Page 11 - An Introduction To Predictive Maintenance

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IMPACT OF MAINTENANCE

Maintenance costs are a major part of the total operating costs of all manufacturing
or production plants. Depending on the specific industry, maintenance costs can rep-
resent between 15 and 60 percent of the cost of goods produced. For example, in food-
related industries, average maintenance costs represent about 15 percent of the cost
of goods produced, whereas maintenance costs for iron and steel, pulp and paper, and
other heavy industries represent up to 60 percent of the total production costs.

These percentages may be misleading. In most American plants, reported maintenance
costs include many nonmaintenance-related expenditures. For example, many plants
include modifications to existing capital systems that are driven by market-related
factors, such as new products. These expenses are not truly maintenance and should
be allocated to nonmaintenance cost centers; however, true maintenance costs are
substantial and do represent a short-term improvement that can directly impact plant
profitability.

Recent surveys of maintenance management effectiveness indicate that one-third—33
cents out of every dollar—of all maintenance costs is wasted as the result of unnec-
essary or improperly carried out maintenance. When you consider that U.S. industry
spends more than $200 billion each year on maintenance of plant equipment and facil-
ities, the impact on productivity and profit that is represented by the maintenance oper-
ation becomes clear.

The result of ineffective maintenance management represents a loss of more than
$60 billion each year. Perhaps more important is the fact that ineffective maintenance
management significantly affects the ability to manufacture quality products that
are competitive in the world market. The losses of production time and product
quality that result from poor or inadequate maintenance management have had a
dramatic impact on U.S. industries’ ability to compete with Japan and other countries

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