A major problem for automotive manufacturers is equipment repair costs and its associated externalities such as defective products caused by poorly operating machines and productivity loss due to machine downtime. This can lead to significant increases in operating costs and downward pressure on profitability.
In a post-COVID economy, this problem means cost savings matter more than ever before. Companies seeking to remain competitive and gain the financial flexibility to meet changing customer expectations and higher performance levels must eliminate unnecessary costs. In a contracting market, competition is cutthroat. Reducing operating expenses is the most effective way to survive.
Success begins with data. Executives enabled with predictive maintenance and real-time data tracking of machine performance are not only able to find the root cause of machine failure and eliminate it ahead of time—identifying equipment issues before a breakdown takes place—but also choose an accounting model, change a maintenance strategy, and become more profitable
3 ways predictive maintenance is the OpEx killer every business needs
Flexibility: Switch easily from an OPEX model to a CAPEX model
To achieve operational excellence while driving down OpEx costs like—consumables, fabric, maintenance, and waste—automotive companies will need to invest in cloud platforms, which make it possible to perform data analysis on their business operations.
Forecasting when equipment might need repairs and performing maintenance tasks before failure occurs enables automotive companies to minimize long-term costs and maximize machine uptime up to 98%. Because these improvements substantially prolong the useful life of the equipment, its costs are on the balance sheet as a Capital Expenditure (CapEx) and the company can depreciate them for tax purposes.
Adaptability: Develop a responsive maintenance strategy
Predictive maintenance, in addition to adding value to an existing asset, enables companies to develop an asset maintenance strategy that is responsive to market changes. Balancing equipment uptime against acceptable costs is easier with the right data, tracking, and reporting tools.
Automotive manufacturers can quickly modify their maintenance management plans to increase machine availability when market conditions demand more products and reduce maintenance activity when equipment is approaching end-of-life. “Depending on the facility, a predictive program, according to a recent report by the US Department of Energy, could achieve 30% to 40% savings.”
Profitability: Increase revenue and decrease operating costs
Increased equipment longevity and accurate performance data enable manufacturers to reduce operating costs without jeopardizing productivity. Based on the aforementioned US Department of Energy report, a “predictive maintenance program can yield remarkable results: a tenfold increase in ROI, 25%-30% reduction in maintenance costs, 70%-75% decrease of breakdowns and 35%-45% reduction in downtime.”
By identifying and examining gaps between predicted and actual performance, manufacturers are able to minimize machine downtime and take appropriate course of action if a failure occurs. As a result, companies are able to produce more products faster with fewer defects. The marked improvement in product quality and delivery speed also leads to a decrease in waste, eliminates repeat production costs, and increases profitability.
In an increasingly competitive economy, automotive manufacturers must be skillful in how they manage their resources. By choosing predictive maintenance technology to identify areas of improvement and reduce operational costs, manufacturers are able to make better decisions to boost innovation, strengthen resilience, and increase sales.
Related
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Predictive Maintenance: Audi Maintenance uses data to predict the future | https://www.automotiveworld.com/news-releases/predictive-maintenance-audi-maintenance-uses-data-to-predict-the-future/
