we need to do this less often or more often?

5. Get closer to the front line and do everything you can to make it easier for people to do their jobs

Lots of people use the term “Our greatest asset is our people” but they seem to forget that this includes the maintenance and production technicians. Too many people have lost touch with the shop floor.

Many people do not measure wrench/tool time or are measuring it wrong. Most of the people we study are shocked by how low their tool time is and many blame the supervisors and technicians. This is not fair since we normally find the root causes of low tool time are poor planning, bad systems and work processes or ineffective support from other departments.

I love the shop floor. This is where you see just how well all of the company systems, planning and other department come together. You cannot do this remotely, you have to make visits, ask what helps and hinders people trying to get work done on the asset. Only by doing this will you understand the issues, the causes and have any chance of fixing these. It’s a wonderful way of getting to the bottom of what is going on and also of engaging the technicians – they are rarely short of ideas!

6. Encourage entrepreneurial thinking and free up clever investment

Once people start focusing on profit they begin to change their decisions and think more innovative. It is exciting to consider yourself an entrepreneur, contributing to increasing profits with different ways of doing things. These do not have to be high tech solutions with simple ideas such as improved tooling or applying formula 1 pit stop style team working.

7. Improve relationships with suppliers for reduce their costs to you

Most people share the cost reduction burden with their suppliers by demanding discounts! This can do a lot of damage since suppliers can resent this and will move to different customers if they can. If they can’t they may reduce quality which could harm your business.

Pace setters have good relationships with their suppliers and contractors and look for a win:win scenario where they can work together to improve efficiencies, make it worth suppliers investing in the contract and share the benefits

About the Author

Laurie Dummett

Laurie Dummett is an award winning consultant and trainer with over 25 years experience in maintenance. He has worked across five continents, in a wide variety of environments from the world’s largest oil refinery to a small bottling plant. Laurie has 10 years of maintenance management experience in the process industry, so brings a very practical approach to training. He moved into consulting with ABB Eutech as their global maintenance specialist where he led maintenance best practice panels, delivered a wide range of maintenance improvement projects and trained other consultants.

Laurie founded his own consultancy, in 2002 to focus on maintenance improvement and best of the best methodologies. As part of this, he developed a range of maintenance “models of excellence” with inputs from authors, international lecturers and some of the world’s leading consultants and operators.

Laurie remains close to the industry and continues to help operating companies, testing and refining his maintenance models in the process. His work in maintenance improvement has been recognized as best-in-class winning prestigious awards such as the UK Chemicals Industry Association national award for Excellence in Engineering.

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