In the asset management industry, businesses do everything they can to ensure that their equipment and machinery are performing at optimum capacity in achieving their production target and avoiding costly downtimes. Asset maintenance, in this case, proves to be a fundamental part of the management of operational expenses, productivity, and life-extension needs of assets. To accomplish an objective, however, organizations need to keep track of various metrics that proactively give insights into asset performance-welcome to the world of Key Performance Indicators.
To increase operational complexity and press for real-time data, companies are interested in asset maintenance software to define their maintenance process and automate KPI tracking. The specific goal of this software is to quantify the relevant metrics: runtime, repair costs, and equipment reliability, leading to actionable insights for better asset management. We will discuss the eight major KPIs that any asset manager must know for best optimizing asset maintenance processes in the following sections.
1. Mean Time Between Failures (MTBF)
MTBF is a highly regarded measure of reliability and performance over a given time span for any asset. The metric indicates the average time between two failures in a system/equipment’s operational life. MTBF is expressed in hours and is obtained by dividing the total operational time of the asset by the number of failures in that period. An example would be: A machine runs for 10,000 hours with five failures; therefore, the MTBF would be 2,000 hours.
Why It Matters:
MTBF has a significant curve when talking about the effectiveness of all maintenance practices collectively along with the reliability of any asset. More MTBF means a machine is functioning most of its time with little downtime or low rate of breakdowns, resulting directly from it to productivity and low maintenance costs. Having a constant watch on MTBF gives organizations a report on how well their assets deliver performance to help in making data-driven decisions for inquiries on repairs, upgrades, or replacements.
- MTBF can give companies insight into the condition of their equipment and be a good measure of maintenance effectiveness.
- The longer the time between failures, the less attention the asset will need, thereby causing minimum disruption and maintenance costs.
- A poor MTBF could otherwise mean that the equipment is aging, is underperforming, or isn’t being followed closely on a maintenance schedule
Real-World Case:
Consider a manufacturing plant with several heavy machines on its production line. One machine has a mean time between failure (MTBF) of 1,000 hours, while another machine has an MTBF of 200 hours. The first machine is plainly a lot more reliable and prone to breakdowns than the second machine. The plant could significantly reduce downtime by enhancing maintenance of the second machine, thus ensuring smooth operations and improved productivity.
By integrating the KPI into their asset and maintenance strategy, businesses will be able to streamline their operations while avoiding many operational disruptions that are costly, thereby achieving a more reliable and cost-effective production process.
2. Mean Time to Repair (MTTR)
Mean Time to Repair (MTTR) is a key performance indicator that measures the average time it takes to repair an asset after a failure occurs. This includes the time spent diagnosing the issue, making the necessary repairs, and getting the equipment back into operation. MTTR is calculated by dividing the total repair time by the number of repairs performed during a given period.
Why It Matters:
MTTR greatly influences the machine availability and operational efficiency. The faster the machine repair, the more it minimizes the downtime, giving the business a quick recovery to normal operations. On the contrary, the longer the MTTR remains high, the longer the downtimes would spread, thereby affecting productivity, heightening operational costs, and delaying the business objectives.
- Tracking and improving MTTR enables an organization to judge how efficient its maintenance teams and repair processes.
- If the MTTR is constantly at higher values, it may be an indication of things like delay in ancillaries’ availability, lack of effective repair processes, or lack of skill of technicians.
- Identifying and mitigating these factors would allow an organization to reduce repair times drastically and enhance equipment uptime.
Real-World Case:
In any manufacturing plant, in case an interruption occurs along the production line conveyor system, an extended repair time (MTTR) would cause the wreckage of the entire production for lengthy periods of time. Resource management, spare part stockpiling, or increased technician training-an effort to shorten MTTR-would all help to gear up production while at the same time optimizing efficiency.
MTTR is not just a measure of how quickly repairs are made but also an indicator of how well the maintenance strategy is being executed. By reducing MTTR, companies can prevent small issues from turning into large, costly breakdowns and keep assets running smoothly.
3. Asset Availability
Asset availability refers to a certain percentage of time when an asset is available and operational for actual use as compared to the total scheduled time for its availability. Asset availability is further defined in terms of its computation, which is dividing actual uptime and the potential total uptime. This KPI is important in analysing what portion of the asset use capacity has been realized and how often production could have occurred if it had been available for service delivery. A high asset availability indicates that the asset is used efficiently with minimal downtime, while low availability points to performance or maintenance issues.
Why It Matters:
High asset availability is a sign of effective asset management and maintenance practices. For businesses that depend on operational assets whether machinery, vehicles, or IT infrastructure ensuring that equipment is available when needed is critical to maintaining consistent output, minimizing disruptions, and meeting business goals. An inefficient asset often requires constant repairs or maintenance, resulting in the delay or increase in costs. Meanwhile, full asset utilization further guarantees that these assets fulfill their role in meeting business objectives, increasing productivity, and reducing operational expenditure.
- Tracking asset availability permits organizations to determine the performance of individual assets and find patterns which might signal potential problems.
- It will also assist maintenance teams in determining which assets require extra attention, upgrade or replacement or process improvement.
- These issues can thus be dealt with proactively to ensure optimum asset performance and reduced chances of unexpected downtime.
Real-World Case:
Performance of delivery operations in logistics depends critically on trucks. Repairs accounting for 20% unavailability hours lead to delivery delays which, in turn, lead to unhappy customers. Improvement of availability of assets through predictive maintenance and timely repairs will ensure that trucks are operational for a greater chunk of time, thus providing better services and improving profit margins for the company.
4. Preventive Maintenance Compliance (PMC)
Preventive maintenance compliance is the percentage of on-time executed scheduled preventive maintenance jobs in ratio to the total number scheduled. It audits an organization’s adherence to its planned maintenance schedules and the execution of its maintenance activities in conformance with these schedules. A high PMC indicates that the maintenance team is doing a good job of carrying out the preventive maintenance program established for them, while a low PMC indicates their inability to execute on-time scheduled tasks.
Why It Matters:
Preventive maintenance plays an important role in preventive medicine for unexpected equipment breakdowns and increased lifespan of assets. Carrying out scheduled inspection, lubrication, part replacement, and system checks at work can give hint of impending trouble that, otherwise, might have become costly repairs or periods of downtime. A high level of PMC compliance ensures that critical tasks are performed with an optimized schedule, reducing unplanned downtime, enhancing the effectiveness of assets, and minimizing costs of repairs.
- A lower PMC rate might indicate that either due to lack of resources, a lack of prioritization, or lack of efficient processes, preventing maintenance jobs might not be done.
- This leads to quicker deterioration of assets, which affects emergency repair costs adversely and causes unexpected failures, thus affecting overall productivity.
Real-World Case:
In manufacturing plants, compliance with preventive maintenance schedules is critical to all but unplanned shutdowns of specific equipment machinery. If a plant has 100 preventive maintenance tasks scheduled within a month and only carries out 75 of them, it has a PMC of 75%. This would therefore mean that 25% of scheduled maintenance tasks are missed or delayed, putting the assets at greater risk for possible failure. Therefore, in improving PMC, it can lead to completing all scheduled tasks in time and lower breakdowns with greater reliability on assets that could improve overall production uptime.
5. Overall Equipment Effectiveness (OEE)
OEE is a measurement that reflects how effective equipment has been in terms of availability, performance, and quality. OEE is calculated as the product of three main factors: availability, performance, and quality, which are expressed as percentages that give an indication of how well equipment is performing compared to its ideal capacity.
- Availability provides the ratio of actual operating time compared to the total planned operating time.
- Performance is measured in terms of speed equipment runs compared to its full potential speed.
- Quality measure is in relation to the number of good-quality products created, relative to the total amount produced.
OEE is expressed as a percentage, with 100% representing perfect production with no downtime, no performance losses, and no defective products.
Why It Matters:
OEE is a holistic metric that gives the overall status of an asset. OEE takes into consideration whether the equipment is available for production and to what extent the equipment is being effectively utilized during running hours. Hence, by monitoring OEE, manufacturers will be able to analyse any discrepancies arising out of equipment downtime, slow production speeds, or production of defective goods to make proper corrections to improve productive performance at large.
- A low OEE score indicates that the equipment is underperforming in one or more areas, and improvement is needed.
- On the other hand, a high OEE score signifies that the assets are operating at their best, contributing significantly to the company’s productivity and efficiency goals.
Real-World Case:
OEE in a car manufacturing plant may show that a specific assembly line is running at 60% effectiveness. Availability may be the issue because of regular maintenance; performance could be low as machines are not running at optimal speed. There may also be quality issues such as defects in finished products that lower the OEE even further. By implementing maintenance programs for its machines, optimizing the speed of production, and solving issues in quality control, the plant will achieve improved OEE and, thus, better productivity, less waste, and reduced cost.
6. Cost of Maintenance per Asset
The cost for maintenance per asset is a key performance indicator that evaluates total expenses for maintaining a single asset over a defined time. The total expenses include labour, parts, materials, and any external services necessary for repair or upgrades. The total maintenance cost is obtained by calculating the total maintenance cost and dividing it by the number of assets. Organizations thus can determine whether they are using financially efficient maintenance strategies on a per-asset basis.
Why It Matters:
Tracking maintenance costs by asset is very important in assessing the financial implication of maintenance for every asset. High maintenance costs may mean that the asset is old and must undergo frequent repairs or replacement of parts. This KPI, when monitored, enables businesses to find out which assets are becoming too costly to maintain, enabling them to make informed decisions on whether to continue to pour money into such an asset or replace it with newer and more efficient equipment.
- Other lower maintenance assets may well signify finetuned and efficient well-kept devices positively working for an organization.
- Knowing how much maintenance to incur on that cost per asset equips an organization to program maintenance schedules optimally, put out the intelligent purchase decision, and manage the budget effectively.
Real-World Case:
In large warehouses, such forklifts are the lifeline for moving goods. In case the maintenance cost of a particular forklift is being driven through the roof due to frequent repairs, spare parts, downtime, etc., perhaps replacing the forklift with a new model will instead be much cheaper than keeping it in maintenance. By computing maintenance costs against each asset, the warehouse can more reliably decide when to replace an old asset versus just incurring costs on maintenance.
7. Work Order Completion Rate
Work Order Completion Rate is a KPI that measures the proportion of work orders completed in due time against the total number of work orders created in each time frame. It measures how well the maintenance team is doing in terms of efficiency and effectiveness in attending to and completing maintenance activities as scheduled. A high Work Order Completion Rate reflects the ability of the maintenance teams to manage their workloads and deadlines, while a low rate could reflect either delays, resource shortages, or inefficiencies in the maintenance process.
Why It Matters:
Timely completion of work orders has a direct bearing on both operational efficiency and reliability of the assets. On-time completion of work orders ensures timely carrying out of maintenance jobs, thus preventing sudden breakdowns and improving the performance of assets in general. High completion rates would imply that the equipment is well maintained, resulting in low numbers of failures and downtime, whereas a low completion rate would point to problems like poor prioritization of work orders, not sufficient manpower to get the work done, and not enough parts to complete the jobs, thus leading to increased unplanned downtime and a backlog for maintenance.
- Organizations can evaluate their maintenance planning and scheduling processes by tracking this KPI and ensure that no critical tasks are neglected.
- It also helps maintenance teams locate any bottlenecks in their workflows or inefficiencies as they can take corrective action by improving them for better performance.
Real-World Case:
The maintenance team of a manufacturing facility is assigned 100 work orders within one month. If they manage to complete 90 of those on time, that will yield a work order completion rate of 90%. A high completion usually means that the maintenance team is very organized, resources are being channelled duly, and the facility is running efficiently. If, however, that rate falls much below the established norm, it could mean that some of those work orders have started to slide due to reasons such as the unavailability of technicians to carry out work or absence of spare parts.
8. Asset Lifespan
Asset lifespan is the overall duration of effective use expected before major replacement or major overhaul of an asset. It is determined for the most part by factors such as the design of the asset, the operating intensity, maintenance history, and environmental conditions. For understanding maintenance strategies over the long term, determining the lifespan of an asset is key in knowing when to replace or upgrade it.
Why It Matters:
Continued monitoring of asset life helps organizations make decisions on whether to repair an asset or invest in new equipment. Extending the life of an asset and proper maintenance and repair is a way of reducing capital investment because it delays the replacement of assets. Ignoring deterioration, which, in turn, will cause breakdowns, unpredicted downtimes, and loss of productivity, will have a significant impact on maintenance costs. This implies that they will measure asset life as part of maintenance optimization and service life so that the assets deliver expected performance while minimizing the risk of unplanned failures.
- The understanding and management of asset life span allows for future investments to be planned.
- When companies can forecast the scheduled and unscheduled needs for replacing or overhauling key assets, they can budget for such expenditures and avoid last-minute financial surprises.
Real-World Case:
HVAC systems are supposed to last about 15 years in a commercial construction environment with regular maintenance. If the systems are serviced regularly, they may withstand several years more and postpone replacement costs. However, poor maintenance may lead to the sudden failure of the HVAC system, resulting in costly repairs or early replacement. If the business can monitor the asset and extend its life, it can avert the financial hardship caused by untimely replacement.
Conclusion
Effective asset maintenance is of utmost significance for the business operations, and measurement of the right KPIs is needed to align maintenance strategies with organizational goals. Metrics like MTTR, MTBF, asset availability, and compliance with preventive maintenance assist the optimization in the performance of assets, hence increasing productivity and reducing costs. The use of a CMMS to monitor these KPIs constitutes indefectible machinery that automates and streamlines the processes on the one hand and ensures that maintenance tasks are executed efficiently and assets are managed in the best possible way. With a careful watch on these metrics, improvements in asset performance and an excellent bottom line are guaranteed to any business.
