What is a Key Performance Indicator?
A key performance indicator (KPI) is a measured value that signifies how well an organization is meeting a strategic goal over time. Organizations often utilize numerous KPIs to track their progress across various parts of their operation. Asset management KPIs help maintenance managers evaluate an asset’s performance as well as bring visibility to problems or a need for change.
Maintenance professionals use a computerized maintenance management system (CMMS) to track numerous maintenance metrics, including information about asset performance. When used correctly, CMMS software can provide valuable maintenance reports that help you make better decisions about your assets.
Asset Management KPI Examples
Every organization has its own unique strategic business goals and will want to track different types of information. However, there are a handful of KPIs that are used across many organizations. In this article, we describe common asset management KPIs.
Mean Time to Repair
Mean Time to Repair (MTTR) represents the average time required to repair an asset, from the moment an incident occurs until it is returned to service. This measurement includes the time it takes to notify technicians, determine the issue, perform maintenance, test the solution, and get the asset running. To calculate the Mean Time to Repair, you divide the total amount of downtime (usually in hours) by the number of repairs:
How to Interpret Mean Time to Repair
MTTR is a reflection of how quickly the maintenance team responds to breakdowns and is used to predict how long a particular piece of equipment will be unavailable. Too much downtime can result in missed orders, overtime, and strained client relationships. Downtime on mission-critical equipment greatly impacts your bottom line, since all related operations cannot function.
MTTR is commonly used when making repair versus replace decisions. As assets age, they take longer to repair. Using a MTTR report can show how an asset is performing relative to similar assets and help you build a case for replacement. That said, there may be other underlying issues that are causing an undesirable MTTR. You should also investigate whether changes are needed to staffing, scheduling, or inventory management.
Mean Time Between Failure
Mean Time Between Failure (MTBF) is a measure of an asset’s reliability and directly affects availability. It represents how long equipment performs its intended function under normal operation before a problem occurs. Note that MTBF excludes time required for proactive maintenance activities like scheduled preventive maintenance. MTBF is calculated by dividing the total runtime (the time the equipment is in use) by the number of failures.
How to Interpret Mean Time Between Failure
By tracking Mean Time Between Failure, an organization can monitor an asset’s current performance as well as try to predict an asset’s future performance. A low MTBF value (meaning that failures occur often) can be a sign that equipment is reaching its end of life and is becoming too difficult to maintain. Instead, it would be more economical to replace the asset.
MTBF may also signal that there is an issue with the asset’s preventive maintenance plan. Maintenance managers should determine if there is a need to change the frequency of scheduled maintenance tasks or introduce new ones.
Overall Equipment Effectiveness
Overall Equipment Effectiveness (OEE) measures the productivity of an asset over a period of time. This KPI is typically used in manufacturing environments, especially where lean manufacturing is practiced. While the maintenance team may not be responsible for tracking this KPI, it will be impacted by maintenance activities. This calculation is a little more complicated than the previous KPIs we’ve discussed, but we will try to simplify it.
Availability means, “Does the asset run when it is scheduled to be used for production?” It can be determined by dividing actual run time by planned production time. Availability excludes any planned maintenance activities, such as preventive maintenance or maintenance that takes place during plant shutdowns.
Performance compares how much product was actually produced to what could theoretically be produced during the actual availability of the asset. It is the maximum speed possible for producing quality parts. To calculate performance, first multiply the ideal cycle time (i.e., 0.75 seconds per unit produced) by the total count of units produced. Then, divide that number by the total availability of the asset.
Quality measures how many units met quality standards, taking into account any that were defective or require a rework. In this equation, quality compares the number of good units to the total number of units produced.
How to Interpret Overall Equipment Effectiveness
Using Overall Equipment Effectiveness, manufacturers can assess how efficient their production process is and what is negatively affecting it. Low availability might be caused by faulty parts or insufficient preventive maintenance such as lubrication or calibration. Low performance may be related to factors that affect your cycle time. For example, machines may experience excessive wear and tear from being run outside of specification. Poor quality indicates that there may be a problem with the production process, either with assets or production staff. Using a CMMS, maintenance managers can identify what changes to make to maintenance schedules, activities, or resources to improve OEE.
Track Asset Management KPIs with FTMaintenance
FTMaintenance is a CMMS that allows you to capture vital asset and maintenance data to calculate insightful KPIs to meet strategic goals. Maintenance is an important aspect of effective asset management. To remain successful and profitable, it is essential to measure asset performance and adjust maintenance operations accordingly. Tracking asset management KPIs using a CMMS will help you make smarter, data-driven decisions. Schedule your demo today to learn how FTMaintenance CMMS software can help you improve your asset management process.