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		How can reducing your reactive work orders add value? How can added reliability contribute to the bottom line? How can vendor warranty control add value? How can reduction of spares inventory add value?		Assume you are a UTILITY company with: Annual revenue = $750 million Operating costs = $540 million SG&A = $125 million Plant and equipment book value = $250 million Net profit = $38 million Total maintenance costs = $100 million 70% of maintenance costs are from reactive work orders totaling $70 million/year. Technicians average 50-hour work weeks

How can reducing reactive work orders add value?

Benefits come from reducing the average cost of work orders, increasing reliability and reducing the inventory of repair parts.

Why wait until something breaks? Unplanned work orders often involve a repair instead of a general servicing. These orders increase parts consumption, increase safety issues, upset production, and can damage customer relations. Below are two examples of how reducing unplanned work orders can add value to your business, assuming you fit the profile above.

Perform preventive and predictive maintenance to reduce the number of reactive work orders and the total cost of maintenance.

With improved forecasting, you could reduce the cost of reactive maintenance by 20%. This results in a $14 million (20% of $70 million) per year savings.

Reduce overtime costs by reducing reactive work orders.

Reducing the number of hours a technician works each week from 50 to 45 hours saves 13% on labor.

Safety is also enhanced by reducing unplanned events and overtime hours.