How do we justify maintenance costs when return on investment isn’t always obvious?
Justifying maintenance costs can be more difficult than justifying buying a new asset, but it’s doable if we can make stakeholders understand the end value of maintenance work.
1. Explain maintenance work in reliability terms
Let’s say a company buys a new robot that increases production rate by 15%. That’s an obvious return on investment – despite the fact that the robot costs a certain sum, it will make back that sum over time because it increases productivity. We can explain maintenance work in the exact same way: when we optimize asset reliability and increase asset uptime, we are drastically reducing the amount of time our equipment spends offline and in downtime (and making more product to boot).
We can explain maintenance cost in a way that emphasizes the benefits of optimizing equipment uptime (uptime goes up = production time goes up = more products = more profit).
2. Benchmarking KPIs and metrics
Tracking metrics and KPIs helps justify maintenance cost as well, whether that’s uptime, asset availability, or number of breakdowns over a specific time period. While it might not always be persuasive to show how your facility is performing in a vacuum, measuring your facility against world-class standards can be an incredibly persuasive way to demonstrate the value of maintenance work (and there are resources to help you do this).
For instance, let’s say that a maintenance manager wants to implement a new preventive maintenance program to influence the facility’s planned maintenance percentage (PMP). In this case, it’s helpful to calculate your facility’s current PMP and compare that to a world-class PMP (~80% planned maintenance). When management sees that their figures are much lower than established benchmarks, that can be a particularly persuasive way of justifying maintenance costs.
3. Communicate regularly with both management and employees
Two-directional communication helps people understand in a qualitative way how maintenance is useful. Even with PMP and other such metrics, it’s still difficult to justify maintenance costs in quantitative terms. If that’s the case, you can use a qualitative focus to justify maintenance costs:
- How well the facility is running
- How technicians have to focus less on reactive maintenance
- What kind of feedback you get from employees at all levels
Ultimately, justifying maintenance cost relies on changing the culture of thought around maintenance. Poorly maintained equipment leads to low productivity because the maintenance team is always fighting fires. When things run smoothly, however, productivity is up, which means more end product and more profit.