Fig 3: Profit & loss (P&L) example for each elevator
The operational variable that measures the breakdowns of elevators is the “breakdown index,” which refers to how many breakdowns occur per elevator over a given period of operation, normally a 12-month period. This KPI, which appears in Figure 1, is one of the most important parameters for calculating the profitability of a maintenance contract.
The ratio that should generally not be exceeded in multinational companies is 10%, which comes from the maximum permissible number of breakdowns on a maintenance route (geographical group of elevators usually made up of 120 elevators maximum). Each route is serviced by a technician, who, generally, should always be the same.
In other words, a breakdown index of 10% on a route means that 12 breakdowns of different elevators (or the same elevator) occur throughout the year on that route.
Figure 3 shows that the uncontrolled cost that can damage the P&L is the cost of corrective maintenance due to poorly performed preventive maintenance. The better the preventive maintenance, the lower the costs of corrective maintenance. The uncontrolled cost must include the opportunity cost of not performing preventive maintenance on other elevators in the daily route planning and the cost of overtime for the technician.
Following up on Figure 3, a normal preventive maintenance contract for one elevator that has a monthly income of \euro75 (\euro900 per year) has a direct preventive maintenance cost of \euro46 per month (\euro552 per year) and gives the company a GM of \euro348 (38.6%), without breakdowns.
To obtain the EBITDA, the selling, general, and administrative expenses (SG&A) of each individual company shall be applied.
RESULTS
Let’s take as an example the premises of elevator 1 from Figure 1. Let’s suppose 1, 2, and 3 breakdowns for elevator 1 this year, with 1 hour being spent to resolve each breakdown. We must also add 1 extra hour that the technician could have spent on preventive maintenance of the other elevators on his assigned route. Let’s calculate the variation in profitability of the maintenance contract in all cases, assuming that the local company has an SG&A of 15%: