Maintenance costs are a major part of the total operating costs of all manufacturing
or production plants. Depending on the specific industry, maintenance costs can represent between 15 and 60 percent of the cost of goods produced. For example, in foodrelated industries, average maintenance costs represent about 15 percent of the cost
of goods produced, whereas maintenance costs for iron and steel, pulp and paper, and
other heavy industries represent up to 60 percent of the total production costs.
These percentages may be misleading. In most American plants, reported maintenance
costs include many nonmaintenance-related expenditures. For example, many plants
include modifications to existing capital systems that are driven by market-related
factors, such as new products. These expenses are not truly maintenance and should
be allocated to nonmaintenance cost centers; however, true maintenance costs are
substantial and do represent a short-term improvement that can directly impact plant
profitability.
Recent surveys of maintenance management effectiveness indicate that one-third—33
cents out of every dollar—of all maintenance costs is wasted as the result of unnecessary or improperly carried out maintenance. When you consider that U.S. industry
spends more than $200 billion each year on maintenance of plant equipment and facilities, the impact on productivity and profit that is represented by the maintenance operation becomes clear.
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