By William J. Goetz, Vice President of Corporate Development

The quote, “Never waste a good crisis!” has been attributed to many people, including Winston Churchill. Upheaval breaks inertia, creating the opportunity to bring about change. During a crisis, day-to-day norms are disrupted, making systems, processes and even culture more susceptible to change. A crisis heightens the need to do things differently and pandemic-driven labor shortages should increase executives’ appetites for reliability transformations.

Manufacturers are already producing more with fewer people. Manufacturing output has climbed back above pre-pandemic levels, but employment still lags by 35,000 employees.

Looking forward, Deloitte estimates that 2.1 million manufacturing jobs may go unfilled by 2030. This amounts to about 13% of total potential employment. With demand for manufacturing workers outstripping supply by such a large margin, competition for employees is not going to ease and the need to produce more with fewer people will intensify.

As manufacturers prepare to face a decades-long employee shortage, improving asset reliability should be part of their strategy. First, highly reliable operations require fewer people, providing protection from shortages. Second, employees are seeking work with significant quality of life attributes that perfectly align with higher reliability: predictable schedules, safe work environments, and good benefits engendered by long-term profitability. It is likely that the most reliable manufacturers will become employers of choice.

There is plenty of proof that reliability programs can reduce labor requirements, drastically cut maintenance budgets AND increase production. Bruce Hawkins recently shared his experience at a Society for Maintenance and Reliability Professionals (SMRP) Conference. This quote from his presentation highlights the potential labor savings that can be achieved.

“At our base year, we spent $39.1 million in maintenance, we had 200 maintenance craftspeople and on average 250 contractors at that site at that point. In year seven, we spent $17 million, and we had 173 maintenance craft people and six contractors. We achieved this reduction just by making work go away.”

The benefits of transitioning to a new model go beyond simply saving labor. At Bruce’s plant, significant increases in Overall Equipment Effectiveness (OEE) were achieved alongside cost reductions. Reliable operations produce more product, are safer and more environmentally friendly. Perhaps most importantly, reliable operations are more predictable, affording better work life balance. They are the kinds of places people want to work.

To succeed in the near-term, business leaders will need some quick wins that deliver labor. PM Optimization (PMO) and planning and scheduling are two vital drivers of maintenance efficiency that can lower resource requirements in the first year. Failure analysis shows that many legacy PMs provide no mitigation of any failure mode. PMs are calendar-based and are expected to be performed regardless of machine condition, but in many cases the machine is operating troublefree. In our experience, after a formal PMO exercise, 30% of these calendar-based PMs are deleted and replaced with predictive/condition-based tasks – performed only when machine condition warrants. On average, another 30% are eliminated simply because they are not addressing failure modes, and yet another 30% survive but only with strengthened quantitative measurements. Amazingly, only 10% of legacy PMs survive as-is! Imagine how much work is eliminated, and how much less labor is needed, based on PMO alone!

Planning and scheduling maintenance work is another major time saver. Average “wrench-time” (productive, value-adding time) in a typical factory without good planning and scheduling is 25% – 30%. That’s less than two hours of every eight-hour day! But a top-quartile plant with effective maintenance planning and scheduling achieves double that: 50-55%. Effectively planning and scheduling can virtually double the capacity of the labor force to do work, without adding any cost. Put another way, if we’re struggling to keep up with the work on the books, eliminating wasted time allows that work to be accomplished with fewer resources – theoretically, with half the number of labor resources! As we struggle to attract and retain qualified labor in this crisis environment, why would any plant continue to do business in a reactionary way?

As firms seek ways to address the pandemic’s effects, they should seize the moment and develop the momentum needed to drive a reliability transformation. The pandemic-driven crisis has made the reactive maintenance model untenable. Change is needed and leadership should not waste this crisis!