Maintenance Cost Reduction Strategies and Model Development for Ethiopian Leather Industry
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Date
2019-10-25
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Addis Ababa University
Abstract
Maintenance is the combination of all technical, administrative and managerial actions during
the life cycle of an item intended to retain it in, or restore it to a state in which it can perform the
required function. One way that companies can regain control over their costs is not only to
assess these costs, but also systematically classify and identify the various costs that are
associated with maintenance. Therefore, a maintenance cost reduction strategy is important to
reduce maintenance cost. In this study, the factors increasing maintenance cost, identification of
critical machines, causes of machines breakdown, and availability of purchasing, finance and
maintenance strategy were assessed.
A set of four year maintenance cost data were collected for the identification of factors
increasing the maintenance cost. To analyze the data six sigma tools, which are pie charts, Pareto
charts, fishbone diagram, histogram and ABC equipment classification methods were used. Due
to shortage of recorded data on breakdown time impossible to find maintenance cost associated
with breakdown.
Based on the analysis main factors increasing maintenance cost were identified. The data
analysis showed that the spare parts and outsourcing maintenance work cost account 66% of the
maintenance cost. So that the spare part and outsourcing maintenance work take to further
investigation.
On the other hand the result from the analysis shows that the company has no proper
maintenance strategies to different machines, record keeping and documentation on maintenance
activities and history and they have knowledge and skill gap on how to maintain a machine, how
to use maintenance tools and over all, unavailability of all-inclusive and standardized
maintenance, purchasing and financial strategy that reduce maintenance cost to follows.
This paper proposed lean maintenance strategy and develop a model through incorporating the
lean maintenance strategy for the reduction maintenance cost, considering the existing problem.
The model simplifies the whole process and makes the activities to be efficient and standardized.
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Keywords
Ethiopian Leather Industry, Cost Reduction, Model