Tracking KPIs Accross Multiple Plants And Business Units
EP Editorial Staff | March 2, 2006
This wraps up a two part article based on a presentation at the 2005 SMRP Conference, in St. Louis, MO.
USG began its implementation of asset care and work management best practices in 2001. The goal of the project, which came to be known as the Reliability Performance Model and the RPM Initiative, was to develop a world-class asset management program utilizing recognized best practices that focused on the areas of equipment reliability and maintenance productivity to improve plant operating efficiencies.
An important part of the project was the early development of 26 Key Performance Indicators (KPIs) and expectations to provide information on where the project worked well and where it didn’t. Today, these KPI are still helping the corporation build on its successes and leading it to making process changes where unfavorable trends are emerging. Thus, the RPM Initiative continues to strongly influence the way asset care, maintenance and reliability are managed at USG’s manufacturing facilities.
Part I of this article, published in the February 2006 issue of MAINTENANCE TECHNOLOGY, focused on the first 13 of these KPIs that included:
1. Monthly Maintenance Spending (by dollar)
2. Monthly Maintenance Spending (by %)
3. Monthly Work Mix by Priority
4. Monthly Work Mix by Type (hours)
5. Monthly Work Mix by Type Summary (%)
6. Monthly Work Mix by Expense Class
7. Completed Work Orders per Man Day
8. Priority 1 Equipment Closed Emergency Work Orders
9. Equipment Other than Priority 1 with 4 or More Closed Emergency Work Orders
10. Equipment with Costs Greater than $1,000
11. Failure Codes
12. Job Delays
13. PPM and SAR Completion Times
In this concluding installment, the focus is on the remaining 13 of the 26 KPIs and some of the results that USG has achieved since it began utilizing these metrics. The article picks up here with KPI #14.
14. Percent of Labor Hours Charged to Standing Work Orders
Standing work orders (SWOs) are used to capture labor hours and minor materials costs for work that is typically not associated with a specific piece of equipment. In some cases that involve specific equipment, a SWO may be used if the time and cost associated with the work is insignificant and if there is no need to capture maintenance history for the equipment.
At USG,SWOs are used to to cover non-specific routine work, such as housekeeping, quick adjustments, safety meetings, etc., as well as small jobs that take no longer than 30 minutes and cost no more than $200 to complete.
By definition, a SWO does not provide any detail or work history and is simply used to cover maintenance labor costs. It’s just a record of time spent working on a small job.
KPI #14 provides the past year’s monthly use of SWOs as a percent of the total hours charged to work orders during the month.
A high percentage (> 5%) of SWOs is not a desirable situation and may indicate that the work order system is not being utilized effectively. If this occurs, the situation is evaluated so that specific work orders are generated to develop accurate equipment histories. Think of SWOs as lost-equipment history.
In addition, work done under a SWO is not scheduled.Consequently, the high use of SWOs negatively impacts weekly schedule compliance. This is yet another reason to minimize the use of SWOs. Benchmark: SWO < 5%.
15. Age of Completed Work Orders
KPI #15 calculates the age of completed work orders as the time the Work Order was requested until the time it was completed. Three groups are defined: less than one week, between eight and 14 days, and greater than two weeks.
This is a leading KPI to show how well the job planning function is taking place. It is good to see the majority of completed work to have aged over two weeks since requested and before being completed so that the planner has time to plan the work. Jobs completed in less than one week of being requested indicate that there is no planning occurring for these jobs.
Benchmark: < 15% of the work orders are completed within one week of being requested.
16. Man Days of Work in the Open Work Order Backlog – Excluding HOLD
As another leading indicator,KPI #16 provides information on the size of the backlog at the end of the month.
Benchmark: 3-5 crew weeks of schedulable work in the backlog.
Too large of a backlog may indicate that additional help is needed to get work done or that the backlog is not being well managed.Too small of a backlog may indicate that not enough meaningful work is being identified or that the crew size is too big for the required work load.
Each USG plant conducts a monthly backlog review to ensure that its backlog is managed.Aged work-order reports are used to look at the less-than-30-day-old, 30- to-90-day-old and over 90- day-old work orders.
Benchmark: Plants target keeping their over-90-day-old work orders at less than 5% of the total estimated hours in the backlog.
17.Man Days ofWork in the Open Work Order Backlog – ON HOLD
KPI #17 indicates how much work is on hold at the end of the month. A large amount of work on hold should prompt an investigation into why (e.g. need design help, purchasing issues, etc.).
Benchmark: There is no exact benchmark for this indicator. Instead, an ON HOLD report is reviewed monthly to make sure work does not sit in the backlog too long for reasons that can be corrected (slow design, poor deliveries, etc.). This review is another part of a plant’s monthly backlog review.
18. Monthly Work Order Totals – Work Orders with Feedback
KPI #18 provides the number of completed work orders and the number of work orders completed, but returned without minimum feedback by month for prior 12 months. USG requires that craftspeople provide feedback after completing all jobs. At a minimum, a reason for failure code (RFO) and a delay code are required. KPI #17 is a good auditing tool to make sure that the organization is getting minimum feedback. The challenge is to use the feedback information to make improvements.
Benchmark: Zero (0) work orders submitted without feedback.
19. Total Manpower Utilization
USG requires that the crafts are scheduled for 100% of their time. KPI #18 provides a rolling 12-month trend of the percent of the craftspeople’s time that is actually scheduled.
The purpose of this KPI is to show if the crafts are being fully scheduled, i.e. 100% of available hours charged to work orders.
Benchmark: 100% of craftspeople’s available time is scheduled and charged to a work order.
20.Mechanical Manpower Utilization, Available Hours vs. Hour Charged by Priority
KPI #20 provides the same information as provided in KPI #19, but looks only at the mechanical hours, breaking them out into what work is being done, based on the work order priority.Again, reactive work (emergency, urgent work and break-in work; i.e. priorities 1, 2 and 5) should be minimized.
21. Electrical Manpower Utilization, Available Hours vs. Hours Charged by Priority
Same as KPI #20 above, except KPI #21 covers electrical hours.
22. Work Order Hours Estimated vs. Actual – Mechanical
KPI #22 compares work order estimated hours to actual hours charged by month for the past 12 months for the mechanical craftspeople.
KPI #22 is used to measure how well USG is planning and estimating jobs (over- or under-estimating) or ifjob delays are negatively affecting job completion times (under-estimating) for the mechanical craftspeople.
Benchmark: Estimating accuracy should be within ±10% of the actual hours charged.
23.Work Order Hours Estimated vs. Actual – Electrical
Same as KPI #22 above, except KPI #23 covers electrical hours estimated versus actual.
Benchmark: Estimating accuracy should be within ±10% of the actual hours charged.
24. Weekly Schedule Compliance
KPI #24 calculates the weekly schedule compliance for each week in the month. Schedule compliance is calculated as the percent of all scheduled work orders completed during the week, i.e. number of work orders scheduled and completed divided by the total number of all scheduled work orders * 100%. The cutoff date for the next week’s schedule is the Friday of the prior week.
Benchmark: > 90% weekly schedule compliance.
25. Mechanical Schedule Utilization KPI #25 provides a rolling 12-month
trend of the amount of mechanical work that is proactive (priorities 3, 4 and 6) versus reactive (priorities 1, 2 and 5).
Benchmark: < 10% reactive (priorities 1, 2 and 5).
26. Electrical Schedule Utilization
Same as KPI #25 above, except KPI# 26 covers electrical work
Benchmark: < 10% reactive (priorities 1, 2 and 5).
Managing the process
The adage that if you don’t measure it, you can’t manage it is central to the effective use of USG’s KPIs.However, the corporation is being careful not to just manage the numbers, but focus on managing the process to improve asset care–and, consequently, improve the KPIs. Fig. 1, illustrating the Reliability Performance Model and Metrics, shows how the work management process and KPIs are interconnected.
At a minimum, all plants review their KPIs on a monthly basis and select two or three on which to concentrate. Examples of the effective use of the Reliability Performance Model and the work management process to improve plant performance are:
Initiative 1. . .
In an effort to address the high number of emergency and break-in work, Plant 1 reviews all reactive work orders weekly to ensure the validity and necessity of each.
A small plant team of operating and maintenance personnel communicate the results of the weekly analysis plant-wide to make sure that all employees understand the effect that reactive work has on maintenance productivity and scheduling.
As a result of this team’s focus, its communication effort and the plant-wide understanding of the effect that reactive work has on maintenance productivity, reactive work has been reduced from 20% to less than 15% since the beginning of the plant’s RPM implementation in 2004.
Initiative 2. . .
Plant 2 also is dealing with the issue of a high amount of reactive work. Knowing that proactive asset care is grounded in prevention, Plant 2 is focusing on developing good preventive work to address its high rate of equipment failures.
Each maintenance supervisor and planner has been charged with the objective to develop one PPM task per week, with attention given to the most critical equipment first.
Although it is still early in the implementation of Initiative 2, reactive work at Plant 2 has been reduced by 40% since this initiative was started.
Initiative 3. . .
Plant 3 employs USG’s PPM optimization process on every equipment failure that shuts down the production line.
Plant 3 is the only plant running near the 40% PPM target and has one of the highest FROMPM rates in the company. Its focus on prevention has enabled the plant to reduce total delay by 33% and increase plant output by 8%.
Initiative 4. . .
Plant 4 developed an operator inspection program to improve the planning horizon by driving the age of completed work orders up so that less than 15% of the work is completed within one week of being requested. Just as importantly, this inspection program also has helped to drive down reactive work that was trending below 15% by the end of the 2nd quarter 2005.
Typically, operators tend not to report problems until defects are to the point that production is impacted (line shuts down or off-quality product is produced). If the defects are minor and do not affect production, then the operators tend to just “live with it.”
At Plant 4, a team of production, electrical and mechanical employees develop operator inspection lists to help identify defects before the defects shut the machine down or cause offquality product. Rather than live with a problem, operators now report minor defects that, in the past, had grown into bigger problems.
Since beginning to use the operator inspection program, the amount of work completed within less than a week has dropped by 33%. This should improve the planning horizon and permit better planning.
Problems are found early so that the repairs can be planned and scheduled.
Initiative 5. . .
Plant 5 also uses an operator/ maintenance team approach to reduce reactive work.
The team keeps in close contact with the production department to ensure that the scheduling time is adequate to complete the work, and with the planners to be sure that job plans and parts are available.
In addition, the urgency of each job is accurately communicated during the approval process.
As a result of this team’s focus, reactive work is down to less than 10%; schedule compliance is greater than 90%; only 7% of the work orders are requested and completed in less than one week; there is a low use of standing work orders.
In addition,PPMs are trending in a positive direction.
Initiative 6. . .
Plant 6 saw an increase in its trouble calls covered under standing work orders and wanted to address this issue due to the loss-of-work history. The plant monitored its use of the standing work order for trouble calls and found that the number of calls could be more effectively handled using discrete work orders.
Based on this analysis, Plant 6 chose to do away with all standing work orders and now schedules all work using discrete work orders. Trouble calls are handled using emergency or urgent work orders.
Schedule compliance remains near 90%. Furthermore, the amount of reactive work remains below the company average of 20% and the good work history has improved the plant’s reliability program.
Quarterly KPI review
One additional tool that is used to focus attention on the monthly KPIs and work management process improvements is the company wide publication of quarterly KPI results. This communication is supplied to all manufacturing plants, and just as importantly, to their respective vice presidents of manufacturing through USG’s intranet website.
The quarterly KPI review provides the current quarter results, historic quarterly results and average results by company and implementation phase This communication ensures the added attention of corporate management and instills a competitive atmosphere into the program to help promote plant compliance and process improvement initiatives.
Future challenge – RPM scorecard
Once the RPM Initiative became a companywide program, the RPM Corporate Steering Committee was formed to oversee and monitor the program.
The committee is made up of senior management from manufacturing, finance, IT and purchasing. It meets quarterly to review the initiative’s progress and manage it from a strategic level.
Although the monthly KPIs are aimed at addressing work management program compliance and process improvement on the plant floor, the Corporate Steering Committee routinely asks how well the initiative is going (e.g. are goals being achieved; is money being saved?)
Even though the steering committee understands that the initiative is a long- term improvement program (three to five years) focused on optimizing plant capacity, senior management also needs to see progress and savings–even in the short-term.
While the plant KPIs are tracking local plant compliance in a variety of areas, the RPM Steering Committee has asked to see the overall performance of the initiative across the enterprise, on a plant-by-plant basis.
Members have asked to see a single number that is representative of a plant’s overall performance and compliance. They have asked that a report be developed for each plant that addresses the following two strategic areas:
1. Plant Performance
a. Total maintenance costs
b. Plant productivity
c. Plant efficiency
d. Product cost
2. Program Compliance
c. Operation of the central storeroom
RPM scorecard – in development
While the final RPM Scorecard that USG is developing may look different, these four areas will be scored:
1. Plant Performance – Cost and Delay
a. Total plant maintenance spending
b.Gross production/net hour (measure of speed)
c.Net production/gross hour (measure of waste, delay, operating efficiency )
d.Maintenance cost/net production
e.Mechanical and electrical delay
2. Work Management Component
a. % Reactive work
b. % Manpower utilization
c. % Standing work orders
d. Age of completed work orders (% < 1 week)
e.Weekly schedule compliance
3. Reliability Component
a. % PPMs
b. % FROM PMs
c. % PPMs not completed
d. Documented reliability savings
4. Storeroom component
a. % Storeroom built
b. % Part relocated
c. % Storeroom items live
d. Inventory accuracy
Scoring of the plant performance portion of the scorecard will compare current year cumulative financial and production results against the base year results. The base year has been specified as the last full year prior to the RPM implementation; it will be used as the plant performance standard in all future scorecard reporting.
Scoring of the work management, reliability and storeroom components will compare current year cumulative KPI results against the targets established in Table I.
Scores for each of the areas will be calculated and then transferred to the plant-specific scorecard. Scores over 100% indicate that the goal is being exceeded. Scores of 100% indicate that the goal is being met. Scores under 100% indicate that the goal is not being met.
The total score will be developed from the four individual area subtotals. The plant performance will be weighted at 40% to reflect its strategic importance, and the other three areas will be weighted at 20% in calculating the total score.
The scorecard will be color-coded for emphasis. Green indicates achieving or exceeding objective (> 85% of goal); yellow indicates progress is being made (75% to 85% of goal); and red indicates an area that is not achieving the goal (< 75% of goal). By color-coding plant results, the scorecard will become an easily-read visual reference of how well a plant is performing.
The RPM scorecard will combine the above elements of plant performance and program compliance into a single easily read format. An example is shown as Table II.
The RPM scorecard will provide the total score as the single number that can be used to indicate how well a plant is doing and enable USG management to compare plants against one another (rack and stack based on the total score).
By racking and stacking plants based on RPM performance, those that are falling behind will be able to elicit the help of more successful sites. Similarly, USG management also will be able to identify the company leaders and use these plants to promote the initiative, celebrate successes and provide personnel to help the lowerperforming plants. The RPM scorecard will become another tool for continuous improvement.
USG’s Reliability Performance Model and RPM Initiative continues to be successful at the 35 plants where it is currently deployed. Based on this success, company-wide implementation of the RPM Model will continue. By 2008, all 56 of USG’s manufacturing facilities will have implemented these work management best practices.
The goal of the RPM Initiative is to develop a world-class enterprisewide asset care program utilizing recognized best practices to focus on the areas of equipment reliability, and maintenance productivity to improve plant operating efficiencies. The overall strategy of the initiative is to set up a strong,well-trained operator/maintenance team organized around the planning functions to provide better utilization and improve the efficiency of the plant’s assets.
The development of standard company- wide KPIs to help plants identify areas that are working well and address areas the need attention has contributed significantly to the success of the RPM Initiative. But, the focus is on managing the process–not managing numbers–to improve asset care.
Continued and regular plant-level reviews and company-wide comparisons of these metrics and an RPM scorecard to report overall progress to upper management are the means by which tracking of KPIs across multiple plants and business units have become such an effective tool in improvements within USG. MT
Jay Padesky is Technical Manager Manufacturing Reliability and Maintenance for the US Gypsum Co. He is a Registered Professional Engineer (Michigan) and a Certified Maintenance and Reliability Professional (CMRP) with over 25 years of experience in various engineering and management positions. Since 2002, he has headed up USG’s RPM Initiative, which is instituting work management, material management and reliability best practices at all 56 USG North American manufacturing locations. Padesky is active in the Society of Maintenance and Reliability Professionals (SMRP), where he is a member of the association’s Best Practices Committee. Padesky holds a Bachelor’s degree in Chemical Engineering from the University of Michigan. Dick DeFazio is the president and CEO of Performance Consulting Associates, Inc. (PCA, Inc.), an asset management consulting and engineering firm headquartered in Atlanta, GA, since 1976. He is a Board Certified Management Consultant (CMC) with over 25 years of experience in both the public and private sectors.DeFazio and his team specialize in helping corporations implement Best Practices and World Class Reliability strategies in order to adapt to rapid changes in market trends and technology.