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

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