July 2, 2021MAINTENANCE
The Beginner’s Guide to Understanding Maintenance KPIs
“If you aim at nothing, you will hit it every time.” – Zig Ziglar
Of course, goals come in all levels of difficulty. The key to achieving our biggest aspirations? Break them into bite-sized chunks, set clear KPIs, and change course, as needed.
Key performance indicators (KPIs) are measurable benchmarks to evaluate our ongoing progress, both personally and professionally. KPIs illustrate where we’re gaining momentum, where we’re falling behind, and where we’re standing still.
This analogy is especially true when it comes to O&M departments. But that doesn’t mean that even the most capable maintenance managers don’t sometimes cringe when asked about KPIs.
“When you look at what these KPIs so often are, you can understand why so many managers switch off,” HBR contributor Graham Kenny says. “The number crunchers take over, and can overwhelm operating managers with spreadsheets and precise breakdowns of financial results and output measures. Pretty soon, managers feel like they’re being asked to jump through hoops they don’t really understand—and don’t particularly want to.”
Want to feel better about tracking maintenance KPIs?
This article will provide an overview of how to build a data-focused maintenance team, which metrics to track, and how to streamline data management with computerized maintenance management systems (CMMS). After reading, you will feel more confident discussing KPIs with others.
The Beginner’s Guide to Understanding Maintenance KPIs
When first approaching maintenance KPIs, it’s helpful to think of your department as a miniature business. Yes, it exists in support of your organization’s primary goal: profitability, but it’s also a unique ecosystem with its own processes, expenses, and desired outcomes.
As the manager of this ecosystem, you can shift your maintenance department from a “necessary expense” to a “profit-generating” unit. What is the key to making this shift?
It’s tracking maintenance KPIs, of course! Acting upon the right KPIs is the difference between running an average maintenance program and a world-class one.
Tracking key performance indicators can help you make better decisions around maintenance scheduling, procedure standardization, asset management, inventory management, and more.
The best maintenance teams optimize equipment reliability so much so that their organizations make significantly more money than they spend on maintenance-related expenses. Before we dive into which maintenance KPIs you should track, let’s take a closer look at the term’s meaning.
What Is a Maintenance KPI?
Maintenance KPIs are measurements that link the effectiveness of organizational processes with specific maintenance goals. O&M managers use maintenance KPIs to measure, analyze, evaluate and improve processes to enhance asset reliability.
Good maintenance KPIs act as quantifiable benchmarks that correlate with broader company goals. For example, an organization wanting to cut costs may set a KPI to minimize maintenance costs by 10 percent. Of course, no two maintenance departments are exactly alike. Additionally, best practices can vary widely by industry, sector, and location.
Maintenance KPIs can measure:
- Asset downtime
- Asset performance
- Inventory management
- Maintenance task management
- Maintenance spending and costs
- Workplace safety and compliance
Put simply, organizations use maintenance KPIs to measure the performance of maintenance technicians, operational systems, and processes.
Maintenance Metrics vs KPIs
Though maintenance pros often use the terms maintenance metrics and maintenance KPIs interchangeably, there are some slight technical differences.
Maintenance performance metrics are measurements that provide insights into the effectiveness of maintenance team and systems operations. Managers can use performance metrics to quantify daily maintenance activities compared to their target numbers.
Alternatively, KPIs technically refer to the target numbers themselves. For example, say your KPI is to minimize average maintenance costs by 5 percent within the next quarter. You can track maintenance performance metrics to monitor the effectiveness of your efforts.
Evaluating metrics like maintenance overtime, planned maintenance percentage (PMP), and overall equipment effectiveness (OEE) can help you reach the KPI.
5 Essential Maintenance Metrics to Track
As mentioned above, maintenance objectives should align with overall organizational goals to be effective. Goals can vary substantially according to business size, type, and location. However, most maintenance departments can benefit from tracking some or all of the following metrics:
1. Equipment Downtime
For asset-intensive industries, such as manufacturing, unplanned downtimes are costly. The International Society of Automation (ISA) estimates that factories lose between 5 and 20 percent of productive capacity during each downtime incident. Periodically tracking downtime is a crucial aspect of establishing a baseline for the effectiveness of all maintenance department activities.
The best way to reduce downtime is to place all critical pieces of equipment on PM maintenance schedules in accordance with manufacturer’s guidelines. Not only will routine maintenance reduce costly breakdowns, but it will also extend asset life cycles.
2. Maintenance Backlogs and Overtime
Maintenance backlogs can play a significant role in the recruitment of maintenance technicians. Consistently tracking maintenance time and cost data will reveal whether a department is overstaffed or understaffed at any given time.
Too many outstanding worker orders suggest the need to hire additional staff. Alternatively, no backlogs could indicate an unnecessarily large team that could be trimmed.
Managers can also measure overtime to determine if the department is relying too heavily on reactive maintenance. An over-reliance on reactive maintenance leads to technician burnout, unnecessarily high maintenance costs, costly downtime, and reduced productivity.
3. Asset Performance Metrics
Asset performance metrics allow you to track the effectiveness of your maintenance programs. The most revealing metrics to track include:
- Mean Time Between Failure (MTBF): MTBF refers to the amount of time it takes before asset failure occurs. It measures the amount of time between failures. MTBF is only measured for repairable assets. Increasing your MTBF for critical assets can help optimize your overall maintenance strategy and improve productivity.
- Mean Time to Repair (MTTR): MTTR measures the average amount of time it takes your maintenance team to repair a broken-down asset. This maintenance performance metric includes diagnosis, repair, and recovery time. MTTR is key to identifying and eliminating inefficiencies in maintenance processes.
- Overall Equipment Effectiveness (OEE): OEE is a metric used to gauge overall facility performance. It measures the productivity of facilities, machinery, and process. When measuring OEE, it’s essential to factor in equipment availability, performance efficiency, and product quality. OEE helps identify departmental waste and inform improvements to SOPs.
Always seek to identify the root cause of poor performance metrics. This requires investigating SOPs for problematic bottlenecks, gathering input from maintenance personnel, and evaluating existing communication systems, among other necessary digging.
4. Operational Metrics
PMP measures the percentage of your overall maintenance time that’s dedicated to planned maintenance. Higher PMPs suggest that your maintenance plans are effective and your team isn’t overly reliant on reactive maintenance.
Schedule compliance, also referred to as preventive maintenance compliance, is a metric used to measure the percentage of PM activities completed as scheduled. Just like PMP, higher schedule compliance suggests that PM planning and scheduling are effective.
5. Maintenance Cost as Percent of RAV
Lastly, track your replacement asset value (RAV) if you’re trying to determine the cost-effectiveness of your maintenance operations.
RAV refers to the amount of money it would cost to replace a production plant along with its existing assets in the current moment. When calculating RAV, include the facility itself and all of the physical assets within it that require routine maintenance.
However, don’t include working capital such as raw materials. Other maintenance metrics worth tracking include replacement parts inventory management, asset uptime and availability, the number of workplace incidents and accidents, and the number of requests for rework.
How to Determine Which KPIs to Track
We recommend that beginners track no more than five maintenance KPIs at any given time.
Staying “lean and mean” will help prevent data overwhelm and support the kind of incremental improvements that lead to lasting change. So, how do you determine the right KPIs to track?
Ask yourself the following questions:
- What specific changes would most benefit your department?
- What specific outcomes would most benefit organizational goals?
- Which performance metrics could you use to measure progress?
- What management SOPs could you put in place to streamline tracking?
Prioritize the maintenance objectives that most strongly support your organization’s unique goals. It’s a good idea to run your proposed KPIs by executive leadership to ensure everyone is on the same page.
As previously mentioned, chosen KPIs and maintenance metrics can vary substantially based on industry, location, and other factors. With that said, one of the most common KPI-related questions we receive is deserving of its own section.
What Is a Good KPI for a Manufacturing Maintenance Department?
Good manufacturing maintenance KPIs focus on improving overall productivity. More than any other industry, manufacturers are under immense pressure to increase hourly output without sacrificing safety, quality control, or standardization.
For example, you may set a manufacturing KPI to increase the production of widgets by 30 percent by 2022. As previously discussed, maintenance KPIs also should align with overall business strategies. Each organization has unique priorities based on stakeholder needs, wants, and demands. Manufacturing is no different.
Above all, make sure your KPIs support the objectives of organizational leadership. For example, setting a goal to trim maintenance costs by 25 percent may not be realistic if leadership plans to expand assembly lines to meet increased consumer demand.
Streamline KPI Tracking with MaintainX CMMS
Maintenance KPIs and performance metrics are useful tools for optimizing maintenance operations and measuring progress.
Select a few KPIs to track so you can make effective changes in your organization. Monitoring too many metrics at once may stretch your resources too thin and reduce focus.
The good news? Mobile maintenance software streamlines data management, making it easier than ever to evaluate and act on information.
MaintainX helps maintenance managers create, assign, and oversee work orders; catalog information on assets, parts, and vendors; and access visual performance reports within seconds. Seriously, it’s a breeze!