The 80/20 rule, also known as the Pareto Principle, states that most things in life are not equally distributed. Take maintenance costs, for example. It’s likely that just a few assets account for a large part your budget.
Many maintenance departments aim for 80% preventive maintenance and 20% reactive repairs. According to the Federal O&M Best Practices Guide, a company can save between 12-18% using a preventive rather than reactive maintenance strategy.
However, in reality, many companies are nowhere near achieving this goal. Does that mean 80% preventive maintenance is unrealistic?
Here’s a closer look at the origins of this rule and how to successfully apply it at your organization.
Where did we get the 80/20 rule for preventive maintenance?
While an 80/20 ratio is prevalent throughout most modern industries, it was first recognized by an Italian economist, Vilfredo Pareto, in the early 20th century. Pareto became famous for remarking that 20% of Italy’s citizens controlled 80% of the country’s wealth.
In 1940, industrial engineer and management consultant Dr. Joseph Juran demonstrated that 20% of production problems caused 80% of product flaws. By focusing on this small number of high-consequence issues, a manufacturer could improve quality with less overall effort.
Juran later coined the popular phrase “the vital few and the trivial many.” It applies to almost anything in life, including preventive maintenance.
Imagine discovering that most of your industry’s downtime was caused by a limited number of maintenance issues. If you could identify and eliminate these few problems, you’d wipe out a significant portion of your downtime.
Keeping the Pareto Principle in mind, what if:
- 20% of equipment failures caused 80% of shutdowns
- 20% of repair parts accounted for 80% of inventory costs
- outsourcing 20% of upkeep reduced costs by 80%
Focusing on the 20% can deliver big results.
Now, it’s likely that your company’s numbers won’t be an exact 80/20 ratio, but the idea—and the potential—remains the same.
“Increasing the share of planned maintenance over the time spent on breakdowns should be a top priority for forward-thinking maintenance organizations,” according to Efficient Plant Mag. Those who concentrate on the “vital few” spend their time, money, and effort more effectively.
Advantages of preventive vs reactive maintenance
Preventive maintenance is the systematic process of avoiding failures and breakdowns before they occur—an investment today that saves time and money tomorrow. Compare this to reactive maintenance, which responds to problems only as they happen.
Adopting preventive maintenance in favor of run-to-failure delivers real advantages, including:
Cost savings
Repairing breakdowns generally costs more than preventive maintenance. Plus, unplanned failures can significantly impact budgets as damage cascades onto other systems.
Longer equipment life spans
Most assets run better when the maintenance department follows the recommended OEM instructions. Regular preventive maintenance identifies broken or worn parts and replaces them before they can shorten equipment life span.
Scheduling efficiency
Reactive maintenance is a scheduling nightmare. Maintenance technicians could be idle one day but the next have more work than they can finish.
Preventive maintenance levels out workloads, relieves stress, and ensures qualified team members are available when they’re needed.
More uptime
A run-to-failure approach results in unplanned shutdowns. Preventive maintenance increases asset reliability and uptime.
With a documented preventive maintenance strategy, companies can significantly reduce downtime. For instance, DeFoe Corp cut its downtime in half.
Getting to 80% preventive maintenance
Unplanned downtime lasts four hours on average and costs as much as $2 million per occurrence, according to research by Vanson Bourne.
Understandably, companies are eager to optimize their preventive maintenance ratio, not only to decrease expensive downtime but also to enhance productivity and improve safety.
Although the goal of 80% preventive maintenance is worth striving toward, there are several challenges along the way. Gathering the right asset data, setting priorities, and streamlining maintenance processes are just a few.
Here are six steps to make concrete progress.
Assess your current preventive maintenance program
Before making any changes, evaluate your existing processes.
How many maintenance activities were preventive versus reactive in the past year? How did the costs compare?
How does your team track and manage preventive maintenance tasks now?
Do you use preventive maintenance software?
If so, does it give you visibility into the most important metrics, including;
- Total hours of operation
- Hours spent on different types of maintenance activities
- Downtime due to unexpected repairs
- Repair history
- Cost of spare parts
- Asset life expectancy
Analyze maintenance data
Examine maintenance data and look for patterns. For instance:
- Which assets are the most critical for operations?
- Which repairs are the most time-consuming?
- The most costly?
- What are the most common causes of unexpected maintenance?
Identifying the most common causes of undesirable trends helps identify exactly where your maintenance program needs to change.
When you zero in on big problems, such as breakdowns, you’ll find they often lead back to small, preventable oversights. Poor processes or inadequate communication may cause operational setbacks.
Analyzing data for a large number of assets can be challenging, but software with powerful reporting capabilities makes it much easier. With the reporting features in ManagerPlus EAM software, you can create customized reports and KPIs. You can see your progress at a glance or drill down to see more details.
Prioritize preventive maintenance tasks
All assets are important, but some are more critical to operations than others. Maintenance schedules and activities should prioritize the equipment that affects the bottom line the most if it goes offline. These assets have high criticality.
There’s a difference between critical assets and assets with high criticality. Critical assets are extremely important, while those with high criticality are vital to a process. For example, a lock on a tool cabinet is undeniably critical for preventing theft, but it has low criticality when it comes to production.
Prioritizing maintenance should take several other factors into account, including:
- The level of technical or specialized skills needed to complete certain activities
- Whether maintenance requires taking an asset offline
- The impact on employee safety
Create a schedule
When scheduling preventive maintenance tasks, balancing priorities maximizes your technicians’ time. An optimal schedule delivers effective upkeep for the lowest cost.
High-level scheduling should address priority work and take advantage of planned downtime, while at the granular level, schedules need to account for technicians’ skill sets and availability. And don’t forget to build in contingencies for the unexpected.
Maintenance work order scheduling through EAM software simplifies the process. You can create work orders automatically, based on triggers such as time, equipment usage, production cycles, mileage, and more.
With these features, you can stay on schedule for preventive maintenance for every asset, ensuring nothing falls through the cracks.
Examine maintenance processes
Strengthening your preventive maintenance program means reviewing your current processes to identify bottlenecks and inefficiencies. It might not seem like a few moments of wasted time make a big difference, but across an entire maintenance program, it adds up.
Examine your procedures one step at a time. How long do technicians spend searching for information? How long does it take to process approvals? Is red tape getting in the way of work? Be sure to speak to technicians to find out firsthand about unnecessary slowdowns.
EAM software with mobile capability streamlines maintenance processes, giving employees access to schedules, asset records, parts availability, and instruction manuals wherever they are working. Electronic approvals and push notifications reduce the need for paperwork so employees spend less time waiting and more time on preventive maintenance tasks.
Evaluate your progress on maintenance KPIs
Achieving that magic 80/20 ratio is the goal, but business operations are always changing. To be successful, stay flexible. Start by establishing smart KPIs.
Like guideposts, KPIs point to what matters. Tracking asset data within your EAM software helps you navigate change by identifying what you’re doing right and where you need improvement.
A few KPIs worth watching include:
- Preventive maintenance vs. reactive maintenance ratio
- Preventive maintenance costs
- Total cost of ownership of assets
- Average time for task completion
- Work order backlog
Your goal is in sight
For some enterprises, production already accounts for regular maintenance, while for others, it’s typical to run equipment until it fails. Still, your team can achieve an 80% preventive maintenance ratio with the right EAM software system in place.
ManagerPlus can help you achieve this with intuitive dashboards, comprehensive KPI tracking, and automated work order scheduling. Using our software, you can quickly uncover the “vital few” activities that make the biggest impact on your maintenance efficiency and costs. You can also simplify PM scheduling using drag-and-drop schedules so you can reprioritize quickly.
Ready to take control of your preventive to reactive maintenance ratio?
Schedule a free demo of ManagerPlus today.
