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Reliability vs Cost

  • A Plan for Breaking out of Budget Jail

    by Torbjörn Idhammar

    I wrote this column for those who want to improve equipment reliability but feel as if they are stuck in "budget jail". Assuming your fiscal year starts January 1, November and December is the time to plan your jailbreak!

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  • Inappropriate Measures?

    by Oli Hakansson

    I was asked a question recently about the level of spare parts inventory that should be carried as a percent of the Asset Replacement Value (ARV).  This is not an unusual question.  In fact, these types of questions come up frequently.  Maintenance of inventory turnover levels and storeroom value as a percentage of ARV are dependent on a host of factors specific to each plant.  Because of the complexity of these calculations I have written a series of articles that should give you key benchmarks and trending factors that should be considered when managing your plants reliability efforts.

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  • Reliability and Maintenance in a recessionary market: Cut Costs or Improve Reliability?

    by Christer Idhammar

    Focus on activities that drive cost, not cost alone. 

    In 1980 I conducted the first seminars titled “Reliability, the future competitiveness factor”. Looking back I realize how true the title of these seminars was. Anyone with financial assets can buy the same equipment and processes.

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  • Reliability Improvements = Cost Reduction (Part 1)

    by Christer Idhammar

    In the May column, I discussed results that a mill had experienced in the ten years following implementation of initiatives with a primary focus on cutting costs as quickly and extensively as possible. In summary, it proved to be a financial disaster. 

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  • Reliability Improvements Drive Down Maintenance Costs

    by Christer Idhammar

    An organization must focus on sustainable results, not just cutting costs. Three case studies illustrate.
    Results-oriented organizations focus first on the quality and volume of production throughput, followed closely by the cost to produce the required quality and volume. This approach will improve reliability performance, which will drive manufacturing costs down.

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  • Reliability Improvements=Cost Reduction (Part 2)

    by Christer Idhammar

    Tough choices

    The figures in this column describe an actual case where a pulp mill decided to do whatever it took to cut costs—mainly through maintenance cutbacks. The mill belongs to a big corporation and was a high-cost producer. When the cost saving initiative started, pulp prices were low and profitability was low, from a short-term perspective, compared with other mills in the corporation. The fast-pace cost reduction actions included the following:

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  • Visible and Invisible Maintenance Cost Savings

    by Christer Idhammar

    In my earlier column I wrote about the Fox versus the Hedgehog approach. That column was also published in an electronic newsletter and included in the weekly poll. The poll results show that only 16.7% of all respondents thought their company was a hedgehog company. The rest viewed themselves as Fox or a mix of Fox and Hedgehog organizations.

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