CIPS Level 4 Diploma in Procurement and Supply L4M7 Question # 30 Topic 4 Discussion
L4M7 Exam Topic 4 Question 30 Discussion:
Question #: 30
Topic #: 4
Sidel Corp is a major food processor. It invested heavily on manufacturing facilities and processing machineries. Sidel's expenses on maintenance are exceptionally high. To minimise the total cost of maintenance, what should Sidel Corp do?
A.
Replace every machineries at breakdowns
B.
Only conduct preventative maintenance
C.
Outsource corrective maintenance but in-source preventative maintenance.
D.
Balance between proactive maintenance and reactive maintenance
Maintenance can represent a significant portion of the cost in asset intensive organisations (such as Sidel - a food processor), as breakdowns have an impact on the capacity, quality and cost of operation. However, the formulation of a maintenance strategy depends on a number of factors, including the cost of down time, reliability characteristics and redundancy of assets. Consequently, the balance between preventive maintenance (PM) and corrective maintenance (CM) for minimising costs varies between organisations and assets. Nevertheless, there are some rules of thumb on the balance between PM and CM, such as the 80/20 rule.
Preventive maintenance is a type of proactive maintenance, while corrective maintenance is an example of reactive maintenance. Therefore, the answer should be "Balance between proactive maintenance and reactive maintenance".
[Reference:, - Preventive and corrective maintenance – cost comparison and cost–benefit analysis, - CIPS study guide page 158-163, LO 3, AC 3.1]
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