Findings from a recent Lawson international benchmarking survey that looked at maintenance of plant, equipment, facilities and assets, reveal that a "fix it when it's broken" attitude is prevalent among organisations - costing potentially millions of dollars annually.

"Almost 90% of organisations agreed that preventative maintenance increases productivity and return on assets," says Lawson Australia's Adam Eaton, "yet only around a third spent more than half of their budget on preventative strategies."

Eaton says the organisations surveyed acknowledged that preventative maintenance adds true economic value to the bottom-line, yet they still were not investing in an integrated, preventative maintenance strategy to maximise this profitability.

"Organisations are under increased pressure to deliver more for less," he says, "with reducing resources and budgets. The results show there also appears to be a lack of awareness by management of issues relating to maintenance and the benefits that can be gained by an integrated maintenance system or advanced maintenance techniques such as Reliability Centred Maintenance (RCM)."

A cost rather than an investment
Just under half of the survey's respondents (49.8%) indicated they thought maintenance was an 'investment'. "This relatively figure indicates a lack of awareness of the potential return on investment from enterprise asset management and the need for maintenance generally," says Eaton.

"Those that view maintenance as a cost generally take a corrective, rather than a preventive, approach and yet see equipment failure, or even wear and tear, as inhibiting profitability,"

Eaton says it's not just down time that can cause huge losses, but also how fast a plant can be up and running again and whether the right processes are in place. "Are the necessary parts in stock? The right technicians available? All contingencies need to be accounted for," he says.

Barriers to maintenance
"There appears to be many good intentions, but in practise, maintenance procedures are somewhat conflicting," says Eaton. "One of the most common barriers to implementing change to a maintenance strategy is poor comprehension of the issues by management, with around a quarter of respondents believing that this is one of their biggest challenges."

Gartner's Kristian Steenstrup, says maintenance professionals need to work more closely with management to establish the investment case for maintenance system improvements. "They need to communicate the benefits that an efficient maintenance solution can provide their organisation," he says. "Showing over the long-run, the savings that a preventative strategy can provide, as well as the increase in plant capacity."

Lack of funding for preventative maintenance is also one of the key issues says Eaton - emphasising the need for return on investment calculations for Enterprise Asset Management (EAM - a module in the Lawson ERP solution) and for maintenance managers to be able to sell those benefits to the decision makers in their organisations."

Organisational impact?
One in eight respondents indicated that their annual loss of production, due to plant equipment failure, exceeded US$500,000.

"It is at the larger end of the scale that we are seeing most of the losses," says Eaton. "A third of organisations with more than 1000 staff experienced an annual maintenance-related loss of production of more than US$500,000 - most of which could probably be avoided with the right maintenance strategy.

Maintenance management software is a critical tool in contemporary production and operations environments. Integration of systems and practices to manage organisations effectively has revolutionised maintenance, but organisations need to be able to calculate the return on investment the solution will provide them and sell the benefits to management.

"The facts appear to be simple. A greater investment in maintenance means increased up time which and greater profit," Eaton says. "It's just a matter of proving exactly how much an organisation can benefit." 

April 2004