Spend a little on reliability, save a lot on maintenance
Maintenance is big part of any mine’s operating costs, but is it too big a part? These days everyone is looking for ways to cut costs, but cutting costs to maintain equipment usually backfires. If you cut maintenance, reliability will suffer, downtime will increase and costs will grow. It’s where you cut that matters.
We spend on maintenance in two ways – discretionary and non-discretionary. Breakdown maintenance is non-discretionary. We do repairs in response to equipment failures.
When breakdowns affect production, we do all we can to get things back online. Downtime is expensive – a huge lost opportunity. The whole organization is engaged in battling the consequences while maintenance deals with the failure itself. If we need more people for repair work, then we disrupt other jobs by pulling resources, usually preventive and predictive work. Oops – we’ve just moved spending from discretionary (proactive) to non-discretionary (reactive) and set the stage for future breakdowns. It’s great for the adrenalin junkies and would-be heroes, but bad for business.
Our non-discretionary spending rises, total spending rises and revenue potential falls. Breakdown maintenance can be the most expensive – often by a factor of three times or more. Usually it is unplanned (or poorly planned) and rushed. You pull the stops – spending on overtime, rush delivery of parts, moving people from other work to the repair, etc.
Planned proactive work, by contrast, is well planned, provisioned, unrushed and executed during normal hours. Moreover, if it is well targeted, then it helps us to avoid the breakdown situations that are so common.
Notice the “if ”– doing the right proactive work is very important. Maintenance programs make extensive use of planned component replacements or other preventive actions and only a little bit of predictive maintenance. Some replacements are needed, but some are not. All intrusive work (such as replacement of components) can lead to “premature” failures that arise because of random factors we’ve inadvertently created in doing the replacements. Those “infant mortality” failures are obvious – the equipment is back in the shop or undergoing repair very shortly after PM was done. Those failures are a sign that the maintenance program is poorly constructed. Often, predictive maintenance could have told us that there was no need for the replacement, had it been used.
Spending on getting the right maintenance program, spending on good planning and scheduling and then having the discipline of sticking to it will save you money.
There are several methods used to determine the best maintenance activities to avoid failures and the consequences of failures. The best is reliability centred maintenance (RCM). It comes from the aircraft industry where it has had undeniably huge success in avoiding crashes due to equipment failure. Aircraft are not all that unlike mining equipment – complex electrical/mechanical systems with electronic controls, operating under high stresses in challenging operating environments. Of course not all equipment failure in mining is as critical, so applying RCM on all systems can be overkill. We use other methods for less critical applications. This will cost about 2 to 3 % of the capital cost of any asset.
Considering that maintenance costs will far exceed capital costs over the life of the asset (often by a factor of 4 times or more), the potential for savings is high. In fact, we usually identify immediate savings so doing this actually reduces spending right away. With smart financing we can keep that cost out of CAPEX, spread it out and keep cash outlays below the immediate payback the analysis generates. It pays for itself and quickly!
Cutting maintenance will increase your maintenance costs.
Spending on reliability reduces maintenance costs and can do it quickly. You shift money from reactive to proactive efforts and avoid costly failure consequences as well as costly repairs. Times are tight – can we still afford not to do this?
James Reys-Picknell is a mechanical engineer (University of Toronto 1977) with 39 years in maintenance and asset management, and the author of “Uptime – Strategies for Excellence in Maintenance Management,” now in its 3rd edition.