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Strategic Maintenance Planning By Brad McCully, ATS

Why do we need to do Strategic Maintenance Planning?

In today’s global competitive environment every manufacturer feels cost and price pressure. Performance improvement is required and it must happen immediately. As companies implement Lean manufacturing, the challenge is that the assets must perform well and maintenance must accomplish this on a limited budget.

Maintenance’s mission is to have the equipment available when it is required to run. In the old days we waited until equipment broke and we fixed it. That is no longer acceptable. We must think about our job just like a NASCAR pit crew. That is we can be the best at fixing it when it breaks, but if it breaks too often we will still lose the race.

What is Strategic Maintenance Planning?

 It is working on the things that improve the plants business condition, not just doing good maintenance. It means making choices about where we focus our time and effort, where we spend our money. It is the business solution that maximizes our limited resources to the fullest. And it is a thought process that enables us to target on the key success factors that keep our plants operating successfully.

Strategic Maintenance Planning is a process that allows us to make investments that have great returns. It enables us to target the large areas of waste on the factory floor by investing in asset improvement efforts driven by the maintenance team. Sometimes it feels like we are drifting toward and iceberg. Above the water all we see are the costs from the maintenance spend, when the real costs that will hurt us is under the water. Costs like unscheduled overtime, or scrap and rework. Were talking about the wasted production dollars that are a result from poor asset maintenance. The true cost of an under funded maintenance effort goes beyond the maintenance spend.

How do we do Strategic Maintenance Planning?

 The first step is to understand the plants business goals. That is what will it take to improve the plants financial performance. Find out how these goals will be measured and ensure you can get the measurements regularly because they will be maintenance’s goals also. Secondly, ask “what maintenance processes must we be really good at in order to drive plant performance toward those goals?” Will it be fixing preventive maintenance, predictive maintenance, training operators on cooperative maintenance, or some other activity? The third step is to ask “what tools, training, or technology will the maintenance team require in order to execute those key processes well enough to make a difference?” And lastly we must answer the question “what are the financial ramifications to executing this plan. What will the investment in maintenance be and what impact do we expect on production? Be prepare to answer these questions and be prepared to talk about how each activity will be measured. There are a couple tools we you should use to help you answer these questions and they are a Balanced Scorecard and A Strategy Map.

The Balanced Scorecard is a set of measurements you put together to measure your plans performance. They are the measurements developed when you answer the previous questions. The measurements have four perspective and they are Financial, Production or Customer, Maintenance Processes, and Innovation & Learning or People. These four perspectives make up your overall strategy plan. It is the result of answering the previous questions. 

The process of answering these questions is done with the use of a Strategy Map. A Strategy Map is a pictorial representation of the four perspectives and how they interrelate to one another. You can draw out your plan on a Strategy Map and talk through it in fairly quick fashion. This is a great practice use to get buy-in to the plan before you spend too much time on it. If management believes in your concept you can do the financial work to justify any investment required. If they don’t buy into the plan then make another plan. The Strategic Plan is based on several cause and effect relationships. This is known as the hypothesis of your plan. Basically the plan explains that is the plant needs improved financial performance then some production measurement must improve. Of the production measurement is to improve maintenance must perform some process or processes to make the assets perform better improving production performance. And if maintenance is to improve its processes certain learning or innovation must take place. This flow of cause and effect relationships is what explains your plan. Also the cause and effect has timing dynamic to it. The Learning and Innovation measurements will improve first. Next the maintenance process measurements will improve. Then the production measurements will improve. And lastly the financial performance of the plant will improve. Its important that everyone understands the timing in order to set proper management expectations. This timing dynamic is known as leading and lagging indicators. Leading indicators are the Learning and Innovation along with the Maintenance Process measurements.  When the leading indicators react as planned we can feel confident we are executing a good plan. When they don’t behave as we wish we may need to revisit the plan and our hypothesis for the plan.

When do we do Strategic Maintenance Planning?

 Ideally we do it prior to the budgeting process, but it takes time to get use to the tools so starting immediately is a good idea. There are some things you can do immediately like getting your team use to the idea and having your maintenance team help develop the plan. You might even bring in the production people because nobody knows the equipment better than the people who work with it everyday.

What are the benefits of Strategic Maintenance Planning?

If you follow the process properly you have great communication and plan buy in.

Regardless of how well you know what the plan should be, if you don’t have maintenance and production people all buying in and helping out it will most likely fail. Also the more people buying in the better chance you have of getting any investment money.

How do we measure the benefits of Strategic Maintenance Planning?

One way to think about improving factory performance is by looking at the Value Chain for maintenance. The Value maintenance delivers is derived from a well functioning Maintenance System that impacts Asset Performance. When Asset Performance improves, it has a positive impact on Direct Labor cost and the Quality (Direct Material Yield) of the product. When all three of the major cost drivers, equipment, people, and direct material are positively impacted the plant’s financial performance improves.