BUSINESS & MANAGEMENT METRIC 1.1 RATIO OF REPLACEMENT ASSET VALUE (RAV) TO CRAFT-WAGE HEADCOUNT Published on April 16, 2009 Revised August 23, 2020 DEFINITION This metric is the replacement asset value (RAV) of the assets being maintained at the plant divided by the craft-wage employee headcount. The result is expressed as a ratio in dollars per craft-wage employee. OBJECTIVES This metric allows organizations to compare the ratio of craft-wage personnel on a site with other sites, as well as to benchmark data. The RAV is used in the numerator to normalize the measurement, given that different plants vary in size and replacement value. The metric can be used to determine the standing of a plant relative to best-in-class plants which have high asset utilization and equipment reliability and generally have lower maintenance craft-wage cost. FORMULA Ratio of Replacement Asset Value ($) to Craft-Wage Head Count = RAV ($) / Craft-Wage Headcount COMPONENT DEFINITIONS Craft-Wage Headcount The number of maintenance personnel responsible for executing work assignments pertaining to maintenance activities. Includes the number of contractors’ personnel who are used to supplement routine maintenance. The headcount is measured in full-time equivalents (FTE). Page 1 of 3 Replacement Asset Value (RAV) Also referred to as estimated replacement value (ERV), it is the dollar value that would be required to replace the production capability of the present assets in the plant. Includes production/process equipment as well as utilities, facilities and related assets. Also includes the replacement value of buildings and grounds if these assets are included in maintenance expenditures. Does not include the insured value or depreciated value of the assets, nor does it include the value of real estate, only improvements. QUALIFICATIONS 1. Time basis: Yearly 2. This metric is used by maintenance managers to measure the effectiveness of their craft-wage workforce. 3. This metric can be calculated and used to compare a process, a department or an entire facility. 4. Contractors that are employed as part of capital projects or upgrade work should not be included. 5. Contract employees who support the regular maintenance workforce and perform maintenance on a site should be included. 6. If contract costs for painting, plumbing, carpentry and similar activities are included as part of the RAV, this contract headcount should be included in the denominator. 7. A full-time equivalent should be normalized at 40 hours per week. 8. For facilities using total productive maintenance (TPM), maintenance performed by operators should be included. Page 2 of 3 SAMPLE CALCULATION For a given facility, the replacement asset value ($) is $624,500,000 and the craft-wage headcount for maintenance employees is 150. The Ratio of Replacement Asset Value ($) to Craft-Wage Headcount = RAV ($) / Craft-Wage Headcount The Ratio of Replacement Asset Value ($) to Craft-Wage Headcount = $624,500,000 / 150 maintenance employees The Ratio of Replacement Asset Value ($) to Craft-Wage Headcount = $4,160,000 per maintenance employee BEST-IN-CLASS TARGET VALUE There is no best-in-class target value identified at this time. CAUTIONS There are no cautions identified at this time. HARMONIZATION This metric has not been harmonized to CEN standard EN 15341. REFERENCES Approved by consensus of SMRP Best Practice Committee. Page 3 of 3
