In today’s fast-paced industrial landscape, maintenance and reliability professionals face increasing pressure to ensure optimal equipment performance while controlling costs and managing risk. Effective maintenance management is key to achieving this balance.
While long-standing reactive maintenance approaches may seem like a quick fix – spending only when absolutely necessary – the long-term costs of unscheduled downtime, excessive repairs, and decreased efficiencies can be debilitating to an organization’s bottom line.
In contrast, a well-structured, cost-effective maintenance strategy can drive operational efficiency, improve asset longevity, and lower the overall maintenance costs and total costs of ownership. This article focuses on key strategies for cost-effective maintenance management and the role of maintenance and reliability professionals in supporting this.
Shifting from Reactive to Preventive and Predictive Maintenance
The foundation for a cost-effective maintenance strategy starts with focusing on performing the right maintenance activities at the right time. A traditional reactive approach – essentially, fix it when it breaks – is often the most expensive and least efficient method.
This results in a mad dash or firefighting approach when the equipment inevitably breaks, resulting in expedited spare parts costs, potential overtime labor costs, and the real risk of health, safety, and environmental consequences that may occur.
Unscheduled downtime can disrupt production volumes or levels of service, leading to lost revenue and unnecessary repair costs. A shift towards preventive and predictive maintenance can dramatically reduce these negative outcomes.
Preventive maintenance (PM) involves regular inspections and upkeep based on manufacturers’ recommendations or historical performance. The timing of PM activities is typically calendar or usage-based, for example, changing the oil in your car every 6 months or 10,000 kilometers driven.
PM is far more structured than a reactive maintenance approach and helps prevent the failure of critical equipment or components by replacing or restoring them at set intervals. Predictive maintenance (PdM) takes this a step further by using condition-monitoring tools to analyze asset health and detect when a failure starts to occur, well before it impacts production, and no or limited secondary repairs.
PdM provides a time window when repair interventions can be planned, scheduled, and performed. A PdM approach helps to reduce downtime, extend the asset life, and avoid costly repairs, leading to a more predictable maintenance schedule with fewer unplanned, unscheduled outages.
Reactive maintenance may seem cost-effective, but its long-term impact can be disastrous.
Methodologies such as reliability-centered maintenance (RCM) encourage maintenance and reliability professionals to consider how equipment might fail within its operating context and identify whether a PdM, PM or a deliberate run-to-fail approach is most appropriate given the risks and impact of equipment or component failure.
By combining PM and PdM, maintenance and reliability professionals can increase equipment availability, increase equipment uptime, reduce the number and frequency of emergency repairs, and minimize the escalating costs of reactive maintenance.
Technology for Enhanced Decision-Making
Modern technology has been a game changer for PdM. Recent technological advances, such as Internet of Things (IoT) devices, sensors, and data analytics, have enabled maintenance and reliability professionals to monitor asset health against operating conditions in real-time.
Integrating these technologies into equipment maintenance strategies and practices offers an opportunity to optimize performance while minimizing costs and risks.
Combining preventive and predictive maintenance minimizes downtime and extends asset life.
For example, sensors can track temperatures, pressures, vibration, and cumulative production throughput to provide valuable data on the health of the equipment. Analysis and comparisons of the various data points give us the information and knowledge to set warning and alarm limits, predict impending component failures, and recommend actions.
This can reduce manual inspections, avoid changing component parts too early, and avoid costly downtime. Additionally, this information can become an input to enterprise asset management (EAM) maintenance work management software for better integration of maintenance activity schedules, inventory management, and repair histories, enabling better future planning and resource allocations.
Thoughtful investment in technology enables maintenance and reliability professionals to achieve a more precise, data-driven approach to equipment activities, which lowers costs, avoids unnecessary risk, and improves overall asset performance.
Spare Parts Optimization
One often overlooked aspect of maintenance management is spare parts inventory management. While maintenance technicians like to have every possible spare part on hand in unlimited quantities in the event of an unexpected repair, the need to avoid associated downtime needs to be balanced against the very real costs of unnecessary spare part storage, especially if parts become obsolete or damaged while in the warehouse.
Data-driven decision-making turns maintenance from a cost center into a strategic advantage.
Uncertainty or delays in the supply chain after ordering spare parts should not be overlooked either. Spare parts optimization is focused on achieving that delicate balance between spare parts availability, risk reduction, and costs to stock the parts.
Modern inventory management software, often integrated with EAM systems, helps track parts usage patterns, predict future demands, and support ordering spare parts on an as-needed basis—often just in time or to meet set stocking levels.
This approach minimizes excess inventory while stocking the right quantities of spare parts to ensure they are available when needed. By maintaining the right stocking levels, companies can avoid the high costs of overstocking and the risks associated with stock-outs that may lead to production delays or expedited shipping charges.
Strong partnerships with parts suppliers and original equipment manufacturers (OEM) can ensure predictable and, ideally, fast delivery times for critical spare parts. This allows more inventory management flexibility without compromising production equipment availability and uptime.
Employee Training and Development
Effective maintenance management is not solely reliant on the equipment or technology used. The competency of the maintenance and reliability professionals plays a critical role in cost-effective maintenance.
An optimized spare parts strategy balances availability, risk reduction, and cost control.
Competency is the combination of formal knowledge and education – gained through a skilled trade, technician, technologist, or engineering qualification – plus experience applying relevant skills in the workplace.
Empowering our employees through ongoing training ensures they have the necessary and up-to-date skills to perform high-quality maintenance tasks, troubleshoot problems quickly, apply the latest predictive maintenance and condition monitoring techniques, and optimize equipment performance.
We want to attract, retain, and develop our maintenance and reliability employees so that they have ten years of progressive experience, not year one experience ten times.
Maintenance and reliability professionals and their employers should invest in training programs that focus on technical skills and emphasize best practices in maintenance management.
These maintenance management knowledge certifications emphasize the holistic nature of maintenance management, including topics such as financial performance, production operations, and human resources, in addition to the more typical planning, scheduling, and maintenance strategy development.
Recent advanced maintenance management training also includes the latest thinking in maintenance information management and how maintenance, reliability, and asset management integrate and align for maximum value.
Skills such as the ability of maintenance and reliability professionals to speak the language of the board room, also known as dollars, by learning to build business cases for maintenance management improvement opportunities should not be underestimated.
Regular skills development allows teams to identify and address minor issues before they become big problems, reducing the frequency and cost of repairs. It also creates a culture of continuous improvement within the maintenance and reliability teams that encourages a greater sense of ownership of equipment and business processes.
When employees are encouraged to take an active role in maintenance planning, problem-solving, opportunity identification, and implementation of their ideas, they become more invested in the organization’s success, which leads to improved performance and, overall, more cost-effective maintenance management.
Outsourcing vs In-House Maintenance
Maintenance and reliability managers must navigate whether to perform all maintenance activities in-house with employees or outsource some or all maintenance functions.
Maintenance outsourcing can sometimes be a cost-effective option, especially for specialized tasks that are performed infrequently, where there is a lack of in-house expertise or specialized equipment, or when risk-based or regulatory considerations mean that an arm’s length third party best performs the task.
Outsourcing allows organizations to tap into external expertise without the need for the purchase of specialized equipment or training employees to stay current with the latest specialized regulations.
This is not to say that outsourcing is without challenges. If poorly managed, it can lead to communication barriers, reduced control over the quality of work performed, and uncertainty in cost forecasts.
The best approach may often be a hybrid model where core maintenance activities are handled in-house and more specialized tasks are outsourced to third-party experts. An example that is highly relatable for many companies is elevator and crane inspection, maintenance, and repair.
These are highly specialized maintenance activities with tight regulations and severe consequences if not completed properly. Over my career in commodity production companies, this specialized maintenance work has been outsourced. A detailed cost-benefit analysis that considers all aspects of costs, risks, and performance can assist maintenance and reliability professionals in determining the appropriate mix for their needs.
Performance Indicators and Continuous Improvement
The final key to cost-effective maintenance management is implementing and tracking equipment and maintenance process performance indicators. Both equipment and maintenance process performance indicators should integrate and align with overall organizational key performance indicators (KPIs).
Continuous improvement in maintenance is the key to long-term cost savings and reliability.
Regularly tracking equipment performance indicators such as mean time between failures (MTBF), overall equipment effectiveness (OEE), or equipment availability, maintenance, and reliability, professionals can gain valuable insights into how maintenance strategies perform. They can use this analysis to identify areas for improvement and adjust maintenance strategies as necessary.
Continuous improvement and the associated cultural mindset are critical for successful, cost-effective maintenance management. Leveraging data to review past equipment performance informs decisions for future optimization. Reliability professionals can use root cause analysis (RCA) techniques to investigate recurring failures and recommend preventive and predictive strategies.
They can use RCM techniques to make informed recommendations on predictive, preventive, and deliberate run-to-fail activities for specific failure modes in a given operating context. This continuous improvement culture and mindset encourages a holistic approach to balance improved production performance, minimize risks, and reduce overall costs.
Key Takeaways for Smarter Maintenance Management
Cost-effective maintenance management is not strictly about reducing expenses – it’s about establishing a sustainable, efficient, and effective approach to maintenance that maximizes value from assets over their lifecycle.
Adopting predictive and preventive maintenance strategies, embracing technology, optimizing spare parts management, investing in employees’ training and development, thoughtful outsourcing, and cultivating a continuous improvement mindset and culture all support cost-effective maintenance management while improving overall asset performance.
In the constantly evolving industrial landscape, solid maintenance management approaches will help organizations drive value from their assets with a balance of cost, risk, and performance.
Susan Lubell P. Eng CFAM MMP CAMA is the Principal Consultant at Steppe Consulting Inc. and the author of Root Cause Analysis Made Simple – Driving Bottom Line Improvements by Preventing One Failure at a Time. She specializes in asset management and reliability strategy, cost-effective maintenance programs, and operational excellence within 24x7x365 asset-intensive companies. In her industry association roles, Susan serves as the elected Chair of World Partners in Asset Management (WPiAM) and is a past president of the PEMAC Asset Management Association of Canada.
