Most businesses have assets and those assets must be efficiently and effectively controlled because this has a major impact on the bottom line. Maintenance – the servicing and monitoring – of fixed infrastructure and mobile equipment is an integral and important part of asset management that maximizes an asset’s useful lifetime and minimizes its cost, whilst also enhancing its safety.
As a specialist insurance provider to ports, terminals and the freight transport sector, TT Club identified maintenance issues as a recurrent contributor to costly insurance claims. This was a key driver in the development of a newly published 76 page handbook ‘The Importance of Maintenance – a handbook for non-engineers’.
The handbook – produced in association with the Port Equipment Manufacturers’ Association (PEMA) and ICHCA International – is a comprehensive guide for good practice in maintenance procedures. It seeks to help port businesses assert or improve control over their infrastructure and equipment in straightforward and cost effective ways, thereby improving business operations and making meaningful cost savings.
TT Club analysis
Analysis by TT Club has shown that, in the port and terminal industry, issues resulting from the application of inadequate or incorrect maintenance procedures cause about 25 percent of the cost of equipment damage. Furthermore, about 50 percent of quay crane claims arising from weather issues where cranes are blown along their rails are exacerbated by poor maintenance of gantry motors or brakes. Poor maintenance should clearly be a prime concern to those aiming for the optimum performance of their assets.
The handbook offers readers a general understanding of the critical issues concerning asset management. The guidance aims to be accessible to non-engineers, seeking to help management and decision makers in port facilities. It is also relevant to other businesses involved in cargo handling; it offers advice for improving control of their assets, while, at the same time, maintaining customer service levels.
“The handbook concentrates upon two stages of the asset lifecycle – maintenance and monitoring – but gives a concise picture of the entire lifecycle,” explains James Callahan, TT Club board member and chairman, president and chief executive of Nautilus International Holdings Corporation Los Angeles. “It was specifically written with non-engineers in mind and, therefore, not intended to be very technical. Rather, the aim was to emphasize certain key processes that will, ultimately, protect your bottom line and improve profitability.”
Operations and engineering
The handbook highlights the need to balance the requirements of the operations and engineering and maintenance departments. There is often a cultural difference between these departments and operations people sometimes see maintenance as more of a hindrance than a help, but maintenance is like fuelling a car: if you don’t do it then it will stop working!
While the engineering department is usually responsible for asset life cycle management, the operations department seldom has any significant involvement. As Laurence Jones, TT Club director global risk assessment argues, “This is a misguided strategy as the operations department has an integral role to play. We would urge port and terminal facilities to overcome inevitable cultural departmental differences and to implement an integrated maintenance policy and strategy.”
Two common issues
Senior management must address two common issues that often disrupt efficient operations – task scheduling, or the allocation of assets to tasks, and budgetary constraints. Operations and maintenance functions compete for access to assets. However, satisfying short-term operational needs may lead to major asset downtime because of failure – postpone maintenance at your peril! One of several useful case studies in the handbook describes an incident in Asia when a quay crane suddenly collapsed due to rope failure. Despite broken strands having been found in the boom ropes several weeks earlier, the rope change was deferred due to operational pressure. This failure of task scheduling resulted in the loss of a quay crane and significant operational downtime.
Budgetary constraints
When facing budgetary constraints, a quick and easy way to cut costs is to defer or reduce the maintenance budget – but take caution if considering this approach! A case study from Australasia details how a maintenance department was told to cut its budget by 20 percent. While this, initially, helped finances, it was continued for over six months, with planned maintenance jobs deferred and repetitive tasks and inspection frequencies extended. The number of equipment breakdowns increased, severely reducing ship loading rates, and more business was lost.
The situation spiralled and, in the end, the only way to bring the equipment back to acceptable levels was to engage numerous contractors and additional staff for a year. The actual maintenance budget for that year was 200 percent above the norm.
So, if the maintenance budget must be reduced, make it a shortterm solution! As an extended solution, it affects reliability and any costs incurred to regain reliability may substantially exceed any costs saved. Impacts on future reliability may adversely affect service delivery with consequent loss of business. It is, therefore, prudent to enforce a realistic maintenance budget on schedule.
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