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The No. 1 PM Law You Should Know

February 23, 2010

The number one law of economics you need to know is based on a principle discovered over 200 years ago. You’ve probably heard of it - it’s called the Law of Diminishing Returns.

As any good MBA student can tell you, this law states that as one production factor increases while the others remain constant, overall production decreases after a certain point.

In plain English, it means as you increase preventive maintenance, production output eventually decreases. The following chart illustrates:

The Law of Diminishing Returns

 

 

 

 

 

 

 

 

 

 

You see, there’s a fine line between doing too much, too little and just the right amount of preventive maintenance. Clearly, there’s a point at which increasing PM hurts the bottom line.

The reason? Simple. Most PM procedures require that the equipment is shut down. That means uptime goes down, so production output eventually goes down too. Meanwhile, maintenance costs go up.

So how much preventive maintenance is too much?

According to a private study, best practice programs generate 15% of their maintenance work from PM inspections. Another 15% is corrective work identified by those inspections.

So preventive maintenance should account for about 30% of your total maintenance workflow.

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Comments (2)

  • This is an interesting article on a subject that I've dealt with for the last 35 years. I believe that PM is one component of a product. It's one of the necessary components required to provide production with a product called "capacity". A long list of PM activities may look impressive and offer an easy way to measure output of the PM crew, but this is a 2-dimensional perspective. A PM program must be a living process and have a 3rd dimension, it must be the ever-changing, growing and improving process.

    My experience gives me a rule of thumb; that on a monthly basis there should be a 1% to 3% change in PM schedules, tasks, cancellations or improvements. Without this living component I've found that the effectiveness of PM declines. Simply put PM done right is inspection. Inspection will find ways to improve, and improvements will drive better results. As the author said the results decline based on "things being constant", so moving to a process of continuous improvement is what I recommend, because it works.

    1) Posted 10:25 am, 25 February 2010 by Herb Charles

  • Wouldn't there be some correlation with your 'PM curve' and the RCM 'PF curve' to show how predictive services, tracking measureable degradation, will intersect PM resources, in 'measurement/tracking' wear & fault to failure scenario? I find PM and operator-type walk-abouts deploying tools of some nature. In later stage of component failure's the physical signs can be 'given over' to basic measurment/senses, so, is not an element of 'prediction tracking' affored these resources?

    2) Posted 1:42 pm, 01 March 2010 by Robert L. Bagley

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