Most large plants invest hundreds of millions of dollars in capital assets. Effective management of these assets has a significant impact on both the balance sheet and income statement. While many organizations today are beginning to realize the massive amount of untapped value hidden in plant assets, until recently, maintenance was often overlooked during the corporate business planning process.

"From a financial perspective, it is difficult to reconcile management's hesitancy to acknowledge maintenance as a viable business function," said Mike Laszkiewicz, vice president, Rockwell Automation Services & Support. "After all, proper maintenance underscores a basic business principle: increased equipment reliability will lead to increased production and ultimately more product revenue potential."

For more than 20 years, Laszkiewicz has been working with manufacturers of all sizes to help them identify solutions to improve production values like output, quality, time to market and cost. Although manufacturers are becoming more aware of the pivotal role plant asset management plays in improving business performance, many still fail to take the action needed to fully capture the benefits.

"As I talk to manufacturing executives, plant managers and maintenance managers around the world, I'm often asked what can companies do to stay competitive in today's global economy," said Laszkiewicz. "After they describe their business drivers and manufacturing processes, the first question I ask them is, 'How is your maintenance strategy linked to

Laszkiewicz says that in the last 18 months there has been a significant increase in the number of companies that have begun to shift their perception of maintenance — from one that sees it as a necessary expense, to one that views it as an opportunity to increase profits. The key, he believes, is getting management to think beyond the reactive, tactical approach to maintenance of ten years ago and look at it from a strategic, long-term, business-level perspective.

Houghton LeRoy, director of consulting enterprise applications for ARC Advisory Group, agrees. According to LeRoy, poor understanding of the issues at stake and a lack of the right metrics are two fundamental reasons management has often discounted their maintenance operations as overhead. "Historically, maintenance has been viewed as a liability and a cost center, and manufacturers were largely apprehensive in terms of making the initial investment of time and money to implement proactive programs," LeRoy said. "However, when companies begin to view their maintenance activities in the context of a continuous improvement strategy, (instead of simply a repair strategy) they'll be able to more easily connect these activities to improvements in productivity, competitiveness and the overall bottom line."

Both Laszkiewcz and LeRoy believe that with the vast amount of a capital companies have tied up in fixed plant assets, they must evaluate and consider ways to maximize the return on these assets while optimizing production availability. In recent years, advancements in technology and new tools and specialized services are helping to dramatically improve maintenance functions, optimize performance and enhance profitability.

So how does an organization transition from a reactive, cost-focused maintenance approach to a more profit-oriented, strategic approach? Leading industry experts, like Laszkiewicz and LeRoy, agree that companies must first identify their performance and profitability goals and then develop a strategy that's a...(Read whole article)