Commentary: Looking at maintenance as an investment

Mining is a tough business and in order to stay competitive, every available advantage must be considered and wherever possible, put into practice.

There are times where such an advantage requires a tremendous amount of effort with only a measured benefit. But there is an advantage that could benefit many miners a great deal — and all it really takes to get it started is to change a way of thinking.

Right now, pretty much every mining operation around the world looks at maintenance as a cost. The one guiding principle about anything labelled as “cost” is that it’s something to be controlled during the good times and cut as much as possible during the tough times.

Such a mindset is not only misguided and often leads to missed opportunities, but it can have catastrophic consequences given that in mining, maintenance makes up a larger portion of an operation compared with virtually any other industry.

This is due in large part to the very nature of the business: when you blast, break, grind and separate rock, it does tend to be a bit hard on the equipment.

On the other hand, if maintenance were considered an investment, newly realized opportunities could provide benefits that would help ensure the long-term viability of many operations.

One of the things that distinguishes a cost from an investment is that when you try to control or cut a cost, you have a defined limit that, once reached, cannot be forced further or it could cause more harm than good.

An investment, on the other hand, has a much greater range for benefit. In other words, the floor is always closer than the ceiling.
What does this paradigm shift mean in practical terms, and how should it be applied?

Let’s say a new liner has become available for some part of the operation, the lower part of a shell for a gyratory crusher, for example. The new liner is at least twice as expensive as the one that is currently used.

In an environment where maintenance is looked at only as a cost, this is when the conversation most often ends. However, when it is considered an investment, the conversation — and moreover the analysis — goes somewhat further.

The first bit of the analysis is to determine the downtime cost per hour. In this case, we shall say it is $50,000 per hour. The present liner requires change out every 12 weeks, and as it takes 16 hours and a crew of six to complete the task, is priced at $10,000.

The new liner is priced at $20,000, is changed every six months, and requires only eight hours and the same size crew to complete the task.

When you do the math you will find that for an investment of $10,000 (the price difference between the two liners) you will find a return on investment that would be the envy of many stockbrokers.

It would appear at first glance that this is not much more than applied common sense, however, those of us who have been in the maintenance field for any length of time know that opportunities like this get missed regularly.

Of course, this is not to suggest that those who make such decisions based solely on cost are any less intelligent than those who see such a situation as an investment opportunity that can potentially generate returns.

It’s just that they have been conditioned to think in terms of “maintenance equals cost, and cost must be controlled.”

To alter this traditional way of thinking takes some effort, but given the potential for large returns, the effort is more than worth it.

There are other benefits that are gained from the “maintenance as a means of investment” philosophy. Another common situation in many operations is a lack of time and resources.

Going back to our crusher example, you will recall that to change the liner, it took a crew of six people. Let’s say that the new liner was installed and that this crew is now required for the liner job only twice a year instead of every 12 weeks.

Therefore, during the times that the crew would have been needed on the 12-week cycle, it is available for other work, such as changing belt idlers that seem to be replaced only on breakdowns.

As the investment philosophy moves forward, other such improvements are realized, each building on the success of the other.

Even in operations where improvements are sought, the systems used to obtain them are not as focused as they should be.

Quite often when an improvement is identified, the process starts with someone seeing a better way of doing a particular task. They pass on this information to their immediate supervisor.

Many will do their best to get the process of making the improvement happen, but given the amount of work and range of responsibilities they have, this is usually hit-or-miss.

To get the full benefit of maintenance as an investment, there are some basic steps that are required.

First, upper management must look at how they and others in the operation currently view maintenance. This might require an outside resource so that an unbiased conclusion can be obtained.

If it’s concluded that due to the current mindset, there are indeed opportunities being missed, then a clear, concise program will need to be developed so that a process of continuous improvement and maximum return on investment can move forward.

This program will require some basic components, the first being a dedicated crew whose only task is to seek out and obtain investment opportunities.

Such an office, which we will call the office of special projects, would work with both operations and maintenance to get a complete picture of the cost of downtime for all the equipment, and seek out ideas from across the entire operation as to what types of investment would be required to see a much better return on the maintenance that is currently being carried out.

If a suggestion for an improvement comes forward, the office of special projects would be responsible to see that it is fully investigated and, if found to be of benefit, to work with the people who have responsibility for maintenance in that particular area to realized that improvement.

It would not take very long before the return on investment in the office will be far greater than the initial capital required to set it up.

Once the process of having maintenance considered as a means for investment is completed, opportunities that have been there for a long time will emerge.

Winston Churchill put it quite well when he wrote about opportunity: “Remember the story of the Spanish prisoner. For many years he was confined in a dungeon — one day it occurred to him to push the door of his cell. It was open; and it had never been locked.”

— The author worked for more than 30 years with the Iron Ore Company of Canada in a variety of positions including welder, lead hand, team leader, PM inspector and designer. In 2007, he established the mine-maintenance consultancy Foresight Solutions Inc., based in Labrador City, NL,
www.foresightindustrialsolutions.ca. He can be reached at foresigh@crrstv.net or tel. 1-709-944-2064.