Am I spending too much (or too little) on maintenance activities?
A common metric that rationalizes maintenance expenses is taking the total maintenance cost (MC) as a percentage of the estimated plant replacement value (PRV), or simply MC/PRV. This takes all maintenance expenses spent in a year and compares it with the estimated value of your plant. Best practice benchmarks suggest MC/PRV values of 2-3%.
Taking the absolute value of the total maintenance cost of a plant might be an intimidating number to look at. To get more context behind your bill, it would help to measure the total cost of maintenance against some other value that would be reflective of your plant’s capacity. This will enable you to rationalize whether your costs actually make sense given the total value of your facility that’s at stake.
Other metrics available:
If you think that the MC/PRV metric is not for you, or if you just want a different approach on analyzing your maintenance cost, then you might want to explore other metrics that compare your maintenance cost with other relevant metrics:
Maintenance cost/Total manufacturing cost is a popular metric that takes the maintenance expense as a percentage of all manufacturing costs incurred by the plant. Typical best practice benchmark values are at 10-15%.
Maintenance cost per asset can be calculated for each equipment to assess which parts make up a big chunk of the total cost. While this can be a tedious process, maintenance software such as CMMS or EAM can significantly reduce the work.
Maintenance cost per maintenance type can be a useful approach for facilities with various types of equipment, potentially using requiring different types of maintenance strategies. This metric can provide insight on how much you are spending on reactive maintenance, and proactive or predictive maintenance.
Maintenance cost per unit produced is particularly useful for production facilities, especially if you are trying to bring down your total unit cost of production. Values may vary, but this should generally decrease as processes are streamlined.
The list of metrics available to evaluate maintenance cost goes on and on. Working with the team to brainstorm can help to pool together the knowledge and experience to identify which metric is most applicable.