Turning Maintenance Into Profit

As global competition intensifies, owners are adopting new concepts and technologies. Yet, many overlook the most important aspect––the maintenance. While maintenance is traditionally underutilized, organizations are increasingly recognizing its impact on quality and resultant competitive advantage.

Turning Maintenance Into Profit

Maintenance Image.

The word “maintenance” portrays negative connotations in most people’s minds. Frequently, when asked regarding maintenance, people respond with negative examples such as a broken machine, a faulty equipment or facility or the most common one, "something needs to be fixed".

These are all negative images, none of which reflect the true meaning of the word which is defined as ‘the work of keeping something in proper condition; upkeep’.

The perception of the word “maintenance” has changed drastically; it has been twisted and pushed into an ugly light. Typically maintenance resources are cut first because upper management views maintenance as an expense. This approach will lead to major consequences to the long term success of any organization. By just looking at profit and loss statements and cut expense items to increase profits, the system would have to maintain more with less resources thus jeopardizing survival of the  company.

Cost Versus Profit.

In order to truly see the positive effects that proper maintenance has upon an industry, we must view maintenance as a positive rather than a negative. Maintenance is a profit center not a cost center. A cost center is concerned solely with controlling adherence to a budget while in a profit center, managers have the authority to reallocate existing resources as well as expend additional resources with corresponding accountability for results. Having profit based approach can result in unexpected opportunities to sell more and/or produce higher quality products resulting in higher efficiency and profit.

A profit center mentality demands innovation and creativity.
A cost center approach treats maintenance as a charity.

We all know that preventive maintenance (PM) can minimize breakdowns. Hundreds of thousands of dollars can be lost per hour during downtime. Hypothetically, let us say that for every hour of downtime, $1000 is lost. It is not uncommon for equipment to be down for a few weeks each year, let us say 100 hours per year. In this example, the company will lose $100,000 in the 100 hours of downtime. Multiply that by the number of machines per plant or facility, and the number could be staggering. If appropriate PM was in place, downtime would be minimized and tremendous amounts of money could be saved, which is exactly how maintenance is turned into a profit center.

Why CMMS?

With constant downsizing, maintenance has to produce more with less. How does a maintenance department survive let alone turn it into a profit center? One of the best tool is the use of a CMMS. A properly selected CMMS can tremendously help your organization

Increased productivity.

If the system provides the employees with a planned job, the procedures, needed parts, and tools, the employees will be able to go directly to the job and do the needed work with no delays or interruptions. The employee will also work safer, since job plans would include all safety procedures. All this will increase labor productivity.

CRAFTSMAN WORKS ON THE LOWER PART OF THE REACTOR DURING CONSTRUCTION OF THE CATALYTIC COAL GASIFICATION UNIT.
CMMS helps diffusing employee frustration resulting in happier and more productive worker.

Increased equipment availability.

Within a few months of implementation, it will become much easier to identify repetitive faults and trends. This information will assist in maximizing equipment uptime and reducing breakdowns. Your emphasis should shift from reactive to proactive maintenance, and your ratio of percent planned to unplanned jobs should increase. A corresponding reduction in downtime will follow.

Inventory control.

Planning of jobs permits parts to be available when and where needed. Experience shows that a reduction of 10 to 15 percent in parts stocked and consumed is possible. Reductions also extend to inventory carrying charges, as well as to stockroom size, staff, and service requirements. As work becomes more predictive, so does your stock holding. Carrying out regular stock reviews allows you to minimize stock and to reduce expensive inventory. Spare parts can be linked to equipment, ensuring that obsolete parts are readily identified. Many users find that the returns from a CMMS come through improvements in inventory control, with savings of 10 to 15 percent being typical.

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Savings up to 15 % is possible through inventory control.

Compliance issues.

Compliance with industry regulations. Some industries such as food processing, pharmaceuticals, and petrochemicals require that your asset management systems comply with the national or international standards that regulate their industry. If you require such compliance then you should select a CMMS that has a provision for the same. Meeting the regulatory requirements can save you money that you would otherwise pay in fines for not meeting the requirements.

Getting a CMMS for your organization.

At Magnus Code we pride ourselves in providing you with reliable, secure and technologically advance CMMS solution. Our product can be customized to the needs of your organization. Our solution using software as a service (Saas) brings major advantage to any organization aspiring to improve their standing.

Hosted in the cloud, Magnus Code offers the flexibility to expand and contract with data demands. Users benefit by only paying for the data resources they need, rather than committing large initial investments to ensure there is capacity to handle the growing influx of data from IoT instrumentation — virtually eliminating hardware costs.

Our deployment of latest technology help with staffing and resource challenges because it requires far less intervention and support from IT than on-premises deployments. CMMS engineers, CMMS administrators and technical teams in the field can manage the system largely on their own. As a result, capital expenses related to IT can be converted into operational expenses and resources.

By modernizing your system through Magnus Code, you can integrate technology faster with less risk and enables you to find new insights and operating models for competitive advantage.

Talk to our team now to get started.