Is your mine maintenance ruled by short-term satisfaction?

Welcome to my column on maintenance management. This column will be a forum in International Mining to discuss maintenance work processes and the management of maintenance. I am always interested in comments from articles and suggestions for new topics; please e-mail me at t.idhammar@idcon.com. Envision this: A business management consultant firm has just made an audit of your mine. The consultant team is presenting findings and recommendations. There are many “improvement opportunities” for your organisation highlighted in the presentation. When it comes to maintenance, the audit states that your maintenance cost is too high compared to other mines. No surprise so far, just another day in the office for you.
The interesting part is where the consultant proposes to assign a team of MBAs (costing $450/hour) to help your organisation cut maintenance cost. It is interesting and nerve wrecking because there is very little talk about equipment reliability as a counterweight to the cost. It is only talk about cost alone. This situation is unfortunately fairly typical in our mines.
If we look at what it means to cut maintenance cost instantaneously, we don’t have many options. We must either cut people or postpone maintenance work. The only time this approach will be successful is if you have people in the organisation not doing anything, or if you have a lot of maintenance work that doesn’t need to be done at all (see Figure 1). For a description what usually happens when cost is cut without other changes.
I would argue that it requires no skills whatsoever to cut maintenance cost while disregarding equipment reliability. Hence, no need for the MBAs… unless we classify the MBAs as unskilled labor.

Figure 1. If costs need to be cut quickly in maintenance, the only options are to delay work or reduce work force. Both will result in faltering equipment reliability since valid maintenance jobs will not be done, and PMs are missed. Once reliability goes down, production volumes are reduced, and maintenance cost for spare parts and repairs go up, and total cost per tonne goes up since we can’t produce as much as before with the same fixed costs

Some readers may think that no mine would focus on cost that way. But, the reality is that we , we may know we shouldn’t, but in our actions we ! We even pay MBAs money to do what a well-trained monkey could do!
We cut the cost; wait 18 months, and reliability and therefore production volume falter. Why are we doing this?
Is it that we don’t understand the above logic? I don’t think so; I think all people in mines understand that it is wrong to focus on cost alone. The reasoning that I have been able to produce in my years of working with different organisations is that most people look for instant gratification in all facets of life. If we cut maintenance cost now (without improving work systems and skills), the effects of those cuts will not show up in equipment reliability until 12 to 18 months later. By then, the person that made the decision to cut cost, has been moved to another position, another mine, or promoted to corporate and doesn’t have to deal with the reliability problems caused by the cuts.
To prove my point, we can see the same behaviour in many different places in our culture. We know it would be good for us to lose weight, we know how to do it, but around 50% of the western world is obese. It doesn’t make sense, but we keep providing poor maintenance to our bodies even if the price is a shorter life, just for that instant gratification! We know it costs 13-18% more to buy something on a credit card, but we still do it. Even countries spend money they don’t have for instant political gain, and we as the people allow it.
Unfortunately, most companies don’t make a change until equipment reliability has grown to become a very large problem, and therefore more expensive to fix. I think the same is true for people; it often takes a heart attack before a person decides to lose weight and keep a lower weight.

Figure 2. Focus on what drives costs down long-term. Improved work systems in mainly planning and scheduling and preventive maintenance will make equipment reliability higher, which means we can produce more volume with the same fixed costs. Costs for spare parts and emergency labour also go down. Total cost per tonne too goes down. However, it may take some investment and time to get there

The process of improving reliability for a mine is similar to losing weight for a person. It is simple in theory, but hard to execute.
In future articles I will discuss how to cut cost the right way in more detail, but for now I will leave you with the following advice.
1. The exact cost that is of interest is the ‘total cost/tonne’, the maintenance cost/tonne and total maintenance cost is irrelevant as long as the total cost per tonne is low 2. Focus on what drives the cost (see Figure 2) not the cost itself. If we focus on what drives the cost, we can truly improve reliability and lower costs, but it may take you a while to get there. The total cost/tonne is highly driven by the amount of planned and scheduled maintenance work you have (including Preventive Maintenance tasks).