Saturday, January 26, 2013

How to Lose Money Neglecting Maintenance


After my last post about asset management, friend Peter reminded me of the challenges posed by no or poor equipment maintenance (see comments in my last post for Peter's email to me), a topic closely related to asset management ... asset maintenance. I thought I'd comment on it in this week's post.

Every piece of equipment needs some kind of regular maintenance. Engineers call it progressive and scheduled maintenance. If you make sure to maintain your equipment in good working order, not only is it more cost effective, but as Peter suggests, it prevents down time due to equipment failure. Many equipment operators have found, to theirfinancial peril, the benefits of keeping their farm, mining and other plant and machinery in tip top condition. It's truly a matter of a dollar spent is a dollar saved.

I remember my father telling me the story of a mine at which he worked as an engineer in Tasmania (Australia). The mine had a helical decline through which large haulage vehicles drove, extracting ore from the bowels of the mine. Several times on the way out of the mine with a heavy load of ore, the haulage vehicles broke down blocking the decline. Until they were repaired, miners stood about waiting and no other vehicles could go into or out of the mine. The month's production schedule was blown and once blown, could rarely be recovered.

In that instance, it wasn't a maintenance problem that caused the problem, but the outcome was the same. Lost time and productivity. What happened on these occasions was that hydraulic hoses along the side of the vehicles had caught on rocks jutting out of the walls of the decline breaking them and letting hydraulic fluid escape. Within a week, my fathers maintenance team had fitted all six haulage vehicles with steel guards to protect their hydraulic hoses from rock strike. Problem solved.

At a far less costlier level, have you ever worked in an office where the photocopy machine or printer has run out of toner (the black or coloured powder that reproduces text and images)? I have, and it's very annoying because you can't print or copy anything until you replace the toner. In the small towns in which I have worked, often toner cartridges had to be purchased interstate and shipped in by air to get our equipment up and running again. It's not only very inconvenient but reduces productivity. As a manager at a correctional centre, I insisted on having two replacement toners available for every printer and photocopier in my department so that this potential loss of productivity was avoided. When one cartride run out, another was immediately ordered to replace it.

Major equipment usually comes with maintenance recommendations and a warranty requiring the maintenance schedule be met to retain warranty validity. This requires a service book or record. With static plant like diesel generators, airconditioners etc, the service book can be retained near the plant. With mobile machinery like fork lift vehicles, a record needs to be retained in the Maintenance Department.

While there is always a possibility of a piece of plant or machinery unexpectedly breaking down, the odds in favour of successful operation can be improved with scheduled maintenance. Progressive maintenance such as painting of buildings or replacement of fan belts on machinery can ensure asset value and reduce unscheduled stoppages.

An organisation that is Working Smarter will have asset maintenance schedules and sufficient qualified staff to ensure the maintenance is carried out efficiently and effectively. If it isn't cost-effective to handle it with internal staff, there are plenty of contractors on the market who will take on the tasks for a reasonable cost.

What has been your experience with progressive and regular asset maintenance? What "horror" stories can you share with us?

Robin

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