Preventative maintenance - the cost of maintaining equipment
The cost of maintaining equipment can be much higher than we realize. Sustaining equipment for its original design consumes time, labor, materials, tools, facilities, and most importantly lost production.
By Tracy Strawn, VP of International Business, Marshall Institute
The cost of maintaining equipment can be much higher than we realize. Sustaining equipment for its original design consumes time, labor, materials, tools, facilities, and most importantly lost production. Higher costs occur when a greater loss of production is incurred and it takes more time, resources and materials to correct the problem than it did to prevent it. Reducing equipment downtime and related cost is the greatest argument for planned maintenance versus unplanned maintenance.
Most people know planning ahead is the best approach to preventing corrective maintenance. Preventive maintenance reduces reactive or breakdown maintenance, resulting in lower cost. In essence, you actually will repair things less often if you do a good job at being proactive and heading off those expensive disasters. You pay penalties when you respond to problems rather than preventing those problems. Are you with me?
Many organizations consciously decide to run to failure (RTF). RTF is when we choose to wait until something breaks down before servicing it. RTF can be an acceptable strategy in specific cases but almost always costs more than preventing failure. An organization that manages by using RTF uses the old saying "If it ain't broke, don't fix it." Unfortunately, that is the wrong approach. "An ounce of prevention is worth a pound of cure" is a better maxim. Sorry, I couldn't resist a good cliché. If you wait until the equipment breaks down, you pay for lost production, higher parts cost (often having to be shipped in at a premium cost), overtime, and all associated "collateral damage."
Collateral damage varies by product, equipment, production line, industry etc. To determine the PM program for specific equipment, criticality and the consequence of failure must be established. If the criticality and consequence of failure is high then failure is unacceptable and must be prevented. Think about airplane maintenance. If a critical component on an airplane fails at 30,000 ft the consequence of failure if extremely high and the collateral damage is unacceptable, so scheduled maintenance must be performed.
A more common and less critical example of collateral damage is that a $10 seal may wind up costing thousands of dollars in lost production, parts and labor; not to mention lost confidence from the customer for late deliveries as well. The normal rule of thumb is that corrective maintenance costs two to five times more than preventive maintenance. Yes, there is a cost associated with preventive maintenance, but how much more are you spending on corrective maintenance? Look at the big picture not just maintenance dollars.
Case Study Database
Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.
These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.
Click here to visit the Case Study Database and upload your case study.
Annual Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.