A Ridiculously Simple Guide To Maintenance KPI
When you run any type of department, how do you know if you’re doing a good job?
In the maintenance world, the answer to that question is maintenance KPI (Key Performance Indicator) and maintenance performance metrics.
One might think that spending is a crucial thing to look at as top managers seem to only be interested in how much they need to spend on their maintenance departments. However, doing a unilateral analysis based on cost alone doesn’t give you any usable information on the performance of your maintenance team. For that, you need to go much deeper.
As every department should have clear goals to work towards, the best way to measure the efficiency of your maintenance actions is to define your maintenance KPIs and use maintenance metrics as guideposts to ensure you are moving in the right direction.
How to do all of this in practice? Continue reading to find out.
1. What is maintenance KPI?
The purpose of every maintenance department is to ensure a productive environment that can fulfill the main business goals of their respective organizations.
A maintenance KPI is a measurement of performance that helps you focus on maintenance objectives you want to reach. It is a quantifiable value that shows how effectively an organization is progressing towards achieving its key maintenance objectives over time. While the objectives can differ from one facility to another, they usually revolve around increasing equipment uptime, decreasing costs, and improving maintenance performance.
In essence, maintenance KPIs provide a direction for operational improvement and help you focus attention on what matters most by asking:
- Where are we now?
- How far do we still have to go?
- What do we need to do to get there?
2. What is the difference between maintenance KPIs and maintenance performance metrics?
Although the terms maintenance KPIs and maintenance performance metrics are often used interchangeably, they are not the same.
We have seen above that maintenance KPIs are measurable values that show how effective you are at achieving maintenance objectives, whereas maintenance metrics track the status of a specific process.
Furthermore, maintenance KPIs are strategic while maintenance performance metrics are tactical. KPIs are comparable to a compass that shows where we want to go, while the metrics are more oriented towards the smaller steps we need to take to get there.
Let’s consider a situation that many organizations can relate to. You have set a KPI to reduce your company’s deferred maintenance backlog by 30% over the next quarter. Your findings show that among other issues, a major recurring problem is a high occurrence of reactive work leaving little time for scheduled maintenance. Different factors can contribute to this situation like work orders are not being closed quickly enough because your department is understaffed.
To get the facts, and start resolving this problem, you can try to track things like maintenance overtime, percentage of work order completed on time, and planned maintenance percentage. These are your maintenance metrics.
3. Which KPIs for maintenance should you define and track?
In most organizations, defining and tracking KPIs for maintenance is part of a larger process that starts when the top management of the organization lays out the overall business goals of the company. Once these company-wide goals are established, department heads and managers can then set goals and action plans for their individual units in line with the overall business strategies.
As the maintenance manager, deciding which maintenance KPIs to track starts with identifying your major maintenance pain points.
Consider those areas that need improvement the most in your team’s deliverables. For instance, you may struggle with equipment repeatedly breaking down, or the fact that your team is spending too much time on reactive maintenance. Whichever of those problems is more likely to prevent you from reaching the defined business goals is the first one you should focus on.
From this information, you can proceed to list the various issues and start categorizing them.
Generally, these are the most common areas that KPIs for maintenance fall into, along with common metrics used in each category:
- Work efficiency – Maintenance Backlog, Maintenance Overtime, Machine Set-Up Time, Percentage Emergency Work, Overtime Hours, MTTR, number of Rework Requests
- Costs and spending – Maintenance Cost as Percent of Replacement Asset Value (RAV), Maintenance Cost Per Unit, Utility Consumption (per utility)
- Asset maintenance – Planned Maintenance Percentage (PMP), Schedule Compliance, Mean Time Between Failure (MTBF)
- Safety and compliance – Number of Reported Accidents and Incidents, Lost Time Injury Frequency Rate (LTIFR)
- Asset performance – Overall Equipment Effectiveness, Asset Uptime
- Downtime – Production Uptime Percentage, Equipment downtime
- Work order management – Average Time to Complete Work Orders, Percentage of Work Covered by Work Order
- Spare Parts Inventory management – Stock-Out, Inventory Accuracy, Turnover Ratio
How to define KPIs for maintenance
To properly define KPIs for maintenance, it’s advisable to see them as goals and approach them as such. Failure to do this means that your improvement efforts will lack focus and direction.
Your ultimate goal is to improve across the board. However, progressing from your current position to the desired point requires well-defined steps that are specific to each KPI.
After identifying each KPI as a goal, you need to frame them in a manner that makes each one powerful, effective, and time-sensitive. If not, all you’ll have are “wishes”.
You have probably come across the goal-setting acronym SMART.
Let’s look at how this framework applies to defining KPIs for maintenance:
- Specific: Maintenance goals should be well defined and clear. Everyone knows the who, what, where, when, and why of the goal.
- Measurable: Each one comes with specific criteria to measure progress towards accomplishing the goal. Ideally, you should be able to assign one or more maintenance metrics (which you can track) to every maintenance goal you define.
- Achievable: The goal is attainable. It is challenging enough to keep you motivated, but not impossible to achieve.
- Realistic: It can be realized within the allocated time and with the available resources (usually refers to budget and staff, but can include tools such as CMMS).
- Timely: Have a clearly defined timeline to create a sense of urgency. This is non-negotiable for success as goals with no due dates tend to be indefinitely postponed.
The next section shows a few examples of what that looks like in practice.
Examples of maintenance KPIs
Here are some examples of potential maintenance KPIs that a maintenance manager might look to define:
- Reduce unexpected downtime by 30% over the next twelve months.
- Improve labor time for scheduled maintenance tasks by 10% in four months.
- Reduce energy consumption by 15% by the end of next year.
- Achieve 97% inventory accuracy levels in three months.
- Reduce rework requests by 40% over the next six months.
That being said, defining your maintenance KPIs is just the first step on the path towards improvement.
Each of your KPIs should be broken down into more details that outline your plan of action, maintenance metrics you plan to use to measure your progress, and milestones.
For example, in the list above, we have our first KPI as Reduce unexpected downtime by 30% over the next twelve months. Depending on the identified cause of downtime (let’s imagine it is doing too much reactive maintenance in this case),you could break this goal down as follows:
- Plan of action: Incorporate more proactive maintenance methods, mainly more preventive work.
- Metrics: Use Planned maintenance percentage, preventive maintenance compliance, and number of work requests as the metrics you want to track and improve upon.
- Milestones: Have a detailed overview of these metrics every 3 months.
The trick lies in choosing the right metrics. As there are numerous factors that can impact each of your KPIs, the idea is to:
- find which of those factors are underperforming
- define actions you will take to improve them and
- define metrics you can use to track if those actions are fruitful or not
4. How CMMS helps you track the most important KPIs
Although KPIs are necessary for your overall maintenance objectives, it is preferable to limit yourself to a few important ones and focus on them as top priorities. With too many KPIs, you run the risk of stretching available resources too far and losing focus.
Most KPIs are best tracked by using their associated maintenance metrics. As a central hub for all maintenance information, a modern CMMS is your best option for tracking and managing almost all required metrics.
With CMMS you can extract any kind of maintenance-related data and generate reports that help you easily track the progress towards your KPIs.
To better illustrate this, let’s discuss a few ways in which CMMS helps you track all of those metrics.
Work order and Work efficiency management
A CMMS will show you the status of your work orders whether scheduled, completed, or overdue, as well as metrics such as MTBF, Planned vs Unplanned maintenance work, and more.
Tracking work orders helps to uncover several issues that may otherwise go unnoticed. For instance, your work order reports are especially useful for monitoring workforce efficiency.
These reports will reveal situations like the heavy reliance on reactive maintenance, too much time spent on particular tasks, non-compliance with scheduled maintenance, any factors that are causing workers’ overtime, and other staff productivity problems that can affect a variety of your maintenance KPIs.
Costs and Expenditures
Every CMMS that was designed with good user experience in mind is an easy-to-use tracking tool that presents an ongoing overview of every kind of maintenance cost in your facility. All you need to do is define your KPIs and enter all cost-related data into the system.
Let’s say you are manufacturing shoes, and one of your KPIs is to reduce Maintenance Cost Per Unit. The formula for Maintenance Cost Per Unit says that we need to divide [total maintenance cost] with the [number of produced units].
You can easily get the needed information by dividing the total figure from your CMMS summary report (made up of spare parts, routine maintenance costs, emergency repairs, labor costs, etc.) by the number of shoes produced during the measurement period. Using this data, it’s easy to track this KPI on an ongoing basis and decide where to make adjustments or not.
Once you ensure that all related costs are accurate and inputted into the system when due, most modern CMMS are designed to aggregate the information into simple and easy-to-read reports. Using Limble, you can also generate custom reports and graphs to view cost-related key performance indicators at a glance on the CMMS dashboard.
That being said, just knowing your Total Costs isn’t something you can use to improve it. This is why, for many of the metrics and data we mentioned in this article, Limble CMMS allows you to drill down and explore which actions/things lead to the numbers you see on the dashboard.
So, for example, if you would click on Total Costs in Limble, you would get something like this:
And you can further click on each thing on the list to get an even more detailed breakdown.
With all of this data at your disposal, it gets much easier to define metrics you want to track.
Equipment and Asset downtime
One of the most beneficial features of CMMS is that it offers its users thorough historic information on asset history and performance. On the CMMS dashboard, you can easily see the level of downtime for particular equipment. Other information you can track includes the number of assets currently in operation, those nearing a breakdown – as well as all out of service machines.
All this information helps you to define measurable metrics you can use to track KPIs related to equipment downtime.
Spare Parts Inventory management
Efficient spare parts management is essential for optimal maintenance operations.
With a CMMS, you can easily avoid major inventory issues like overstocking, or stock-out during critical periods. This is achievable by tracking inventory KPIs and associated metrics such as stock-out, inventory accuracy, reorder point, slow-moving parts percentage, obsolete parts percentage, and more.
Accurate data informs good decisions
As you probably understand by now, metrics and KPIs are very closely intertwined and sometimes it might be hard to distinguish one from the other.
But at the end of the day, it doesn’t matter if you sometimes switch them around. What does matter is that the data you use to track them is detailed and accurate.
A maintenance department is a complex environment where one action can have an impact on several different things. This means that getting to the root of the problem is often impossible without quality data.
As it so happens, mobile CMMS like Limble is the perfect way to efficiently track and store all relevant maintenance-related information that you can use to make informed decisions.