Week of 13 March 2017: Maintenance Storerooms
Jim Thompson
Email Jim at jthompson@taii.com Listen to this column in your favorite format If you have read my thoughts on maintenance storerooms over the years, you will accuse me of having been all over the place, and you will be correct. At one time, I adopted the attitude that everyone should do what they were best at doing, and in the case of paper mills, this was making paper, so they should outsource storerooms. I still think this is good for small consumables and specialized repairs (such as roll repairs and recovering). However, for other items, such as pump assemblies, screens, motors and so forth, keep your own--but take care of them. This philosophy certainly applies for existing papermills (but read to the end). What I want to emphasize further this week is at a higher level. This is the net asset value in your storeroom. Last week we talked about unscheduled downtime and, simply, it is a fool's game to have unscheduled downtime in your budget. This week, we get a bit more complicated. We are going to stick with our base assumption--your machine's contribution is $20,000 per hour. You will use this with any magical formula you accountants use to calculate savings. **** Maintenance Month Platinum Sponsor: RMR Mechanical: We perform as planned! Visit us at www.rmrmechanical.com! **** What we want to know from the technical side is this: the cost of the parts that caused downtime in your mill in the last two or three years--the cost of parts you did not have on site. The downtime could have been scheduled or unscheduled downtime--makes no difference. For instance, if during scheduled downtime you discovered you were missing a spare part, which then caused you to order it or reschedule downtime in the future, you need to know this. Then, applying proper savings calculations, determine if that part should be in your maintenance storeroom. In fact, I can save you the effort--unless it costs upward of significant five figures, you should have it in the storeroom. Nevertheless, you need to do the calculation. Arbitrary caps on storeroom asset value can cost money. I certainly understand top level management doing this; it is easy. Yet it is costing them money on the profitability side, because the true cost of this practice is hidden in the details. Investment owners are the worst at this. They think they can buff up the balance sheet here. In reality they are degrading the P&L. Strategic owners, especially the very large companies with a large fleet of mills in the same grades, do a better job. **** Listen to the latest industry news on Pulp & Paper Radio International. Just go to iPulpRadio.com! **** We would like to hear from you. Please take our quiz this week here. For safety this week, every time we open a machine to do maintenance we create the opportunity for a safety incident. Be safe and we will talk next week. **** Nip Impressions has been honored for Editorial Excellence by winning a 2016 Tabbie Award! **** You can own your Nip Impressions Library by ordering "Raising EBITDA ... the lessons of Nip Impressions." ________ Other interesting stories:
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