The Maintenance-Finance-Safety Connection

Did you know computerized maintenance management systems can be used to mitigate financial and safety risks faced by manufacturers?

Most coverage of computerized maintenance management systems (CMMS) tends to focus on their ability to reduce downtime, guide maintenance teams, and improve production operations. What’s not typically discussed is how CMMS can be used to mitigate physical and financial risks.

Paul Lachance, senior manufacturing advisor at Dude Solutions (a CMMS supplier), noted the following downtime statistics for industrial shop floor operations:

  • In 2016, the average cost of downtime across all businesses was $260,000 per hour—a 60% jump from 2014, according to Aberdeen Research. In some industries, the cost is considerably higher. In the auto industry, for example, downtime can cost up to $50,000 per minute or $3 million per hour.
  • The true cost of downtime is unknown. Consultants believe that 80% of industrial facilities are unable to accurately estimate their downtime. A common estimate is that factories lose anywhere from 5% to 20% of their productivity due to downtime.
  • Human error causes 23% of unplanned downtime in manufacturing— 2.5x higher than other sectors, according to ServiceMax.
  • A 2017 ServiceMax survey found that 70% of companies lack complete awareness of when equipment is due for maintenance or upgrade.
  • Manufacturers experience an average of 800 hours of downtime every year. 

Paul Lachance, senior manufacturing advisor at Dude Solutions.Paul Lachance, senior manufacturing advisor at Dude Solutions.“There are risks all around us. Life and work are all about balancing those risks,” said Lachance. “Some are financial risks, like unplanned downtime, poor financial planning due to inadequate information or even compliance gaps. Others are more operations- and team-related risks, such as safety, team inefficiencies or even poor communication.” 

Compliance

Providing an example of how CMMS can be used to mitigate operational risks, Lachance pointed to ISO and OSHA compliance. “ISO 9000 is a way of measuring your quality management systems,” he said. “Failing an ISO audit can lead to extra burdens, increased direct and indirect costs, and loss of goodwill with clients, vendors, and suppliers. OSHA-related violations certainly create financial and operational risks. Team safety is clearly a primary goal, but the secondary costs of an OSHA-related issue can be significant.”

Lachance said a well-implemented CMMS can be used to address numerous ISO 9000-related needs via features such as: 

  • Automated preventive maintenance;
  • Well-documented work and safety procedures; and
  • Reporting and record-keeping for audits.

“Having your job safety analysis, safety data sheets, and lockout/tagout procedures alongside your standard preventive and corrective maintenance work order instructions will help mitigate safety issues in the first place and also show an auditor you are serious about that mitigation should an issue arise,” said Lachance.


   Learn how Dana Inc. uses its CMMS as a core tool in its digital transformation process.


CMMS software can also recognize a safety-related work order and automatically associate a safety officer with the order, bump up the priority of the issue, and send an email notification. Likewise, a CMMS can automatically re-alert the team about a work order that’s been sitting around too long. 

“Your CMMS can also manage approvals for a project, purchase, or closing a work order,” Lachance said. “Mitigating operational shop floor risks is greatly aided by a CMMS with dynamic routing, notification, and escalation.”

Communication

A CMMS can also be used to help your team, vendors, contractors, and even assets communicate. “Your CMMS dashboard can be setup to show you many KPIs (key performance indicators). For example, improving your ratio of preventive-to-corrective maintenance is essential. To do this, set a goal and publish it on your dashboard. That way it will be hard to ignore if you see it all the time and continue to work with your team to help improve.”

In addition to the safety-related notifications Lachance pointed out above, notifications are another example of how to improve communications with CMMS.

“When you are low on parts, a CMMS can alert you via email or notification on your dashboard,” he said. “This will help you avoid those dreaded stock-outs or missing a key spare part when you need it. Likewise, as work orders are assigned to team members, contractors, etc., you can make sure they get a notification with a quick link into the CMMS. This will help shorten response times and catch problems quicker. All of this is assisted with a mobile CMMS.”


   Listen to this podcast to learn about using CMMS to calculate mean time to repair (MTTR) and mean time before failure (MTBF) maintenance metrics.


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