May 13, 2022MAINTENANCE
How to Use Maintenance Metrics and KPIs
Maintenance Metrics and Key Performance Indicators
A Key Performance Indicator (KPI) or maintenance metric is a well-defined and quantifiable measure that an organization uses to gauge its performance over time. Manufacturing companies specifically use maintenance metrics to monitor, analyze, and optimize operations, often comparing their efficiencies to competitors in the same sector.
Manufacturing businesses can, and should, choose several KPIs to focus on to help guide decision-making.
Why Are Manufacturing Maintenance Metrics Important?
KPIs are essential for manufacturers because they are defined, measurable metrics that help businesses focus on what is most important to track, analyze, and optimize performance over a period of time.
KPIs let manufacturers know whether they are on course for success, if they are growing, and where issues may be present within their businesses. Having a KPI dashboard readily available can make company and business goals and priorities stay in focus and ensure the organization is moving forward as a whole.
The manufacturing industry represents more than 10 percent of the US economy and more than 15 percent of the global GDP. The only way to stay ahead in this fiercely competitive industry is to implement manufacturing KPIs and maintenance metrics.
Everyone strives to increase the top line of a business, trying to gain more market share to increase profits. While this is important, what if you could increase your bottom line without taking on expansion risks? This is where KPIs for the manufacturing industry come into play.
There are many manufacturing KPIs considered standard throughout the industry. However, that does not mean that your company should apply them to your maintenance management. While many of them are applicable, some are not.
There might even be the possibility that a standard manufacturing metric does not even exist for what you want to measure. If you are going to create your own production metric, consider the following.
Every KPI needs a clearly defined goal. Be specific and set up parameters that clearly define your goal. This goal needs to be something that can be numerically defined (quantitative, not qualitative).
It is essential that you can objectively measure your progress toward the goal. This means collecting and interpreting data, which brings us to the following.
There must be a clearly defined data source with a strict procedure of how the data are measured and collected. There should be nothing left to interpret here.
Reporting your data is just as important as collecting it. Different manufacturing KPIs will have different reporting frequencies.
CMMS and KPI Reporting
Choose a CMMS that not only compiles equipment data but also translates it into useful and familiar industry metrics. Ideally, CMMS should cross-reference work order data by assigned technician, asset type, priority status, time to complete, and more to integrate into meaningful reports that support sound decision-making.
Mean Time between Failures (MTBF)
Mean Time between Failures (MTBF) is a useful KPI for leaders when considering total maintenance costs and equipment costs. MTBF equals the operation time between failures divided by the number of failures. In other words, if this metric is accurate, it can help inform capital allocation to increase efficiency across the operation.
MTBF = Production Time / Failures
For example, a production line unit (Asset A) may have been on for 2500 hours in a given year. In that year, however, the unit overheated and went down 12 times. Therefore, the MTBF for the line is a little over 208 hours. If comparatively, the average MTBF of similar production line assets in the factory has an MTBF of 800 hours, you can quickly identify your outlier.
The higher the MTBF, the longer a system is likely to work before failing. If the MTTR is 2 hours, Asset A has caused 24 hours of downtime in your operation. If this production line yields $20,000 per hour, those 24 hours of unplanned downtime could amount to $480,000 of lost production output. If you factor in the cost to repair Asset A, both labor and parts, you may conclude that it makes sense to allocate budget to replace Asset A this year.
Scheduled Maintenance Critical Percent (SMCP)
Scheduled maintenance critical percent (SMCP) is a tool used by companies to organize recurring planned maintenance tasks and prioritize overdue maintenance tasks. The tool calculates how late your maintenance tasks are in relation to their frequency of occurrence. Tasks with higher percentages are given priority.
So, why is SMCP needed? Ideally, it is performed on the exact manufacturer’s recommended scheduled day, and everything works out perfectly. However, as any seasoned technician will agree, things do not always work out as planned on paper.
How to Calculate SMCP
SMCP is calculated by adding the number of days scheduled maintenance is late to the number of days in a maintenance cycle. Divide your result by the number of days in the maintenance cycle and multiply that number by 100 to arrive at a percentage.
SMCP = (number of days late + number of days in cycle) / number of days in cycle * 100
Two scheduled maintenance tasks on the same system are overdue. The first task, typically completed every 30 days, is 3 days overdue. The second task, which is performed every 90 days, is five days late. So, which task should your maintenance team tackle first?
Task 1: (3+30) / 30 * 100 = 110%
Task 2: (5+90) / 90 * 100 = 105%
According to SMCP, Task 1 has the higher percentage and, therefore, you should prioritize it.
Benefits of Tracking SMCP
Calculating SMCP benefits organizations in three ways:
- Improves Maintenance Scheduling: SMCP allows you to know which tasks to prioritize for improved effectiveness.
- Reduces Cases of Reactive Maintenance: The formula also allows you to identify assets that are more prone to failure and take care of them. You can clear your backlog in order of priority.
- Makes Audits Easier: Missed maintenance schedules can cause trouble with audits and compliance. Tracking your SMCP enables you to highlight urgent tasks and take care of them before they cause problems. It also helps to identify the root cause of overdue tasks for addressing.
Finally, SMCP helps to reduce unnecessary downtimes and maintenance costs. It is a foundational maintenance metric that can help to elevate your maintenance strategies.
Mean Time to Repair (MTTR)
Mean Time to Repair (MTTR) refers to the average time maintenance teams spend diagnosing, repairing, and recovering failed pieces of equipment. MTTR is a baseline that maintenance departments use to improve asset efficiency, minimize unplanned downtimes, boost bottom lines, and assess equipment value.
Mean Time to Repair (MTTR) provides a useful productivity benchmark for organizations seeking to reduce prolonged repair times and their associated expenses.
Conducting an MTTR analysis allows organizations to evaluate the quality and effectiveness of their maintenance strategies, processes, and practices. For many industries, organizational effectiveness is dependent on asset reliability.
Critical equipment breakdowns often translate to extended repair times, technician overtime, outsourced contractor fees, and lost production schedules.
Maintenance experts recommend striving for an ideal MTTR below 5 hours. However, the metric can vary substantially based on asset type and importance, for example. Well-informed department leaders routinely monitor MTTR for both individual pieces of equipment and the organization as a whole.
The metric provides insights into maintenance scheduling, replacement parts purchases, and maintenance task completion. Ultimately, delving deeper into “the whys” behind extensive MTTR metrics helps maintenance teams increase uptime, enhance efficiency, and decrease unnecessary costs. MTTR includes the time taken to:
- Notify maintenance technicians of a failure
- Diagnose the cause of the failure
- Fix the problem at hand
- Wait for overheated equipment to cool down
- Reassemble, align, and calibrate equipment
- Set up, test, and restart equipment for average production targets
It is worth mentioning that hunting down replacement parts can significantly impact MTTR. Lack of inventory management optimization leads to out-of-stock parts, expedited shipping costs, and serious maintenance delays.
How to Calculate MTTR
Calculate Mean Time to Repair (MTTR) by tracking the total amount of time an asset undergoes recovery after downtime, then dividing by the number of times the asset in question has failed within a given time.
MTTR = Total downtime / Total number of failures
For example, if an organization spends 50 hours total on unplanned maintenance for an asset that broke down eight times in one year, the asset’s MTTR is 6.25 hours. Notably, MTTR does not depend on an asset’s uptime. It only factors in how long each unplanned stoppage lasts. The MTTR formula assumes that well-trained maintenance personnel perform all maintenance tasks sequentially.
How to Improve MTTR
The first step to improving MTTR is to understand the four stages of MTTR: problem identification, diagnosis, repair, and verification that the asset is operational again. The primary goal is to reduce the time spent in each stage. Of course, preventive maintenance is crucial to reducing significant equipment breakdowns.
However, asset data collection, analysis, and problem-solving are what ultimately reduce MTTR. The most important ways to reduce MTTR include:
- Anticipating breakdowns and organizing resources needed for corrective maintenance
- Providing maintenance personnel and third-party contractors with detailed standard operating procedures to avoid miscommunication while performing tasks
- Ensuring that maintenance personnel are adequately trained and equipped with the necessary skill sets
- Leveraging technology, such as computerized maintenance management systems (CMMS), to streamline maintenance activities
- Implementing well-managed spare parts and tools inventory system
MTTR is one of several maintenance metrics that operational managers use to track time spent on equipment failure and repairs. Lower MTTR translates to less downtime, reduced maintenance costs, stable production, and improved customer satisfaction. A Computerized Maintenance Management System (CMMS) platform is the easiest way to collect, store, and analyze MTTR.
Overall Equipment Effectiveness (OEE)
Overall Equipment Effectiveness (OEE) is a key metric for organizations to measure production effectiveness and efficiency. The metric identifies underperforming assets and connects poor performance to availability, performance, and/or quality issues.
This information provides useful insights for planning, scheduling, and conducting maintenance activities. In the end, OEE helps optimize maintenance strategies and reduce costs.
Successful manufacturing plants consistently monitor several critical equipment parameters that contribute to operational performance. Overall Equipment Effectiveness (OEE) is one such metric that helps organizations identify the percentage of productive manufacturing time.
OEE helps operational managers identify underlying losses, eliminate waste, benchmark progress, and improve manufacturing processes. Notably, Seiichi Nakajima, the pioneer of Total Productive Maintenance (TPM), established the metric in the 1980s.
Factors of Overall Equipment Effectiveness
Three primary factors drive manufacturing plant performance: product quality, availability, and performance efficiency. Organizations striving to achieve world-class OEE ratings should aim to score the following percentages within each category:
- Availability: Rating of at least 90 percent. Availability factors in both planned and unplanned downtime during production. A 100 percent score means a facility experiences no downtime during production.
- Performance Efficiency: Rating of at least 95 percent. For performance, small stops and slow cycles should be taken into account. Processes that run without any stops or slow cycles have a 100 percent score.
- Product Quality: Rating of at least 99 percent. Quality takes into account defects and includes parts that need reworking. A rating of 100 percent means that the facility never produces defects.
For example, a facility with a 100 percent OEE score always produces high-quality products with zero downtime. Alternatively, a facility with a 60 percent OEE score fails to meet quality standards 40 percent of the time.
How to Calculate OEE
To calculate OEE, multiply Availability by Performance Efficiency and then multiply this number by Product Quality.
OEE = Availability * Performance Efficiency * Product Quality
Benchmarks for Overall Equipment Effectiveness
Besides being used as a baseline to track progress and eliminate production waste, OEE is also a benchmark for comparing the performance of given assets to other similar organization assets, industry standards, and/or the results of different shifts for the same asset.
The benchmarks for OEE are:
- 100 Percent: Production is perfect, and the facility is only producing quality goods as fast as possible without any downtimes.
- 85 Percent: This is a world-class rating for discrete manufacturers that produce itemized products such as automobiles, furniture, toys, and smartphones. Most organizations strive to achieve an 85 percent OEE rating in the long term.
- 60 Percent: This is a fair rating for discrete manufacturers. However, they are always aiming to improve this mediocre rating.
- 40 Percent: This is a low rating and is common for manufacturers still improving their performance. Minimizing downtime can improve the rating.
Equipment downtime is the amount of time production stalls due to a non-functioning piece of machinery. According to Industry Week, the manufacturing industry loses about $50 billion each year to unplanned breakdowns. Downtime also can be the result of corrective maintenance, emergency maintenance, or preventive maintenance.
The Cost of Equipment Downtime
Unfortunately, machine failures affect critical business functions and limit profitability. Some of the costs an organization may incur because of equipment downtime include:
- Detection Costs: These are costs incurred to investigate the root cause of equipment downtime. An organization spends resources and dedicates its personnel to identify and diagnose the issue correctly.
- Containment Costs: Containment costs are expenses spent minimizing the downtime’s impact and preventing the failed asset from affecting other pieces of equipment. It also includes fees for temporary fixes.
- Recovery Costs: These are costs spent on restoring baseline operations after a downtime. For example, locating and installing backup systems for data recovery.
- Ex-post Response Costs: After equipment downtime, an organization incurs incidental expenses resulting from production disruption and recovery. Costs include legal costs and penalties from regulatory authorities.
- Equipment Costs: These are repair and replacement costs for the affected piece of equipment. It includes the cost of purchasing replacement parts and delivery to the location. Expenses to fix other assets damaged by downtime also fall into this category.
- Lost Revenue: This is the total revenue an organization loses because of downtime. It includes disruption to production, incomplete customer purchases, and collapsed sales contracts.
- Business Disruption: This refers to the overall cost of the downtime, including lost revenue, lost productivity, missed production deadlines, recovery costs, reputational damage, customer churn, and other long-term damages to the organization.
Unexpected equipment downtime causes interruptions to business process flow, damages assets, and results in massive losses. It also forces maintenance personnel to divert their focus from preventive maintenance activities to reactive maintenance. Reactive maintenance is often more expensive than proactive maintenance.
How to Track the Cost of Equipment Downtime
Calculate the total amount of revenue from the sale of products made during the equipment breakdown. Here’s an example:
- Company X produces 10 units an hour that sell for $50 apiece
- The machine used for making the products breaks down for 4 hours.
- The company will have lost $2,000 in profits during downtime
Of course, the example does not show the indirect costs of downtime. It is possible that Company X also had to put extra capital toward the expedited shipping of parts, outsourced expertise, or overtime pay to mitigate the problem. Depending on the size of the organization, and the frequency of downtime, each of these extraneous costs adds up to sizable reductions in profit margins.
How to Manage Equipment Downtime
Company leaders cannot afford to overlook the impact of equipment downtime on organization profitability. Organizations must learn to manage downtime to control operational costs and maximize efficiency by:
- Anticipating the impact of downtime on the business: Even for planned downtimes, schedule maintenance activities with minimal disruption to production. It is advisable to schedule activities during off-hours. Scheduling maintenance also helps to organize resources for temporary fixes.
- Tracking an asset’s useful life cycle: Knowing when a machine will reach the end of its useful life cycle helps to prevent unplanned breakdowns.
- Using advanced technology: Technology such as computerized maintenance management systems (CMMS) helps an organization monitor asset performance and predict when failure is likely to occur. It enables an organization to take a proactive approach to maintenance and minimize unexpected downtimes.
Organizations lose massive amounts of revenue due to equipment downtime. While it is impossible to eliminate downtime, companies should do everything they can to minimize such occurrences.
To reduce equipment downtime, organizations need to invest in robust CMMS software, document their maintenance efforts, and implement proactive maintenance programs. Tracking downtime is essential because it determines how an organization uses its maintenance resources.
Tracking equipment downtime saves money and time by directing resources to the right maintenance activities.
MaintainX and Key Performance Indicators (KPIs)
As you no doubt know by now, work order management maintenance software is a solution that allows facilities managers to effectively track and manage all work order information through a single dashboard.
Like MaintainX, when you use a centralized place to create service requests, monitor real-time status updates, track work order completion, and leave feedback on work performed, you can easily manage work orders across a multi-location enterprise.
A well-designed work order management system can be both intuitive and comprehensive. That is, it should be simple to manage your entire work order process from start to finish. Instead of employees manually submitting service requests, work order management software automates the process.
With only a few clicks, a work order can be entered, approved, and dispatched to a contractor.
However, your work should not stop there, even if using MaintainX has already made a world of difference. Our interactive dashboards show you everything you need to run your team and manage your assets with precision.
By analyzing work orders created and resolved in a specific department, across a facility, within a team, or completed by an individual, you will get both real-time snapshots and deep dives into how the work is getting done.
The MaintainX reporting dashboards capture industry-standard KPIs, including workforce productivity, completion rates, distribution type, and open work orders, to name a few.
Dashboard maintenance metrics are essential for many reasons, but perhaps the most important is that they are evidence of the success or failure of workflows throughout a company or a team, with an individual, or even with a particular piece of equipment.
In the best of all worlds, we want our workflows, our work orders, to be completed on time, efficiently, and with minimal costs. How we get there is another story.
8 MaintainX Reporting Dashboards
One of the things you will realize fairly quickly is that the data is only as good as what is input by the people doing the work. If no one is creating the MaintainX work orders correctly in the first place, it will be hard to gather the data you need.
Similarly, if the work orders are created correctly, but no one fills them out, your data will also be incomplete.
Once you start inspecting the data, you will gain a good sense, in real-time, of how the work is being done, how your machines are functioning, and how costs are rising and falling. In addition, with this information, you can act on the data in the reports to get where you need to go.
In MaintainX Reporting, you have access to eight reporting dashboards, as well as grouping reports by user or asset and looking at all repeatable work orders. From each of these reports, you can drill down for more real-time details. Simply click on the name of the chart for a full-screen view of that report.
The eight Reporting dashboards provide you with detail about work order completion. They are:
- Created & Completed Work Orders
- Repeatable & Reactive Work Orders
- Work Orders by Status
- Work Orders by Priority
- ·Work Orders Completed with Inspection Check
- Work Orders by Time to Complete
- Work Orders by On-Time & Overdue
- Time & Cost Reports
Real-time data allows you to be nimble and accurate. Real-time data enables you to check your workforce’s efficiency and effectiveness, equipment, assets, and inspections. As they happen. We cannot really be any faster than that.
MaintainX Work Order Management Software
Work order management software is a solution that allows facilities managers to effectively track and manage all work order information through a single dashboard. As with MaintainX, when you use a centralized place to create service requests, monitor real-time status updates, track work order completion, and leave feedback on work performed, you can easily manage work orders across a multi-location enterprise.
Using the right CMMS helps organizations:
- Navigate real-time performance data for KPIs
- Identify insights that allow you to highlight organizational bottlenecks and take action
- ·Track assets to manage asset downtime and capital equipment allocations
- Monitor team performance to identify top performers and employee performance efficiency
- Monitor maintenance metrics to calculate KPIs across assets, teams, and locations
By analyzing work orders created and resolved in a specific department, across a facility, within a team, or completed by an individual, you will get both real-time snapshots and deep dives into how the work is getting done.
For more information about a range of topics important for tracking KPIs to improve your organization’s efficiency, productivity, compliance, and safety, we recommend you review MaintainX’s Support Center, blog posts, and Learning Center.
We have a fantastic ever-growing set of resources for you on MaintainX. Our blogs cover the range of our features and use cases. Our support includes instructional materials, and our learning center provides courses like this one, explanatory materials, and answers to your questions.
Please also always feel free to chat with us live by going to our website and clicking on the Chat emoji at the bottom right of your screen.