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The Maintenance Department as a Profit Center?
ISSN: 0148-7191, e-ISSN: 2688-3627
Published April 01, 1988 by SAE International in United States
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The Maintenance Department's main contribution to company profit is to control equipment maintenance costs. Too often, the Maintenance Manager receives information which is inadequate in content or format to calculate the true cost of either his parts inventory or labor. He can't control what he can't measure.
One result is his inability to judge whether it is cheaper to perform the maintenance himself or send it to the equipment dealer. For a fair comparison, the cost of labor and parts inventory must be calculated the same way as the dealer. This means setting up the Maintenance Department as a profit center rather than a catch-all cost center.
Operating Maintenance as a profit center offers several other important advantages. Even the simplest profit center accounting system can provide the information for developing the strategies needed for successful, continuing operations. It is much easier to establish and track progress toward measurable goals. Capital investments can be economically, not emotionally, analyzed. Maintenance is confirmed as a serious business entity with the respect and personal gain this suggests.