The Maintenance cost-reduction conundrum


Here’s a situation that’s not uncommon. You, as Maintenance Manager or Plant Manager know there’s something wrong with maintenance. You see two or three tradespeople doing work that needs only one, people are hanging around the Storeroom or leaving early, you see work being done that’s of questionable value and no one can give you a good work schedule. Reliability is “OK” but you suspect that its costing more than it should to achieve that.

Your immediate thought is that the planning and scheduling of maintenance work needs to be improved – and that is probably exactly right.

However, you know that the problem with improving planning and scheduling is that your tradespeople will become more productive, so if nothing else changes more work will get done, more materials will be used and costs will go up.

You also recognize that if you try to balance the increased productivity by reducing your maintenance work force, the reaction will wipe out any gains that you are trying to make. In fact, you may already have committed to “no lay-offs”.

So how do you reduce costs by moving to a more professional approach to maintenance management through better work planning and scheduling without reducing your work force?

One way is to reduce manpower through attrition. Most maintenance departments are concerned about the impending loss of experienced tradespeople as they retire and are having difficulty finding skilled replacements. The option is to improve the effectiveness of a smaller work force to achieve the same results that you do with your current level of manning.

Unfortunately, attrition takes time. It may take five years or more to get down to the new target manning level, and it is almost impossible to match the rate of improvements in efficiency to stay in balance with that reducing manpower over such a long period of time.

There are alternatives.

The most successful approach I have seen is to make a sudden reduction in the number of tradespeople available for maintenance work by assigning a significant number to an “untouchable” project crew. This project crew is assigned only to work that would otherwise have been executed by a contractor (which may include shutdown maintenance). This takes careful planning, very experienced supervision and some special training. However, when you consider the savings that can be achieved by avoiding contractors, any costs associated with these actions will have a very good return.

The introduction of this new crew may also provide an opportunity to address any restrictive trade practices that are not protected by union agreements (and most are not).

As with any change, some resistance can be expected and strong leadership is essential. However, resistance is unlikely to come from your good tradespeople, who will find their work more challenging and rewarding. Most tradespeople in the new crew will find that their project assignments are more interesting than many maintenance routines and will provide learning opportunities.

The greatest resistance will come from the union, because the change will eventually result in a reduction in their membership, and their revenue. It is, of course, necessary to respect any agreements that are in place, but those agreements usually provide considerable freedom for improving performance.

There will also be resistance from some supervisors and planners, because they will quickly see that they will be expected to change the way that they work, perhaps substantially, and that the focus will be on them. They must be involved in all aspects of this change.

It goes without saying that the introduction of a project crew and the corresponding reduction in maintenance tradespeople must be preceded by the training and (perhaps) organization and system changes required to provide the required level of professional work planning and scheduling.

There are other opportunities to reduce costs by assigning tradespeople to activities that have value but do not use any materials. Examples include:

– training

– updating and improving the preventive maintenance programme

– eliminating obsolete stock from your Storeroom

– re-naming stock items so that tradespeople can easily find them

– preparing standard job plans for repetitive work

– developing standards for equipment rebuilding

However, most of these are “projects” that will have an end, so if attrition is expected to occur at a reasonable rate the schedule for completing these activities should balance the anticipated manpower reductions.

And there may be other opportunities to reduce the cost of outside services, e.g. by carrying out some equipment rebuilds in-house (if it is economic. Some rebuilds require very specialized equipment to match OEM reliability).

And remember that you will be saving the company money through these changes. Some of those savings could be spent on providing opportunities for employees to get further education, and perhaps some would appreciate a leave of absence for travel that can not be done during normal vacation time. Responsible union leaders recognize the inevitability of change and most will willingly participate in finding opportunities for their members.

If you are contemplating improving work planning and scheduling (and these are very different activities – see Planning and Scheduling – What are they?) it is very important to think the process right through to the end so that you have an answer to the basic question “How will this affect the bottom line?” and a plan to complete the change process.

And throughout the process, make sure that the four basic steps to successfully implementing changes are followed (see Successful change).



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Don Armstrong, P.Eng, President
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