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Week of 6 March 2017: Maintenance "Costs"

Email Jim at jthompson@taii.com

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This is maintenance month here at Paperitalo Publications. It also marks my 46th year in industry and my 25th year as a consultant. I have been around.

I believe this experience gives me the authority to say this: I have never, not once, seen over-spending in maintenance. I'll go a step further--although one can certainly reach a point of diminishing returns in maintenance, I don't think I have ever seen maintenance expenditures reach negative returns. I don't think it can be done.

What is the acceptable amount of unscheduled maintenance to budget into your operations? Zero. Why? Because the parts and time required to make an unscheduled repair always costs more than doing the repair on scheduled time. Granted, you may have to increase your time for scheduled maintenance, but that is far better (because it is planned) than any unscheduled maintenance.

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I saw a mill once that was approaching what I would suggest is the proper level of maintenance spending. It was an old cylinder board mill in eastern Wisconsin, recently acquired by a major company (which I am sure killed the maintenance program). Old but impeccably maintained and clean, the electrical maintenance superintendent could sit in his office and call up each motor in the mill. From there he could see how many days it had been in service, to what temperature it was running, what amps it was drawing and so forth and so on. This was over 15 years ago. I asked him when they last had an unscheduled motor failure. He said he could not remember.

Their storeroom was impeccable as well and everything was logically laid out and accessible.

Routinely budgeting or accepting unscheduled maintenance is like accepting safety accidents or unscheduled plane crashes. All three are disruptive and unpredictable in costs. Not budgeting them does not mean they are not going to happen, but deliberately budgeting them means you are accepting mediocrity.

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Listen to the latest industry news on Pulp & Paper Radio International. Just go to iPulpRadio.com!

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So why do we spend so little on maintenance? The simple answer is "everybody does it." The next answer is that management deludes itself and thinks, despite the track record of their mill, they are going to do better next year.

What everyone misses is that a dollar spent on maintenance is going to return $1.20 to a $1.40 to the bottom line. Furthermore, this seems to go on forever, or at least until every maintenance worker has a gold-plated fork truck.

We have been conditioned to think maintenance is a cost and unscheduled maintenance is acceptable. There is no basis for this logic; it is just a rumor passed around from board room to board room. It is time for your senior management to take a long hard look at the numbers, not the traditions.

What do you think? You may take our quiz online this week.

For safety this week, it goes without saying, safety risks go up in unplanned maintenance outages as compare to planned ones.

Be safe and we will talk next week.

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Nip Impressions has been honored for Editorial Excellence by winning a 2016 Tabbie Award!

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You can own your Nip Impressions Library by ordering "Raising EBITDA ... the lessons of Nip Impressions."

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