Industrial maintenance: what does a breakdown cost?
" Maintenance, that's expensive! "
This belief is well entrenched in the minds of many industrial managers!
In reality, industrial maintenance is expensive... if it is not done. And maintenance managers know this.
But how do you make sure that the decision-makers hear it: site manager, industrial director or CEO?
This awareness is fundamental if the maintenance department is to have the necessary resources to develop an equipped and organised maintenance system.
This requires a concept that is both easy to understand and difficult to evaluate: the cost of failure.
While the cost of the maintenance service is known and monitored on a monthly basis, the cost of breakdowns is arbitrary. We do not know in advance when and where failures will occur. So, on the one hand, there is a fixed and certain cost (the maintenance service) and, on the other, an uncertain cost (the cost of breakdowns).
How do you calculate the cost of breakdowns?
There are various calculation methods and we will look at two of them.
The simplest is to take an example of a repair, and compare the replacement cost in the case of a breakdown and during a planned shutdown. The disadvantage is that it is not complete, as it only gives an example. So it cannot be generalised.
The second method is to calculate the so-called "indirect maintenance costs", i.e. the total cost of defects of all machines on the site.
Method 1: Calculation of a defect
For example, it may be decided not to replace the bearing in a machine. But then it must be replaced after it has failed. If we compare the cost of repairing the bearing during a planned shutdown with the cost of replacing the bearing during production, we see that the cost of replacing the bearing is as follows:
| Replacement during a planned shutdown | Replacement in the event of a defect | |
|---|---|---|
| Rate per hour of maintenance | 40 €/h | 40 €/h |
| Cost per hour of production staff assigned to the machine (2 persons) | 0: no staff is assigned to the production schedule | 60 €/h. Cannot be transferred to another production: it is not known when the machine will start again. |
| Machine cleaning to get to the housing | 0: was carried out when the workshop was shut down | 0,5h x 40 €/h (service technician) |
| Collecting symptoms and locating the fault | 0 | 1h x 40€/h |
| Demontage pils | 0,5h x 40 €/h | 0,5h x 40 €/h |
| Looking up in the warehouse and bringing to the machine | 0: planned and anticipated | 0,5h x 40 €/h |
| Assembly lager | 1h x 40€/h: the procedure describes the precautions to be taken | 1,5u x 40€/uur: no procedure |
| Testing, restarting | 0,5 Hours of production and maintenance | 0,5 Hours of production and maintenance |
| Machine downtime and costs | Not counted, as it is planned and integrated into the production schedule. | For a machine with an hourly rate of €200 4.5h to €200, that is 900 |
| Time and labour costs of production | 0,5h à 60€, dus 30€ | 4,5h à 60€, dus 270€ |
| Time and labour costs of maintenance servic | 2h à 40€, dus 80€ | 4,5h à 40€, dus 180€ |
| Price of the bearing | 120€ | 120€ |
| Total | = 30+80+120 = 230€ | = 900+270+180+120 = 1470€ |
Thus, the same repair may cost 6 times more after a failure than when planned and integrated into the production schedule.
The limitation of this method is that it does not take into account the following costs
- Possible lost sales and penalties from customers,
- Caused downtime on upstream and downstream machines,
- Non-compliant parts,
- Possible loss of brand image.
- Another disadvantage is that this calculation can obviously not be done for every fault, nor for every machine.
However, it is important to know at least the hourly rate of vital machines. This helps the maintenance department to choose its priorities and, for example, to assess the importance and depth of the preventive maintenance to be carried out.
Method 2 : Indirect costs of maintenance
The calculation of indirect costs is necessary to know the effectiveness of your maintenance. It consists of an evaluation of the annual cost of all defects.
To calculate the indirect costs, the costs for each machine must first be calculated. This is often done by multiplying the number of breakdown hours for each machine by its hourly rate:
Indirect cost of machine A = number of downtime hours of machine A x Rate per hour of machine A
Next, add up the indirect costs of all the machines.
Indirect maintenance costs = machine cost A + machine cost B + machine cost N....
This evaluation is not always possible or sufficient. This is where management control can bring its methods and rigour, and also the fact that the figures it presents are recognised by management.
Conclusion
In the end, conclusions can be drawn from the calculation of the cost of failures, and in particular whether sufficient preventive action is taken and whether :
Indirect costs > direct costs (labour + parts) è the preventive measures taken are insufficient
Indirect costs < direct costs è preventive action is effective (but beware of over-preventive action!)
Whichever method you choose, it makes it possible to compare the cost of maintenance and the cost of failures, and therefore to value the work of the maintenance department. These are excellent indicators, which show the management with figures that investing in efficient maintenance pays off!
Source: Claude Kojchen, expert in industrial maintenance
https://e-bpm.tech/maintenance-industrielle-ce-que-coutent-les-pannes/
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