A tough decision has been made and an underperforming facility/plant has been targeted for a shutdown within the next 12-24 months. In an effort to save additional dollars senior management is looking to slash their preventive maintenance costs and perform repairs only when equipment or assets breakdown. This is called breakdown maintenance.
A breakdown maintenance solution means that preventive maintenance programs are essentially suspended and only equipment or assets that breakdown and impact production are repaired. While it may seem like a smart idea at the beginning, this type of maintenance solution will have the opposite impact on costs from what senior management intended. Below are 6 reasons senior management should not sacrifice preventive maintenance even if a facility/plant may shut down or is getting ready to shut down.
- Repair maintenance only is like playing Russian Roulette with numbers, the cost of one repair may be more than keeping an extra person on staff. The full time equivalent (FTE) cost for a $60k a year position is about $90-100k/year (benefits, payroll taxes, overhead etc.) Replacement of one or more large pieces of equipment as a result of missing the early identification of a problem through inspection or preventive maintenance can easily exceed this cost.
- Labor costs per employee will likely increase as reactive repair maintenance is largely unplanned and may require overtime. Preventive maintenance is much more than a random check for potential problems. It is a method for scheduling maintenance to be efficient and cost effective. All this is lost if preventive maintenance is abandoned.
- Employee morale takes a nosedive, reducing productivity, increasing turnover, decreasing skill sets available. Facilities professionals take pride in their work, not giving someone the proper tools to do their job is likely to lead to poor repair work and therefore additional costs.
- Liability exposure is increased should an accident occur. Maintenance cutbacks and cost concerns have resulted in a number of public and expensive tragedies. American Airlines Flight 191 comes to mind.
- Operating expenses are likely to increase over the short term as equipment becomes less energy efficient
- Loss of liquidation or resale value occurs if a shut down is unavoidable as unmaintained assets have a substantially decreased lifecycle. It is a lot easier to sell a used piece of equipment with a great maintenance history than a leaking piece of junk.
Breakdown maintenance should not be confused with condition based maintenance where there is still an inspection or monitoring process occurring. Preventive maintenance is still the heart of condition based maintenance and predictive maintenance solutions. When closing a facility or plant, the smart financial decision is too continue preventive maintenance programs until the actual closing of the facility.