Posted under Blog by Nick Leonard, Growth Marketer
This title caught my eye as I was researching maintenance in terms of profit optimization.
My initial take on the title was that it meant, “maintenance will continue forever”, meaning, you will always need to maintain assets based on breakdowns, preventive tasks, and for safety reasons.
Even when an asset reaches the end of its useful life, it will be replaced in some form or another with a new piece of equipment that will also require maintenance.
So, maintenance never actually ends from the practice of an organization – it merely gets adjusted to fit ever-changing business needs.
But reading a little further into Peters’ article, “Maximizing Maintenance Operations for Profit Optimization: The Journey to Maintenance Excellence”, it goes on to talk about 4 interrelated challenges that face maintenance organizations all around the world:
Without diving too deep into the above (as these are covered quite thoroughly in Peters’ article), the takeaway here is that there will always be maintenance to plan, perform, and improve upon – and that is especially true of asset-intensive organizations, thus making maintenance a forever practice.
The fact that ‘maintenance is forever’ means that companies need to figure out new ways to plan, perform, and improve their maintenance practices, which when done properly will help with the overall profit optimization of an organization.
Let’s take a quick look at profit optimization and how maintenance fits in.
Profit Optimization is finding an alternative with the most cost effective or highest achievable performance under the given constraints, by maximizing desired factors and minimizing undesired ones. In comparison, maximization means trying to attain the highest or maximum result or outcome without regard to cost or expense.
In order to achieve profit optimization, maintenance must be included in the overall equation.
Rarely is maintenance seen as a way to improve the bottom-line – more often than not it is deemed a cost-center and something that “must be done”.
For maintenance to truly contribute to a company’s overall profit optimization, there must be alternative (new) ways to perform maintenance under the current (given) circumstances in order to maximize resource utilization and output at the lowest possible costs.
With advancements in technology and continued research into historical data, many maintenance organizations are beginning to realize that intelligent maintenance can actually drive profit.
We’ve talked a lot about maximizing resource utilization in previous blogs so we will maintain the focus here on how maximizing resource utilization can help with profit optimization.
The premise is quite straight forward actually – if you are maximizing your resources (people in this case), you are ensuring that there are little to no wasted labor hours.
Wasted labor hours = wasted money, which takes away from the bottom-line, thus affecting profit optimization for the entire company.
And while the premise may be quite straight forward – actually maximizing resource utilization is not so simple.
The first place you need to start is with the actual planning of the work itself.
Making sure that you have the proper resources available at the time the work needs to be completed, as well as a number of different factors such as any permits that may be required, parts and tools to complete the job, and more. To learn more about planning best practices, check out our White Paper here.
Maximizing output and profit optimization go hand-in-hand.
The more that you are able to produce, the more revenue that can be realized from that production. And, in order to maximize output, not only do you need to efficiently plan and utilize resources, you need to ensure that the downtime of output-producing assets is minimized.
A decrease in downtime leads to an increase in uptime, which leads to more output and more revenue, which helps to drive profit optimization.
If your assets are consistently breaking down and not being fixed in a timely manner, then it will take you much longer to reach your production goals, ultimately affecting profits.
One way in which companies are combatting downtime is by moving from a reactive maintenance strategy to a predictive maintenance strategy.
One of the biggest ways in which maintenance can play a role in positively impacting profit optimization is by reducing the cost of maintenance at the organizational level.
Maintenance is inevitable. As is the point of this blog, maintenance is forever. It has to happen. And, while cutting resources or only conducting maintenance when something has broken down may save you money in the interim, it is not sustainable especially when talking about profit optimization.
Cutting the maintenance budget and the number of maintenance people will save on costs initially but will have adverse effects in the long-run.
Putting measures in place to go from a reactive maintenance strategy to a predictive maintenance strategy will help to control maintenance costs by eliminating unplanned downtime and maximizing resource utilization.
Maintenance isn’t going anywhere. So, rather than disregard it, make it a part of your overall strategy to help drive profit optimization. To learn more about controlling your maintenance costs, you can access our White Paper here.
“Organizations that clearly understand that “Maintenance is Forever” and find the key to balancing all resources toward optimum total operations success will succeed in the 21st Century.” – Peters
To learn more about how VIZIYA can help you improve your overall maintenance strategy and processes, click here to talk with one of our experts.