Why Cutting Maintenance Costs Backfires | Augury

Why Cutting Maintenance Costs Backfires

Manufacturing Meet Up

April 1, 2026

Season 3 is here, and the “barbarians at the gate” brought company: $5.70 diesel, supply chain chaos, and labor gaps that won’t quit. When the pressure hits, the knee-jerk reaction is to slash the maintenance budget. But Ed and Alvaro are here to tell you why that’s a trap that often leads to catastrophic failure.

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Full Transcript

Ed Ballina: Hi, I’m Ed Ballina.

Alvaro Cuba: Hello guys, Alvaro Cuba here.

Ed Ballina: So hey, welcome to the third season of the Manufacturing Meetup podcast. We’re three in. This is a show where we kick back in our downtime and we talk about the realities of the shop floor and how to keep ahead of the barbarians.

Alvaro Cuba: In manufacturing, the barbarians are always at the gate. But what a fancy hat you have there, amigo. This is very cool.

Ed Ballina: My hat is not quite as exciting. I had to keep myself warm with my hat. And when I got here to Raleigh, North Carolina, it was 82 degrees.

Alvaro Cuba: So hey, let’s just jump right into this. No warm-up, right? We made our predictions last year and I had no idea that they were going to be executed in the first quarter of the year. Here all of them at once, and even more.

Ed Ballina: We did not predict that we were going to land somebody on the moon this year, but that could still happen. The year is still young. So hey, all kidding aside, folks, we are facing some pretty challenging times, right? Not to say that the supply chain isn’t always dealing with chaos, but this is a little extra special. The current geopolitical climate really brings a lot of uncertainty, cost pressures.

Alvaro Cuba: Energy cost is just the tip of the iceberg, no?

Ed Ballina: It’s going to challenge our costs and our ability to provide the service levels.

Alvaro Cuba: Direct hit into your energy cost and your gas and your electricity.

Ed Ballina: No, most definitely. As you look at this and you frame it with all the other concerns that we’ve been facing, there’s a lot to take in.

Alvaro Cuba: You’re trying to plan for all this. I almost see it as — I hate to say it — but it’s almost like COVID 2.0, right?

Ed Ballina: Most definitely. Every time you shut down, you have all these phantom stealth losses that you don’t think about, but they cost you real money.

Alvaro Cuba: The biggest lever these days we call machine health.

Ed Ballina: If you can have a line improve its efficiency from 50 to 60 — 10 points — that is a big number.

Alvaro Cuba: Nowadays, we are lucky that in the last five years the technology has jumped significantly.

Ed Ballina: Absolutely, and it’s a real good point. Find out what the impact of this is going to be on your business before somebody knocks on your door and says, you got to make up $4 million because we are just seeing our COGS blow through the roof.

Alvaro Cuba: You have to be flexible to cover the peaks and valleys of the demand.

Ed Ballina: When you shut down a piece of equipment, you are obviously stopping production, but you’re not stopping the usage of energy.

Alvaro Cuba: The answer is efficiency, because efficiency goes a long way, no?

Ed Ballina: Look, we realize that sometimes when we give you some advice, we know it’s not easy.

Alvaro Cuba: At the same time that you are saving energy, yeah.

Ed Ballina: The real money comes in machine health and efficiency.

Alvaro Cuba: Look for those efficiency points, and put your entire people to think about how we run more efficient.

Ed Ballina: Hope you found some of these ideas helpful.

Alvaro Cuba: And thank you for joining the Manufacturing Meetup. If you enjoy the episode, please like us if you are watching on YouTube and give us a review if you are listening on iTunes.