A "Parable" About Cutting Maintenance Costs

• Category: Blog
• Friday, 24 February 2012 00:00

A plant reliability manager once told me a story whose lessons I will never forget:

The multi-national company’s new vice president was making his first trip to the plant. Like most new VPs he wanted to make a strong first impression, and send a clear message to everyone that he expected results.

The new VP gathered the plant supervisors and managers into the conference room and announced he expected a 20% increase in performance. Since “everyone knew” that maintenance costs were too high, he began by challenging the maintenance/reliability manager with “can you cut costs 20 % this quarter?”

He got an immediate answer of “of course.” It seemed too easy, so the VP raised his challenge to “cut costs 30%” to which he received the same immediate “of course.” There were too many smiles around the table, and the VP was suspicious. “Can you cut 40%?” “Can you cut 50%?” The answer was the same “of course.”

The maintenance/reliability manager seemed to be honest and truthful in his “of course” answer. . . but it made no sense, given the plant’s past high repair costs and poor plant reliability.

“Okay, tell me why you can cut costs so much compared to the past,” asked the VP.

Without a smile or any sense of irony, the maintenance manager said “I can cut costs, but the more I cut costs the less the plant will be available for production. Which do you prefer, lower maintenance costs or higher production . . . you can’t have both.”

The reality is that companies make profits when their production units are running, and it takes a certain amount of maintenance to keep them humming along.

So also in the world of data.

Deferring maintenance on data, like the plant maintenance example above, is simply, as the saying goes, “kicking the can down the road.”

Poor data, like deferred equipment maintenance, has a definite cost in terms of lost production, poor labor efficiency and the increased likelihood of catastrophic failures.

Many plant managers and others understand this well. However, they often have an initial hurdle to overcome within their organizations to get the funding approved for data management projects.

If you’d like to learn more about how one can go about getting the funding, please register for the Utopia workshop “How to Fund Your Next Data Project” at http://www.sap-centric-eam.com . The conference will be in San Antonio March 4-7.