5 Profit Killers to Avoid in Your Maintenance and Repair Operations
Maintenance managers have a slew of data at their disposal — data that tells them whether their maintenance approach is efficient or not. Metrics like mean time between failure or data about maintenance, repair, and operations (MRO) spend year-over-year vs. throughput are simple examples that can drive decision-making. But one metric that’s not always present is one worth seeking out. How are small maintenance and repair inefficiencies costing you profits?
It can seem like a hyperbolic question to ask. If your maintenance metrics show efficiency, how could your MRO program negatively affect profits? The answer comes by looking at individual facets of a maintenance program that’s efficient on the surface. Here are five identifiable profit killers that may be affecting your value stream.
- Siloed service schedules —Maintenance efficiency is the sum of its parts. Siloed service schedules can obfuscate data that shows opportunities to increase profitability in more efficient throughput.
- Inefficient staffing — Just because you’re on schedule doesn’t mean your MRO is efficient. Running lean staffing may save you on cost, but it also may prohibit the development of a leaner manufacturing maintenance schedule. Keeping up on maintenance doesn’t equate to staying ahead of downtime — especially if you spend more time fixing a problem than you save preventing it.
- Stockouts and lagged orders — Many factories run a lean inventorying system to reduce the amount of money tied up on their books. But running too lean and facing stockouts can eat into profit at an order of magnitude higher than static inventory costs. Find a balance between lean inventory and costly stockouts.
- Compliance issues – Everything from Occupational Safety and Health Administration (OSHA) violations to in-house non-compliance with processes can cost your business money and reduce profitability. OSHA fines are an obvious detractor from profitability. In-house non-compliance, such as deviation from standard operating procedures (SOPs), can fundamentally alter maintenance and repair strategies to the point of being a catalyst for downtime.
- Underperforming equipment — Repairing equipment that’s consistently inefficient or breaking down may signal a fruitless endeavor that’s destined to devalue your profits. It’s critical to identify problematic equipment and recurring problems to avoid pouring money into short-term fixes and ineffective solutions. As a problem persists, it might be time to move past maintenance best efforts and look to more meaningful solutions, such as getting the manufacturer involved.
Ultimately, maintenance and repair strategies play a significant role in setting profit margins. They dictate the efficiency of the value stream, which impacts profit margins based on production standards. Put another way: good maintenance keeps a value stream profitable, bad maintenance weighs heavy on profitability.
Maintenance managers should take the time to evaluate their MRO strategy and identify areas where these profit-killers may develop. Making staffing adjustments or creating an accountability system for compliance may come with a surface cost, but quite often that cost is recouped in better profit margins. Step back and look not only at the efficiency standard of MRO, but how it contributes to the profitability of an efficient value stream.