A constant challenge for every vehicle maintenance operation is how to increase productivity while at the same time reducing costs. One method for uncovering opportunities for improvement, by identifying costly or inefficient practices, is benchmarking.
Benchmarking is a continuous process for evaluating the practices and metrics of an organization and then comparing them to those companies recognized as leaders, explain officials at ABB (www.abb.com), a provider of power and automation technologies that enable utility, industry, transport and infrastructure customers to improve performance while lowering environmental impact. The aim of benchmarking is to identify and incorporate the improvement opportunities regarding cost reduction and production performance.
MEASUREMENT VERSUS BENCHMARKING
There is a difference between maintenance measurement and maintenance benchmarking, points out Joel Levitt, director of international projects for Life Cycle Engineering (www.lce.com) – an organization that provides consulting, engineering, applied technology and education solutions that deliver lasting results – and author of Fleet Maintenance’s Management column. With benchmarking, the results are used to motivate shop personnel to change.
“Maintenance measures have always been used privately to evaluate a manager or department,” he says. “A benchmark is widely publicized to the rank and file to be of maximal benefit. A good use of benchmarks is to measure if the maintenance function is improving, sliding or stagnant.”
BASIC TYPES
There are two basic types of benchmarking: internal and external. Internal benchmarking compares performance against past periods between business units, teams, individuals or groups within an organization.
“This benchmark shows if you are improving, but not where you are,” notes Levitt of Life Cycle Engineering (LCE). “The benchmark is problematic if the equipment is constantly changing.”
External benchmarking is a comparison of an organization’s performance to best-in-class companies within its industry or to organizations in other industries, or in even government or education. This provides the opportunity to learn from those at the leading edge.
Compare yourself to the best maintenance operation, especially in your segment, he advises. “Continuous improvement would measure your progress to catch up to them and eventually surpass them. It is very sobering to see just how good the best-in-class is compared to you.”
By way of example, he noted a Northeastern city that wanted to see how it compared in getting its refuse trucks repaired and back in service. Its own measurement system showed significant improvement. At the start, this city had 46 percent availability of its trucks. After two years of improvement, it had 61 percent availability, which was thought to be good.
The city called around and found another city that averaged 80 percent availability with a lower maintenance cost per vehicle. “Using a best-in-class benchmark can be a sobering experience,” says Levitt. “Best in the world is the ultimate comparison between functions.”
HARD TO MEASURE
LCE’s Levitt references David Peterson, general manager of CSI Inc., a provider of predictive maintenance technology. As someone who has studied world-class maintenance organizations for years, Peterson has found that one of the major problems with benchmarks is that some of the most important maintenance issues cannot be directly measured. These include:
- Labor. While labor hours and ratios relating to hours are easy to gather and develop, it is harder to evaluate the true productivity of a maintenance work group, says Peterson.
- Callbacks. Callbacks or rework are also difficult to track, he notes, because there are many reasons for this, including inadequate technician knowledge and skill, bad attitude, improper tools, cheap/bad parts and inadequate conditions.
- Grievances. Grievances are countable but morale is not, according to Peterson. Grievances come too late in the process to be reliable measures of morale. Morale can plummet well before grievances increase.
MEASURES
Maintenance benchmarks can be divided into four main measures, says Levitt of LCE. They are costs, parts, work ratios and customer service, and he outlines some key evaluations for each.
1. Costs
- Maintenance cost index. The usual measure of traditional maintenance departments, this plots the total maintenance cost for the last few years, perhaps by quarter, and is useful to show what is being spent. Combine that information with estimated changes for the future and it becomes another data point.
- Maintenance cost to budget (by line). The most common benchmark, this is what an organization is doing in relation to what it would do. Variance reports show where problems might be developing.
- Maintenance cost per unit of output (for example, yards of garbage or ton-miles). Assets that are used to make a product or provide a service require maintenance to be preserved. This usage creates a need for an investment for every unit of usage, which could be making bricks or collecting refuse. That activity can be related to the use of the asset (such as a truck or shop) needed to provide that product or service.
- Maintenance cost per revenue dollar. This relates maintenance costs to total useful output measured by revenue.
2. Parts
- Maintenance labor to parts. This is a useful ratio because when added to other knowledge it provides input into formulas to estimate budgets for such things as fleet expansions or new buildings.
- Inventory turns. While maintenance inventory is different than a retail inventory, the analysis of turns is useful when insurance policy stock is removed from consideration. After that removal, the turns should approximately reflect that of an industrial distributor.
- Purchase to issue ratio. This is an advanced indicator of inventory accumulation or depletion. If an organization is trying to reduce its inventory, then this ratio must be run below one.
- Inventory level per mechanic or inventory level per asset value. There is an optimum level of inventory for conventionally configured operations.
3. Work Ratios
There are many measures for various types of work. Benchmarks on the use of manpower are essential to see how the mix of work is improving, LCE’s Levitt says.
- Planned maintenance hours. These hours, from all sources of work, should exceed 80 percent of the worked hours. Worked hours include the percentage of:
+ Emergency hours (unscheduled work).
+ Do-it-now hours (unscheduled).
+ Short repair hours (scheduled).
+ Corrective maintenance (scheduled).
+ Preventive maintenance (scheduled).
“The first important analysis is planned (short repair hours + corrective maintenance + preventive maintenance) to unplanned (emergency hours + do-it-now hours),” he explains. “This ratio shows how much your facility is ahead of the breakdown curve – how much you are dominated by unscheduled events. Trends give you a feel for whether there is improvement.”
- Personal service work. Determine how much personal service work is being done. This encompasses such things as non-maintenance chores, event set-up, minor jobs around office, etc. There might be money-saving opportunities in reviewing the details if the ratios look too large, says Levitt.
- Ready backlog by craft (weeks per person per craft or by area). Many experts believe that managing the backlog – work immediately available to be done, including pending work – might be one of the most important jobs of maintenance leadership, he notes. The amount of backlog should not fall too low – two weeks per person – or too high – four-plus weeks.
One calculation issue is whether to use true time available or the scheduled length of a work shift, he points out. For example, calculations show an 8-hour work day is reduced by an hour and 20 minutes for meals and actual breaks, and an additional 30 minutes for meetings and other information exchange. A real workday might be closer to 6 to 6-1/2 hours.
- Overtime. This “is an interesting indicator because in most maintenance situations some natural overtime – 3 to 9 percent – indicates that you are properly crewed,” says Levitt. “‘Natural’ means that people are not slowing down to create overtime. If there is no overtime, the temptation is to think that there are too many maintenance people for the workload.”
This does not include organizations that artificially restrict overtime, he adds. “Unscheduled overtime for emergencies is a problem because it not only shows a lack of planning, but also a lack of control over deterioration.”
- Hourly-to-support people, hourly-to-planner or hourly-to-supervisor ratio. Excess support staff sometimes gets in the way of productivity, observes Levitt. One area of savings may come from moving support staff back to the floor where possible. Other measures, such as hourly-to-planner ratio and span of control, can help sharpen up support ratios and optimize the amount of work back-up the staff has.
- Effectiveness (work order hours/standard hours) ratio. This measure shows how much work is really done.
4. Customer Service
- Downtime hours by reason. Downtime, and the specific reasons for it, should be tracked because it can reveal problems. All types of downtime need to be analyzed together.
- Breakdown report. These can take many forms – from a list of breakdowns with causes and response times to mean time between failures with mean time to repair information added. “In all cases,” emphasizes Levitt of LCE, “a breakdown should be treated as an educational opportunity to see where, if at all, the system failed.”
- Number of service calls. This can reveal how effective maintenance is at foreseeing problems and correcting them before they occur. This benchmark would be affected by significant changes in an organization’s size, equipment or mission.
- Mean time to respond (MTR). How long does it take to respond to a service call, from the time it is phoned in or entered in the computerized maintenance management system, to the time a service person shows up? In some organizations, particularly field service, this is a major way to rate the maintenance department.
- Mean time to repair (MTTR). Once a response has been made, how long does it take for the repair or service to be completed and for the customer to be satisfied? “When this is added to MTR, you can get an idea how long your customers are unsatisfied,” Levitt says.
- Callbacks or rework. These “are the bane of maintenance,” he says, and the reason for them has to be uncovered and fixed. This ratio, trended over time, indicates if the problem is being addressed.
- Maintenance satisfaction survey. This metric comes from responses to surveys of attitudes toward maintenance. The surveys are intended to garner feedback on such things as quality of the service provided, expertise, responsiveness, professionalism, overall satisfaction, etc.
TAKEAWAY
Benchmarking can be used by any maintenance operation to find opportunities for improvement and to identify the best practices for enhancing maintenance management.
However, the real benefits of benchmarking come when better practices are adapted and implemented. This is what leads to superior performance.
