Six Steps That Cut Costs
EP Editorial Staff | May 17, 2018
Maintenance work processes must be well defined and followed to realize the true benefits of reliable operations.
By Al Poling, CMRP, RAM Analytics LLC
The ultimate reliability and maintenance goals of any manufacturing operation are to achieve failure-free operation and low maintenance cost. Why are these two objectives critical?
• Achieving 99% uptime (the highest level of mechanical availability on record) provides the maximum return on investment. The difference between where those below this historic benchmark are and those that have achieved it is free, unrealized capacity. Unfortunately, manufacturers with lower levels of asset reliability often unnecessarily spend countless millions, or even billions, on green-field projects.
• Sustainable, low maintenance cost, which is only attainable through high reliability, provides a game-changing competitive advantage. The global benchmark for world-class maintenance cost is 1% of plant replacement value (PRV).
Many manufacturers measure the cost of maintenance on a per-unit-of-production basis. This is called maintenance cost per unit (CPU). Coupling a low maintenance cost per unit of production with maximum throughput results in the lowest maintenance CPU. Companies leverage this advantage by reducing their sales prices to undercut competitors. In more extreme cases, high-reliability, low-maintenance-cost manufacturers ship their goods throughout the world and undercut local producers. The fact is that winners and losers in today’s global marketplace are separated by only the slightest difference
But having failure-free operation doesn’t automatically lead to low maintenance costs. Operations that have high reliability but no well-defined maintenance work process suffer inherent labor inefficiencies and organizational ineffectiveness. These inefficiencies can push maintenance costs to second- or third-quartile levels of performance.
Note that every dollar of inefficiency reduces the competitive advantage gained through high reliability. Stated more directly, every dollar of maintenance cost is one less dollar of profit.
One might wonder why those who work so hard to achieve high levels of reliability fail to place equal emphasis on maintenance efficiency. The answer is simple: Once they have increased capacity and profit, they become careless and lose their focus on good management practices. That’s why it’s essential to develop a well-defined maintenance work process—and more important, to follow it.
Despite protestations from poorer performers, their maintenance operations aren’t different or unique. Maintenance is performed the same way around the globe. A need is identified, documented, and prioritized, and work is planned to address it. The planned work is scheduled, preferably at an opportune time, and completed, and the root cause of failure is captured, along with the activities executed in the repair. In short, the maintenance work steps are identification, authorization, planning, scheduling, execution, and closure.
Step 1, Identification: The maintenance-work-identification step begins with an observation, usually by a machine operator who documents an asset malfunction. The operator should first diagnose the problem. Diagnostic activities include comparing normal operation to current abnormal operation.
Operators have typically used their senses, i.e., sight, sound, and feel, to identify and assess malfunctioning equipment. Today, though, sensors are used extensively to discern malfunctions at levels undetectable to humans. As a result, a common problem in highly automated manufacturing environments is getting field operators to check their equipment. All too often, they rely on instrumentation and alarms to make them aware of abnormalities. To counter this cultural issue, many organizations require operators to use hand-held devices when making their rounds. Bar codes or RF devices attached to the equipment are used to ensure on-site inspection is conducted.
Included in work identification is some form of diagnostic analysis. Thus, operators must be trained in troubleshooting techniques. Once operators diagnose problems, they must determine whether they have the skills and tools necessary to effect a repair.
As is often said, operators are the first line of defense against unplanned failures. If they can successfully perform and complete a repair, costly downtime and unnecessary maintenance can be avoided. If they can’t, it’s essential that they accurately document their findings for the benefit of those who follow. This is especially critical in 24-hr. shift operations where maintenance personnel typically work the day shift. If operators don’t capture their findings with sufficient granularity, it will be up to maintenance teams to do so—and they won’t be able to leverage what the operators may have observed in the way of important pre-failure symptoms. Those types of observations can be invaluable in root-cause analysis.
Step 2, Authorization: Work authorization is a crucial but, sometimes, complicated part of a maintenance process. That’s because companies often impose barriers that prevent shift personnel from making maintenance-approval decisions. In such cases, the repair is delayed until someone with the requisite approval level makes the decision—which can unnecessarily extend downtime.
Sadly, it’s still not unusual to find well-intentioned financial barriers that add cost and contribute to poor decision-making in today’s plant operations. Although not as bad as it was in past decades, obsession with maintenance cost is still a problem.
If repairs are delayed until someone authorizes the expenditure of funds, production throughput is detrimentally affected. Shop floor personnel should be authorized to make an effective permanent repair. If they are not, they will likely make temporary repairs, and the process will inevitably repeat itself in the not-too-distant future.
In some cases, decisions can involve multiple levels of management, resulting in authorization by committee. Such short sightedness not only increases downtime, it demoralizes those closest to the equipment who know what to do. Once denied the trust to make repair decisions, operators will naturally reject any attempt to hold them accountable for equipment performance.
Step 3, Planning: While maintenance planning has been around for more than a 100 years, far too many sites fail to do this step well. Lacking a disciplined approach to maintenance planning, they are basically forced to recreate a job plan every time a repair is needed.
Over time, every maintenance job will be repeated. Failing to store detailed maintenance job plans so they can be easily found and retrieved not only affects scheduled repairs, it prevents front-line supervisors and craft personnel from accessing invaluable repair-procedure information, resulting in wasted time and inefficiency.
No matter how skilled or experienced, maintenance-craft personnel should follow defined job plans and repair procedures. Given the fact that humans are prone to mistakes, every reasonable effort must be made to lessen the likelihood of error. Job plans should include labor and material requirements, including the craft, hours, required parts.
Step 4, Scheduling: The maintenance-scheduling step is preceded by two key planning activities. The first is to have planned work in a backlog that can be easily retrieved. The second activity is to confirm that all materials and resources are available for work execution. Once all materials and resources are confirmed, the job can be scheduled.
Work selected for scheduling is usually done through a prioritization process. The prioritization must be objective, based on business needs, not on the whims of any individual or group. If the prioritization process and subsequent scheduling isn’t objective, it will fail. In such circumstances, individuals or groups of individuals will make the decisions that help them personally, rather than the one that helps the business.
The scheduling step includes use of resource-leveling methodology. Resource leveling begins by identifying the resources available by craft for the scheduled period. A scheduler then aligns the work with the available resources to create the optimum schedule.
Schedule compliance is critical to overall success. Failing to adhere to the schedule results in further inefficiency and unnecessary cost. This is a tricky area, as people can be very creative in coming up with ways to “game” the schedule. Thus, measuring and, in turn, reporting schedule compliance is crucial, as is holding individuals accountable for deviations.
Step 5, Execution: The maintenance-work execution step is where skilled craft workers perform their assigned work. For this part of the process to be effective, craft workers must have the requisite skills to execute such assignments.
Maintenance craft workers are a valuable asset and must be treated as such. This means providing them with on-going training to keep their skills current with repair best practices and techniques. It is folly to argue against training personnel for fear they will become more valuable and seek employment opportunities elsewhere. In fact, failing to provide requisite training and keeping skills on the low end of the scale will invariably result in poor performance and ineffective repairs, as well as high levels of costly rework. Lately, this problem has been somewhat moderated by the global shortage of skilled labor: Organizations have been forced to invest more to attract and retain skilled craft personnel.
Sub processes associated with work execution include tools and materials. Skilled craft workers must have quality tools readily available. Failing to provide them will hamper the workers and—again—result in inefficiency and extended downtime.
Workers should have their own sets of quality tools, as well as easy access to larger tools, such as chain falls, that are disbursed from a tool room. (Note: Tool rooms should have online capabilities that allow availability of needed items to be confirmed and tools reserved.)
As for the other sub process, the best-designed maintenance work process will fail if quality repair materials are not provided or made readily available. The most common non-value-added activity gleaned from maintenance-work sampling involves highly skilled and highly paid maintenance-craft workers waiting on, searching for, or delivering repair materials. The root cause of this problem is usually “control” or misaligned goals and objectives.
The control issue tends to arise when purchasing or storeroom personnel, thinking that they are doing the right thing, exercise undue control over materials. A good example is elimination of zone or satellite stores for high-volume, low-cost materials, which ultimately adds unnecessary delays to work execution. In such cases, it is not uncommon to find transaction costs exceeding material costs. It’s also not uncommon to find misalignment of goals and objectives between maintenance departments and purchasing and or/storeroom organizations.
If a purchasing department is evaluated on price savings alone, it can be led to make poor decisions such as buying lower-quality materials that fail prematurely or, similarly, failing to understand the lifecycle cost of repair materials. Addressing these issues may require a senior executive to become involved in aligning organizational objectives. Left to their own devices, departments will naturally lean toward adopting metrics that make them look good, often at the expense of others or the business.
Step 6, Closure: The final step in the maintenance-work process is closure. Among other things, equipment should be tested to ensure an effective repair before craft workers leave the work area.
Closure also includes capturing detailed repair history for diagnostic purposes to help reliability engineers or specialists discern systemic issues. Repair history is required to aid those who affect the repair the next time it is needed. Moreover, maintenance planners must have feedback on the accuracy of their job plans so they can adjust them to better reflect actual work execution.
Finally, tools and unused material must be returned to their rightful place. And all trash and debris should be removed from the job site and properly disposed.
Although this discussion may seem like common sense to anyone working in industrial facilities, most operations still do a less-than-stellar job performing maintenance on their assets. Remember that maintenance represents the largest fixed cost in manufacturing. If it’s done well, costs will be low, and the business will be competitive. If it’s done poorly, maintenance costs can be exponentially higher—to the point that they can be the difference between operating at a profit or a loss. In some cases, poor maintenance work practices can be the proverbial straw that broke the camel’s back and force a business to close.
The example graph in Fig. 1 is based on my experience tracking maintenance costs in the global process industry. It shows that such costs don’t follow a normal bell-curve distribution. There’s a short tail on the left side of the curve reflecting the increasing number of low-maintenance-cost operations and a long tail on the right side reflecting a decreasing number of high-maintenance-cost operations.
Note that the tail on the right side gets shorter as those who perform maintenance poorly eventually close when they are no longer competitive. Conversely, the left side continues to compress as more and more organizations recognize the business benefits of failure-free operation. My questions to you are, on which side of this type of curve would your operation appear—and what are you doing about it? EP
Numbers Don’t Lie
Benchmarking studies have confirmed that establishing and following a well-defined maintenance work process results in a notable competitive advantage. Those who do not have and/or do not follow that type of process will spend two to three times as much on maintenance labor as those who do.
Estimating how much maintenance labor inefficiency is costing your operation is an easy calculation. But it’s not just about the cost of labor: With increased maintenance costs, there must be more overhead to support the additional needed craft workers.
Look for empirical evidence of labor inefficiencies within your organization. Examples include late starts in the morning when equipment isn’t prepared for maintenance, or excessive maintenance travel time as workers search for tools, materials, or other items required for successful job execution.
The maintenance work process doesn’t just define what maintenance personnel “do,” it defines what others—especially those on the operations side—must do to ensure efficient and effective maintenance work execution.
Al Poling has spent almost 40 years in the reliability and maintenance arena with various process industries. A Certified Maintenance and Reliability Professional (CMRP), he served as technical director for the Society for Maintenance and Reliability Professionals from 2008 to 2010. Contact email@example.com.