Copyright Cahaba Media Group, Inc. All Rights Reserved. After 12-18 months, the maintenance cost will rise again because the preventive maintenance wasnt performed. Instead, lets try to cut maintenance costs by 20%. There is software that competes for milliseconds in speed to get better trades. True cost reduction does not come as a result of using cheaper parts, as an example below will show. Using earlier terminology, it can be said that the maintenance debt is reduced. The average cost for fixed speed failure prevention technology (Emotron M-20 or ITT PS-20)per pump is $725. Cost can be cut today, and results can be shown in the next monthly report to the market. Thermography and ultrasound are more cost effective and have historically helped the customer reduce maintenance costs while also providing more efficient and accurate information. Its the secret to maintenance and reliability all great organizations know, and, With few exceptions, most mills I visit ask me what I think of hiring a contract maintenance company, or in other words, outsourcing their maintenance. Learn how to reduce reactive maintenance and downtime with practical ideas. Pumps can be centrifugal or positive displacement. However, most of these companies only use these technologies sporadically and miss the opportunity for better results. The average cost of each repair is $2,500 (pumps and seals), not factoring in lost production or environmental clean-up costs. The electronic components of the technology will almost always last longer than the mechanical components of the equipment it is designed to protect. Predictive maintenance in the form of vibration monitoring and analysis is purchased starting in the first year for all 500 pumps. maintenance The execution of the chain and preventive maintenance is the key. But there are more ways to avoid waste. If the reduction of maintenance cost is the main goal for maintenance, the organization is on the wrong track and will eventually fail. Not only because fixing damaged equipment is costly, but also because your operations have to slow down or even come to a halt in order to accommodate the reparation works. Many plants are regulated by union agreements and may have to lay off the most recently employed maintenance crafts people. Understanding and implementing the correct work processes for good reliability and maintenance will generate improved reliability and lower total costs/ unit produced and maintenance cost/ unit produced. Why? Parts that look good on the surface may have significant flaws when it comes to material integrity, efficiency (power consumption) and other engineering variables that directly affect the part's reliability. Advantages of predictive maintenance are: Making any cost reduction and reliability program a complete success means integrating additional consultative services into the program, which might require partnering with a competent service provider. Is a part really cheaper if it costs less initially but fails more often or consumes more energy when in use? Some maintenance work will have to be cut out or deferred in order to reduce the maintenance cost, but the question is what work the maintenance manager will cut out? Customer started with $750,000 in pump and seal inventory. 14 tips to reduce maintenance costs in 2023 Infraspeak Blog By investing in predictive maintenance, the customer can now predict pump failures and remove the pump from service before it catastrophically fails, which minimizes repair costs and eliminates environmental cleanup and lost production costs. Why is the cost increasing? Modifying equipment is necessary sometimes, typically when the equipment was not initially specified correctly or when process parameters change. The available choices to cut the maintenance cost for any organization are: 1. Inventory amounts are typically based on usage, or turns. State Farm recommends between 1 to 4 percent of your homes value. Change could be done fairly easy and could really help a cost cutting effort in some plants. To train personnel correctly, find a professional training program and use it. Assume, too, that all personnel are trained in five separate training sessions at the plant, and each attendee paid $250 for the training. The initial maintenance cost increase has several components, but the main cost is the cost of improving the equipment condition. These steps are explained below: Training is the foundation of cost reduction. of equipment that needs to be back on-line quickly, we will have to pay maintenance overtime cost. By considering that 70 to 80 percent (call this 75 percent) of all failures occur as a result of operator error and system upset, this customer prevents a minimum of 75 failures, or saves approximately $187,500 in maintenance costs and another $22,500 in lost production and environmental cleanup costs. Low profit immediately transfers into cost cutting measures, but the other half of the equation is disregarded. WebCost Reduction with Future Maintenance In addition to restoring and improving concrete properties and providing an added layer of protection to the embedded reinforcement, future maintenance costs associated with design operations are also reduced. These newly enabled workflows allow you to do the following from the comfort of your Infraspeak platform: Expand your Client/Supplier base and book of contacts During a 5 year period, however, the customer saves $3,150,000 before accounting for his program costs. There is a short period of time before the pump, mechanical seal, or both will fail if operators do not detect and act upon the unit's condition. The short answer is Yes it will for about 12-18 months. The lost production and environmental clean-up costs can easily add up to another $150,000 annually. But jobs cant be planned that fast, so craftspeople will be handed emergency work. When one is trained on the equipment, one understands the limiting components that affect overall equipment life. Tools such as a good CMMS, artificial intelligence solutions, and inspection tools are very helpful in improving The Chain and/or preventive maintenance, but they are only enhancements. The good news is that the two go hand-in-hand, you just have to start at the right end. How to reduce maintenance cost the right way comes up a lot for our clients. Management decided to try to get a good financial quarter and postponed the repair for the next shutdown six (6) months later. Since the warning system (Condition Monitoring) is eliminated or reduced, the planner tries to plan breakdown work that is happening today. It would be more or less impossible to make an analysis that encompasses all the important factors that include maintenance cost. There is great news about the maintenance cost! Adding to the uncertainty of Maintenance Cost/ Estimated Replacement Value, is the ERV itself. Partner with a competent, proven and local repair facility. Just to mention one example, good planning cant be done unless there is information and physical access and kitting of spare parts. the equipment with the highest preventive maintenance costs; the equipment with the highest number of work hours per year. For example, if a plant has poorly documented preventive maintenance routines, the cost of fixing that problem is not clear to all. Without a doubt, you should invest in a good preventive maintenance strategy and ideally in an Intelligent Maintenance Management Platform (IMMP) capable of scheduling, tracking and reviewing all technical operations. As you can imagine, those forms werent used very often. The second choice is to pay $50,000 + risk of break down (%) X Cost of break down. But lets see what happens by shifting the focus to equipment reliability instead of cutting maintenance costs. Sure enough, you will have fewer periods of downtime and you will avoid expensive and time-consuming repairs. Patching is more important than ever because of the increasing reliance on technology, but there is often a divide between business/mission Manage quote requests and agree on proposals for work orders and purchase of stock. We buy things with 20% interest on a credit card instead of saving to buy it later for a much better deal than paying 20% interest. These negotiated terms also help the customer reduce costs. According to the results from this poll, very few pieces of equipment fail because they were improperly applied or constructed with the wrong materials, which leads to corrosion or wear-related premature failures. If your average repair time is too high, one reason could be having a lack of spare parts in stock. Other instigators to maintenance cost reduction initiatives are business consultants that compare a plants maintenance cost with similar plants. In reality, it is very common that, for example, a $50,000 investment is changed into two, $25,000, investments in order to classify it as an expense. At the time, the cost to repair it at the upcoming shutdown was CAN $50,000. Best practices. This leads to an incorrect maintenance cost map that does not identify significant cost drivers, and generates faulty decision making. Concrete Repair Cost 2. Try to cut maintenance costs within a few weeks or months by focusing on the maintenance cost itself. Enterprise patch management is the process of identifying, prioritizing, acquiring, installing, and verifying the installation of patches, updates, and upgrades throughout an organization. Infraspeak Networkis a shared workspace that introduces collaboration to procurement and work-execution processes between facility and maintenance managers and vendors, suppliers, contractors and facility service providers. Lets look at the maintenance cost from one more angle. Cost and efforts of software maintenance Consider partnering with a competent service provider who will commit a specified amount of time in the plant each week to assist in application engineering of equipment, troubleshooting and process engineering assistance. Perhaps it can be compared with baseball pitches or ice hockey slap shots, which are roughly the same speed. Not upgrading equipment will result in increased failures. If the same management is there, it is unlikely they will admit actions taken a couple of years ago was a mistake. But how can you prevent breakdowns? Predictive maintenance involves services such as vibration monitoring and analysis, seal leak detection, loss of seal flush detection, temperature trending, thermography, ultrasound and oil analysis. Therefore, the revenues increased a lot more than the total cost even though their maintenance cost was relatively high. Quality of the product. Well, nothing happens! The findings are described in an article in Nature Energy, with further details on the Berkeley Lab website. No, it is not useless to benchmark maintenance cost. According to one study,50% of maintenance costsare waste. If the motor is replaced before the breakdown it may cost 1. Perhaps someone decided to stop changing grease in gear and grid coupling because it takes too much time in a shutdown, how much does that cost? It can be hard to show the value of something that didnt happen. This strategy has the potential to reduce your maintenance spending by up to 5%. There has to be an understanding for the future costs of maintenance actions and/or doing nothing. Historically, there have been various approaches to reducing maintenance costs. An inexperienced person may say that the people are working inefficiently, they may only have a tool time of 30% total work time. Sub-optimizing by performing a maintenance cost analysis by itself is a mistake that can lead to poor decisions by top management. Guide to maintenance costs: how to calculate and how to reduce Use of failure prevention technology provides the following results to the customer: Remember, we can prevent 70 to 80 percent of rotating equipment failures by using failure prevention technology. Unfortunately, many organizations often have the goal of reducing maintenance cost. In most cases, the stock market pressures a company to improve stock prices by making more profit. That is why companies exist. If you are repairing/rebuilding less equipment, it makes no sense to continue investing in the overhead of an in-house repair facility. Maintenance Often, another business consultant looks at the business and compares the maintenance cost with similar plants in the industry and draws the conclusion that the maintenance cost is too high, and the same circus starts over again. In Formula 1, it can be done even faster. Its not all or nothing. What was their return on investment? What does it cost to reschedule, re-arrange all work to the new date? In other words, ensure that you are not scheduling maintenance tasks that do not prevent anything specific. When equipment is inspected better (step 1 in the chain), problems are found, and those problems need to be repaired (step 2-4 in the chain). The recently laid off people will be needed at some point and the company has induced a future cost of re-hiring and re-training these people by the sudden lay-off. 2. Remember, the cost of maintenance is the sum of many costs, such as actual equipment repair costs, the cost of labor, lost production (revenue) costs and environmental clean-up costs, among others. Reduce unpredictable costs by up to 3.2x. Consider what is more important to the customer, whether significant cost reduction is co-managed with the help of a competent service provider or whether the plant uses Brand X or Brand Y equipment. It does not fail. Use of non-OEM, cheaper parts can reduce some initial cost, but most of these parts have been reverse engineered. The good news is that the investment payback is extremely short, and the overall savings are dramatic. The hidden maintenance costs are many. The wear of the belt that carries rock in the sun will be more than the one that carries wood chips indoors, therefore, the maintenance cost will be higher. As MTBM extends from 1.5 years to 5 years, the amount of inventory required, used or turned is significantly less. There are seven points to monitor and analyze for each pump and for each motor. The fixed time replacements werent done, so that equipment is now breaking down. If you work in a plant, mine or mill, you are most likely under pressure to increase the equipment reliability and reduce the maintenance cost at the same time. Maintenance is essential to ensure everyones safety and comfort! By doing things right, the life of equipment is prolonged and therefore less work goes in for repair. The cost not only included maintenance cost, but also the lost production profit and additional damages. An analytical person may think that the operations maintenance team may prioritize jobs incorrectly and that there is a cost saving to be made by better analysis of the necessity of each job. This costs the customer $12,500. If the seal was the limiting maintenance item in the pump, then one could set a realistic goal of 5 years for mean time between maintenance (MTBM). The same can be done in industry. We live in a global economy. This is the main reason that basic reliability has to be UNDERSTOOD by the organization as a whole. 6.3 How to calculate maintenance costs But VA in itself has no use without the chain. Maintenance Costs Today's technology is a reliable solution. In addition to the obvious cost savings, customer benefits include improved overall ROA, measured results, a more reliable facility, managed versus reactionary maintenance and staff reduction opportunities. As reliability improves, MTBM and the ability to reduce inventory levels improves. Preventive maintenance), and the bearing can be changed safer, faster and better because VA gave us lead time to plan and schedule the job. We've emphasized the importance of data analysis and scheduling to reduce maintenance costs. The lime kiln broke down six weeks later for a total cost of CAN $300,000. Enterprise patch management is the process of identifying, prioritizing, acquiring, installing, and verifying the installation of patches, updates, and upgrades throughout an organization. First, the magnitude of the repair cost is much greater when equipment is allowed to catastrophically fail. Failure to address proper installation and alignment procedures or failure to balance rotating equipment dooms the equipment for certain premature failure. 8 IT Maintenance Cost Reduction Strategies August 27, 2020 Len Riley Reading Time: 4 minutes Each budget cycle, CIOs are expected to reduce operating Use of predictive maintenance will reduce the nominal cost of each repair from $2,500 to $1,500. Common sense. Either you have too many people, and/or there is maintenance work that doesnt need to be performed. WebMaintenance Cost Reduction Project: Solving Problems with Labor and Maintenance Costs Prepared by: JWS August 4, 2008 Executive Summary ABC and its primary customer DCE If we misalign a bearing to 10 thousandths instead of precision align it to 2 thousandths, the life may go from 15 years to 3 years (an estimate), again, it will take 3 years for the misalignment to cause a problem. This happens often, especially when failure prevention or predictive maintenance technology is not being used, making troubleshooting operations more lengthy and netting fewer wins per unit of time. Dr. JAYASEELAN has about 30 years of experience in various industries. If all of your employees know how to detect problems, malfunctions will be detected much faster. Execute contracted maintenance work more efficiently. If targeted results are not achieved quickly, many reliability personnel are reassigned or let go in an attempt to reduce personnel costs. Reduce the need for maintenance. The idea is that your plant is so well organized that work can be executed effectively. The customer actually saves more than this for two reasons. The evaluation criteria for the service provider will be the total amount of cost reduction realized, so the service provider has a definite interest in becoming more involved in equipment application and selection, process improvement discussions and reliability team activities. While the maintenance cost is an important long-term outcome of maintenance management, it should not be the main goal. This is not talked about a lot because most companies have very clear rules about what to capitalize and what to expense. Reliability functions are often collateral duties and do not receive the proper attention. If plants are completely different, it would be absurd to try to compare the maintenance cost. The training needs to be the correct training and include engineers, maintenance technicians and operators. All this raises repair costs. Traditional maintenance methods currently employed achieve some results, but far greater results are possible. More breakdowns mean more labor, more parts, and more downtime. The cost and effort of software maintenance can be reduced by: Adopting a proactive maintenance strategy that includes regular testing, monitoring, and updating of the system to prevent problems from occurring Automating repetitive and routine tasks Reducing Maintenance and Operation Costs at Industrial and Municipal Facilities. Increase Asset Performance and Reduce Maintenance Costs