Maintenance professionals often see themselves as the unsung heroes of the plant. They toil away out of the limelight, underfunded and unappreciated, to keep things from literally falling apart. Too many maintenance leaders imagine themselves to be at the mercy of the budget, the whims of Production, and the cantankerous equipment they cannot get the time or resources to care for properly.
By: Peter Munson
The sad truth, however, is that we maintenance leaders have only ourselves to blame for this state of affairs. Maintenance managers have accepted the idea that they are running nothing more than cost centers. If Maintenance is a cost center, the sole route to optimization is by cutting those costs to the minimum possible level. This race to the bottom is only periodically interrupted by spectacular crises in equipment reliability that force un-forecast spending, followed perhaps by a short-lived improvement program investment before the cuts are resumed. In this view, Maintenance is not a partner to the business: it is all drag, no thrust.
There is no bolt of enlightenment coming out of the blue to fix this for us. Maintenance managers must take it upon themselves break out of the cost center mold and start measuring and communicating their value as business partners. The maintenance cost center trap is undercutting your company’s profitability and eroding the value of your balance sheet. Machinery and equipment make up 40-60% of a company’s balance sheet in the process industries. What is more, the value stream for 100% of your revenue only runs when that machinery and equipment is working properly. Considered in this light, Maintenance is a value center charged with preserving the value of over half of your company’s balance sheet and enabling 100% of your revenue stream.
Maintenance metrics are too inward focused and are aggregated at too high of a level to drive meaningful discussions – and ultimately actions – with business partners. For example, plant wide maintenance budget reporting as a stand-alone item is never going to impress, even if broken down into categories such as preventive and corrective work. If you are at or under budget, why not cut more. If you are over budget – why?! Even with good explanations, you do not have the business-specific data in front of your partners to drive the conversation.
Instead, maintenance managers need to break cost and performance down to levels and outcomes that mean more to their business partners. For example, you can report unit cost and volumes for corrective maintenance by area. This would be the average cost of corrective work orders times the number of work orders for the period. The breakdown by area should match the way that Production sees their world. This will help the responsible managers to understand what they are getting (often demanding) and what it is costing in their area. This helps to make it relevant to them and it also helps the maintenance manager to identify and discuss area-specific issues. The area manager that insists on breaking the schedule for every work order will stick out like a sore thumb on this type of report, in the units that matter: dollars. The point here is that other departments consume maintenance work like it is a blank check because it is. You have to give them the data that helps them control their consumption.
Overall mechanical availability is another underwhelming metric. Even when it is great, someone will always ask, “How can mechanical availability be that high if I keep having issues with pump 123A?” Again, break your reporting down by area and focus on what matters to the rest of the business. Focus on production critical assets and show measures of response time and quality for that population, such as work order aging, proactive repairs resulting from condition monitoring, and levels of rework and repeat repairs. These measures can be reported alongside the specific mechanical availability for production critical assets, along with lost production reporting, which will enable much more meaningful discussions around the cooperation required to continue improving.
Your reporting should also highlight how proactively investing in maintenance improves business performance. You can tie preventive maintenance (PM) expenditure and PM compliance by area to reduced breakdown maintenance, lower corrective maintenance costs, and fewer lost production events. For some assets and processes, you may be able to quantify improved production performance following preventive maintenance actions (e.g., throughput, quality, etc.). These are excellent ways to put maintenance value in front of your business partners.
Production is not a customer. They are a business partner. What is more, maintenance professionals know that Production needs, but often fails to listen to, their expert advice. There are longstanding cultural factors at play here, as well as the short-term focus and incentives that day-to-day production supervisors face. The reporting and mindset shift described above will only get you so far. You need to transform your partnership with Production – and document the transformation! If you want people to stick to the prioritization matrix, to play by the rules, and to stop saying “my area is different,” you need to establish more detailed, reporting-backed service level agreements. Quantify service levels, such as response time and volume. These service levels can vary by equipment criticality, work order priority, area, and even process. Such agreements can be used to take some of the “blank check factor” out of the Production-Maintenance relationship and enable production leadership to think more critically about how they want to partner with Maintenance to improve performance.
By tying reporting to value at the level that production leaders individually care about, this gives all parties a more nuanced understanding of how to achieve the best business results from the maintenance investment. If you are reporting only aggregate cost numbers, the group sees only one solution: cut across the board. By reporting unit cost and volume, as well as service level and quality items that are tied to business performance, you give your partners data to inform choices. Instead of lopping a percentage off the top, you can have a much more precise discussion about how to control costs by addressing specific outliers in volume or unit cost, or by cutting in places where it will have the least impact on business performance.
This transformation will not happen overnight. You will have to put in work and exercise patience up front to improve your reporting and change how your business partners see Maintenance. Once the transformation begins, however, it will pay great dividends not only for the position of Maintenance as a value center in the organization, but in the business results that Maintenance enables. Experience has definitively shown that attitudes toward Maintenance are not going to make a miraculous change. It is up to maintenance professionals to take control of their fate and start acting like the value center that they are.