”How to Develop a Business Case to Optimize Your

Current Maintenance Department”

By Ricky Smith CMRP, CMRT

Sponsored by…
Questions? Please text in your answers in the Chat function
1. Do you feel your current Maintenance and Reliability Processes are efficient? “Yes or No”
2. How effective are your current Maintenance Processes? (1 – highly effective ….. 5 not
effective) Example: Maintenance Planning and Scheduling
3. Is your Maintenance cost too high?
4. Do you feel there is an opportunity to optimize your current Maintenance and Reliability
Processes?
• Yes or No

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 Maintenance Best Practices Standards
• PM Execution – 15% labor hours
• PM Results – 15% labor hours
• PdM Execution – 15% labor hours
• PdM Results – 35% labor hours
• Total Work “Planned” – 90%
• Reactive Work – Less than 2% labor hours
• Stock-outs – less than 2%
• Scheduled compliance by day/week – 85 to 90%
• Failure Elimination is a key focus of all (FRACAS)
• Work orders are closed out with ALL Codes ID
• Maintenance Cost as a % of Replacement of Asset Value

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 Maintenance Best Practices Attributes
• 90% plus of work is Planned, parts kitted, procedure, etc
• Scheduled Maintenance Work is scheduled by day by hour
• Storeroom has the parts available when required (min/max/reorder point)
• Preventive Maintenance is performed to specifications and seen as #1 Priority
• Maintenance Technicians are provided the time to accomplish the work to
specifications through Maintenance Scheduling
• Production and Maintenance are seen as equal partners
• On break-ins Maintenance Techs may need to “patch” the equipment however (no
frequently) they know their must be a corrective work order written and scheduled to
restore asset at later date
• All Maintenance Technicians are trained and skilled in Root Cause Analysis Techniques

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 Alignment of all Stakeholders is Not an Option
Task Positions Plant Prod Maint Stores Maint Maint Maint CMMS
Mgr. Mgr. Mgr. Mgr. Tech Super Planner Admin

CMMS Management I I C C I C R A

Leading and Lagging KPI I I A C I C R R

Management

Preventive Maintenance I I A I R C C C

PM Evaluation/Optimization I C A C R R R R

Maint. Planning/Scheduling I R A I I R R I

Work Execution I I A I R C I

Maintenance Rework I I A C R C C C

Production Rework I A I

Failure Reporting, Analysis, A R R C I C C C

Corrective Action Process

Responsibility “the Doer” (could be more than one)

Accountable “the Buck stops here” (One person only)
Consulted “two-way communication” (in the Loop)
Informed “one-way communication” (kept in the picture)
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 Optimizing Maintenance through continuous improvement is critical to
success of any organization and begins with the end in mind and knowing
where you are otherwise you will continue to reap the same results.

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 Where to Begin?
Verify Maintenance Labor, Material, Maintenance Contractor, Restoration Cost, etc.

Before any Maintenance Optimization initiative can begin a business case must be established with
the financial benefit or risk determined.

In order to determine the ROI (return on investment) it is important to first establish the objective for
the reliability initiative.

The initiative’s objective should have a financial value assigned.

An example may be:

 Reliability Objective: Increase reliability of production assets on a specified production line by

8% with a financial value of $11 million USD the first year.

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 Establishing a Baseline Where You Are
• Replacement Asset Value (RAV), (Use the insured value) it is the dollar value that would be required to replace
the production capability of the present assets in the plant. (Source: SMRP Best Practices)
• Includes production/process equipment, as well as utilities, facilities and related assets.
• Does not use the insured value or depreciated value of the assets.
• Includes the replacement value of buildings and grounds if these assets are included in maintenance
expenditures.
• Does not include the value of real estate, only improvements.
• In order to establish a baseline, use the insured value of your plant/facility
• Let’s look at known RAV cost of Typical vs a World Class Organization

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Optimizing Maintenance Cost is Achievable

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 World Class Maintenance vs Typical Attributes
Category Typical Maintenance World Class Maintenance
Maintenance Cost as a % RAV 5.6 – 11% 2.0-2.5%
Budget Compliance Less than 60% 100%
Planners per Craftsperson No Planner or No Proactive Planning Process 1 - 20
Absenteeism 10% plus +/- 5.0 %
Ready Backlog in Weeks Unknown 2-4 weeks
% Planned Work 15% or less 90%
Schedule Compliance 50% 90-100%
PM Compliance 60% 95-100%
Inventory Accuracy Unknown 95% plus
Maintenance Training Cost No Budget 6% of Budget
Maintenance Rework High Low
Accurate Maintenance Dashboard Not Available 100%
 What is a Maintenance Assessment?
1. It is an evaluation of the current state of Maintenance
2. A Maintenance Assessment identifies gaps in your current Maintenance
Process
3. Provides the information needed to determine:
 Quick wins
 Gaps in your current Maintenance Process
 Provides information in order to create a Master Plan which provides a map to guide one
from current state to future state

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 Maintenance Assessment Example
“Score yourself in the “Key Maintenance and Reliability Principles?”

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Maintenance Assessment Example
“Score yourself in Reliability”

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 Leading / Lagging Scorecards are Critical for Success
• One must measure what they Manage
• Leading KPIs Lead to Results
• Lagging KPIs are the Results
• Scorecards must be Accurate

Maintenance

Preventive Maintenance

Planning/Scheduling

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 Create a Master Plan
 Identify all Stakeholders
 ID how much money is lost because of current practicess
 Create a Plan with Stakeholders
 Quick Wins
 Long Term Sustainment
 ID Expected gains at specific points
 ID Roles and Responsibility using a RACI Chart

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 Optimization Roles and Responsibilities
“Example”
Plant Accounting Maintenance Production Maintenance Maintenance Consultant
Task Position
Manager Manager Leadership Supervisor Technician
Training in Maintenance/Reliability A I R R R I R
Best Practices (what good looks like)
Conduct Maintenance Assessment I A R R R
ID Production Best Rate or OEE A C R
Create a Master Plan with… I C A C C C R
• Quick Wins
• 3-5 year plan
• Cost expectations for each step
• Defined Roles and
Responsibilities using RACI
Create Leading / Lagging KPIs C C A I R R C
Dashboard
Implement the Plan I I A C R R C
Meet weekly for 1 hour to C A R R I C
determine;
• Where are we on the Master
Plan
• What is working (sustain) www.onupkeep.com
• What is not working (RCA)
Name “One” thing you can take back to work
and Make Happen
Text in your answer

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Questions/Comments

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