Intentia: nearly 68 percent allocate less than half of maintenance budgets for preventive activities
Schaumburg, IL January 21, 2005 Global enterprise solutions provider Intentia has release the results of its 2004 global enterprise asset management (EAM) benchmarking survey. The benchmarking results show that businesses still question whether preventive maintenance is worth the cost and effort with nearly 68 percent of respondents allocating less than half of their maintenance budgets for preventive activities that reduce equipment failure and plant shutdown.
The survey investigated maintenance practices within the power, infrastructure and utilities, manufacturing, food and beverage, and pharmaceutical sectors. According to the findings, over 85 percent of the respondents agreed that preventive maintenance increases production and operations capacity, with almost two-thirds reporting that their preventive maintenance gives them a competitive advantage in their market. However, the proportion of actual spending committed to maintenance is less than 10 percent.
"These findings suggest disparity between the value of preventive maintenance and the actual commitment of sufficient resources to these needs," said Brian Dunks, EAM industry solutions director at Intentia. "As a result, many businesses are failing to take advantage of one of the few remaining untapped areas that can directly benefit bottom-line performance."
The Cost of Downtime
Half of the respondents said they could limit their average annual cost for lost production to $50,000 as a result of plant or equipment failure. Almost seven percent of the businesses reported an annual loss of production in excess of $1 million. These losses do not reflect downtime, including scrap, lost customers, higher unit costs, and additional labor and utility overheads.
Power generation and utilities organizations claim the lowest level of downtime. For many businesses a planned maintenance strategy is critical to reducing equipment failure and downtime, meeting industry safety requirements, and ensuring business continuity and plant availability in order to maximize productivity and profitability.
"Increasing the availability of equipment can clearly have an impact down the entire supply chain," added Dunks. "Reliable equipment enables organizations to complete customer orders on time and at the pre-determined unit cost. This delivers what the customer wants, when they want it and at the right price."
Key Inhibitors to Successful Maintenance
Many organizations experience challenges to successful maintenance operations. Common key inhibitors include:
* Poor Comprehension of Issues Thirty-two percent of respondents indicated that poor comprehension of maintenance problems by line managers is a key issue, an increase of 10 percent over last year's results.
* Lack of Funding Sixteen percent of respondents indicated lack of funding as a major issue. Poor capital purchasing, management techniques and staff shortages were also contributing factors in getting changes to maintenance practices in place.