If your company operates high-priced equipment subject to wear and breakdowns, asset performance improvement is paramount to your profitability and growth. From trucks and trains to heavy machinery to buildings, every one of your assets can become a liability if not correctly monitored and maintained.
What exactly is asset performance? In short, asset performance is your company’s ability to efficiently use its physical resources.
Your facilities and heavy equipment are essential to your success, but they require consistent maintenance and repairs. The better you can balance high performance with upkeep, the better your asset performance will be. Ultimately, this is a key metric not only in assessing performance over time, but in comparing yourself to competitors and demonstrating your value to leadership and investors.
Given its importance to heavy equipment, asset performance impacts a wide variety of industries, including manufacturing, construction, energy and transportation companies. Maintenance managers in these fields are under constant pressure to do more with less while also reducing depreciation, downtime and replacements costs.
Most heavy industry operators have to contend with tight schedules and thin margins, and asset performance improvement is often left on the back burner.
Consider the construction industry. Contractors’ lifts, cranes and bulldozers need to remain in operation to complete jobs on time and within budget, and sidelining an asset for maintenance causes delays. The same is true for manufacturers, who have to weigh assembly line repairs against slowed or halted production.
In the long run, however, routine preventive maintenance allows for less overall downtime, lower repair costs and significant gains in efficiency. Here are a few reasons why you should make asset performance a top priority and a few tips for doing so without additional delays or downtime.
What are the benefits of improving asset performance?
Reducing equipment downtime
Equipment downtime—particularly unexpected downtime—is one of the most expensive burdens of any business. In fact, over 80 percent of companies have experienced an unexpected outage within the past three years.
The average cost of unplanned equipment downtime is $260,000 per hour, according to the Aberdeen Group. If equipment is down for just four hours, that’s $1,040,000 per incident, and can be significantly more if you’re operating highly specialized machinery. Not surprisingly, many organizations are making it a top priority to eliminate unplanned downtime.
Where do these staggering costs come from? Asset outages create ripple effects that reach far into an organization’s critical functions. First, detection is required to pinpoint which machines and parts have broken down. Second, containment efforts are required to ensure one broken part doesn’t cause even more outages downstream. That may mean additional downtime as more assets are temporarily taken out of commission.
Finally, recovering from the outage requires replacement parts and maintenance calls to put the compromised asset back into production. Depending upon the nature of the outage, there may even be legal expenses and regulatory fines. Overall, this combination of downtime, replacement costs and tertiary costs cuts deeply into profits.
Fortunately, a preventive maintenance strategy can drastically reduce outage frequency, as well as the costs incurred when an asset does break down. Looking at year-to-year costs, it is far cheaper to schedule downtime for maintenance than it is to contend with unexpected downtime and the disruption it causes.
Maximizing asset efficiency
Preventive maintenance and other asset performance strategies are often overlooked in the name of speed and efficiency. While delaying maintenance may offer short-term gains in production, it inevitably leads to losses in efficiency and lower performance over time.
Consider a complex, multifaceted manufacturing line. From bearings and seals to conveyors and robotic arms, every part needs to perform at its best for the line to produce at its full potential.
As parts degrade and faults remain unnoticed, however, errors and delays become far more frequent. Output will begin to decline over time.
Ultimately, a preventive maintenance plan will allow you to maximize both uptime and efficiency. Fewer errors and outages will also lead to higher reliability and a more consistent growth curve—key indicators that investors look for.
Improving asset performance isn’t just profitable; it’s imperative to your employees’ health and safety.
Mismanaged machines are dangerous, and even small faults can create safety risks.
In fact, OSHA’s top causes of job site deaths include electrocutions, compressions and being struck by falling objects—some of which may result from faulty heavy machinery. The same is true of poorly maintained buildings, which subject employees to falls, shocks and other hazards.
Most of these incidents are avoidable with the same routine maintenance procedures that keep assets performing at their best. OSHA even considers preventive maintenance to be a form of hazard control, in terms of employers’ due diligence in keeping their workers safe.
Plus, improving worker safety will benefit your bottom line. Every injury involves potential costs, including investigations, legal fees and worker’s compensation, not to mention the loss of the worker’s productivity. As is typically the case with preventive measures, an ounce of prevention is worth a pound of cure.
Insurance and warranties
With regard to both worker’s compensation and asset protection plans, insurers want to know you’re doing everything in your power to prevent claims. To that end, preventive maintenance is one of the best ways to lower your liability and reduce your premiums. If well-documented maintenance processes prove you were doing everything in your power to maintain your heavy equipment, you may be more likely to get coverage for repairs and replacements, as well as accidents and injuries that result from equipment failures.
The same is true when it comes to warranties. Most manufacturers’ warranties apply only when their products have been maintained according to their specifications.
Without a preventive maintenance plan, it may be difficult to qualify for parts replacements and service calls under warranty.
Long-term asset ROI
Finally, improving asset performance through preventive maintenance and other means offers organizations significantly greater returns on their investments. Facilities, transportation and heavy machinery are some of your most significant expenses, and to turn a profit, you’ll need to ensure their productivity far outweighs their maintenance costs.
How can you simplify asset performance management?
For any company with thin margins and tight deadlines, improving asset performance can mean the difference between breaking even and realizing a profit. Fortunately, there are plenty of sound asset performance management (APM) strategies that can help you boost performance without disrupting business or incurring additional costs.
You can only improve what you track and measure. The first steps in any sound asset management strategy are to take stock of your inventory and develop a system for monitoring maintenance schedules, lease information and other key metrics. Fortunately, recent technological improvements have made asset tracking simpler, more affordable and more accessible.
For instance, the Fourth Industrial Revolution and the Internet of Things are phasing out traditional barcoding, reducing human errors and offering facilities managers a bird’s-eye view of their resources. Many facilities are also shifting to cloud-based management platforms, which offer both convenience and far lower price tags than on-premise asset tracking solutions.
Unplanned repairs can cost thousands, and in some cases millions of dollars. Exact costs vary by industry, but in worst-case scenarios, unplanned downtime may cost a company 10 times the cost of planned maintenance.
A preventive maintenance program can pay for itself multiple times over through reductions in repair costs and downtime. In fact, one highway contractor realized an incredible 50 percent downtime reduction with a better management system for parts cleaning and replacements.
These kinds of returns are possible because unlike reactive repairs, preventive equipment maintenance significantly extends the life of your assets, even those in the five-, six- and even seven-figure range. That savings amounts to a tremendous amount of capital per additional year of an asset’s lifespan, allowing owners to reinvest in labor, new facilities and new equipment.
The execution of your maintenance program will depend upon your specific assets. However, the basics for most industries are the same:
- Form a maintenance team
- Take inventory of current assets
- Plan required purchases
- Create preventive procedures and schedules
- Create documentation
- Train workers on documentation and inspection
- Determine roles and responsibilities for each maintenance task
Once these measures are in place, it’s also critical to analyze available data and make adjustments to your plan. With more information regarding faults, outages, replacements and required maintenance, you can continually streamline your maintenance program, achieving higher uptime with lower costs.
Automatic anomaly detection
Over time, even slight amounts of friction, vibration, gas emissions and electrical discharge can render heavy machinery unsafe and damage it beyond repair—and these are just a few of the anomalies that can affect your assets. Many of them are difficult or impossible for humans to detect, but you can monitor them using sensors. If you can detect these anomalies as they occur, you may be able to make simple adjustments and avoid expensive repairs altogether.
To realize true, long-term asset performance improvements, it’s not enough to catch one-off failures or check the same boxes on a maintenance sheet day after day. To get the most out of your preventive maintenance program, you must spot the negative trends within your organization. For instance:
- Which job sites have produced the most asset failures?
- Which operators are causing the most wear and tear on your machinery?
- Which assets have cost you the most in repairs?
Only by answering these kinds of questions can you pinpoint the gaps in your current operating procedures and course-correct.
How does asset management software improve asset performance?
In today’s information-rich, increasingly complex economy, effective asset performance management can’t be done by hand. To coordinate your efforts, you need a comprehensive asset management platform. The best asset management software will allow you to:
From small parts to massive machines, every asset in your inventory must be accounted for. A digital, centralized system makes it far easier to keep track of assets across multiple job sites, and it allows you to order parts and materials before they become scarce.
Monitor sensor activity
You may have thousands of sensors installed on assets deployed throughout your organization. A central hub makes it possible to track the real-time data they provide, ultimately allowing you to react quickly to problems.
Decentralized digital systems are being phased out in favor of more modern, accessible technologies. With an integrated, cloud-based asset management tool, anyone in your organization can access maintenance records, warranty information and other critical data.
Track asset KPIs
To gauge the success of your asset performance improvement plan, you need a single source of truth. With your inventory, maintenance data and work orders in one place, your software can help you calculate key performance indicators including workloads, response times and costs.
Spot asset management trends
The only way to create lasting performance improvements is to act on trends in your data. With everything centralized in a single cloud-based repository, you can find the greatest opportunities for cost reduction, safety improvements and greater long-term asset ROI.
Revolutionizing your organization’s APM
Improving organization-wide asset performance isn’t easy, but with the right services and tools, it can be done. Better APM will ultimately lead your company towards greater asset ROI, higher profits and a safer, more productive work environment.
By providing comprehensive asset management software solutions, ManagerPlus has guided organizations of all sizes towards those goals. Our enterprise asset management software includes integrated, cloud-based solutions for work orders, inventory, asset management and preventive maintenance, offering a real-time view of your physical resources. Now, with our new Lightning upgrade, those same solutions are faster than ever. Just as importantly, our team of passionate asset management professionals can help you implement best practices to maximize your return on investment.
Are you ready to boost the performance of your physical assets while reducing maintenance costs?
To see ManagerPlus in action, request a free demo today.