Strengthening Asset Management at Amoco Chemical

EP Editorial Staff | September 1, 1999

Networking, benchmarking, and TPM comprise three-tier approach for cutting maintenance costs in half and boosting overall asset effectiveness by 25 percent.

Maintain Assets Network (MAN) has served as a vehicle to substantially strengthen the culture of maintenance and reliability in Amoco’s chemical businesses over the past two years. It is one of five “networks of excellence” established by the Amoco Chemicals Manufacturing Council in 1996 to drive improvement in 20 manufacturing metrics established to measure performance of the company’s chemical sector and chemical plants.

MAN met for the first time in late 1996 and consisted of representatives from nine U.S. chemical plants, three non-U.S. chemical plants, and one representative for eight fabrics and fibers plants. The group met bimonthly and began to set priorities, with initial activities centered on improving three metrics:

  1. Maintenance costs, as a percent of estimated replacement value (ERV)
  2. Availability ratio (reliability)
  3. Sustaining capital

Baseline costs were established and a goal set for 1999 to reduce maintenance costs by 50 percent. The group struggled with the magnitude of the goal, differing maintenance accounting practices, and the calculated replacement value of the plants. One network member was assigned the task of developing standard guidelines for maintenance cost accounting and replacement value calculations. MAN members also devoted time to understand each other’s organizations, work processes, current improvement activities, and opportunities.

Strategy development
Early in 1997, it became apparent that the group had to move beyond discussing the merits of the metrics and start to impact them. The network established five subcommittees to cover:

  1. Long-term MAN strategy
  2. Reliability improvement
  3. Pumps
  4. Centrifuge
  5. Product change

The first subcommittee mission was to develop long-term MAN strategies to give the group needed direction. The other four subcommittees were to research and recommend best practices in their assigned areas that could be implemented at the plants to quickly improve equipment reliability and to reduce maintenance costs. They covered equipment reliability, pump maintenance and reliability, centrifuge maintenance and reliability, and reducing lost capacity from product changes.

It was believed that all of these efforts, if embraced by the plants, would deliver the overall asset effectiveness (OAE) goal of a 25 percent increase and the maintenance cost goal of a 50 percent reduction. The MAN strategy is summarized in the section “Three-Tiered Strategy.”

Networking activities
The Reliability Subcommittee explored reliability best practices inside and outside the chemical sector and the company and reported to the network in December 1997. It recommended the use of 12 reliability practices and six reliability tools:
Reliability practices

  • Elements of preventive maintenance
  • Equipment repair history
  • Corrosion monitoring
  • Portable vibration monitoring
  • On-line vibration monitoring
  • Infrared thermography
  • Positive material identification
  • Rotating equipment alignment
  • Steam trap monitoring
  • Lube oil analysis
  • Rotating equipment balancing
  • Critical equipment monitoring

Reliability tools

  • Reliability in engineering
  • Reliability modeling
  • Equipment maintenance plans
  • Root cause failure analysis
  • Reliability centered maintenance
  • Data recording and analysis

All documents were placed on the Amoco Web page and updated as needed. The Reliability Subcommittee developed a self-assessment process for the plants that serves as the basis for “scorecards” developed by a new Measurements Steering Committee. The subcommittee’s official task is complete, but the company continues to benefit from the relationships and networks that exist between the plant representatives, and the group plans to meet at least twice a year to share successes and problems they are experiencing in the reliability arena.

The Pumps Subcommittee also met extensively in 1997 and 1998 to explore and recommend best practices relating to pump maintenance and reliability in the same fashion as the Reliability Subcommittee. It completed its work in 1998 and issued seven best practice documents: pump repair procedures, pump repair documentation, pump repair training, condition monitoring, preventive maintenance, mechanical seals, and root cause failure analysis.

These documents are on the Amoco Web page, and the group also made recommendations to the Measurements Steering Committee to follow progress of the implementation of these practices. Amoco continues to benefit from the relationships and informal networks that remained in place.

The two other subcommittees produced best practice documents that were distributed throughout the chemical sector.

The benchmarking process used by Edwin K. Jones, P.E., Inc. is conducted in three steps and focuses on a model of seven best practices:

  • Leadership
  • Planning & scheduling
  • Preventive & predictive maintenance
  • Reliability improvement
  • Spare parts management
  • Contract maintenance management
  • Human resource development and training

The first stage of the assessment process was a kickoff meeting at each plant. It was designed to form the plant’s benchmark team, define the roles of team members, review the benchmarking process, and provide an initial tour of the plant. A data questionnaire was left for the benchmark team to complete.

The second stage was a two-day meeting referred to as the validation visit. During this stage, key data are validated to be consistent with the comparison database. There are also interviews with maintenance craftsmen, maintenance supervision, operators, operator supervision, stores employees, reliability/maintenance engineers, contractor supervision, training coordinators, and maintenance planners and schedulers. A preliminary, verbal report of the findings is made to the Plant Leadership Team at the conclusion of the validation visit.

At this point, interpreting the comparison data, the interview issues, and the plant condition is initiated with discussion among team members. These issues are included in the final report, along with the observations of the “unbiased, external, calibrated resources,” highlighting the opportunities for improvement. The final report has a balanced mix of team observations of maintenance practices and validated comparison data displayed in graphic plots along with data from “World-Class” plants.

The final stage, another two-day meeting, takes place approximately one month after the validation visit. The plant usually receives a benchmark report about a week before the third visit. The report includes plant data compared with other Amoco plants and with a selected set of “World-Class” plant data. Also provided is an initial estimate of the potential savings that might be obtained if the plant could close the gaps with the World-Class plants.

This third visit concludes the assessment process with a plant-wide review of the benchmark report. A great deal of emphasis is placed on shifting from the “assessment mode” to a “strategy development mode.” The basic concept is: “OK, now that we have a better idea of where we are, where do we go from here?” The second day of this visit is then devoted to jump-starting the beginning of a Maintenance and Reliability Strategic Plan. The team selects areas to be improved, then lists specific tasks to deliver the desired results. Champions, resources, and dates are assigned to each task. The benchmark team then completes the strategic plan development over the ensuing two to three months.

Benchmarking results are summarized in the section “16 Plants Benchmarked.” Each site’s plan usually includes an overview of the maintenance strategy and how it fits with the plant’s overall manufacturing strategy. It also includes some analysis of the savings potential that results from executing the plan. Savings are viewed in two categories: maintenance cost savings and business benefits of improved equipment reliability and availability. The plan lists the areas of improvement, the key issues, specific actions to be taken, metrics to be tracked, and a Gantt chart showing a timeline for all of the tasks to be completed. Seven plants have presented their plans to the network, with the remaining plants scheduled to do so in 1999.

Total Productive Maintenance (TPM)
After a TPM presentation to the Manufacturing Council in July 1998, the TPM Steering Committee (TPMSC) started to develop details around the essential TPM elements Amoco planned to pursue. These elements included:

  • Equipment improvement teams (EIT)
  • Asset ownership (autonomous maintenance)
  • Asset reliability
  • Maintenance effectiveness
  • Early equipment management
  • Training

The TPMSC included in its TPM model all known best practices from the subcommittees, the pockets-of-excellence from the benchmarking initiative, and other best practices gleaned from networking with other TPM companies and consultants. Because much of what was included already existed somewhere in Amoco, the TPMSC developed a site assessment tool to enable the plants to assess the quantity of work required in each of the TPM elements. This enabled plants to develop short-term strategies for the elements that were in use, and longer-term strategies for the elements requiring more time and effort.

The TPMSC then selected four areas of TPM as good places to start. They were autonomous maintenance/clean to inspect; process recording and data entry (PRIDE), an operator-based data gathering process using a combination bar code reader and data entry tool; equipment improvement teams; and work order prioritization.

These “places to start” provided a means to quickly immerse the plant in a TPM culture using best practices that had proven successful within Amoco. Plants could quickly link up with other plants that had implemented a given process, learn from their experience, and generate early success while developing their longer-range plans.

“Clean to Inspect,” a process taught by Productivity, Inc., a TPM consulting firm, works on the principal that as you clean equipment, you inspect it thoroughly in the process. The detailed inspection identifies small abnormalities that could lead to poor performance or a breakdown. In other words, if you take care of all the little things, the big things will take care of themselves. It also has several ancillary benefits in that the employees who return equipment to like-new condition will work to keep it in like-new condition. During the process, cross-functional teams look for opportunities to improve the performance and maintainability of the equipment. It has been very successful at two sites in transforming operators from merely operators of the equipment into equipment caretakers.

PRIDE is an Amoco data-gathering tool that also can transform the operator into an equipment reliability resource. Using the Equipment Specific Maintenance Plans (ESMP), employees can select the equipment reliability data to monitor the equipment condition, predict impending failures, and help troubleshoot the root cause of breakdowns. This information can then be trended and used by the equipment improvement teams.

Equipment Improvement Teams (EIT) exist in some form at most of the plants. They are cross-functional teams that are given the time, training, and resources to address the root cause of poor equipment performance or breakdowns. Several plants have well-established EIT programs that serve as the cornerstone of their TPM effort. Other plants use them sporadically to solve major problems. The intent of TPMSC is to upgrade plants’ use of EIT.

As cited in the benchmarking report, work order prioritization, misuse, and abuse were barriers to plants being able to plan and schedule their work. The Texas City plant recognized this in 1996 and learned a process called the Ranking Index of Maintenance Expenditures (RIME) at a planning and scheduling workshop at the Marshall Institute. It is a process where criticality of the equipment and the importance of the different types of work determine priority with minimum interference from people. Its use dramatically reduced the number of urgent work orders and it was cited as a pocket-of-excellence during benchmarking. It was thought that by using RIME, all plants could do more and better planning and scheduling to reduce costs and take a first step away from reactive unplanned maintenance.

The TPMSC also researched job postings for TPM coordinators, external TPM consultants, and Amoco technical experts for specific elements and tools, as well as suggested training and training material. All of this was assembled into a TPM Manual to assist the plants with developing their implementation plans.

TPM workshops
TPMSC realized there was a need for a wider base of TPM knowledge throughout the sector. As plants discussed TPM with their employees, inaccurate statements were causing resistance to the initiative. A three-day workshop was designed to teach the attendees the fundamentals of TPM, let them meet people who were already doing TPM, see TPM in action at a plant, learn about site implementations, and learn about “good places to start.” It was hoped that the attendees could then return to their plants and accurately describe TPM and start to develop implementation plans.

By September 1998, five more workshops were held. In all a total of 325 people were trained, giving the sector the knowledge base it needed to move forward.

TPM implementation plans
Most plants now have TPM implementation plans. Several sites have appointed full time TPM coordinators, most have EIT, half are committed to installing PRIDE, and six have contracted with external resources and have done “Clean to Inspect” training. More than half has instituted RIME.

The TPMSC continues to meet every two to three weeks, usually via teleconference, to discuss progress. It advertises successes and assigned action items to investigate areas where progress is slow or lacking. A TPM activity scorecard is used to track progress and TPM metrics are being incorporated into computerized maintenance management system (CMMS) software. In 1999, the TPMSC plans to initiate a TPM Users Forum so people from across the sector can come together to share successes, work on common issues, and look for help in problem areas. The committee will make detailed assessments of the issues at each of these sites to develop the topics for the forum.

The TPMSC has asked MAN to further develop a vision and training for Asset Reliability/Reliability Engineering and for Maintenance Effectiveness/Planning and Scheduling. MAN commissioned these steering committees in August 1998. These visions are described in the section “Planning and Scheduling” and the section “Reliability Engineering.”

Best practices implementation
MAN established the Best Practices Steering Committee (BPSC) to facilitate implementation of the best practices recommended by the Reliability and Pumps Subcommittees and to investigate new best practices for new issues. The BPSC charter ncludes:

  • Place best practices in the “top drawer” of people who use them everyday. Make available expert maintenance resources to all levels of personnel. Provide a Web page search engine to obtain easy access to these practices and resources.
  • Best practices and resources will be investigated and recommended to the plants by the BPSC. Each plant will be urged to evaluate the strategic fit of these practices and tools to their business. If applicable, they will perform a cost/benefit analysis to determine the priority of implementation.

Metrics and measurements
Because the plants used different computer systems and accounting practices, getting consistent unmanipulated data for measurements has been a major problem for MAN. With the impending start up a new company-wide system, MAN commissioned the Measurements Steering Committee (MSC) to develop standard measures. Its objectives are:

  • Establish standard CMMS cost reports for all U.S. chemical plants.
  • Consolidate MAN best practice scorecards for the purpose of measuring progress.
  • Select and define key CMMS metrics to be used and recommend targets.
  • Investigate reporting for non-CMMS and non-U.S. plants.

Effects of strategy
The most dramatic effect of MAN has been the downward trend in maintenance costs. Cost performance has closely followed the goals set forth in the three-tiered strategy and was reduced by 30 percent in two years. However, the improvements in reliability measures did not materialize as quickly as expected but their goals are still expected to be met.

Several of the activities sponsored by MAN should deliver additional benefits in 1999 and 2000. The Maintenance and Reliability Strategic Plans at each of the plants were completed in 1998 and should have a substantial impact as they are fully implemented. Most of the pump and reliability best practices have been migrated to the plants and are beginning to have an impact on performance. Plants will be implementing their TPM plans, and Reliability Engineering will be significantly upgraded in 1999.

Together these two initiatives will fundamentally change maintenance in Amoco’s chemical sector from reactive to proactive and should dramatically impact the availability ratio and OAE for Amoco Chemical’s manufacturing assets. MT

Edwin K. Jones is principal of Edwin K. Jones, P.E., Inc., 28 Quartz Mill Rd., Newark, DE 19711; (302) 234-3438; e-mail Mark E. Lawrence is an internal maintenance and reliability consultant and is the coordinator for the Maintenance and Reliability Network (MRNet) at BPAmoco, WL4 Room 1794B, 200 Westlake Blvd., Houston, TX 77079-2682; (281) 560-4411; e-mail




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