this happens mostly in the last quarter of the year, when it becomes obvious that the costs are eating up the revenues and pushing the KPIs in the red area. The pressure is higher particularly in cases of low capacity utilisation equipment: “Why should you spend money on maintenance of underutilised capacity?” By reducing the maintenance budget of such equipment you increase the failure downtime and expand the production time. But since there is enough time available for the required production, so why bother? There is a trade-off between the maintenance costs and the production time/cost. The concern is whether a certain reduction in maintenance cost will disproportionally increase the production cost. Let’s take a closer look at the maintenance activities.
Which maintenance activities can be put off or cancelled?
The maintenance activities fall under four categories: the breakdown maintenance, the preventive/predictive maintenance, and the improvement maintenance involving also equipment modification.
The breakdown maintenance is carried out immediately. Because it is unplanned it puts maintenance crew under strong pressure from production and sales. Breakdown maintenance incurs long efforts to identify the failure, extended searching time to find or buy the necessary spare parts, overtime work and postponement of the planned maintenance jobs not to mention lots of out of spec products and the accidents risk.
The preventive / predictive maintenance plan must in the first place be optimised and adapted to the current operation. The optimised preventive / predictive maintenance jobs could possibly have some slack allowing postponement for a few days. Cancelling them, however, is not an option, because this will cause breakdowns after a while.
It is the improvement maintenance activities that you can only push in the future or even cancel on the basis that you accept to postpone or to forgo any future maintenance budget reduction.
A reduction in maintenance effort can therefore affect the improvement and the predictive / preventive maintenance only, since the –expensive – breakdown maintenance can’t be put off. It is obvious that a reduction in maintenance effort will eventually increase the breakdown maintenance and will disproportionally increase the production cost. On the other hand if you resist the temptation to reduce your maintenance job, chances are that you will be able to reduce your maintenance budget in the future. Put in other words, you need to keep or even increase the maintenance effort to reduce your maintenance budget, not the other way around. So, to the question “How much can you reduce the maintenance budget?” the answer, as expressed by the author of World Class Manufacturing R. Schonberger, is “Maintain the equipment so often and so thoroughly that it hardly ever breaks down, jams, or misperforms during a production run.” What then remains to be done is to carefully integrate the maintenance activities plan with the production plan in the framework of Total Production Planning (TPP). TPP is based on the premise that the factory has developed the operator – maintenance technician employee (see below). TPP facilitates the resource allocation and enables the discipline of execution of both the maintenance and production requirements in one unique time plan.
How can I exploit the extra machine availability?
Then the question is “What can you do with the extra idle time that you will gain as a result of the increased machine availability achieved by the focused maintenance activities?” Extending the production beyond the scheduled production order is never an option. This can only increase the stock and the working capital tight up with it. Besides, extra finished goods stock is a head ace to the sales people, who will have to offer price reductions.
Yet, there are a lot of other value adding activities that you can implement. You may try to use the equipment to produce other products. You may also use the freed up resources to expedite equipment modifications that will improve quality or productivity. Alternatively you may use the saved production time for training, which always falls victim of scarcity of time. Training across and in depth improves the flexibility and excellence of the maintenance technicians. Besides, flexibility requires that operators are getting involved in maintenance. Demand fluctuations and market share volatility requires operators’ involvement in maintenance like cleaning, lubrication, checking or even in some repairs and maintenance tasks and vice versa maintenance technicians’ involvement in production operation (some factories hire technicians for both production operation and maintenance, creating a new faculty the operator – maintenance technician.) All these not only explode the training agenda, but also promote the better utilisation of the shop floor employees in value adding activities in cases of demand fluctuations. Last but not least, the low capacity utilisation allows the reduction of the underutilized machines production rate. This results in the reduction of machine failures, makes the machines to run more smoothly and allows the operators to better run their machines.
Conclusion
Production is set up using buildings, equipment processes and people to produce goods. As long as this is valid, all the above must be kept in perfect condition. Any compromise will lead in downgrading of cost, quality or delivery of goods and will in the end spoil the business. Low capacity utilisation is to be seen as an opportunity to reallocate equipment to production lines, achieve clever maintenance implementation or better maintenance plan integrated with production plan (Total Production Planning) and improved training programme, which builds flexible technicians and operators capable of participating in a demanding employee involvement plan, which assisted by maintenance excellence paves the way to world class manufacturing. Cutting maintenance results in ruined factories and eroded profitability. Contact us for further information on Total Production Planning.
1/2/2019
Alkis Charalambopoulos, www.leansolutions.gr
Keywords: Maintenance budget, breakdown maintenance, preventive maintenance, improvement maintenance, operator – maintenance technician, training, equipment utilisation, production plan, maintenance plan.
this happens mostly in the last quarter of the year, when it becomes obvious that the costs are eating up the revenues and pushing the KPIs in the red area. The pressure is higher particularly in cases of low capacity 
utilisation equipment: “Why should you spend money on maintenance of underutilised capacity?” By reducing the maintenance budget of such equipment you increase the failure downtime and expand the production time. But since there is enough time available for the required production, so why bother? There is a trade-off between the maintenance costs and the production time/cost. The concern is whether a certain reduction in maintenance cost will disproportionally increase the production cost. Let’s take a closer look at the maintenance activities.
Which maintenance activities can be put off or cancelled?
The maintenance activities fall under four categories: the breakdown maintenance, the preventive/predictive maintenance, and the improvement maintenance involving also equipment modification.
The breakdown maintenance is carried out instantly. Because it is unplanned it puts maintenance crew under strong pressure from production and sales. Breakdown maintenance incurs long efforts to identify the failure, extended searching time to find or buy the necessary spare parts, overtime work and postponement of the planned maintenance jobs not to mention lots of out of spec products and the accidents risk.
The preventive / predictive maintenance plan must in the first place be optimised and adapted to the current operation. The optimised preventive / predictive maintenance jobs could possibly have some slack allowing postponement for a few days. Cancelling them, however, is not an option, because this will cause breakdowns after a while.
It is the improvement maintenance activities that you can only push in the future or even cancel on the basis that you accept to postpone or to forgo any future maintenance budget reduction.
A reduction in maintenance effort can therefore affect the improvement and the predictive / preventive maintenance only, since the –expensive – breakdown maintenance can’t be put off. It is obvious that a reduction in maintenance effort will eventually increase the breakdown maintenance and will disproportionally increase the production cost. On the other hand if you resist the temptation to reduce your maintenance job, chances are that you will be able to reduce your maintenance budget in the future. Put in other words, you need to keep or even increase the maintenance effort to reduce your maintenance budget, not the other way around. So, to the question “How much can you reduce the maintenance budget?” the answer, as expressed by the author of World Class Manufacturing R. Schonberger, is “Maintain the equipment so often and so thoroughly that it hardly ever breaks down, jams, or misperforms during a production run.” What then remains to be done is to carefully integrate the maintenance activities plan with the production plan in the framework of Total Production Planning (TPP). TPP is based on the premise that the factory has developed the operator – maintenance technician employee (see below). TPP facilitates the resource allocation and enables the discipline of execution of both the maintenance and production requirements in one unique time plan.
How can I exploit the extra machine availability?
Then the question is “What can you do with the extra idle time that you will gain as a result of the increased machine availability achieved by the focused maintenance activities?” Extending the production beyond the scheduled production order is never an option. This can only increase the stock and the working capital tight up with it. Besides, extra finished goods stock is a head ace to the sales people, who will have to offer price reductions.
Yet, there are a lot of other value adding activities that you can implement. You may try to use the equipment to produce other products. You may also use the freed up resources to expedite equipment modifications that will improve quality or productivity. Alternatively you may use the saved production time for training, which always falls victim of scarcity of time. Training across and in depth improves the flexibility and excellence of the maintenance technicians. Besides, flexibility requires that operators are getting involved in maintenance. Demand fluctuations and market share volatility requires operators’ involvement in maintenance like cleaning, lubrication, checking or even in some repairs and maintenance tasks and vice versa maintenance technicians’ involvement in production operation (some factories hire technicians for both production operation and maintenance, creating a new faculty the operator – maintenance technician.) All these not only explode the training agenda, but also promote the better utilisation of the shop floor employees in value adding activities in cases of demand fluctuations. Last but not least, the low capacity utilisation allows the reduction of the underutilized machines production rate. This results in the reduction of machine failures, makes the machines to run more smoothly and allows the operators to better run their machines.
Conclusion
Production is set up using buildings, equipment processes and people to produce goods. As long as this is valid, all the above must be kept in perfect condition. Any compromise will lead in compromise of cost, quality or delivery of goods and will in the end spoil the business. Low capacity utilisation is to be seen as an opportunity to reallocate equipment to production lines, achieve clever maintenance implementation or better maintenance plan integrated with production plan (Total Production Planning) and improved training programme, which builds flexible technicians and operators capable of participating in a demanding employee involvement plan, which assisted by maintenance excellence paves the way to world class manufacturing. Cutting maintenance results in ruined factories and eroded profitability. Contact us for further information on Total Production Planning.
1/2/2019
Alkis Charalambopoulos
Lean Management Consulting, www.leansolutions.gr