Free Course Video #2:

The value of planning & scheduling

This is a free sample from the course Implementing Maintenance Planning & Scheduling (PS100).

Key points

In this lesson, I talk about the value of planning and scheduling. I’m going to do that by walking through a detailed example in which I’m going to show you how you can increase your workforce by 35% without hiring anyone. Instead, you’re going to get 35% higher output from your existing workforce. And I’ll show you how to put a dollar value on that productivity increase.

And that is something very important, for when you are communicating with management in your organization to sell them the concept of planning and scheduling, being able to express the value of scheduling and planning in dollar terms will make it much easier to get management support. The key points I want students to take away from this lesson are:

What you’ll learn

This video is one of the 48 video lessons contained in the course “Implementing Maintenance Planning & Scheduling”.

Some of the other things we discuss in this module are:

The bigger picture of why Maintenance Planning & Scheduling is important to your success
The basic elements of a maintenance planning & scheduling process
How waste occurs in maintenance
How we use planning & scheduling to tackle this waste and become more efficient
Do you have protective functions? Do they have failure-finding tasks assigned?

Please note: if you are interested in the course in one of these languages either with subtitles or with a voiceover in your native language, please contact me directly. We are working hard on getting the course translated into all these languages, but this will take some time.

Video Transcript - LESSON 2.4

The Value of Planning and Scheduling

Hi there and welcome to lesson four of module two in which I’m going to talk about the value of planning and scheduling. I’m going to do that by working through a detailed example in which I’ll show you how you can increase your workforce by 35% without hiring anyone. Instead, you’ll get 35% more output from your existing workforce. And I’ll show you how to put a dollar value on that productivity increase. And that is something very important, because when you engage with management in your organization to sell the concept of planning and scheduling, being able to express the benefits of planning and scheduling in dollar terms will make it much easier to get management support.

The key points that I want you to take away from this lesson are first with planning and scheduling, a typical maintenance organization can increase their workforce by about 35% without hiring any more people. You do this simply by being more efficient and getting more work done with your existing resources. And the second key point is that the value that planning and scheduling brings to an organization can be expressed in monetary gains. I.e., it can be expressed in real hard dollars and that is important, because that is the language that management understands and so that is the language that you need to be able to speak.

Now in the previous lesson we talked a lot about waste in a typical maintenance organization and we saw there were many areas where waste occurs in a maintenance organization, and we talked briefly how planning and scheduling reduces that waste. And in lesson three we also talked about the fact that typical productivity or wrench time in industry is about 30%. Now in this lesson we’ll explore the value we create when we implement planning and scheduling and increase that productivity to a typical 45%. You see, 45% is typically what you can achieve if you put in place an effective planning and scheduling process, and it should be achievable for just about any organization out there.

Now, the example we’re going to discuss is the example that is in the wrench time calculator that you can download from the article How to Sell Planning and Scheduling to Your CEO on the Road to Reliability website. And so you may have actually downloaded it before joining this course, but if you haven’t, there’s a link to download the spreadsheet in the resource section of this lesson. It’s a very simple but powerful little calculator and helps you to estimate your current wrench time and then determines the value you can create for your organization by implementing planning and scheduling and improving your wrench time. You don’t need to download it right now, as I’m going to walk you through the calculations, but you will need to get it for the assignment that is later on in the course.

Okay, so let’s start. Now, in this example, we’re going to assume we have a relatively small organization with 20 maintenance technicians. These technicians work five, 10 hour shifts week for 48 weeks per year, and their current productivity is a typical industry average of 30%. So every week our 20 technicians work five shifts of 10 hours. That means every week our 20 technicians work a thousand hours. 20 technicians times five shifts times 10 hours per shift, gives us 1,000 hours per week. And we already said that their productivity or wrench time is a typical 30%, and you can assess that in the wrench time calculator by looking at specific jobs as an example. I’ll show you later when I do a walkthrough example of the wrench time calculator.

But for now we’re assuming that we’re taking a 30% wrench time. That means, out of the thousands hours of work we do per week, only 300 hours per week are actually productive maintenance hours. Which is 1,000 hours times the 30% wrench time, which gives us our 300 productive hours. Now, we’re going to implement planning and scheduling in this organization and we’re going to eventually, after maybe about six months, achieve a maintenance productivity of 45%. Yeah, so we’re going to increase the wrench time from an initial 30% to 45%. But as part of selling the value of planning and scheduling to our leadership, the management of our organization, we promised that we would not do this with more people. We said we can do this with no extra people. Now, that creates a bit of a challenge as for planning and scheduling to work, we do actually need to have a planner and a scheduler. And since we were dealing with a reactive maintenance organization, we didn’t actually have those roles.

So what we’re going to do, is we’re going to take some of our technicians and use them to fill the planner role and the scheduler role. A typical industry ratio of the number of technicians a planner can plan for is about one to 20, to one to 30. So that means that one planner should be able to plan the work for about 20 to 30 technicians. Now, we’ll assume the bottom end of that ratio. And so, we’ll assume we need one planner. Let’s also assume we’d take one technician and convert her or him to our scheduler.

That now leaves us with 18 technicians to do the actual maintenance work, which is clearly a reduction in available manpower compared to the original 20. So how is this going to work? Well, let’s work the numbers up again. We now have 18 technicians who work five shifts per week with 10 hours per shifts, right? Which gives us 18 technicians times 10 hours times five shifts is 900 hours per week, which is a 10% reduction from the original 1,000 hours per week. Which makes sense, because we took away two technicians out of the 20 which is also 10% right? So we’ve actually reduced our available hours by 10%. But having implemented planning and scheduling, after about six months, our productivity has increased. It is no longer 30% but a more reasonable 45% and that means we now get 45% out of 900 hours is 405 productive hours per week. Even though we reduced our number of technicians, we’ve actually gained 105 productive hours in a single week. That is 35% increase in productivity.

Now, the traditional way to increase your man hours by 35% from a 20 man crew, would be to hire another seven technicians, which is 35% times 20. And that is the beauty of maintenance planning and scheduling. We achieved that same 35% increase in productivity without recruiting any additional staff. In fact, we have two less technicians and that is exactly what this magical formula shows. In fact, the productivity of 18 technicians supported by a planner and a scheduler is actually equal to the productivity of 27 technicians without planning and scheduling. And so, 18 plus two actually equals 27.

Now, that we have defined the productivity gain in man hours, we can actually put a dollar value against that, and that is exactly what the wrench time calculator does for you. Now, let’s assume our technicians cost a company $100 per hour, and of course this varies to where you are in the world and what skill set they have et cetera. But we’ll take around $100 per hour number. And remember, those should be the total cost. That’s not what a technician earn. That is the cost to the company. So we’re going to assume $100 per hour per technician, and we can see that the 35% productivity across our crew of 20 technicians would be worth more than half a million per year. That is each and every year.

So by implementing planning and scheduling in a crew of 20 people, we have gained monetary value of half a million dollars per year. Now you can imagine in a large scale industrial organization with potentially hundreds of technicians, contractors, or staff, the value of planning and scheduling can quickly run in the millions of dollars per year. But even in a relatively small organization, the value is really significant. And remember, the value is only one part. We’re really doing this so that we can break through the reactive maintenance cycle and improve reliability in the longer term. And that is where even bigger monetary gains will come from.

Also remember, when you price the cost of your technicians per hour, you really need to use a total cost of company, which is what I just mentioned, which is usually a lot more than the rate of technicians get paid, right? Typically, it’s 60 or 70% more, and again, that depends on where you are in the world and what industry you’re in. So make sure you do use the right labor cost when you make this calculation. And look, it doesn’t have to be accurate to the last dollar, but you don’t want to be off by 50% either. This is important to get right, because this is the number that management, they’re going to be very excited about, or at least it should be.

Now remember, what we saw here is a rather simplistic example to demonstrate the value of planning and scheduling that you can bring to an organization. In real life, things do and will get a lot more complicated. For example, there’s many ways that you can set up your planner and scheduler roles. And this is something we’ll talk about in more detail in module four on planning and module six on scheduling. For example, some small organizations might struggle to have separate planners and scheduler roles and may therefore opt for a combined planner scheduler role. Not my favorite solution, but sometimes it’s required. Other larger organizations or organizations that operate really technically complex plants, may actually opt from multiple planners, in which case you may have planners who only plan for a specific trade.

And the bottom line is that you really need to consider your organizational requirements and then determine how you can best achieve those. And a great thing about the wrench time calculator is that you can very easily play around with your assumptions. It literally takes no more than a minute to figure out if your organization could support, for example, three planners and schedulers and still create a similar improvement in productivity. And I’ll show you this a little bit later in the demonstration of the tool.

Now, just a little bit on wrench time assumptions, because you ultimately will need to make an assumption when you put this together. As we said in lesson 2.3 and we’ve talked about again now, without planning and scheduling, typically your wrench time that you see in an industrial maintenance organization is 30%, but it can actually be a lot lower. I’ve seen organizations with wrench times in the teens, i.e. Around 15%. Now, when you implement a sustained and effective maintenance planning and scheduling process and it’s running and it’s sustained, you should be able to get wrench times of around 45%. World-class organizations achieve wrench times of 55% upwards, maybe 60%. But please, do not use that when you build your business case, because getting to world-class is really a long, hard journey, and a lot more effort to get to the basic 45% wrench time. And not many organizations will ever get there for many different reasons. But please don’t plan for anything upwards of 45%.

Getting to 45% productivity is very realistic for most, if not all organizations. And so that is something that you should be able to use as a basic assumption. Now if your current productivity is really low, so if you are one of those organizations that has wrench times in the tens, i.e. 15%, maybe start with a lower target of say 35 or 40%. Keeping it realistic will really help you to sell the concept to your organization, and it gives you the ability to exceed your target. In the next couple of minutes, I’ll just walk you through the actual wrench time calculator. It will be quick, but it’s just to give you a feel for how the tool works.

All right, in the rest of this lesson, I want to talk you through how to use the wrench time calculator. If you don’t already have a copy of the calculator, then you can download it from the resources section in this lesson. But you may have already downloaded the calculator when you read the article, How to Sell Planning and Scheduling to Your CEO on my Road to Reliability website. And if you have, then you can just use that one, because it’s essentially the same calculator. All right, so go ahead and fire it up, open a spreadsheet, if you can, so that you can walk with me. Otherwise, just watch the video and it will become clear how to use it, it’s a very simple tool. So when you open up the spreadsheet, you’ll basically see this title screen. It has a link to the article that I showed you earlier, that I mentioned earlier, How to Sell Planning and Scheduling to Your CEO, and there’s two buttons.

The first button that says, “Step one, The Problem.” And the second button, it says, “Step three, The Value.” Now, those steps link back to the steps I describe in that article, How to Sell Planning and Scheduling to Your CEO. Now, the first step, The Problem, is basically going to take you to a worksheet where you can enter your data and estimate your maintenance productivity. The second button, Step three, The Value, will take you to another worksheet, which then takes that maintenance productivity as an input and helps you to estimate the potential value that planning and scheduling can bring to your organization.

So let’s have a look at that first worksheet, Step one, The Problem. All right, so when you open up that worksheet, this is what you basically see. There is on the left hand side of the screen two tables, and on the right you see a chart. The first table here on the left, that says, “Shift Productivity,” allows you to enter, against a number of activities, the time that you are not actually working, not actually doing maintenance as a shift. All right, so let’s have a look at that in a little bit more detail. The first cell you need to fill in, is actually here at the bottom and it says, “Total Shift Time.” And at the moment it says, “10 hours.” Which means that for your maintenance shift, you’re assuming that the shift duration is 10 hours. And so, then what you do in the area above, in this section, you write down all your lost time, all your nonproductive time, all the things that your maintenance technicians are required to do that is not actually doing maintenance.

So what you see here is, I’ve assumed that your technicians require 20 minutes per day to receive their instructions from their supervisor. After that, they might spend 30 minutes to isolate the equipment and to apply their own personal locks on as part of your lockout, tagout procedure. The next is the travel to and from the work site. Now I’ve allowed here 90 minutes. I’m assuming that you’ve got a large site where technicians, at the beginning of the day, have to travel to their work site, they might work. Then mid morning they would come back for a break, go back to the work site. For lunch, they would come back to the office environment where they have a lunch room and then after lunch go back to work site and the same again in the afternoon for a mid afternoon break. Now, 90 minutes, may be way too much for your site, it could be too little. It totally depends on your personal circumstances, on your organizational circumstances.

The next allowance is 60 minutes to basically collect their parts, find additional parts, all those kind of things. 30 minutes for getting tools. Maybe 30 minutes for communication delays, waiting on clarifications from the supervisor. 60 minutes for authorized breaks. So that’s 20 minutes in the morning, 20 minutes in the afternoon, maybe 20 minutes for lunch. That may be too little. It doesn’t really matter. The idea is that you put in your specific values for your organization. There’s a little bit in there for idle time at the job site. I mean, when the guys are working and getting ready, there’s always a little bit of time where they need to set up. Now, you could call it idle time, you could call it setup time.

And that’s the other thing is, what you see here, all these cells that are gray with blue text is what you can change. So you can change these descriptions. So this is just an example. The next row I’ve put in there are some late starts and early quits. That happens, right? We’re all human. People start maybe five minutes late and maybe quit 10 minutes earlier. It could be 10 minutes, it could be 50 minutes, you may have a very disciplined workforce in which case it’s maybe just zero or five minutes. The next line item I’ve put in there is clean up. Every site needs to be cleaned up at the end of the day. So you’ve got to allow some time for that. Same with paperwork, closing out your work orders, closing out your permits, et cetera. And excessive personal time. So that made me people taking some time to check a phone or send a personal email, et cetera. Now, you may be inclined not to include those things, but you should really try and make this list as reflective of reality as possible.

So once you’ve put in all the nonproductive time, what shows up here is the remaining productive time that you have left, which is 180 minutes. And then here in the section below, that’s summarized in hours. Nonproductive, seven hours, total shift time, 10 hours, productive time, actually doing maintenance, hands on tool, three hours, which gives you a wrench time of 30% and that’s what you see reflected in the pie chart here on the right. Now, you may think that that seems excessive, but let me tell you honestly, that is a very fair representation of what an average work site looks like. Sure, the nonproductive categories that are shown there may be quite different from site to site, but that 30% is very, very typical of an average industrial site and their maintenance productivity. Now, so that fills in that first table there, shift productivity.

The second table that’s right next to it is productivity of a typical job, and that just allows you to do essentially the same analysis but at a job level. So instead of doing it for a whole day, you’d just say, “Okay, I’m going to pick one job and I’m going to basically analyze what my delays are and I’m going to use that to give me an estimate of our job wrench time.” And it’s up to you which one, which method, you want to use, it doesn’t really matter. They both will give you an approximation of your wrench time.

So, the way this one works is a little bit different, but in principle it’s the same. You enter in all your nonproductive categories and their durations. Now here, this is again in minutes, and then at the bottom here, instead of an automatic sum, what you do is you don’t put in your shift time like here, but you actually enter a time to do the job. So in this case, what you’ll see is I’ve entered in, it takes an hour or 60 minutes to do the actual job. And above here, are all the delays associated with doing that one job. So, in that case, the nonproductive time is two hours. It is one hour to do the job, which is what I entered here, and it shows back up down here. The total time is three hours and the wrench time is therefore 33%. Now, if you click on the button below, you’ll actually show the chart that is associated with analyzing your productivity of that one single job.

So what you need to do in step one is basically analyzing your productivity, either using the shift view, a more generalized overall view of your whole group of technicians, or analyzing a typical job. Or you could do both, but it depends. Often you find that some people like the approach of looking at just a typical job, because that just means more to them, it’s easy to visualize. At the same time, people will then very often say, “Ah yeah, but that was just that one job.” And which is why it can be handy to have the overview on the shift productivity. Or you can do both and see how that comes out. But the most important thing here is to be really, really honest and to be really, really clear on where your delays are. Make sure what you enter is fact and based on what you observe.

And so one good thing to do would actually be to be out on the site, and have a look at some jobs and see where the delays are going to be and record it, and you can do that by simply following three or four jobs during a day or over a period of a couple of days, and just recording typical values to give you an approximate wrench time. And remember, at this point, really what you want to do is you just want to estimate, at a high level, your wrench time. Now, we’re talking 25%, 35%, 45%, you don’t want to get it down to very accurate percentages, it doesn’t matter.

All right, so when you’ve done that, and you’ve got your productivity, now let’s assume we’re just going to run with the 30% that sitting here. We’ll go to the next tab, which is down here, and it is Step three, The Value. Now, again, the same thing here. The cells that are gray with blue text, you can enter. All right. Now this worksheet works in the same way as the previous one in that the gray cells with the blue text are the ones that you can change. And what this sheet does is, it basically allows you to calculate what value planning and scheduling could bring to your organization if you increased your current productivity to a target productivity. So what I’m assuming here is a current productivity of 30%, and that 30% is the percentage I got in Step one.

And then I’m going to assume a target productivity, once I’ve got planning and scheduling in place, and in this case I’ve assumed 45%, which is a very reasonable number. It is a typical number that a reasonably efficient maintenance plant would achieve. It’s not world-class, but it is something that when you implement planning and scheduling properly and get it to work, you certainly should be able to achieve an overall wrench time of around 45%. Now, the next thing I need to do is enter in some more detailed numbers around the number of personnel you have, the shift duration, shift hours, et cetera, so that we can calculate the value.

So the next cell to enter is your shift duration in hours. So here, I’ve just assumed that we work 10 hours a day, five shifts per week. So, five days per week, 10 hours per day. Now, we’re going to assume that we’re going to work 48 weeks per year and we have 20 technicians. Now in terms of the hourly technician rate that you see here, I’ve assumed $100. And that is basically the cost of having a technician work for one hour on our site. Now that is not necessarily what the technician receives himself, but that’s what it would cost to the business. Obviously, that number, I know the other numbers above will be different for your organization. The next cell you see below that is the first calculation, and it basically calculates the number of productive hours per week. And that is simply saying how many productive hours, how many real maintenance hours you should get out of your pool of technicians.

Okay, so that is basically multiplying the number of shifts and the number of hours per shift multiplied by your productivity, and obviously, the number of technicians. So, in our case, we have a 10 hour shift with 20 technicians, so that’s 200 hours per day and we work five shifts per week. So we have in essence 1,000 hours at our disposal per week. But because we only have a productivity of 30%, we will now only be able to actually execute maintenance, real maintenance, hands on tool time for 300 hours. So this is the number before we implement planning and scheduling. Now we’re going to implement planning and scheduling. And as I explained in that article, we’re going to basically do that with no change in headcount. And the premise of the article is that try, and sell planning and scheduling to your CEO, it’s going to be much easy if you can demonstrate that you can be more efficient with the head count that you have, rather than having to go and hire more people, hire people like planners and schedulers.

So what we’re assuming here is, we have 20 technicians and we’re going to take one of those and to become a planner and then we’re going to take a further technician and make them a scheduler. And so now we no longer have 20 technicians, but we have 18 technicians. So now we have 18 technicians working 10 hour days, five shifts per week. So we actually have less available hours. But because once we implement planning and scheduling, our overall productivity will go up from 30% to 45%, our productive hours per week are now 405. Which means we’ve gained 105 productive hours per week, even though we’ve taken two technicians out of our pool and made them a planner and a scheduler, because we’ve increased the productivity of the rest of the crew, we’ve actually gained more time. And in fact, we’ve increased our productivity by 35%. And this is what you see summarized in the charts to the right. So the pie chart that you see here shows your current productivity, 30%, and your non-productive time, 70%. It analyzes your productive hours per year, your non-productive hours per year and the value of that productive time and non-productive time.

And then the chart on the right shows you your planning and scheduling state. So once you’ve implemented planning and scheduling, your productive time has increased from 30% to 45%. And so, your productive hours per year has increased from 14,400 to 19,440. Your non-productive hours have come down. Now, if you look at the value of the productive time that we had, it was about $1.4 million. Now, that we’ve increased the productivity, it’s $1.9 million. So the total gain is about half a million dollars per year. And that gain is basically you get extra out of your technicians but expressed in a dollar value.

Rather than saying, “We get so many more productive hours,” the 5,000 hours, we’re actually saying, “That is worth half a million dollars per year.” And that’s the kind of language, that’s the kind of monetary benefit that just resonates with your leadership and your management. And that’s really all there is to it. That is how simple the wrench time calculator works. So all you need to do is enter the specific values for your plant, your current productivity, your desired end productivity, keep it realistic, the number of shifts, and the working hours, the number of technicians, and then take it from there.

Now, let me just do one quick example and we’ll see how it works. So let’s assume that we have a slightly less efficient plan to begin with, 25% productivity. And you see immediately that the chart there on the right is updated. We’ll assume that we’ll also achieve a little bit less, because we have a bigger step change to make. So we’re going to end up with a target productivity of 40% after we’ve implemented planning and scheduling. We’re going to run the same shift duration, 10 hours, and we’ll continue to do five shifts per week, 48 weeks per year. But we’re going to assume that we have a much larger asset, a much larger plant that we’re doing this for. So we’re going to assume that we have 75 maintenance technicians that we need to plan and schedule for.

And let’s assume that we work in environment where the value or the cost of our technicians is a little bit lower. So let’s assume that our cost is $80 per hour. Okay, now, we have 75 technicians, the next field we need to enter is a number of planners. Now, you can’t have one planner planning for 75 technicians. That’s not going to work. And that’s what you see below here. That’s the planner technician ratio, right? One to 75 simply doesn’t work.

Now, as I say to notes here, if you have a stable system and a very experienced planner, your planner should be able to plan for 20 to 30 technicians. But that really depends on your environment. It depends on how well, for example, your PM system is set up. It depends on how many failures you have. How reactive your organization is. So this is typically higher, certainly in the beginning. So we’re going to assume that we have to have five planners. Five planners, I know it sounds like a lot. But that gives us a ratio of one to 15, which is reasonable. Now, in terms of the schedulers, I’m always a fan of having one scheduler per site so that you can really integrate. Let’s assume though that that might be a little bit too much to begin with and we have to find a way to break up the scheduling across two schedulers.

Right. So now what we actually have done, we’ve taken a crew of 75 technicians and we’ve taken seven people out, right? So because the number of technicians we now have left is 68, we’ve taken five planners away and we’ve taken two schedulers away. So we only have 68 technicians left to work with. We’re increasing our productivity from 25% as you see summarized here in the chart to 40%. But we’ve lost, again, we’ve lost seven technicians. But even though we’ve lost seven technicians, because we are increasing our productivity from 25% to 40%, the value that we’re gaining, the value the planning and scheduling brings to this organization with 75 technicians is $1.6 million per year. That’s a lot.

Now, you can imagine if you’re doing this for a large chemical plant, or a large manufacturing asset, or a refinery, or a large oil and gas installation, or a mine, or other asset intensive organizations with a big maintenance burden, you can see the value that planning and scheduling can bring. In this case, we’ve assumed an end state of 40% productivity, which is not that great. We could easily increase that to 45, that would be very, very realistic. In which case, there’ll more than $2.2 million in additional value per year.

All right, that was a not so quick overview of the wrench time calculator. I’ve probably discussed it in a little bit more detail than I was intending to, but I think it’s useful. So please, please, do take the time to actually do this exercise, and go and fill in, in sheet one your productivity, or your organization, and then in the second sheet do the estimate of what planning and scheduling can bring to your organization. And I suspect you may be quite surprised by the potential value. Good luck.

All right. That brings us to the end of this lesson on demonstrating the value of planning and scheduling. Now, before I go, I just want to remind you of the key points of this lesson. And those were first that planning and scheduling will allow you to increase your productivity by about 35%, from a typical 30% wrench time to a more reasonable productivity of 45%. And secondly, you can show that productivity gain as a monetary gain expressed in hard dollars, and being able to do that will be very valuable when you engage with senior management to sell the concept of planning and scheduling.

PS100: Implementing Maintenance Planning & Scheduling

Learn what maintenance planning & scheduling is, how it creates value in an industrial plant and how to successfully implement it.

This course includes:

How much value can you create with Planning & Scheduling?

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We train and coach your team to help you escape the vicious cycle of reactive maintenance and create a Reliable Plant.

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Improve Reliability

Planning & Scheduling

Preventive Maintenance

Defect Elimination

Leadership & Culture

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Online Training

Planning & Scheduling Online Training

Preventive Maintenance Online Training

Scholarship Program

Reliability Resources

Articles & Blogs

Glossary & FAQ’s

About Us

Success Stories

We train and coach your team to help you escape the vicious cycle of reactive maintenance and create a Reliable Plant.

How can we help?

Improve Reliability

Planning & Scheduling

Preventive Maintenance

Defect Elimination

Leadership & Culture

Online Training

Online Training

Planning & Scheduling Online Training

Preventive Maintenance Online Training

Scholarship Program

Reliability Resources

Articles & Blogs

Glossary & FAQ’s

About Us

Success Stories