Reduction in maintenance costs as a result of introduction of a maintenance management system - a case study


1. Background

Since 2007 the building industry has been in turmoil. It started with a number of wrong decisions. It was then hit with the banking and mortgage crisis and now with a triple dip recession. This has also affected all cement manufacturers (with a few geographic exceptions). One of these manufacturers decided that rather than wait and see what happens, it will make more sense to address his major costs through a focused project. A quick Pareto analysis revealed that in most cases maintenance is the single most expensive and impactable cost that a cement plant has. However, merely reducing maintenance budget and cutting costs, without thinking of the impact, was not the answer that the manufacturer was looking for. He wanted a sustainable cost reduction without negative impact on manufacturing and reliability. For this reason, the client decided to seek external help in the form of consultants specialising in operations and maintenance change programs.

2. The Set Up - Maintenance System Analysis

The project started with an analysis of current maintenance activities and a maintenance system in place. This meant reviewing: the spend, short and long term planning, preventative routines, condition testing routines, condition based maintenance, managerial behaviours, meeting structure, work order analysis, typical day for a mechanic and an electrician, operational maintenance KPIs, parts purchasing process, subcontractor usage and spend, in sourcing capability. The review took two weeks and resulted in a maintenance performance report showing major areas of concern that was demonstrated in increased costs. All of these could be traced back to a weak maintenance management system and weak management behaviour: Altogether this meant that the annual maintenance cost could be sustainably reduced by between 15% and 20% if all the issues were corrected. The calculation for this was based on the ability to insource jobs carried out by subcontractors, decrease in part repairs, lower parts cost and the reduction in overtime.

3. Developing a Solution - Making Operations and Maintenance Work Together

The improvement project run needed to be different than so many others done previous to that. It required management behaviour change, process change and a management system that empowered the management to have more control and a greater sense of responsibility for the work done. It also required a closer collaboration between production and maintenance to enable it to become a success. A multi-functional project team was put together, comprising of: consultants, production and maintenance staff, all working together to develop a brand new approach to maintenance through a maintenance management system. The system would define how the maintenance department will function, how it will track and control all maintenance activities and coordinate jobs. The idea was to change the organisation from a very reactive one to a proactive one, a world class maintenance department. To make the changes sustainable, all the implementation was done by the production and maintenance staff while the consultants provided the leadership. This also gave an additional hidden benefit, the start of close collaboration between production and maintenance. The team started by defining how maintenance should work in an ideal world: This resulted in a model of a maintenance management system. As a next step, a review of what was the gap to the ideal was made. This served as a starting point for the development of a change roadmap and the elements themselves: All the elements were constantly discussed with the whole team and explained as to their purpose and value add. In conclusion, the change program roadmap was ready for implementation.

4. Implementing a Maintenance Change Program

The implementation started with a communication drive aimed at all levels within the organisation. This was done to ensure that everyone was aware of the changes about to happen. Implementation itself was done in phases.
  1. Phase one involved active management training for all managerial levels.
  2. Phase two focused on meetings and organisational structure redesign.
  3. Phase three ensured that all planning related activities involved were performed as the model stated; this included plan and KPI visualisation.
The remaining phases addressed the remaining gaps to the model.

5. Challenges

As with all change programs, not everything went smoothly, some of the managerial behaviour changes were difficult to accept by members of staff. Supervisors that have been in the role for a long time did not understand why the follow up was necessary. They believed that the mechanics and electricians should be trusted to do their job. Implementing the idea of follow up required a considerable amount of personal coaching with each of the supervisors.

To begin with, planning as an activity was dismissed as impossible in maintenance and the idea of prioritising work orders was looked upon as comical. This was overcome by a public analysis of a month's worth of work orders. Indeed, it proved that these could have been planned out and only a small fraction of these were emergency jobs.

Similarly, the idea that there was not enough staff to do all the jobs without the help of subcontractors was proven as false.

6. Outcomes

Hard benefits

Soft benefits


7. FAQ

Can similar maintenance management change program be implemented in other industries?

In a word, yes. The type of maintenance management system developed here can be developed in other industries using a similar approach. The industry itself is not as important as the approach and attitude to a change program. Similar maintenance systems have been implemented by our consultants in food, pharmaceuticals and manufacturing industries, to name a few. Moreover, our consultants used the same approach when developing management systems in production, sales, warehousing and purchasing.
Please contact us for more information.

Is implementation of a maintenance management system just a cost cutting exercise?

No, it is not. Implementation of a management maintenance system delivers a different, more structured, way of working. The so called cost cutting is just one of the benefits of being organised. Please contact us to find out how we can help You.

You can find more material about this and related topics here.
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