In our previous Actionable Insights blog, we discussed the Production On Time and in Full by Product Family Action Center. Next, we will provide an overview of the Equipment Cost Action Center as well as the associated key performance indicators (KPIs).
Keeping equipment in good working order is imperative for manufacturers to achieve optimal productivity and high quality, as well as for minimizing downtime. Most companies manage their equipment maintenance well, but often they lack visibility on where the maintenance costs are spent. However, knowing where the company is spending on maintenance can help point out problems such as the need for additional operators, set up or maintenance training, or the need to replace equipment to keep product costs low or quality high. It can also help negotiate better rates if the company uses an outside maintenance service. To help companies achieve the best results from their equipment cost spend, there is the Equipment Cost Action Center.
KPIs on the Equipment Cost Action Center
QAD Action Centers provide analytics to help both managers and users monitor metrics and KPIs. KPI highlights for the Equipment Cost Action Center include:
Labor Cost by Sites
This bar chart shows the labor hours logged for maintenance repairs by site. Comparing the spend in comparable sites can help pinpoint the need for more training or equipment updates. When update funds are limited, knowing this can help the company prioritize its spend as well as areas to focus on for additional training.
Labor Cost by Cost Centers
This shows the maintenance labor costs for each cost center at a site, which can help the company decide to upgrade specific equipment or to provide additional training to the responsible maintenance team.
Labor Cost by Equipment
This is a bar chart showing the total labor cost charged to individual machines over time. This can help the company identify aging equipment that they should consider replacing, or potentially providing additional training to operators and maintenance personnel. It may also help identify the value of using alternate routings, if possible, to minimize the load on equipment that is more expensive to operate.
Material Cost by Sites
By showing the total value of indirect materials used at a site, this bar chart can help identify sites that have less efficient Maintenance, Repair and Operations (MRO) purchasing practices or less effective usage of materials in general. Identifying the more cost-effective sites can raise the overall effectiveness of maintenance material usage by identifying and sharing best practices from more effective sites.
Material Cost by Cost Centers
This chart reveals the cost centers with the best maintenance material costs. While this could simply be the result of newer equipment, it might also identify cost centers with best practices that could be shared with less cost-effective centers, or maintenance teams that might benefit from additional training.
Material Cost by Equipment
This chart shows the material charged to maintenance of each individual machine. This can help companies recognize when it may be time to upgrade or replace equipment, schedule a major overhaul, or provide additional training to the maintenance team.
Contractor Cost by Cost Center
If the company uses contractors for some or all of its maintenance activities, this bar chart can be invaluable by breaking down the cost by the cost center where the contractor worked. This can help to identify whether it is best to onboard more highly skilled employees in-house or to look for more cost-effective contractors. In addition, this provides a good baseline during contract renewal negotiations.
Contractor Cost by Equipment
This chart identifies equipment contractor costs, helping the company to understand where they use their contractor spend. This can help them to determine if bringing the maintenance tasks for certain equipment in-house is a good move.
The Importance of the Equipment Cost Action Center
To keep running efficiently, manufacturers need to keep their equipment well maintained and up to date. The Equipment Cost Action Center can help companies understand which sites and cost centers have the most effective processes so they can share procedures with other sites. The insight provided can also help the company to recognize when the cost of maintenance on a piece of equipment is exceeding its value to production, or when it makes sense to prioritize an equipment upgrade. In addition, it can identify problem areas ranging from operator training to poor MRO purchase or storage procedures. This action center provides the insight managers need to keep equipment maintenance costs low while still ensuring safe and productive operations.
All manufacturers today must find ways to adapt and change their internal conditions in response to customer demands, budget constraints and equipment age and utilization. The Equipment Cost Action Center provides an important piece of information for manufacturers to fine-tune their maintenance programs as well as their equipment upgrade and replacement policies. QAD Adaptive ERP provides insights that help companies ensure their equipment performs at peak efficiency at a reasonable cost.
Which KPIs and metrics are most important to your organization? Learn more about QAD’s predefined and highly customizable Action Centers as well as best practices for each.