Improper maintenance planning leads to improper reduction or management of operational costs. Cutting budgets yearly leads to ineffective planning of preventive work, which leads to expensive reactive and machine failure work.
This article will look at how and why capitalizing on a budget for maintenance program reduces resources and downtime, gives efficient control of costs, and properly manage your budget.
Budget challenges caused by inefficient maintenance planning
When reviewing maintenance costs, the major point to remember is that your company’s behavior alters the cost numbers. When you force the cost numbers, the organization’s behavior will not change.
Behaviors that influence the cost of maintenance include:
- Reactive vs. proactive culture.
- Predictive and preventive maintenance programs implementation.
- Having well laid operational processes to identify, plan, scheme, and implement work.
- Forming a strong relationship between operations and maintenance.
- Using well-laid down methods for improvement.
- Having an operational failure counteracting scheme.
- Maintaining effective operational processes to avert machine breakdowns.
The cost consequences of a reactive culture
A thoroughly planned work order is three times more inexpensive than a similarly scheduled reactive work order in the maintenance sector. It is also accepted that emergency repairs cause up to seven times more than planned maintenance, which has a big effect on the bottom line.
When you figure out the amount of time required to respond to calls, rectify the issue, get spare parts, and the production loss, it is easy to see that changing the culture from reactive maintenance to planned maintenance can greatly affect your maintenance budget.
When you can budget and regulate maintenance costs, the income can increase by up to 30% during high business cycles and above 100% during weak business cycles. It may mean the difference between profit and loss in very low business cycles. In addition, the total cost of maintenance can reduce by up to 35%. Therefore, you can make a noticeable change in your organization with proper maintenance planning.
Basis for improvement
The maintenance budget involves a total sum of finances divided into the main expense areas like contracting, labor, and materials, among others. This kind of structure lacks the basis for creating budget predictions. Budgets need to be made with the notion that maintenance is a complex endeavor. You must build a basis on which to comprehend cost levers and drivers to regulate and minimize spending.
1. Focus on asset-based budgeting
Most maintenance expenses reoccur yearly but differ by the asset. Hence the planning of the budget should be approached from an asset perspective. By looking at past maintenance by the asset, you can accurately forecast the future expenses to maintain and fix the asset. You will be able to figure out the problems quickly and create a razor-sharp focus for your maintenance activities.
Formulating budgets in this instance will make it easier to predict and make justified maintenance decisions. When there is a strain on the budget, you will be able to dig into details to make an informed decision to minimize surprises and blame games when a machine breaks down.
2. Standardise processes
Having well-documented and standardized processes for identification, planning, scheming, and implementing work is a foundation for maintaining consistency when spending. Approval of work is also important for controlling spending.
Making proper implementation of scheduling and planning leads to effective, productive maintenance time of an average organization from around 25% to 55% doubling the success of completing work. The planned work will be finished leading to greater machine reliability and lower unplanned maintenance expenses.
3. Improve data collection for assessment
Despite the data needed for asset budgeting being found in your CMMS system, it is usually insufficient to support the information needed to manage costs. Having relevant data like waste, machine failure, causes of breakdown, and looking for methods of regulating or preventing these expenses makes it feasible to improve overall functionality and reduce expenses.
Among the effective methods of regulating the maintenance budget is identifying and getting rid of reoccurring liabilities and maintenance issues. To make this possible, the maintenance data should be collected and assessed. The bad actors should be organized according to the criticality of impact on the organization. After that, a Root Cause Analysis must be applied to resolve the causes of breakdowns.
4. Alter reactive mindsets
It is hard for the maintenance manager to regulate maintenance costs single-handedly without the involvement of the operations team. When you lack a reliable culture, it is almost impossible to convince the facility manager, the production manager, and the other executive managers to halt production to give room for preventive maintenance. You will have to do this, or achieving reliability will be impossible.
How to get started
5. Use the SAP EAM system
High-quality planning and scheming are fundamental in improving maintenance employee productivity, machine uptime, and minimizing costs. However, it is not easy to work around SAP PM, and the functions attached to maintenance management that have the highest uncertainty in customer satisfaction are:
- Operational data for scheming- the ability to track the availability of employees, qualifications, and techniques for allocation to particular maintenance jobs.
- Work schedule- Automating allocation of tasks to employees over a specified period.
Organizations that utilize SAP can reap benefits from software that offers an interface to SAP information and automates most of the normal planning processes and schemes.
6. Make capital of predictive technology
You can save time and money in PM by investing in technologies that trigger PM tasks and replace previously placed schedules. Forecasting changes in the condition of machinery like an increase in vibration, temperature, and noise give room for some preventive maintenance repairs on an annual basis. Sensors and Industrial Internet of Things (IIoT) equipment offer such information with other incorporated technologies in modern production machinery.
In summary, it is impossible to minimize maintenance expenses and achieve dependable machinery operation simultaneously without proper maintenance planning. Despite it seeming like a tall order, making improvements through these methods can begin a journey towards reliable maintenance planning.
