Maintenance Benchmarking

Have you fallen into the trap of trying to improve plant performance by simply throwing more money at maintenance? It doesn’t work. A benchmarking study of maintenance activities at over 130 plants around the world has confirmed what many of us suspected: increased maintenance expenditure on labour, spares and contractors pushes up the direct costs but the cost of downtime doesn’t go away. However, by implementing successful practices throughout your organisation, plant performance will be increased and costs reduced. In our study, the plants with the lowest maintenance costs also had the lowest downtime figures.

Don’t believe those people who say maintenance benchmarking is impossible because of the need to compare tangibles such as labour costs with intangibles such as plant downtime costs. The Stock Markets of the world benchmark hundreds of thousands of companies every day taking into account tangible and intangible factors.

Since 1991 we have been involved in a benchmarking exercise with world-wide organisations which wanted to reduce downtime. Some of the results were surprising such as very little correlation between cost and age of plant or cost and output quantity. However, even in a well-managed Fortune 500 organisation, the cost of poor maintenance practices was over 5% of turnover. This figure is not an artificial pipe dream: it was derived by comparing the performance and costs of the best in class plants with those of the organisation as a whole. The breakdown of excess costs was as follows:

Please note these are excess costs: the difference between downtime costs for best in class plants and average plants was 2.1% of turnover and so on.

Is the cost of poor practices as low as this in your organisation? It could be much higher. In any event, a figure of the order of 5% of turnover is comparable to the total profit and it surely cannot be ignored!

The keys to low cost and high performance were found to be:

• a defined strategy and mission linked to the business needs;
• focused preventive and predictive maintenance on critical equipment;
• a reliance on skills and training and not on excess resources;
• shared maintenance responsibility with production;
• performance measures for goal setting and improvement;
• upper management support for the above.

Many benchmarking initiatives stop with a report detailing what improvements need to be made. The next crucial step is missed out: providing the tools to help everyone make the improvements. Given that maintenance people are busy the world over, we produced a combination of distance learning tools and face to face training. Plants themselves were left to decide what mix was most appropriate for their particular circumstances. Distance learning tools included newsletters, case studies of successful practices and a practical manual describing the very latest thinking in tools and techniques for maintenance such as how best to set up an inventory management system or carry out a criticality analysis. Face to face training covered all aspects of maintenance management and highlighted the lessons learned from the benchmarking exercise.

The whole benchmarking process is shown in the diagram below. The circular format emphasises a feedback loop and its integration into a continuous improvement philosophy.

Has the benchmarking initiative been successful? Very definitely yes. What started out as a pilot programme on four plants now covers 130 sites around the world. People continue to join it voluntarily rather than being compelled to take part. It is on-going with a different emphasis every year. The data has been used to establish the cost of poor practices on a site by site basis and world-wide and to set priorities for the various improvement projects. Benefits are now coming through in the corporate results: just one particular site has achieved the following by implementing best practices:

• downtime has reduced from 8% to 5%;
• throughput has increased by 65%;
• profitability has risen by 50%.

The value which maintenance adds to an organisation can be obscure. Benchmarking helps to put this value on the map by producing realistic, achievable measures which can be used to drive performance improvement programmes. Are you making the most use of it?

Paul Wheelhouse