Maintenance Metrics and KPIs Must Focus on Business Objectives for Success

Maintenance Metrics and KPIs Must Focus on Business Objectives for Success

It’s an old adage in business that “you can’t improve what you don’t measure” yet in the dynamic landscape of maintenance and manufacturing, it’s also important to select the right things to measure. For years, there has been a tendency to track things like the number of work orders completed, which actually has very little bearing on asset health and business success.

Asset operations management, on the other hand, encourages selecting those key performance indicators (KPIs) that have a direct connection to business goals and objectives. These metrics should focus on reducing downtime, increasing productivity, and decreasing failure rates of equipment. By looking at these KPIs, we can elevate maintenance from being strictly an unappreciated cost center to a valued partner in revenue generation within our organizations.

The following metrics provide invaluable insights into the health of assets, the effectiveness of maintenance strategies, and the overall performance of maintenance teams.

Overall Equipment Effectiveness (OEE)

OEE is a comprehensive metric that assesses the efficiency of equipment utilization by looking at availability, performance, and quality of an asset over a set period of time. By measuring OEE, manufacturers can identify areas for improvement, such as reducing downtime, increasing production rates, and enhancing product quality. A perfect OEE score implies that a piece of equipment or production line is manufacturing only high quality parts as fast as possible without stopping.

When one of these three factors is not optimized, a business can better pinpoint and prioritize maintenance priorities.

The formula to determine OEE is: OEE = availability x performance x quality.

Mean Time Between Failures (MTBF)

MTBF is the average time a piece of equipment operates before experiencing a failure or system breakdown. Understanding MTBF is critical to ensuring the performance, safety, and equipment design of critical assets. By quantifying the likelihood that a piece of equipment or component will fail within a given period of time, companies can better assess the reliability of the systems that support overall business operations.

For example, if the MTBF is high, a business may consider increasing preventive maintenance tasks on a particular asset. However, if it’s extremely low, that organization may want to consider whether it is wasting resources on unneeded maintenance. Making such data-driven decisions has direct implications on a company’s bottom line.

The formula to determine MTBF is: MTBF = asset's total operational hours / asset's total number of failures.

Mean Time to Repair (MTTR)

Related to MTBF, MTTR measures the average time it takes to restore broken equipment to operational status. The longer it takes to repair an asset, the higher the downtime and related costs. Looking at MTTR helps organizations understand how fast their teams can respond to unscheduled breakdowns and then identify areas that can be streamlined within these processes. It can also help determine the health of the asset itself.

Measuring MTTR means that businesses have a yardstick to look at how programs designed to improve the efficiency of technicians' workflows and processes are working. A low MTTR may indicate that additional training or tools are required. It can also indicate that a critical asset is nearing the end of its useful life if MTTR suddenly increases from historic levels.

The formula to calculate MTTR is: MTTR = maintenance time / number of repairs.

Planned Maintenance Percentage (PMP)

PMP measures how much of a company’s maintenance activities are planned in advance, which also reveals the percentage of time spent on reactive and emergency maintenance. Best-in-class organizations can achieve a PMP of more than 85 percent. By tracking PMP, manufacturers can identify additional opportunities to reduce reactive maintenance, measure the effectiveness of training and tools, and decrease expensive unplanned downtime. 

The formula to calculate PMP is: PMP = planned maintenance hours / total maintenance hours x 100.

Asset Utilization

Asset utilization measures the extent to which equipment is used for productive purposes. By understanding which pieces of equipment are not being optimally utilized, a company can make informed decisions about reallocation or maintenance strategies that enhance utilization.

For instance, if an asset is not being fully utilized on one production line, the first question is why? Insufficient orders may indicate room for growth and call for a greater sales effort. A bottleneck immediately before that asset may prompt attention to that slowdown point. Or, repeated maintenance requests on that machine may show that it’s time to replace or overhaul the asset itself.

The formula to calculate asset utilization is: asset utilization = 8,760 hours minus the number of hours an asset is not in use.

Preventive Maintenance (PM) Compliance

Preventive maintenance is usually performed after a certain amount of time or usage; the most common example is a typical oil change for a vehicle by months or mileage. Preventive maintenance is completed while the asset is still working in hopes of reducing the chances for unplanned failure.

PM compliance measures the percentage of scheduled preventive work orders that are completed with a predetermined time. Best-of-class companies complete these tasks within at least 10 percent of the scheduled maintenance interval. For example, tasks that must be done every month should be done within 3 days of the scheduled maintenance date.

The formula to calculate PM compliance is: PM compliance = total number of completed PMs / total number of scheduled PMs x 100.

Conclusion

By focusing on the right KPIs that are more closely tied to business objectives, maintenance teams can better illustrate how their work is tied to revenue, profit, and overall growth. Asset operations management emphasizes making data-driven business decisions, and these maintenance metrics can help your organization focus on decreasing downtime, boosting productivity, and minimizing asset failure rates. All of these efforts have a direct impact on the bottom line.