Reliability Determines Reporting Structure
Klaus M. Blache | February 20, 2019
Q: To whom should maintenance departments report?
A : The answer is typically engineering or operations, but usually because it’s always been done that way. Ideally, maintenance-organization structure and reporting should be based on individual department needs and how those needs drive overall organizational output. This requires considering needed activities, available predictive technologies, trades/technicians knowledge and skills, group size, total number of maintenance employees, past practices, and current culture.
Most maintenance organizations have evolved over long periods of time with various team members moving in and out, changes in leadership and direction, unclear roles and responsibilities, and accountability that can be improved. Regardless of the level of best practices implemented into daily activities (good or bad), maintenance habits are strongly ingrained into the current culture.
A key question often involves centralizing maintenance. Centralization can reduce labor needs and make it easier to maintain technology knowledge and lower training costs. However, a decentralized approach improves area buy-in and plant-floor knowledge of predictive technologies/condition-based monitoring, but there is also a greater chance of the areas using the technology resources on production-related work and unauthorized projects.
Over the years, I’ve watched this happen at many production plants. Centralized maintenance departments were decentralized, so each could perform their own technologies. After about a year, I viewed their headcounts. All had increased (beyond reallocations from central) to cover the various technologies. As a plant, overall maintenance-support headcount increased.
In time, most evolved into hybrid organizations reporting to manufacturing engineering. Plant-wide technology needs (building infrastructure, HVAC, utilities, energy, environmental, central computer rooms) were handled by the central group. Specialized-technology groups were established, but with minimal extra headcount. These groups were based on demonstrated technology needs, return-on-investment, and resulting savings. The central group would assist the areas as needed. The end result was a more efficient use of resources and more efficiently applied predictive technologies.
So, back to the question of reporting structure. If the main plant goal is throughput driven, shouldn’t operations also control maintenance? The best plants have figured out how to partner with operations to facilitate reliability and maintenance (R&M). There must be a shared interest in R&M performance, which can mean some common key performance indicators.
Some leaders simply turn maintenance over to operations. Don’t consider doing this before you have established a proven R&M process and an operations manager who understands it. From what I have seen, only a small portion of companies should consider this approach, based on their R&M process maturity. In production-run maintenance, I have observed maintenance technicians babysitting bottleneck equipment, instead of performing PM routes; increased backlogs; decreased reliability; and increased overall plant costs.
If you are thinking about going in that direction, it’s not just a decision. You need to prepare your R&M processes for this change. However, if you have a top-quartile maintenance organization, you probably aren’t asking about maintenance-reporting structure. Based on various presentations by award-winning companies in all types of industries (pharmaceutical, ethanol production, steel mill, mining), most still do not have maintenance reporting to production.
However, almost all gave credit to the fact that cooperation and coordination with production enabled best-practice results. This included involving operators in daily maintenance checks. My data shows that when companies have operators do regular PM checks and minor maintenance, they realize a 50% improvement in maintenance costs. Just having operators performing regular PM checks (visual controls, better communications/synergy with maintenance) already resulted in 25% maintenance cost reductions. If your maintenance processes are top quartile, your reporting structure has most likely evolved to an optimized structure for your situation. If you keep focus on getting the R&M basics right, you will know what to do next. EP
Klaus M. Blache is director of the Reliability & Maintainability Center at the Univ. of Tennessee, Knoxville, and a research professor in the College of Engineering; email@example.com.