Two common expense reduction strategies that companies in any industry often pursue are abandoning long-term projects and cutting corners, but both are a mistake.

In refineries, one of these mistakes is often made by reducing one of the largest operating expenses – preventative maintenance costs.   Refinery maintenance costs are broken-down into preventative and reactive.  Preventative maintenance costs are costs associated with activities to prevent equipment failures, and reactive maintenance costs are the costs incurred after a failure has occurred.  

When preventative maintenance costs are cut, even though these cuts may be well intentioned, their impact can have long-term negative consequences.  Reactive maintenance is commonly found to be three to ten times more expensive than proactive maintenance, and results in unplanned outages and overtime.   For a refinery, this translates into higher than needed operating expenses, a culture of distrust towards planning activities, and a feeling of being overwhelmed.  Cutting costs associated with proactive maintenance ultimately increases equipment failures and overall maintenance costs.

At Trindent Consulting we suggest a more targeted approach.  We focus on actions that reduce reactive maintenance and increase Overall Equipment Effectiveness.  We assist companies to establish well-defined Asset Performance Management programs that typically include:

1. Defect Elimination – Defining the guiding principles for investigation selection and approach for identifying the root causes of failures to prevent reoccurrence.
2.  Work Management – Establishing Standard Operating Procedures for prioritizing preventative and reactive work orders and managing the work order backlog.
3. Refining Preventative Maintenance Strategies – Optimizing existing Preventative Maintenance Programs to the proper activities, frequency, and detail required for effective work order completion.
4.  Inventory Management – Balancing an inventory to ensure that it is lean and manageable but preventing the need for rushed orders.

To identify if your organization may be suffering from over-reliance on reactive maintenance, consider the following questions:

1. How much production was lost in the last year due to unplanned outages?
2. How many safety incidents occurred in the last year due to equipment failures?
3. In the last year, what proportion of maintenance work was planned versus unplanned?
4. How many weeks behind is the work backlog?
5. How many overtime hours were there in the last year?

If any of these questions are unanswerable, or the answer to any of these questions makes you feel uncomfortable, then it is a good time for an objective third-party review.  Trindent offers in-depth assessments of a company’s status quo and identifies behavioural, process, and systematic challenges within an organization.

To learn more about how Trindent can Make it Happen in your company, reach out to our team on LinkedIn or through our Contact Us page.

This blog is authored by James Greey, a Senior Consultant at Trindent Consulting.