Training and its Value in Reducing Maintenance Costs

Fifty thousand dollars in fire damages because someone didn’t check the oil in a transformer. A $100,000 loss because no one ever cleaned the switchgear. A plant shuts down for 12 days because of dust. An improperly used extension cord results in an employee fatality and monetary losses that climb into the millions of dollars.

It doesn’t make sense. With these types of numbers attached to poor or improper maintenance, why do so many employers underestimate the value of proper maintenance of their facilities and the training that goes along with it?

Unfortunately, maintenance work is invisible unless something is broken, and the value of training is hidden until someone makes a costly mistake. Maintenance employees go unnoticed when all is working smoothly, but all too often, if one small step is forgotten or one tiny error is made, the entire organization instantly notices and blames the maintenance staff for the failure. More often than not, the problem is not their failure at all, but a failure of the organization to support them in their critical jobs through proper training.

The True Cost of Downtime

The true cost of downtime due equipment failures related to a lack of traning can be 10 times or more than what is determined in cost justification reports. This is due to the fact that downtime eventually weaves its negative effects throughout everything an organization does. There are a variety of methods and calculators for determining downtime. In general however, you need to consider the following if you want to understand your true loss potential:

• Calculate how many employee hours are lost to unproductivity while the system is down, and then convert those lost hours into dollars.

• Add up the hours maintenance and other personnel spend repairing and getting the system back up and running, and convert those lost hours into dollars.

• Determine how many hours the facility or unproductive machinery is burning up energy and other resources, and convert those lost hours into dollars.

• Calculate how many hours management and administrative employees spend researching replacement parts, expediting orders or doing other rush-related work, and convert those lost hours into dollars.

• Add in the number of hours customer service or sales personnel will spend explaining the downtime to customers and the effect it will have on them, and covert those hours into dollars.

• Figure out how many sales are lost due to the downtime, and convert those lost sales into dollars.

• Estimate how many customers are lost due to the downtime, and convert the future value of those customers to dollars.

Add all these figures up and add 10 percent to 20 percent to account for the less visible or intangible damages associated with downtime, like lower employee morale, stress-related unproductivity, negative publicity, etc., and you arrive at a minimum cost of downtime.

Resolve to Change

Changing your mindset and departmental culture is the first step you can take to help prevent losses at your company. Compared to a reactive maintenance program, studies have shown that proactive thinking in maintenance can reduce overall maintenance costs by as much as 20 percent, and increase productivity as much as 15 percent, not to mention the potential savings of life, limb and finances through prevention of a catastrophic failure. Those are huge savings and benefits for any organization.