Manufacturing, plant and other facility operations management has been around as long as the dust accumulating in the corners of every business. The dust occurs when sales and operations within an organization have diametrically opposed incentives.
Sales executives incentives are normally revenue or unit based whereas operations are traditionally margin or profit based. Opposing incentives leaves (long-term profit margin) ideas that can benefit both sales and facility operations are left on the proverbial shelf to collect dust.
How the Wall was Built
When enough dust builds up, a wall forms, that prevents senior management from making good long-term asset maintenance and management. Unfortunately, industry executives have long sided with revenue producing investments leaving operations managers to struggle with the leftover resources to achieve the slightest margin improvement.
Revenue generation investment strategies are only successful when the cost of acquiring revenue streams adds to the overall bottom line. Failure to invest in asset management tools can and will ultimately result in operational expenses that exceed the original profit margins or erase them all together.
As many organizations have found out, profit margin shrinkage is just an unplanned breakdown away because it is not just the asset cost but also the cost of labor as well as customer satisfaction.
The Asset Management Value Proposition
The impact of a heavily weighted revenue investment strategy is that asset and maintenance management has been all but ignored until the machinery that kept churning out production started to age and break down more often than initially planned.
Now, after decades of indifference to asset and maintenance management strategies that could lengthen the useful life of assets, organizations are faced with substantial capital expenditures at a time when financing is tough to come by and leaving them wondering what If the machine could have lasted just a little bit longer?.
The lack of investment in maintenance management goes beyond praying for capital funding in order to stay in operation. Intelligent CEO s and financial institutions are starting to look at the maintenance infrastructure for:
Top Ten Asset and Maintenance Management Changes Needed
- Implementation of CMMS software. CMMS software automate many of the manual work management processes as well as:
- Ensure scheduled maintenance on critical assets
- Promote pro-active maintenance on assets to reduce surprise emergency repairs
- Lowers overall labor cost because more work can be done with the same amount of resources
- Increases energy efficiency of assets through better maintenance such as inspections and regularly scheduled maintenance
- Records all maintenance activity on each asset
- Works well with predictive maintenance technologies
- Use of technology for predictive maintenance monitoring.
- Use of technology for asset maintenance functions (handheld mobile devices).
- The ability to use historical maintenance data to identify recurring or increasing problem assets and use this information to make changes or plan capital expenditures.
- The age of maintenance staff and the facility’s ability to transfer this knowledge to new staff.
- Establishment of standard operating maintenance procedures across multiple facilities.
- Better vendor management.
- Lowering in-house support needs by using a hosted CMMS or EAM software solution.
- Are assets being managed from the planning stage through their retirement.
- A greater ROA
Tearing Down the
Wall : Asset Management Visibility
The days of unlimited financial resources are gone. In the modern world, common sense, technology, a desire for improvement and accountability at all levels are necessary for an organization to not only survive but flourish.
Accomplishing the change to greater asset management visibility means that organizations that were once only driven by revenue generation optimization must now understand the balance between sales and operations investment.
So that there is no misunderstanding, without sales, operations cease and without operations, product does not go out the door. Both areas are required in order to be a viable business entity. The wall separating the two must be broken down or optimal results will never be achieved.
Because of the economy, asset management visibility has never been as important as it is today. As a result, new operational investment must come in the form of people, planning, EAM/CMMS tools, training, and the integration of technology to maximize efficiencies as well as minimize costs.
Tear down the wall, clean up the dust, tomorrow never comes, he future is now.