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Three ways to refine maintenance cost monitoring

blogi-kunnossapidon-kustannusseurantaMaintenance is a significant factor in company-level costs that has a direct impact on both company productivity and overall business success. Maintenance cost monitoring is a tool for operational development and a significant part of the business, as it helps create predictability and make strategic decisions, for example in investments.
Irrespective of the industry and scale, the upper-level goal of maintenance cost monitoring is to keep the operational reliability at the defined target level as cost-effectively as possible.

1. Visible and hidden costs

Some of the maintenance cost factors are clearly defined and thus also relatively easy to measure: salaries and bonuses for maintenance personnel, potential subcontracting work and, for example, spare parts and tools. Most also add administrative costs to the equation and include a part of the plant’s shared commodities, such as electricity and water.

Certain indirect costs are often left out of the total sum, even if their existence is realized. These include, for example, production losses, quality degradation and deteriorating security of supply. Indirect costs can be difficult to get a grip on, although they can be a quite significant factor in the overall picture. For example, delivery delays and quality problems not only cause financial losses, but also damages to the reputation, which is difficult to repair. For this reason, indirect costs should also be consistently included in budget and cost discussions.

2. Ensure data quality and adequacy

The task of maintenance is to ensure the availability of the plant, the production volume, and the quality of the final product. Maintenance metrics are a great way to monitor and improve performance.

For successful maintenance monitoring, it is important to ensure that maintenance cost data is produced and stored reliably. It is based on an intelligent maintenance system that combines historical and measured data, and is easy to use, making it convenient to record maintenance regardless of time and place.
It is also important to keep in mind that all data related to direct costs must be reliable, regardless of the source. Relevant data are not only obtained from the systems used by maintenance, but also, for example, from ERP, financial and billing systems.

Also, keep in mind that different organizational levels need different maintenance metrics – do all stakeholders get the information they need at the right time? There is particular need for reviewing monitoring routines when a company is shaping its strategy, or the competitive situation in the market is changing.

3. Draw the right conclusions

The development of maintenance does not end when the reports are on hand and figures are being compared. The actual development work only takes place when the data are actively used as a basis for careful situation analysis and as a tool for decision-making.

For example, in investment decision-making, it is important to be able to verify what benefit the investment brings and which business variable it affects – quality, volume, lead times, security of supply or something else? Maintenance cost monitoring serves as a valuable tool in calculations and decision making. Budgeting is a tool for developing maintenance, but also vice versa: data from maintenance helps prepare budgets.

In addition, it is worth remembering that maintenance costs should not be monitored as an isolated part of the business, but always in relation to production performance. For example, increased maintenance costs do not automatically mean that the economy has failed. If the investments made in maintenance have received sufficient value in terms of production, and thus the profitability of the entire business, the investment can be deemed to have been profitable.

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Ville Vilhu

Ville Vilhu

At Pinja, I’m responsible for the maintenance service products and the development and operations of the related expert services. In my free time, I like to spend time in the nature on foot and on boat.

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