‘Maintaining’ a competitive edge

Published:  20 June, 2014

Ian Ritchie, managing director of Brammer, the UK’s leading distributor of Maintenance, Repair and Overhaul (MRO) products and services, looks at how a planned and proactive approach to managing all aspects of maintenance can deliver significant financial and operational benefits to companies across all manufacturing sectors.

While every manufacturing company has a maintenance department, often, because of time and resource constraints, its role can be primarily based around fire-fighting with very little in the way of planned or preventive action to avoid further downtime in the future.

And, while many companies realise that an improved maintenance programme can help reduce downtime, the majority are still some way off the type of approach, which will deliver long-lasting benefits to the company’s bottom line.

Put simply, developing and implementing a maintenance management programme across all aspects of production is one of the most cost-effective actions a company can take – especially when the costs of production downtime are taken into consideration.

Identifying problems before they occur

One way in which companies can start to tackle the issue of avoiding unplanned downtime, helping to maintain production schedule adherence and maximise their production efficiency and asset effectiveness, is through the process of condition monitoring.

Using condition monitoring equipment on production critical machinery can help identify a problem before it leads to a line stoppage, allowing for maintenance to replace the component with minimal disruption during the next convenient plant downtime.

The application of condition monitoring has been made even simpler by the introduction of wireless systems that can now detect and report excessive vibration or temperature from even the most inaccessible or inhospitable production-critical locations.

Furthermore, it removes the need for components to be changed on a time basis – possibly when change may not be required – and instead allows for change on a condition basis, which can extend service life and maintenance intervals.

Condition monitoring can also help companies plan what spares they need to keep in stock as they have a better idea of how long key components are lasting, reducing the need to tie up working capital in unnecessary stocks of spare parts. This has the further benefit of avoiding unused spare parts deteriorating or becoming obsolete over time and needing to be written off.

Reducing costs in the purchasing supply chain

The sourcing of spare parts in today’s competitive manufacturing environment is another important element of a company’s maintenance strategy, affecting cost, efficiency, safety and productivity.

Indeed, with maintenance typically a top 10 indirect spend for most manufacturing companies, this is clearly an area where major cost savings can be made - particularly as manufacturing input costs, such as raw material, fuel and energy costs, continue to rise and impact on the profitability of manufacturing business.

The supply of MRO components can be highly transactional, with buyers shopping around a number of suppliers to get the best price for the same item, but a successful procurement strategy and rigorous implementation can make a significant difference to the profitability of any company.

To really deliver value and ensure total cost of ownership savings, buyers should seek to reduce the number of suppliers of similar products and services - focusing on the bigger cost base picture rather than looking to shave a small percentage off a price through supplier proliferation.

Reducing supplier numbers streamlines business processes, consolidates expenditure and eliminates expensive duplicated administration costs.

Suppliers providing a comprehensive range of components and services will therefore be attractive to manufacturers seeking to rationalise a supply base to bring economies of scale and consistency of service.

Whole life costs are a true measure

Financial pressures may lead some companies to focus on efforts to reduce their maintenance-related purchasing costs and make decisions based solely on unit price. However, buying cheapest is rarely the best policy for engineering components.

In fact, in almost all cases the total cost of ownership of parts is at least as important as the initial purchase price. Greater cost savings and improved production efficiency can often be achieved by focusing on performance factors such as the production downtime and people costs associated with product exchange, product reliability, service life and ongoing maintenance requirements, rather than just the purchase price.

Creating savings on energy

Well-managed maintenance – in particular not ‘over-specifying’ in terms of the components needed for a particular job – can play a significant role in reducing energy costs and so impact positively on profitability.

In the UK, for example, industrial electric motors and drives account for more than two thirds of power consumption in industry. Yet many motors are unnecessarily oversized for the machines they drive. The annual energy consumption cost of running a motor can be up to ten times its purchase cost. A 10kW motor operating at 87% efficiency could cost £1500 more over its lifetime than one that is just 5% more efficient. Meanwhile, fitting the correct drives can save as much as 50% in the cost of energy consumed.

Clearly, specifying parts that will do the job more efficiently in the long-term can save money and pay big dividends. In particular, cost-efficient energy management is a real opportunity for manufacturers.

Best practice in this area suggests that to deliver the maximum benefit, time needs to be taken to identify the specific areas of the business where the biggest improvements and potential cost savings are achievable, rather than focus on changing just one or two individual components.

The challenge in all of these areas is to identify ways in which manufacturers can improve their production output and efficiency, while reducing costs.

Best practice maintenance strategies build a streamlined supply chain around an authorised distributor of MRO products and services. This ensures continuity of supply, eliminates the risks associated with non-authorised providers and reduces administration costs. It also provides a relationship where both customer and supplier can engage in a proactive way, collaborating on project work that will add real value to the manufacturing process. A collaborative approach, including consolidating vendors of similar products and services, has long been the smart way to manage maintenance operations and to maximise the achievement of operational cost savings.

For further information please visit: www.brammeruk.com

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