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Managing Operations Effectively
Managers who understand key measures can manage operations effectively.
Managers need to know key measures in order to manage operations effectively.
Backlog management. Many people I work with believe a backlog is bad. They believe backlog is any work past due or incomplete. In fact, backlog is the total amount of hours, — not work orders — in the maintenance schedule that includes PM, CM and predictive maintenance (PdM).
So a backlog is good. Managers want four-six weeks of backlog for each discipline and two-four weeks of so-called ready backlog, which is where the maintenance schedule is developed. If managers can manage backlog and maintain the desired level of work, that indicates the department is effectively managing its workload.
Hours available divided by hours worked. One measure used to determine of the hours available to work is determining how many of those were direct. Nothing is more frustrating for a manger than to have the crew sit around with nothing to do. We typically use this as a measure for maintenance scheduler‘s ability to use and optimize the hours available for direct work.
Return on net assets (RONA). RONA measures financial performance calculated as net income divided by fixed assets and net working capital. It reveals if a company and its management are using assets in an economically valuable way. If maintenance costs are too high, then the RONA will be impacted by the cost of maintaining the assets, thereby reducing working capital.
Maintenance cost per square foot (psf). This measure is used extensively throughout industry to benchmark against. In July 2016, the Building Owners and Managers Association reported the following benchmarks for U.S. private-sector office buildings:
• total operating expenses: $8.07 psf
• total operating and fixed expenses: $12.47 psf
• security: $0.72 psf
• administrative: $1.45 psf
• cleaning: $1.52 psf
• utilities: $2.16 psf
• parking: $0.61 psf
• roads and grounds: $0.25 psf
• repairs and maintenance: $2 psf
Using my maintenance expenses from last year, my psf costs would be $4.11. Obviously, I’m way out of line.
Managers need to be clear on efficiency and effectiveness to make smart decisions. We can be efficient without being effective, and we can be effective but incredibly inefficient. The challenge is identifying the balance between efficient and effective.
The top two complaints in customer service are, “It’s too hot” and “It’s too cold.” Your challenge is to make it just right.
Andrew Gager — a.gager@nexusglobal.com — is managing director for North America with Nexus Global Business Solutions. He has more than 28 years of facilities and manufacturing experience, ranging from warehousing operations to plant management. He is a registered CMRP, CPIM, CRL, and Six Sigma Green Belt, and he is formally trained in change-management principles.
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