Maintenance and Finance are both striving to achieve the same result: improving the financial profitability of the organization. Yet, the common goal for both groups is harmed when maintenance is not viewed as an investment by the financial department. Here are the top 4 ways that Maintenance can bridge communication with Finance,
1. Using the right language and terminology
The time has come for Finance and Maintenance to start speaking the same language. Since maintenance can often be perceived as cost-cutter, and not an investment, Finance can be reluctant to allocate funds to needed budgets and resources unless there is the right data and language to bridge that communication. When Maintenance can effectively communicate the total cost of their maintenance plan to Finance, the perception that maintenance is just a cost-cutter is erased!
2. Measuring relevant data
The trend in today’s economy for an organization to reduce costs means maintenance managers are forced to do more with less, and the cycle of miscommunication continues. Maintenance has an opportunity to demonstrate how best to achieve the desired cost savings.
To make appropriate investment decisions, data must be available. The available data must be relevant. The data also needs to be organized in such a way that it has meaning.
A sound strategy to measure maintenance as an investment is to calculate:
- Lost production cost
- Costs required to make up lost production
- Quality costs, particularly rework and scrap energy costs
- Customer dissatisfaction costs
- Delayed delivery penalties
- Lost customer costs
- Environmental penalty costs
- Safety penalty costs
- Devaluation of capital assets
Just as a sound Financial Planner promotes diversification as an investment strategy, so too should the Maintenance Manager. The diversification strategy used in maintenance is an example of a properly planned maintenance program.
The program will include:
- Preventative Maintenance
- Stores Management and Procurement
- Work Order System
- Computerized Maintenance Management System
- Technical and Interpersonal Training
- Operational Involvement
- Predictive Maintenance
- Reliability Centered Maintenance
- Total Productive Maintenance
- Statistical Financial Optimization
- Continuous Improvement
Control your maintenance costs with a little outside the box thinking.
There is no question that downtime of equipment takes time away from production! But wait… planned downtime can be more cost effective than unplanned downtime. Also, not giving the equipment over to Maintenance for regularly scheduled preventative maintenance (PM) increases the likelihood of unplanned downtime which:
- Takes longer to correct than the original PM hours that were required.
- Probably costs more due to lack of preparation and the probability of overtime.
- Could include costs of a lost customer or attempting to satisfy a customer.
Planners and Managers should show that maintenance makes up anywhere between 15 – 40% of total production or facilities costs. A properly planned maintenance program can generate new sales and bring the full impact of maintenance to a company’s profitability. Communicating in these terms will no doubt help Finance understand the situation!