Reliability Also Pays Off in Environmental Incidents and Energy Efficiency

The recent Aberdeen report, “Asset Management: Building the Business Case for the Executive,” points out that unplanned downtime, inability to maintain production rates, safety and environmental incidents can all be traced directly to equipment failures and mismatches in production rates and capacities. It examines specific strategic actions “best in class” companies are implementing around business processes, architecture and knowledge management to understand how those companies are addressing the challenges of optimizing performance while reducing operational costs and unscheduled equipment shutdowns.

The report uses four key performance criteria – overall equipment effectiveness (OEE), unscheduled asset downtime, maintenance cost, and return on assets (ROA) vs plan – to rank responding companies best in class, industry average, or laggard. The differences between leaders and laggards in these four asset management criteria range from 20% in OEE and 15% in unscheduled downtime to 29% in maintenance costs and 34% in ROA.

“The Best-in-Class enjoy less than a tenth of the unscheduled downtime and 26% higher OEE when compared to Laggards,” the authors say. “In fact, Best-in-Class manufacturers reduced their maintenance cost by 30%, hence under-spending the planned budget.”

The report also notes additional benefits of leaders over laggards:

  • 2.9% versus 5.4% asset downtime due to safety or environmental incident.
  • 15.1% versus -8.8% operating margin against corporate plan.
  • -8.4% versus +3% total energy consumption.

Access the full Aberdeen Analyst Insight, “Asset Management: Building the Business Case for the Executive,” by Nuris Ismail and Reid Paquin, offered at no cost for a limited time.

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