Managing the maintenance budget can be time-consuming for the Maintenance Manager. For a Manager in a new role or a site with low maturity in this area, it can be a case of cross the fingers and hope the monthly expenditure was in line with the budget. If budgets are developed using a zero-based methodology then it should be manageable and excursions understood. Unfortunately, for this to be the case it requires involvement from the entire team, not just a few. Below are four tips on how to achieve this:
- Involve those accountable for expenditure in the budget development process – Often we see that the budget is developed by one or two people in the engineering or planning team, they know the equipment strategy in detail so they can efficiently develop a zero-based budget. This is fine for budget development, however, these people are not making all of the expenditure decisions. It is better that the execution superintendents are involved in the budget development process and that they own any assumptions used to create the budget. Getting their involvement is not time-consuming, it ensures they have the necessary ownership of the budget delivery, and always results in them providing input that will improve the quality of the budget and ideas to reduce the maintenance costs.
- Involve those who make expenditure decisions – The fact is that many expenditure decisions are made by planners and supervisors. If these guys have input to the assumptions and desired outcomes, this further deepens the understanding of the details of the budget. This enables these people to work to the budget in a simple manner and they always have ideas for maintenance cost savings.
- Develop a reference tool or book – When the budget is finalised it is necessary to have a simple reference tool or book so that the people responsible for making expenditure decisions (supervisors, planners, superintendents) can easily identify whether the expenditure is in the maintenance budget. When it is not, then there must to be actions to follow in order to identify necessary improvements or an alternative so that the actual costs will reflect the maintenance budget each year.
- Capturing learning and continually improve the maintenance budget – It is essential to capture and learn from times when expenditure is outside the budget. Using cumulative life cycle cost management tools can make this visible and reviewing this on a regular (monthly or quarterly) basis can help identification of opportunities for further maintenance cost savings.
While 20% of the areas represent 80% of the maintenance costs, in order to reduce and control maintenance expenditure it is essential that all of the areas are managed. The many small expenditures can quickly become a large amount of money if not controlled.