Impact on income One of the most important changes corporations achieve when they focus on improving reliability is the impact on the cost of goods sold in the Statement of Income. One of the most significant areas is the level of preventable or unnecessary work that occurs in every plant. On average, at least 40 percent of plant work can be prevented. In addition, as roles and responsibilities are refined and defined, some minor maintenance work can be transferred to production personnel. This tactic leads to operator-driven reliability.
Many organizations have unnecessary layers of supervision and spans of control that are too narrow.
When the organization s structure is optimized to meet world-class standards, the cost of these additional levels can be removed from the cost of goods sold. Many measures need to be tracked to determine how effectively a reliability improvement program is operating. One of these measures is maintenance cost per unit of production. Another is ratio of maintenance cost to replacement asset value, most often expressed as a percentage. Yet another is maintenance cost contribution to cost of goods sold.