Spending the right amount on the maintenance budget for any industry is a matter of huge complexity. Though it is easy to predict the number of expenditures the organisation will have the next year using market data and statistical tools, it is important to understand in case of maintenance for businesses, is where they are spending and what are their maintenance objectives and benchmarks. There are three most important factors which affect the optimum cost level of businesses and therefore significantly influence the maintenance cost of the business. They are :
- Asset Life Cycle Cost strategy
- Planned Asset utilisation
- The behaviour of the organisation in general.
Maintenance Budget for industries :
It is imperative that every manufacturing process and process-driven industries maintain a manufacturing cost sheet where the cumulative price for production of an item is recorded. Maintenance costs for production organisations are generally viewed as fixed costs having components of labour, benefits, materials, contractor labour, salaries, and overhead costs. Due to the absence of any other maintenance cost measures, most manufacturing managers can take a cue from the manufacturing cost sheet and extract the crucial elements of maintenance cost.
Anyone who feels liable towards maintenance cost concerns should have two basic and fundamental business contributions, namely :
- Highly reliable equipment and
- Lowest consistent maintenance cost.
Measures of these functions vary over time and affect manufacturing maintenance costs of organisations.
The imposition of strict budget limits for the organisations :
A budget limit can be characterised by the following points discussed below.
- The maintenance budget of any company or organisation is not built from scratch and takes into account all types of expenses.
- More or less the maintenance budget of an organization is fixed arbitrarily based on the previous year’s budget and often is equal to that. The main objective is to reduce the maintenance budget of any manufacturing company regardless of the condition of the equipment.
- Top.management has little consideration for equipment overhaul as well as major maintenance cycles, which are often not maintained annually, and thus causes performance anomalies.
- Planned investments or expenditures never surpass budget limits. Budget is broken due to unforeseen and unprecedented equipment breakdowns and the associated repairs.
- Often it has been witnessed that any investment meant for the future profit of the organisation has not been granted.
Strategies that allow organisations to escape the maintenance budget constraints :
Efforts should be made to break out of the maintenance budget constraints imposed upon an organisation. It can be done but only with utmost carefulness and prioritisation. The idea is to exceed the maintenance budget imposed upon the organization during the first quarter of the financial year and then recover the lost money in the final quarter or throughout the year, by preaching reliable and sustainable maintenance practices.
Operations and maintenance can work in close synergy and develop an inspection team which would observe the tools and equipment essential for the core operations of the organisation and present a report based on :
- How long will the equipment last and be in working condition until breaking down or failing
- Consequences of potential breakdown like safety issues, environmental factors, lost production, damages sustained and repairs commissioned
- The threat that will cause a breakdown.
This scenario exists in the Indian industrial sector. There is a huge restriction on the maintenance budget imposed on the organisations in every sector. Thus it is important for the organisations to surpass the budget limits by practising processes that are reliable and would augment the organisation’s worth in the future.