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Lessons On Cost Reduction (Read 2623 times)
Rolly Angeles
Rolly Angeles
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Lessons On Cost Reduction
05/31/07 at 17:59:07
 
Dear All,
 
Hoping that we can agree on this lesson,
 
Focus must be on RELIABILITY & not cost, because if RELIABILITY starts to improve then COST will definitely go down, there will be times that focusing on reducing COST will tend to hurt RELIABILITY, it cannot be the other way around. Having a low cost maintenance is a consequence of good maintenance practice. Reducing cost had been a focus for most maintenance managers and that perhaps, we need to learn from the lessons of history. Cost must be studied thoroughly not just based from its initial cost but on the entire life cycle cost of the equipment . . .  
 
Once upon a time
 
The Plant Manager walked into the plant and found oil on the floor. He called the Foreman and asked him why there was oil on the floor. The Foreman indicated it was due to a leaky gasket in the pipe joint above. The Plant Manager then asked when the gasket had been replaced and the Foreman responded that the mtce had installed 4 gaskets over the past few weeks and they each one seemed to leak. The foreman also indicated the Mtce had been talking to Purchasing about the gaskets because it seemed they were all bad. The Plant Manager then went to talk with the Purchasing about situation of the gaskets and Purchasing Manager indicated that they had been trying for the past 2 months to try to get the supplier to make good on the last order of 5000 gaskets that all seemed to be bad. The Plant Manager asked the Purchasing Manager why they had purchased from this supplier if they were so  
disreputable and the Purchasing Manager said because they were the lowest bidder when the quotes was received from various suppliers. The Plant Manager then asked why they went with the lowest bidder and he indicated that was the direction he received from the VP of Finance. The Plant Manager went to talk to the VP of Finance and asked why he set up that direction, the VP of Finance said, because you indicated that we had to be as cost conscious as possible and purchasing from the lowest bidder saves us a lot of money. The Plant Manager was horrified when he realized that he was the reason there was oil on the Plant floor.  
 
End of Story  
 
My Warm Regards,
 
 
Rolly Angeles
Teacher
www.rsareliability.com
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Rolly Angeles
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