The true cost of maintenance to your company includes the lost production prevented by the maintenance, the production costs incurred during maintenance, the cost of utilities on but not used for production, the overhead costs, the handover costs, etc.
But no one includes those add-on costs in their total equipment maintenance cost estimates. If you price your plant and equipment maintenance work only on direct maintenance costs you will never see the true cost, losses and wastes paid by your organization because of maintenance.
Slide 27 – Total Equipment Maintenance Cost is the Direct Maintenance Cost Plus All Production and Business Costs, Losses and Wastes because of Maintenance
In the previous slide we identified there will be a failure cost surge throughout the company when a breakdown occurs. The final true total downtime cost includes all direct repair costs, plus all consequential business-wide costs. Even with normal maintenance, the total equipment maintenance cost needs to include the consequential impacts of doing that maintenance.
You can see in the slide above the true cost of maintenance is more than the direct maintenance cost that the maintenance planner calculates for labour, parts and contracted services. The company will also pay for the production costs lost, the operational resources wasted, plus the business-wide and life-cycle consequential costs of doing the maintenance.
Why Your Maintenance Needs to Be Eliminated
Doing maintenance is terribly expensive because the total equipment maintenance cost imposed on the business is far more than the direct cost of maintenance. The total equipment maintenance cost is the cost of maintenance work, but must also include the total production costs, losses and wastes, and the business-wide consequential costs of the maintenance.
But, nobody includes the wasted production resources and the knock-on consequences when they price maintenance. So, nobody can see the true total equipment maintenance cost they must carry when they maintain their plant and equipment.
It is a smart business to eliminate breakdowns because the cost of failure is so huge. It is also smart business to eliminate maintenance because the cost of maintenance is also so huge. You eliminate the need for equipment maintenance by doing all you can to get the utmost equipment reliability.
|This slide is a companion to the new Industrial and Manufacturing Wellness book. The book has extensive information, all the necessary templates, and useful examples of how to design and build your own Plant Wellness Way enterprise asset life cycle management system-of-reliability. Get the book from its publisher, Industrial Press, and Amazon Books.
Use the head office email address on the Contact Us page if you have questions about this slide.