A Survival Guide for Impending Cost Reduction

Kathy | January 1, 2009

As maintenance and reliability professionals, we are being asked to deliver like never before. Today’s economic conditions demand greater levels of reliability and increased maintenance productivity with an ever-increasing focus on reducing costs. In order to survive, an organization’s plans must turn to optimizing maintenance capacity as a means to achieve its goals.

Continuous improvement processes such as lean and its tools have been the process of choice for most organizations over the past 10 years. Although the business sides of these companies realize tremendous improvements, oddly enough many maintenance processes are left to be a part of someone else’s lean event—or simply made “leaner” as a result of having less than before. There’s no doubt the maintenance process eventually will be targeted for change through the revelation that maintenance cannot keep up with the reliability demand of a leaned organization, thereby becoming a victim of lean. On the other hand, a savvy organizations can choose to proactively apply lean tools to improve its process by design.

Across the industry, we see three business motivators driving our need for improvement:

  • Companies already impacted by market conditions, trying to “survive” implemented decisions
  • Companies preparing for impending reductions.
  • Companies which are unaffected by current market conditions but must remain competitive within their industry.

Although each of these motivators targets improvement for different reasons, the solution is common. You must open the flow of the maintenance process and improve capacity if you are to survive.

Among the reasons maintenance “bats in the cleanup spot” in the continuous improvement lineup is the traditional view held by many companies that a maintenance department is simply a “cost” to an operation. Thus, the only way to improve “cost” is to reduce it! Additionally, many organizations are cutting what they consider to be “muda” (Japanese word for “waste”) out of their maintenance budgets without necessarily making changes in how they operate. Doing so, they severely handicap the maintenance organization’s ability to ensure adequate reliability in equipment and processes, therefore furthering the negative spiral. In this scenario, there are even considerations of decentralization, which places maintenance at the place of concern to compensate for the absence of reliability.

0109-survival-guide2What exactly is lean maintenance?
First, lean maintenance is process improvement, not an outcome or consequence of cutting resources to keep up with external demands. Otherwise, maintenance will have appeared to achieve the goal of being lean, but probably lack the effectiveness and efficiency required to sustain itself or deliver the value required by the environment at which it’s applied.

Secondly—and quite simply—lean maintenance is the application of lean techniques and tools to the maintenance process to drive out waste (anything within your process the end user would not be willing to pay for). The challenge is converting or translating already-known elements of lean into the maintenance process. The most common elements of lean can be applied to any process, including maintenance.

The Lean/Maintenance Conversion Chart (see Table I) takes lean elements and shows the maintenance equivalency in three primary areas of the maintenance process.

  • The process overall focused on workflow and market demand
  • 3-Dimensionsal PMOptimization which drives waste from the forecasted backlog
  • Planning & Scheduling Optimization which drives waste from existing ready backlog.

Getting started
Value stream mapping of the maintenance process…
In their 1996 book Lean Thinking, James P. Womack and Daniel T. Jones de? ned ? ve basic principles that characterize lean. These basic principles should be applied for each product or product family:

  1. Specify value in terms of the end user.
  2. Identify all steps in the value stream, eliminating those that do not add value.
  3. Make the remaining steps ? ow smoothly.
  4. Have the customer pull value from the previous upstream activity.
  5. Pursue perfection though continuous improvement.

In order to apply lean principles, we must agree that maintenance is indeed a process, rather than an event. As a process, Preventive, Predictive, Corrective, Reactive, Project, Production Support, etc. can have different value streams. Therefore, they must be addressed individually, much the same as different products in the production value stream.

Principle 1: Specify value in terms of the end user…
The end user of the value provided by maintenance can be de? ned either as the entity that requires the equipment to operate, or as the end user of the product being made by the equipment. It doesn’t matter because the required behavior should be the same. The value typically can be defined as work performed in order to attain the required level of reliability of the organization’s equipment. Naturally, not all work performed will provide the same level of value. Consequently, work must be prioritized based on the criticality of the equipment to the operation, as well as its impact on safety, the environment and production throughput.

In maintenance, this value is produced via our throughput (transaction) of applied labor hours. This is our “product.” Questions around this product can include:

  • Of my 40 hours, how many are converted into throughput and how many remain as untapped inventory in our system?
  • What is the market demand for these hours (backlog analysis)?
  • What is the productivity in making my product (average productivity in maintenance is 25%)?
  • What are the things eating up the remaining output?

Principle 2: Identify all steps in the value stream, eliminating those that do not add value…

  1. 0109-survival-guide3Create a current-state Value Stream Map (VSM) considering each maintenance work type. Identify all steps and determine which add value and which do not. Of those that do not add value, some will be easy to eliminate immediately, whereas others might require other changes and resources prior to elimination.
  2. Create a future-state map indicating the non-value-added steps removed. This is one of the major opportunities for
    waste elimination/minimization. The map also provides other benefits:
    • Visualizes waste. Creates a sense of urgency to eliminate non-value-added activities as most waste is considered “part of our jobs” or “just how it is here.”
    • Helps standardize how work is done, yielding consistent results.
    • Helps show others outside of maintenance what goes on in the seemingly “black hole” of maintenance.
    • Shows others where maintenance requires their involvement in the maintenance and reliability process.

As shown in Fig. 1, one of the most effective methods for performing a VSM for maintenance is to participate in standardized “ride-along” exercises. These physically trace a job from start to finish, documenting all steps and times captured for each with the exception of actual work times. Estimates are fine, as the emphasis is on the muda “around” the job, not questioning the craft skills within the job. (IMPORTANT: This is NOT a time study and the exercise must be preceded by educational materials that convey the point that the muda is a reflection of the process, not the worker.)

Principle 3: Make the remaining steps flow smoothly…
Once identified, muda that is preventing optimum flow must be removed—but in an order that maximizes labor without consuming it, as it is easy to become overwhelmed by the opportunities uncovered by the VSM exercise. At this stage, it is important that the productivity of the system be measured to document improvements to the system.

  • Measuring Flow—In production it is easy to measure the equipment generating output. In maintenance, however, this presents a unique challenge. The elusive “wrench time” has been the Holy Grail of maintenance—regularly discussed but never captured since resistance to self-incrimination is a human trait. Whereas OEE (Overall Equipment Effectiveness) measures loss in equipment, OME (Overall Maintenance Effectiveness) measures loss within the maintenance process (not the worker) and can trend the impact of improvements (see Fig. 2). Again, don’t be surprised if the initial OME averages 25% of the overall process. The OME typically reveals two of the three types of backlog loaded with muda (undocumented backlog ie: reactive maintenance cannot be addressed until capacity improves, otherwise these efforts become additive) making the forecasted backlog and ready backlog target-rich areas where muda hides.
  • Forecasted Backlog—This is the part of the backlog that is always known in advance, typically including Preventive (PM) and Predictive (PdM) Maintenance. Because these tasks are recurring, there is a signicant opportunity for waste elimination or minimization using a process of 3-Dimensional PM OptimizationSM. This is a series of 14 techniques that are analogous to the application of 5S to PM & PdM tasks, typically yielding:
    • 40% reduction in PM labor hours
    • 35% reduction in scheduled downtime
    • 50-100% increase in PM coverage

    0109-survival-guide4The 3-Dimensional PMOptimization utilizes lean tools itself by incorporating waste removal in the first dimension: Initial Optimization through an application of four of the 5S’s to the PM data as well as the identification defects in the PM. Dimension 2: Task Pass/ Fail Analysis and Dimension 3: Equipment Reliability Analysis provide the Sustainment aspect of 5S as the PM program is now dynamic.

  • Ready Backlog—This is the part of the backlog that is already documented minus forecasted PM work. It usually includes corrective, projects and carryover jobs. Based on the ride-along studies, muda identified are evidence for Planning Optimization. From various stages of starting planning to dialing in an existing effort, sites can realize:
    • 50-100% reduction in work order cycle time.
    • Spare parts time and costs minimized.
    • Scheduled down time minimized as shorter cycle times are applying quick change over disciplines.

Principle 4: Have the customer pull value from the previous upstream activity…
Having the customer pull value from the process is comparable to not performing work before it is required. It is frightening to see how many organizations think of backlog as a bad thing. They see this work as being overdue. Allowing work to accumulate in the backlog for a reasonable amount of time provides several benefits, including:

  • Providing more time to plan the jobs, assuring all resources are available and ready prior to the work commencing.
  • Enabling more efficient scheduling of work.
  • Allowing work to be completed based on importance to the organization via work priority and equipment criticality.
  • Eliminating backlog that is usually indicative of a highly reactive maintenance organization. In these cases, more work exists than what is known and documented in the backlog. It is just not addressed until it fails.

Principle 5: Pursue perfection though continuous improvement…
As with anything, the goal must be to continuously improve against your key performance indicators (KPIs). However, once a process is documented, particularly one as intangible as maintenance, it becomes easier to make adjustments that can be leveraged across the organization. With a documented plan, and using the exact tools in other areas of the operation, it becomes easier to communicate the maintenance process, ensuring less chance that performance will slide back to what it was prior to the improvements.

Survive to thrive
By removing muda in the maintenance process through proven lean techniques, work order cycle time is forecasted and ready backlog is reduced, driving the need for optimized scheduling to fill smaller windows of availability. This cause and effect scenario demonstrates a dynamic process where true continuous improvement can be pursued.

Although you can find most companies already working on “pockets of excellence” driven by local need, such as Planning & Scheduling, PMs and work order systems, true systemic strength comes not from activity-based improvement but from a holistic solution focused on flow. The identification, measurement improvement and analysis of our true commodity, applied (value-added) labor hours, is the key. That’s because the powerful combination of these tools in the correct order will almost double the flow of your maintenance system without increasing individual performance. This untapped capacity is the key to survival. MT

Ed Stanek, Jr. is the co-owner/president of LAI Reliability Systems, Inc. With a focus on maintenance and reliability systems for the past 24 years, he has worked extensively on all aspects of process optimization. Combining the concepts of constraint management, lean and reliability, Stanek has redefined how maintenance optimization and continuous improvement are implemented.

Tibor Jung, co-owner/CFO of LAI Reliability Systems, Inc., has over 25 years of experience in the field of maintenance and reliability improvement. His expertise in optimizing key production processes, as well as maintenance and reliability processes, allows him to provide more holistic solutions to clients’ needs. Such solutions are geared toward bringing together previously conflicting factions within an organization, with the focus on greater reliability to “get more product out the door” and lower costs.

Telephone Stanek and Jung at (615) 591-8900.

LAI Reliability Systems®, PM Optimization, 3-D PM Optimization, 3-Dimensional PM Optimization, OME, Overall Maintenance Effectiveness and Reliability Fusion are service marks of LAI Reliability Systems, Inc., Antioch, IL (with regional of? ces in Franklin, TN). All rights reserved.

For more info, enter 1 at www.MT-freeinfo.com






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