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1.1 Rav Wage Headcount

This document defines the ratio of replacement asset value (RAV) to craft-wage headcount metric. The ratio is calculated by dividing the RAV of assets at a plant by the number of craft-wage maintenance employees. The RAV is the estimated cost to replace all production assets. A higher ratio indicates higher asset utilization and equipment reliability with lower maintenance costs. The metric allows comparison of staffing levels between sites and to benchmark data. An example calculation is provided.

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Alexander Arias Ruiz
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52 views3 pages

1.1 Rav Wage Headcount

This document defines the ratio of replacement asset value (RAV) to craft-wage headcount metric. The ratio is calculated by dividing the RAV of assets at a plant by the number of craft-wage maintenance employees. The RAV is the estimated cost to replace all production assets. A higher ratio indicates higher asset utilization and equipment reliability with lower maintenance costs. The metric allows comparison of staffing levels between sites and to benchmark data. An example calculation is provided.

Uploaded by

Alexander Arias Ruiz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

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).

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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.

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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.

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