How many technicians do we need?
Sam then asked Jim why he was being so timid.
"What do you mean, Sam?"
"If your goal is to cut costs, why settle for 15%?" said Sam. "We could cut a lot deeper."
Jim was surprised, but asked Sam to continue.
"Our maintenance payroll is one million dollars. If we cut 15%, that'll save $150,000, right?"
"Yes, and that's his goal."
"But why not cut them all and save a million?"
"Sam, that's ridiculous! We wouldn't have the technicians to keep our equipment running."
Sam couldn't have scripted a better response.
"So you're saying it's not a straight-line relationship. At some point the extra costs associated with too few technicians would be greater than the payroll savings?"
"Yes!" Jim's voice betrayed his irritation. "That should be obvious."
"It is," said Sam. "I just wanted to make sure it was obvious to you." Sam then asked Jim at what point costs begin to exceed savings. "Is it 16%? 20%? 30%? I know you can't answer that. Neither can our financial manager. But what if the point is 1%, and the next technician we cut actually costs us money?"
Jim realized he had been set up.
"So how do we find that point?"
"You can't," said Sam. "You're looking at the wrong information."
Sam then explained the following concept of backlog weeks:
Imagine a 10-gal. bucket half full of water. A hose is pouring water in at varying rates over which you have no control. A spigot lets water out at varying rates, which you can control. By adjusting the spigot, the objective is to keep the bucket about half full--neither overflowing nor empty.
Now, apply the above to a backlog of maintenance work orders. Backlog is the water in the bucket; new work orders are the water pouring in; and completed work orders, water draining out. The goal remains to keep water--backlogs--in the bucket because if you run out, you'll have a situation where workers will expand work to fill the time, thus lowering productivity.
If backlog becomes excessive--an overflowing bucket--you'll find that you can't do all the requested work. You also won't have time for PM, emergencies will increase, and your credibility will drop.
In either of the above cases, something must be done. If you divide the estimated hours of work in the backlog by the rate at which you complete backlog--estimated hours completed per week--you get "backlog weeks." You should have three to six backlog weeks.
There are two important points here: Notice I said "estimated" hours completed per week. If you complete a three-hour job, only three hours is relieved from the backlog, whether it took five hours to complete or only two. You want apples to apples.
Second, calculate the backlog for each craft separately. You could have too much electrical backlog, for example, and not enough mechanical. If you have one foot on a block of ice and the other on a hot stove, both feet are killing you, even though the average temperature is just right.
If you have too much backlog--and I've seen plants with 20 to 40 weeks--take the following action:
* Purge: Get rid of old or unnecessary work orders.
* Create a realistic weekly schedule that will boost productivity.
* Use technicians with less backlog to complete jobs from the excessive-backlog list.
* If you've done the above and still have too much backlog, it's justifiable to use overtime, outside contractors or to add staff.
After hearing the dissertation, Jim said they could not add staff.
"Jim, if there's work that needs to be done, and we've taken the above steps, how else will it get done?"
"What about crafts that have too little backlog?"
"Right. First, we eliminate all overtime and outside contracts for those crafts. Next, see if our crew can do work in the overloaded crafts. Third, if legitimate work for this craft is not in the backlog, write work orders for it. Finally, don't replace those who retire or quit."
"You make a convincing argument, Sam. Unless we know our backlog weeks, it might be costing us money to cut staff. I want you to start calculating backlog weeks right away."
"I'm way ahead of you, boss. Let me show you how it's trending for the last six weeks."
Pete Little, PE, is president of MPACT Learning Center, LLC, a Greensboro, NC-based maintenance training and consulting firm. He invites IMPO readers to contact him at Pete@MPACTlearning.com.
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|Title Annotation:||HIGH MAINTENANCE|
|Author:||Little, Pete L.|
|Publication:||Industrial Maintenance & Plant Operation|
|Date:||Mar 1, 2006|
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