Benchmarking and auditing…

EP Editorial Staff | January 1, 2009

Part I: Are you Best-of-Class? Consider Specific Auditing Steps

This publication is primarily devoted to upgrading the understanding and management of lubrication practices at industrial facilities. But upgrading lubrication practices is very rarely the only thing that a facility needs. Recognizing that fact, we also subscribe to the practice of “benchmarking.”

It may be reasoned that questions as to how the performance of one plant compares to that of another are answered by formal benchmarking studies. In general, benchmarking compares key performance indicators (KPIs) within an industry sector. Benchmarking studies also define how close a company is approaching a certain number or figure, or the quartile or percentile within which the company can be ranked.

Expectations and reality 
For many years, formal benchmarking studies performed by Hartford Steam Boiler Solomon Associates (HSBSA) have focused on a clearly definable business. The staff made it their goal to address all issues that affect profitability of the enterprise. To this day these studies examine historical facts, not plans.

When HSBSA first embarked on these studies decades ago, its experienced personnel had certain expectations: 

• Little variation in performance—after all, we live in the space age and everyone has access to modern technology

• Similar results for the affiliates of world-renowned companies

• Differences in performance due to such physical issues as size, age, location and unionization 

But, what they found surprised even those seasoned individuals: 

• There were wide variations in performance—despite access to modern technology. Profitability, expressed as Return on Investment (ROI) of pacesetter (Best-of-Class) companies, was typically in the vicinity of 16%, vastly exceeding that of the low performers, some of which reached only 4%.

• HSBSA found no affiliation synergism. Top quartile plants and bottom quartile plants sometimes had the same owners.

• There seemed to be weak correlation to physical factors, at best. Big plants were at the top and big plants were at the bottom. Small plants at the top, small plants at the bottom. Old plants at the top, old plants at the bottom, and the same with plants in this hemisphere or on that continent, unionized or non-unionized.

Statistics showed that the lowest (maintenance cost) quartile’s craftsmen had four times more pieces of rotating equipment per person than the highest cost quartile. Those in the highest-cost quartile are kept busy repairing failures and have no opportunity to examine the causes of these failures. Consequently, they cannot participate in the formulation and implementation of action plans to make permanent repairs or to devise preventive or predictive remedies.

It was further shown that the consistently high performers base management decisions on real data. They adhere to the plan and deal with all deviations. They always focus on economics, optimize revenue and expense, and take responsible risks. We know they record events and thoroughly investigate all causes. These profitable plants follow through by revising their planning to avoid repeat events. They understand that repeat failures are the precursors of extreme failures and that extreme failures culminate in disasters.

The uniqueness of pacesetters 
0109-equipment-realiabilitySolid performers seek sustainable excellence and most decidedly engage their employees. Solid performers are pacesetter companies. In pacesetter companies, there is unconditional acceptance of the fact that facilities, maintenance and organization are an interdependent continuum. This implies a commendable level of communication, cooperation and consideration among virtually all job functions in the plant. A good example would be a petrochemical company with not only a management committee, but also a steering committee that gives guidance and actively elicits employee feedback. This latter activity is structured to give visibility to the efforts of every competent worker. 

Facilities with first-quartile capability are almost certain to engage in lifecycle costing. They will view every maintenance event as an opportunity to upgrade and will base the decision on the findings of a rigorous root cause failure analysis. Combined with lifecycle costing of the various remedial options, these best-of-class companies have positioned themselves to capture financial credits from the chosen course of action.

“Best-of-class,” implying first-quartile companies, thus perform reliability-centered maintenance (RCM) in a thoughtful, results-oriented manner, quite unlike their fourth-quartile peers for whom RCM is often a laborious, costly, and largely procedural effort. Many of the low performers have at one time tackled RCM simply because it had been viewed as the cure-all, the magic panacea. Seeing their efforts frustrated, the low performers have since abandoned RCM and have gone back to their old and ineffective ways of doing things.

Best choice among pacesetters: “building reliability into the equipment” 
Among the typical KPIs are “percent work order backlog,” or “percent unplanned maintenance events,” or “fewest maintenance dollars spent per tons of production.” The different ways of calculating are truly endless—and for industry to be desirous of quantitative numbers is understandable. If it cannot be measured, it cannot become a goal toward which to strive, as the saying goes. Even reliability performance must be quantified; we will describe one quantification method under “periodic post-startup plant audits,” later in this article. However, the probable reliability performance must be assessed before the equipment is selected, and reliability can be designed into the equipment.

As if it needed repeating: reliable and efficient machinery is probably the most important factor in ensuring the profitable operation of process plants. This contention becomes law in the petrochemical industry, where economic considerations often mandate the use of single, non-spared machinery trains to support the entire operation of steam crackers producing in excess of one million metric tons (approximately 2.2 billion pounds) of ethylene per year. When plants in this size range experience emergency shutdowns of a few hours’ duration, flare losses alone can exceed one million dollars. Evidently, the incentives to build reliability into the machinery installation are very high. This is a fact generally recognized by the top design contractors and best plant owners. They allocate funds and personnel to conduct reliability audits and reviews before taking delivery of machinery, during its installation, or even after the plant goes on stream [Ref. 1]. This allocation of funds would reflect in the original budget.

Comparing “audits” with “reviews” 
Many texts have defined a “machinery reliability audit” as any rigorous analysis of a vendor’s overall design after issuance of the purchase order and before commencement of equipment fabrication. Reliability audits would tend to utilize outside resources for brief, concentrated efforts. On new equipment, audits would commence within two months of the purchase order being issued.

Again, and for new equipment, “reliability reviews” are similarly defined as a less formal, on-going assessment of component or subsystem selection, design, execution or testing [Ref. 2]. Reliability reviews would be assigned to one or more experienced machinery engineers who would start being involved in a project from the time specifications are written until the machinery leaves the vendor’s shop for shipment to the plant site.

Note that the primary purpose of the very first (and only pre-delivery) audit effort would be to flush out deep-seated or fundamental design problems on major compressors and drivers before these are shipped to the purchaser. A secondary purpose would be to determine which design parameters should be subjected to non-routine computer analysis and to assist in defining whether follow-up reviews should employ other than routine approaches.

In contrast, machinery reliability review efforts are aimed at ensuring compliance with all applicable specifications. These reviews also take place before equipment delivery and will concentrate more on judging the acceptability of certain deviations from applicable specificafitions. In the process of an ongoing review, an experienced reliability review engineer will provide guidance on a host of items that either could not, or simply had not, been specified in writing.

Staffing and timing of pre-delivery equipment audits and reviews 
If machinery audits and reviews are performed by experienced engineers, they can be a tremendously worthwhile investment. Of course, this presupposes that a perceptive project manager will see to it that the resulting recommendations are, in fact, implemented.

A petrochemical project in the $1,500,000,000 range optimally would staff machinery reliability audits with four engineers for a four-month period and machinery reliability reviews with two engineers for a period of two to three years. Using the 0.1% rule, the total cost of these efforts would be in the league of $1,500,000. If this sounds like a lot of money, the reader may wish to contrast it with the value of a single startup delay day, say $1,000,000, or the cost of two unforeseen days of downtime—perhaps accompanied by the thunder of two tall flare stacks for the better portion of two days.

Once the plant has been running for a while, however, it will be time to conduct the first of many periodic reliability assessments. So, while reliability assurance efforts made before delivery of the machinery are more cost-effective than post-delivery or post-startup endeavors aimed toward the same goals, each has its purpose and justification.

Periodic post-startup plant audits 
After the plant has been operating for a few years, it will be important to compare its reliability performance against that of a best-of-class facility. Note, though, that this comparison is not oil refinery vs. oil refinery, or steel mill against steel mill. Just as even the brightest scholar is not likely to be the top performer in all fields of human endeavor, a best-of-class facility may not be at the peak in every particular work process, operating and maintenance procedure, component reliability, and so forth. Collectively, however, a best-of-class facility will receive a very high ranking in effectively utilizing the best work processes and procedures, tools and components. At a best-of-class facility, very few machines will experience repeat failures and equipment will reach high uptimes. Such a facility will compare well against the majority of other contenders and the audit will spell out the difference in measurable terms. While the various contenders may actually represent completely different industries, they will expend much effort in successfully identifying and upgrading the weak links so as to achieve long equipment life and low maintenance expenditures. In other words, they will not only know that improvement is possible, but will know when and how and where and why to cost-justify improvement steps.

As an example, the use of machine condition monitoring at a Pulp & Paper (P&P) plant may be ranked close to the top 10% of plants, whereas the best practitioner of condition monitoring may perhaps be an aluminum producer. On a scale of zero to 10, the P&P plant may be given a “nine” while the aluminum plant might merit a “ten.” Or, in comparing lubrication practices, a certain bulk chemical plant may only be given a “four.” Conceivably, the smartest and best performer would be a pharmaceutical plant that doesn’t waste a drop, verifies oil cleanliness at the plant gate and uses superior lube application methods throughout.

Coming up 
In the second installment of this two-part article, the author will provide more information on post-startup audits, along with guidelines to help you audit your own operations.


1. Bloch, Heinz P., Machinery Reliability Improvement, Gulf Publishing Company, Houston, TX. Originally published in 1982. The revised 2nd & 3rd Editions (ISBN 0-88415-663-3) appeared in 1992 and 1998.

2. Bloch, Heinz P. and Fred Geitner, Machinery Uptime Improvement, (2006) Elsevier-Butterworth-Heinemann, Stoneham, MA (ISBN 0-7506-7725-2)

Heinz Bloch is the author of 17 comprehensive textbooks and over 340 other publications on machinery reliability and lubrication. He can be contacted at:hpbloch@mchsi.com


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