If a Maintenance Manager is determined to improve the maintenance and reliability functions in their company, they must learn the language. Most Maintenance Managers speak a technical language. However, “C” level executives speak financial terms. Since the two languages are dissimilar, there is an immediate language barrier.
How can the barrier be overcome? It is by the Maintenance Manager learning to speak a financial language. How is this done? The learning process is started by converting all maintenance and reliability activities into dollars. There are several ways to look at maintenance financials. There is the expense side, which focuses on maintenance expenditures. However a sole focus in this area is likely to lead to “downsizing” and cost reductions.
The second way of looking at maintenance financials is the profit improvement side. This is where asset reliability and efficiency is converted to financial profit and loss. When equipment is broken down or loses efficiency, extra equipment is required to maintain scheduled production levels. With the additional assets, the overall cost to produce increases. Then financial measures such as Return on Net Assets (RONA) or Return on Fixed Assets (ROFA) are impacted, since both factor profits over the value of the assets required to produce the profit.
When maintenance managers learn to convert their technical language into a financial language, as mentioned in this post, it is easier to make improvements in their maintenance and reliability functions.
Are you frustrated because Management doesn't seem to understand the value of Excellent Maintenance and Reliability Practices? ReliabilityWeb.com is sponsoring a series of articles to help you address this issue. To see the currently available articles, go here.
Linking Reliability to Profitability
In the January 2004 issue of Insulation Outlook Magazine:
Top 8 Equipment Breakdowns
According to an analysis of Hartford Steam Boiler claims, the following equipment is ranked by frequency of losses. These exposures and breakdowns can be found in most businesses and organizations.
1) Electrical Equipment
2) Air conditioning and refrigeration
3) Boilers, pressure vessels and piping
4) Machinery (all types)
5) Computer equipment
6) Motors (including air conditioning)
7) Pumps
8) Telecommunication
Very interesting statistics!
This information was from "Getting the Most Value Out of Equipment Breakdown Insurance" January 2004 Insulation Outlook by Kristen Lohfeld, Program Manager for the Alliance to Save Energy.
Posted by Terrence O'Hanlon
Reliabilityweb.com
"Tomorrow we'll be doing some preventive maintenance," Adler said.
The Mars rover Spirit, out of commission with computer problems for the last 10 days, has been fixed, the National Aeronautics and Space Administration announced.
If NASA can schedule PMs on Mars - it should be a little easier on Earth.
Terrence O'Hanlon
Reliabilityweb.com
The National Manufacturing Week show is coming up February 23 – 26, 2004 at McCormick Place in Chicago IL.
This year, Reliabilityweb.com has partnered with Reed Expo (the event organizers) to create the Reliabilityweb.com Pavilion. The idea was to group all the maintenance & reliability solution providers in one area for the convenience of the attendees. As the idea grew from 8 exhibitors to well over 50, we added the Reliabilityweb.com Theater right on the show floor at the Plant Engineering area. You can see a list of exhibitors here.
The Reliabilityweb.com Theater features a series of 20 minute presentations every half hour for all 4 days of the event. You can see a list of presentations here.
We hope we see a bunch of our readers there because:
1) It is free (if you pre-register). You can get your VIP Pass here.
2) You will see over 50 reliability & maintenance solution providers in one place – that is very convenient
3) Several of these solution providers will be introducing new products and services at the Reliabilityweb.com pavilion
4) You also get free access to the entire National Manufacturing Week show
Yes – it is a “trade show” but we have worked hard to add an educational element to the event. Please pre-register and then stop by the Reliabilityweb.com booth number 163 to say hello.
See you in Chicago!
Terrence O'Hanlon
Reliabilityweb.com
Ever wonder why a huge elephant can be held in place by a flimsy chain attached to a stake in the ground? Because when the elephant was little, the stake and chain could hold it. It learned that escape was useless. As an adult, the elephant is held by the illusion that it can’t escape, not the reality.
Many Maintenance and Reliability professionals are like the adult elephant...limited by their own perception. To break out of this box, they need to start seeing the possibilities, not the limitations. If you want to break out of this box, it is not as simple as turning on a light in a dark room. First you need to acquire the knowledge that let’s you see the possibilities for improving financial performance with Maintenance and Reliability Excellence. Understanding Reliability, Availability, and Maintainability is the first step to acquiring this essential knowledge. During February 2004, ReliabiltyWeb is hosting a 5-minute online training on Reliability, Availability, and Maintainability. After that, the presentation can be viewed at www.ronamax.com.
Carol Vesier, Ph.D.
www.ronamax.com
Linking Reliability to Profitability
Welcome to the MTalk Blog at MaintenanceTalk.com!
Things at Reliabilityweb.com are already pretty busy – so why start a new project called MaintenanceTalk? Because we think there is still a long way to go and many lessons to learn in the everyday maintenance evolution for most of us. We also wanted to provide easy web publishing access and a public voice for several people we have a great deal of respect for.
We have invited many of our favorite subject matter experts and several have signed on so stay tuned for a dynamic and exciting web site.
By the way, if you still want to learn more about Blogs – search for that term on Yahoo or Google. You may also want to get a “news aggregator” that brings your favorite blogs right to your desk top. More on that subjects later.