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Understanding the Business Side of Your Job

Throughout my nearly 30-year career in manufacturing maintenance, I have routinely faced an undercurrent of distrust, frustration, and communication gaps between manufacturing management and the management of the maintenance organization. These conditions often cause low morale, dissatisfied employees and reduced prof

Throughout my nearly 30-year career in manufacturing maintenance, I have routinely faced an undercurrent of distrust, frustration, and communication gaps between manufacturing management and the management of the maintenance organization. These conditions often cause low morale, dissatisfied employees and reduced profitability for the organization.

The root cause of these conditions lies with lack of knowledge Management has limited or no knowledge of the maintenance function and its ability to contribute to the manufacturing process. Likewise, the maintenance organization has limited exposure to the business side of manufacturing and their own maintenance responsibilities to the business side. The result is that both groups are often unsure how either contributes to the success of the manufacturing process.

To change this culture of confusion and frustration, two steps must be taken. The first is for management to learn about world-class maintenance principles and develop a vision of the type of maintenance culture that would suit the existing manufacturing environment. The second step is for maintenance to learn more about the business side of their own operation and to understand more about management’s role in running a manufacturing facility.

While it would be welcome for both factions to work toward a better understanding of the other, this cannot be expected. For the maintenance professional to attempt to change upper management’s culture toward maintenance can be a challenge. On the other hand, the maintenance professional does have the ability to change his knowledge, attitude, and ultimately, his culture and that of his employees and the entire team.

The goal is to be in a position to justify and “sell” future maintenance programs, processes, and actions that will change the perception and culture of maintenance from that of a cost center to a profit center. This means the maintenance function will not be looked at as a liability, but as a group that contributes to the profitability of the manufacturing group. It does this by increasing machine reliability, product quality, and lowering operating costs.

For perspective, it’s worth noting that to understand the financial operation of a manufacturing facility is a complex undertaking. Members of this group use numerous financial tools and calculations to determine various indicators of a business’ health, such as current value, future value, and return on investment. Maintenance professionals cannot be expected to have access to or training in these financial processes.
However, it is possible for maintenance pros to better communicate their needs and strengths to the financial sector.

Maintenance knowledge to financial information
As noted, every decision made in the maintenance world carries a financial component. For example, for a bearing to have a long and useful life, maintenance pros understand that proper lubrication is required. This conclusion was not reached by using a financial calculation, but through knowledge based on experience or training. If you take this example a step further, however, the “bottom-line” reason for having a lubrication program is not simply common sense, but because it can lower operational costs. 

Now, suppose you want to install an automatic lubricator on a remote bearing that is difficult to reach without causing machine downtime. If you request $500 from management for this purchase, you’ll be asked why. If you simply say “because it needs one” or “it’s hard to reach,” you’ll probably be dismissed and asked to return when you have a better answer.

A better way to attack this problem is to present the proposal this way: “I have an idea that will save us money.” Now you have their attention. To continue: “I propose that we install an automatic lubricator on the bearing on machine xyz. We currently lubricate this bearing once each shift, which causes one hour of downtime each shift. If we spend the $500 to purchase and install the lubricator, we will eliminate downtime and the maintenance technician’s labor, estimated to be three hours per day. Based on the cost of downtime and labor costs, we should see a simple payback in one month.” Not many manufacturing managers will turn down a proposal like this one.

Where’s the information?
Just as important as understanding the type of financial information needed is knowing where to find it. For this, there is only one place the maintenance manager needs to look: the CMMS (Computerized Maintenance Management System).

Though this remains an under-utilized tool in industrial maintenance, the CMMS is the very best way to store maintenance data. It is highly recommended that any serious effort to better interpret the financial side of the maintenance function include maximized use of a CMMS. With this system, there exists a complete, updated machine history, history of labor rates for all maintenance technicians, contractor costs, and supply and repair parts.

In the lubricator example, justification for this purchase included a reference to the routine savings of three hours of downtime to perform traditional bearing maintenance. With a properly installed CMMS, you can easily sort the lubrication work orders for that bearing and machine to determine the exact downtime and maintenance technician labor hours spent in this endeavor. Armed with this information, the justification for an automatic lubricator just advanced to a higher level of credibility.

The next step involves understanding how to communicate the necessary knowledge and information. I have learned two important communication lessons. The first is: Never present a problem to management without offering at least one solution. And second: Never try to sell an idea to management without having compete justification at the same time.

The first rule applies to situations where you have the time to properly develop possible solutions and ideas. When emergency situation arises, don’t be afraid to say, “Give me a few minutes and I will have several possible solutions.”

If time permits, categorize responses in four groups: the ideal solution (if time and cost were not considered); the fastest solution; the cheapest solution; and the best long-term solution. Each solution should include cost, time required, adverse consequences, maintainability, and long-term reliability.

The second rule shares aspects with the first, but differs in that it gives a chance to develop all of the back-up data prior to submitting the proposal. The key to success in this situation is to develop a detailed justification that answers all possible questions before they are asked.

Returning to the remote-bearing example, suppose this bearing has required frequent replacement due to its lack of lubrication. Faced with another bearing failure, the solution, again, is to purchase and install a $500 automatic lubricator that will only need a monthly refill.

The best way to sell this idea to management is to anticipate the questions they’ll ask about it. These would include questions about the bearing’s location, the last time it failed, the cost of repair, time spent lubricating it, number of recent failures, purchase and installation cost of the automatic lubricator, and perhaps most importantly, why the bearing can’t be properly lubricated by hand, and if a better bearing would solve the problem.

This example could be documented the following way:
A bearing on machine #4 has failed four times in the last year. Total machine downtime has been 16 hours with the total repair cost, including labor and materials, of $2,500. The bearing is in an awkward location which requires machine downtime to properly lubricate. I believe desire to limit downtime and, therefore,