There are three things about recessions that are certain:

  • There will always be another one
  • The best time to prepare for the next downturn is now
  • Investing in better maintenance is one of the best ways for companies to protect their bottom line during one

This last point is especially important for organizations that are looking to boost business during tough times, instead of just treading water. In this situation, maintenance can be a secret weapon for companies looking to prepare for, survive, and accelerate out of an economic crater.

Keeping assets in good health is always important, but it becomes even more critical in a recession when budgets are cut and operating expenses are frozen. That’s why the time is now to invest in better maintenance systems and procedures so cost-cutting can be managed with minimal impact.

The consequences of poor maintenance in a recession

The impact on health and safety

Cutting maintenance costs can lead to more than just fewer resources and added inconvenience— it can threaten the safety of staff and customers.

“There are a lot of safety implications to cutting corners on maintenance,” says David Berger, the President of Lamus Group Inc. and a consultant and author with over 30 years of experience in operations, maintenance, and engineering.

“There are regulatory requirements in every industry, and those requirements are going to be harder and harder to meet if you don’t have the people in maintenance to focus on it.”

There are numerous tragic stories that back up this idea. A lack of maintenance caused by budget constraints has led to airline crashesbridge collapsesoil spills, and more.

Maintenance can be a secret weapon for companies looking to prepare for, survive, and accelerate out of an economic crater.

The well-being of workers and customers should always be top of mind, but it’s especially critical during a recession when safety is often an unintended victim of budget cuts and a single accident, recall, or health scare could send customers to competitors.

The impact on product quality

Product quality is often compromised when budgets are slashed, causing maintenance to suffer and downtime to rise. When the desirability of products drop, profits decline, and costs are cut even more. The process repeats itself and the company is sent into a downward spiral.

“In a recession, you have to choose between paying now or paying later,’” says Berger.

“You may have to pay a little more on maintenance now, but if you don’t, it’s going to cost more in the future to catch up with all the breakdowns that’ll happen.”

Even if an organization maintains its own high product standards during a recession, it may not be enough. Today’s highly interconnected supply chain means that if a supplier of key parts goes out of business, it can put businesses in a tough position to keep those standards up.

Maintenance can play a key part in overcoming these challenges. Better maintenance will help you avoid costly breakdowns, extend asset life, and improve productivity to give you shelter during turbulent times.

Weathering the storm with better maintenance

A looming recession can strike fear into the hearts of manufacturers, but it doesn’t have to be this way. Fine-tuning your maintenance strategy and making strategic investments in maintenance resources can reduce your company’s exposure to risk and help the business hit the ground running when the economy starts to recover.

Keep assets healthy

Manufacturing equipment is expensive. If one of these critical assets breaks down for good during a recession, it can make a tough situation must worse. Establishing an effective preventive maintenance program can help you avoid this nightmare by keeping assets running for longer and reducing the likelihood of a huge, unexpected purchase.

The well-being of workers and customers should always be top of mind, but it’s especially critical during a recession when safety is often an unintended victim of budget cuts and a single accident, recall, or health scare could send customers to competitors.

A computerized maintenance management system (CMMS) is one tool facilities can use to build a PM program that ensures assets are operating the way they’re supposed to and can capitalize on every hour, minute, and second of production.

Improve planning for better labor efficiency and inventory purchasing

It’s crucial for companies to save money on labor and parts— and maximize their return on these investments— during a recession. Allocating money to better processes and tools to make maintenance more efficient is one way to uncover cost savings in an economic downturn.

“The biggest thing the maintenance department can do to help a company survive a recession is better planning,” says Berger.

“Maintenance teams should not be fighting fires all the time. The majority of the work should be preventive to be efficient. It’s so much easier to weather a recession in a planned environment.”

Being smart with inventory purchasing and usage is also critical. Having too much inventory is a poor use of money and stock-outs cause spending to skyrocket from urgent reorders and the downtime created while waiting for parts and supplies.

A CMMS allows maintenance teams to automate the work order and inventory purchasing process, making it easier to manage schedules, track parts, identify backlogged tasks, complete work, and respond to emergencies. Streamlining maintenance ensures you’re getting the most from your staff and that they are contributing in areas that create value for the business.

Reduce the cost of downtime

Downtime is synonymous with lost money. Every hour of downtime can cost anywhere from $1,000 to over $1 million. Surviving these losses is just not possible for many companies during a recession.

The maintenance department is often on the front lines of the war against downtime, either helping to prevent it or reducing its impact. In fact, this article by Plant Services estimates that asset availability increases by up to 10% with better maintenance planning, and asset reliability increases by up to 5%.

In a recession, you have to choose between paying now or paying later. You may have to pay a little more on maintenance now, but if you don’t, it’s going to cost more in the future to catch up with all the breakdowns that’ll happen.

A CMMS is a great tool for developing better maintenance practices, which helps your facility build a formidable defence against the impact of downtime. For example, a CMMS makes mobile maintenance possible, allowing technicians to access work orders, checklists, and repair information (like manuals and diagrams) in seconds. Repairs and inspections can be completed in a fraction of the time, limiting downtime and saving your bottom line.

Establish an agile mindset

Flexibility is more important than ever in a recession. Companies that are able to pivot quickly are more likely to survive sudden drops in business, source new suppliers to save costs, and turn small wins into bigger ones when they come along.

Maintenance has a huge role to play in establishing an agile culture and helping companies separate costs that should be cut from costs that are essential.

“You need to know the difference between cutting fat and cutting bone,” says Berger.

“That’s one of the most important questions that you need to ask during a recession. You need to show where you’ve spent your time and money, and the impact of that. You need to show the consequences of eliminating that work and how it could affect the bottom line.”

A CMMS is a perfect tool for demonstrating how important maintenance activities can be to a company’s balance sheet. It has the ability to measure maintenance work and determine how each task has impacted the business. For example, you can track the amount of preventive maintenance completed in a certain time period and compare it to the number of breakdowns in the same stretch to show how maintenance has influenced uptime, production, and costs.

When the clouds part: Maintenance and post-recession growth

Surviving a recession is only half the battle. Businesses must be well-positioned to meet increased demand when the economy recovers and accelerate as fast as possible to gain an edge over competitors.

This article by consulting firm Bain and Company explores lessons from the last global recession and how companies can use them to prepare for the next downturn. They found that the most successful companies accelerated out of the recession by spending and hiring more.

For this strategy to be successful, maintenance has to be an integral part of it. Investing in maintenance ensures the money that is spent leads to actual results by enabling production to ramp up without broken equipment causing delays or subpar goods.

The biggest thing the maintenance department can do to help a company survive a recession is better planning…It’s so much easier to weather a recession in a planned environment.

“You need to make sure that when you do turn the machines on after a recession that they’ll actually work, and that starts with proper maintenance,” says Berger.

“Resisting the temptation to cut costs too deeply will help you increase capacity and availability so you can hit the ground running and meet demand that competitors can’t.”

The bottom line: Better  maintenance can be a recession-buster

Better maintenance is a crucial part of the dam that can keep the roaring waters of a recession at bay. When you can rely on your assets to run efficiently and reliably, you can stay a step ahead of the competition and weather tough times. An exceptional maintenance strategy makes this possible. Maintenance software, like a CMMS, is designed to help optimize the performance of assets, especially in times of recession and downturn. Investing in maintenance, and the tools that improve it, is key, especially when every breakdown costs a small fortune and every dollar counts.

Source:- https://www.fiixsoftware.com/blog/how-to-prepare-for-a-recession-with-better-maintenance/