Bridging the divide: The strategic alliance of maintenance and finance

In today’s cost-conscious business environment, the intersection of maintenance and finance has never been more critical. According to Terry Wireman in Developing Performance Indicators for Managing Maintenance (1998), as maintenance planners and managers grapple with stringent budget constraints, the age-old mantra of “doing more with less” becomes a daily reality.

Traditionally, executive teams perceive maintenance as a cost centre, often resulting in slashed budgets and limited resources. What’s more, finance departments often allocate funds without a nuanced understanding of maintenance requirements, leading to inefficiencies and missed opportunities. The key challenge for maintenance professionals is not merely managing budgets, but redefining these financial interactions to highlight the true value of proactive maintenance strategies.

To shift perceptions within finance, maintenance needs must be articulated in the language of financial metrics and outcomes. It’s essential to pivot from technical explanations of equipment failures to discussions about financial implications, such as production losses, quality costs, operational efficiency, compliance and reputation, and asset depreciation.

For instance, quantifying the costs associated with halted production and the financial burden of ramping up operations can be more persuasive than technical jargon. Similarly, detailing the expenses related to rework, scrap and other quality issues arising from inadequate maintenance highlights the financial stakes involved.

Operational efficiency can be emphasized by highlighting the increased energy costs and operational inefficiencies linked to poorly maintained equipment. Compliance and reputation are also crucial areas, where discussing the financial impact of customer dissatisfaction, environmental fines, and safety violations due to maintenance failures can make a significant difference. Additionally, addressing how inadequate maintenance accelerates the depreciation of capital assets can impact the company’s long-term financial health.

By framing maintenance as an investment rather than a cost, professionals can illustrate the broader financial benefits and foster a deeper understanding within finance departments. Recognizing maintenance as a strategic investment aligns both maintenance and finance towards enhancing organizational profitability. This perspective fosters a collaborative environment where strategic planning and financial consciousness converge to optimize both assets and financial returns.

According to Wireman, effective maintenance management involves leveraging every company asset to maximize return on investment (ROI). Like a skilled financial planner diversifies investments, a maintenance manager must diversify maintenance strategies to mitigate risks and enhance returns. This includes preventative and predictive maintenance, comprehensive stores management and procurement, robust work order systems and CMMS implementation, continuous training and development, and operational involvement and continuous improvement.

Scheduled maintenance activities designed to prevent equipment failures before they occur, ensuring that critical spares are available without maintaining excessive inventory, streamlining maintenance operations and improving tracking and reporting capabilities, equipping maintenance staff with the necessary technical and interpersonal skills, and engaging operational teams in maintenance planning and execution to ensure alignment with organizational goals are essential strategies for effective maintenance management.

For finance to back maintenance initiatives robustly, presenting clear and relevant data is imperative. This includes demonstrating the ROI of reducing maintenance, repair and operations (MRO) inventory appropriately and showing how planned downtime is significantly less costly than unplanned interruptions. By presenting maintenance needs in financial terms, professionals can secure the necessary financial support and foster a deeper understanding within finance departments.

A healthy dynamic between maintenance and finance should be constantly promoted. With maintenance adopting a financially savvy language and focusing on “maintenance as a quality investment,” finance can transform into a powerful ally. Cooperation is pivotal for thriving in a cost-focused business landscape, ultimately resulting in operational efficiency and alignment.

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