Your Maintenance Cost is too High!

Torbjörn Idhammar
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The Coronavirus is spreading around the world as I’m writing this article, and many companies’ finances are shaken to their core. If you are in charge of maintenance, you are probably constantly under pressure to lower costs.

Sometimes you may even be ordered to lower maintenance costs by x% and within a certain time frame. This is probably close to the reality for many right now. Maybe you are already in that pinch? If so, how do you handle it? Lowering the maintenance cost, of course, but how? What steps do you take? I have some thoughts and arguments that may help you when discussing the situation with your peers.

First of all, I think you should ask for a meeting with the person who has decided to lower maintenance costs. I know, it may not be possible, but you should at least try. And if there is any time in history that you should be persistent, it is NOW.

Decisions regarding lowered maintenance costs are rarely logical or based on reasonable data. Most of the time your factory has been compared with a similar factory and some ”genius” (an accountant or top consultant) has just looked at the numbers without considering or including the age of your factory, your maintenance routines, your maintenance debt, your relationship with the unions, what you included in maintenance costs and what major jobs you did (or didn’t do) last year, etc.  

To make a comparison straight across the board will always provide a distorted picture. Your plant may be the second best in the world, but then it’s compared to the one plant better than yours, and suddenly, the opinion is that your costs need to be reduced. Question why! Will the cost reduction really improve company’s result? What do you do with existing repairs already in your backlog? They have to be done. If the decision is not to repair, has anyone done a risk analysis for the consequences?  

But, if you “lose” this discussion it is very important that you are in agreement about how you will go about reducing the maintenance cost.

There are only a few options. One alternative is to lower the maintenance budget immediately and hope that maintenance somehow becomes more efficient. Unfortunately, this is a very common and very bad solution. Repair work for equipment that is already identified has to be done regardless of how much someone wants to reduce the maintenance cost. And all the while, you also cannot become more efficient in just a few days. What typically happens is that repairs are delayed, which causes more breakdowns and more downtime, which obviously also leads to higher cost.

It’s a delayed effect, and it isn’t a good one, at least not for you. The first 6 or 9 months will look good, and then…the results will plummet. If this is how the organization wants to solve the current situation, make sure to find another job within 9 months. Maybe you should become a top consultant or accountant!

Improving maintenance takes time, and that’s because it’s 90% about changing human behavior. To be tough, bark out orders and threaten doesn’t help. No, there is only one remedy—time and leadership. Taking the time to improve work processes through people is typically a great investment, because once work is rolling smoothly, cost will go down and reliability will go up. IDCON has collected many studies from a vast variety of plants around the world over the years. Most of us could stand improvements in the form of operating procedures, lubrication routines, and installation with precision. Most of us also need to improve the chain “inspect-plan-schedule-execute.”

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My advice in short:

  • Discuss whether the cost really should be reduced. Is it possible to keep high reliability and quickly reduce costs?
  • Usually, the answer to #1 is no. So, focus on improving your work processes through strong leadership with your people. Your cost will go down and your reliability will go up. This option is much better than cutting cost in panic and hoping reliability will be okay.

 

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TOR IdhammarThe Author:

Tor Idhammar is the president & CEO of IDCON, INC. 
He has a Masters Degree in Mechanical Engineering and a B.S in Industrial Engineering.  Tor has worked with more than 60 organizations in 20 different countries. 
He is the author of 4 books, co-editor for TAPPI 360, blogger at reliableplant.com and now here at Paper Advance.


About IDCON:
IDCON is a reliability and maintenance management consulting firm. IDCON help organizations find and implement their true reliability potential through improved work management, preventive maintenance, spare parts management, root cause and more.

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