Effective maintenance improves profitability for a company by keeping various costs down. In particular, a maintenance team can use best practices to minimize costs associated with safety, accidents, equipment breakdowns, MRO inventory management, and routine upkeep. At the same time, production output quality is improved.
Unfortunately, many organizations see their maintenance processes as a drain on revenue, and they may cut budgets for those processes. To prevent this from happening—and to secure funding for improvements to the process—maintenance managers need to demonstrate how their departments can help optimize profits. A Maintenance Excellence Index (MEI) is an effective way to do that.
Here, we’ll discuss what a Maintenance Excellence Index is, why it’s helpful, and how to go about implementing one in your maintenance department.
The Maintenance Excellence Index—or MEI—is a method for measuring the overall success of a maintenance department. It was created by Ralph W. “Pete” Peters as a way for maintenance managers to look at a variety of key metrics while at the same time focusing their efforts on optimizing profits for their organization.
Creating an MEI involves taking 10 to 15 metrics, benchmarking them, and measuring success against those benchmarks on a spreadsheet. The index is used to record individual scores for each metric, after which a composite score is generated. Since only the most relevant key performance indicators are tracked on the index, each one is tailored to the needs of the organization.
The key purpose of the MEI is to validate results and return on investment (ROI) for maintenance departments. By demonstrating exactly how specific maintenance metrics impact costs and profits for the organization as a whole, maintenance managers can use the index to justify to shareholders the resources spent on maintenance tasks.
Creating and using a Maintenance Excellence Index can be highly advantageous when it comes to maintenance planning and management. Some of the key advantages of the MEI are as follows.
The MEI is something of a framework that can be used in tracking the metrics that are most important to your organization. Given that you choose 10 to 15 metrics to track on your spreadsheet, you can tailor the index to your specific operational context. For example, a maintenance team that has only a small amount of MRO inventory might not prioritize inventory metrics on its MEI.
Each item is also weighted, with a cumulative weight totalling to 100. This allows higher priority metrics to factor more into the final score than less important ones.
Tip: Whether or not you use the Maintenance Excellence Index, you should still prioritize your KPIs when measuring your effectiveness. Weighting metrics on reports can be a good way to do that.
Success in maintenance can’t be measured through one single metric alone. You need to track multiple indicators to be able to accurately assess maintenance effectiveness, but it can be difficult to hunt those numbers down. Even if you use a CMMS, the sheer volume of data you have in your system needs to be organized in a way where you can see the most important items quickly.
While an MEI gives a single score, that score reflects multiple metrics, all of which are presented on a single spreadsheet. This gives your maintenance team the ability to check current progress at a glance simply by looking over your Maintenance Effectiveness Index. All you need to do is pull the metrics from your CMMS and plug them into the spreadsheet.
In a general sense, the metrics used in MEIs tend to cover the following areas:
Tracking your progress on a breadth of metrics through an MEI is helpful, but only if those metrics are actually focused on optimizing profits for your organization. The overall philosophy behind an MEI is to zero in on metrics that impact your organization’s ability to efficiently turn a profit and to make sure your team keeps eyes on those KPIs.
By keeping metrics focused on what’s most important, you get the most from your CMMS while creating a profit- and customer-centered process, all without sacrificing the maintenance of physical assets.
While your Maintenance Excellence Index will center on long-term goals—which are ultimately represented by your overall score—it does a decent job of connecting those goals with day-to-day actions. Many of the metrics you track can be directly impacted by everyday tasks, making it easier to take action instead of spending ages analyzing how to meet your lofty goals.
As you connect goals with everyday actions, your MEI will effectively show whether your maintenance department is “winning.” It’s an easy way to make your success visible to your technicians, supervisors, planners, and operators, making it much easier to get them on board with improvements to processes and practices. As they see how their work affects your success, your maintenance team is more likely to buy in to needed changes, ultimately making them more engaged in continuous improvement.
While your ultimate goal is to keep maintenance, repair, and operations costs down, that’s only truly possible if you have sufficient funding for effective preventive maintenance and planning. To make certain you get the budget dollars needed to accomplish your maintenance goals, you need to demonstrate how that funding will reduce costs and optimize profits over time.
Your MEI acts as a succinct way to show shareholders and senior executives the value of various maintenance tasks as reflected in your key indicators. Specifically, you’ll be able to show the profitability of maintaining, improving, renovating, and installing physical assets in a safe and effective way. The end result should be the prevention of untimely budget cuts.
Maintenance managers should focus MEIs on whatever metrics are most important to their organization’s success. That said, some KPIs are more useful to track in this way than others. In particular, the following metrics are best suited to a Maintenance Excellence Index.
While this list may look a bit intimidating, remember that when creating an MEI, you’ll only choose 10 to 15 of these metrics. A modern CMMS will usually measure most—if not all—of these metrics for you based on work orders and MRO inventory data you put in.
Tip: If you’re not currently tracking these metrics, you might want to do so. That said, it may not always be useful to track everything, so choose carefully.
To begin implementing an MEI in your facility, you’ll need to go through an implementation process as outlined below. The following steps will help you get the most out of a Maintenance Excellence Index.
Before you do anything else, you need to have a clear picture of what success looks like in your facility. Focus on your company’s objectives, particularly when it comes to optimizing profit. From there, you’ll be able to get a clear idea of what your maintenance department can do to reach those objectives, which will in turn inform the kinds of metrics you’ll measure on your MEI.
With some goals in mind—as well as maintenance tasks that can help reach them—choose the metrics that will best measure your success in performing those tasks. You can find these metrics in your CMMS and financial software. The best place to start is to choose 10 to 15 of the KPIs described in the previous section and pull those up on your CMMS.
Tip: If you don’t currently use a CMMS, UpKeep is a great option to get you started. Our Asset Operations Management platform allows you to track most maintenance metrics with minimal effort.
With a list of roughly a dozen metrics to track, you’ll need to know how well you’ll need to do with each of them. It’s best to benchmark your goals based on world-class standards, such as 85% for Overall Equipment Effectiveness. Benchmarking your goals with world-class standards will let you see how you’re progressing toward the most optimal maintenance processes possible.
While each of the metrics you choose should be important, you’ll still need to prioritize them based on how much they impact the cost efficiency and safety of your operations. As such, each metric should be assigned a weight. That weight will change how much each metric affects the final score on your MEI.
The weight of all your metrics combined should add up to 100, so it acts something like a percentage. For instance, your OEE might be weighted at 16, while your Schedule Compliance might be 4, meaning that they compose 16% and 4% of your final score respectively. These are just examples, of course, so make sure to weigh your metrics based on their actual importance to cost optimization in your facility.
In addition, you’ll need to know how each metric will be scored. Scoring goes from 0 to 10, with 10 being the best. Determine what performance level corresponds to each score. For instance, if you’re measuring OEE, a 10 would be 85%, while 0 might be 35%. The value would then increase incrementally for 1, 2, 3, etc. Conversely, if you’re measuring stockouts, higher stockout values would correspond to a lower score.
With your chosen metrics, benchmarked goals, and weights, it’s time to create your spreadsheet. One axis will list your metrics, while the other will list the following for each KPI:
You’ll populate your current monthly progress with data from your CMMS, then do the math from there. You might also include a section recording progress over time with total scores for each month, quarter, etc.
Tip: A CMMS can let you generate custom reports with the exact metrics needed to populate your MEI scorecard. You might even want them reflected on your dashboard, making them visible to everyone in your maintenance department.
After creating your spreadsheet, it’s time to track your progress. Over time, monitor each metric through your CMMS and record your scores at regular intervals, such as every month. With each metric recorded, assign a score from 0-10, multiply that by the metric’s weighted value, and add them all up to get your total composite score.
The maximum score possible on a Maintenance Excellence Index is 1000, so the closer to 1000 you get, the better you’re doing.
It may be necessary to make adjustments to your MEI over time. For instance, if you find that one metric doesn’t actually seem to reflect in your organization’s profits, you might want to cut it out. Alternatively, you may need to add other metrics to flesh out your score.
Tip: It’s important to make your score visible to your maintenance department. If your team can see how well you’re doing—or in other words, if they can see whether you’re “winning”—they’ll be more likely to buy in to the changes you’ll make as you try to improve your score.
As you track your progress and score your maintenance department in different areas, you’ll likely see metrics that need improvement. That’s largely the point of an MEI. With the insight you gain into your maintenance metrics, you’ll be able to take action to improve your score.
For example, if you notice that planned maintenance percentage is consistently low, you might want to take a look at the types of equipment failures you’re having and plan PM tasks that will prevent those. Your planning practices may also need improvement.
In addition to planning improvements to your processes, you’ll also be able to get shareholder buy-in when you need funding to make those improvements. Your scorecard shows how individual metrics can improve profitability, demonstrating the importance of improving those metrics through specific actions.
Ultimately, an MEI makes important metrics more visible while clearly establishing their relationship to profit optimization. With the information and scores on your index, you can keep your efforts focused on tasks that benefit your people, company, and customers while validating the investment made in your department.
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