Zero Breakdowns – Step 1 Maintaining Basic Conditions
In my last blog, I raised the question about zero breakdowns and if it was possible to achieve that state of equipment reliability. This blog starts the first of five steps to achieving zero breakdowns. The first step is to maintain basic conditions. The three components to this step are:
Equipment cleaning activities in many companies today are primarily motivational activities. And while motivation is a good reason to clean equipment, there are also technical reasons to clean equipment. For example, consider an electrical motor. If electrical motor is allowed to become contaminated, the contamination acts as an insulator, interfering with the thermal transfer process or heat dissipation. This results in excessive temperature rise of the motor. As the temperature increases, the design life of the motor decreases. One study showed that in some motors the useful life was reduced by ½ for every 10 degree C rise in operating temperature above the designed operating temperature. This can be a self-destructive problem, since in some annealed copper wire; a 50 degree C temperature rise causes a 20% increase in resistance in the wiring. This leads to even more heat, more resistance, more heat, until the motor fails.
Even if this does not result in an immediate failure of the motor, it may result in getting six months of life out of a motor, when it was designed to provide 6 to 10 years of life. This means that unnecessary maintenance will be performed.
Also, consider that gear cases have a similar problem. If gear case exteriors are allowed to become contaminated, the internal temperature of the gear case will rise. As the temperature rises, the manufacturer’s suggested lubricant for the gear case is incorrect. The higher temperatures will result in thinning viscosity of the lubricant, creating metal to metal contact between components in the gear case. This will result in rapid wear, again shortening the life of the gear case.
As with the motor, the gear case and components will not fail immediately: however it may need to be replaced after two or three months of use, rather than seven or eight years of use. This leads to excessive maintenance cost and lower availability of the equipment.
Hydraulic systems also have a problem with cleanliness and heat. A hydraulic system is equipped with a reservoir that is designed to dissipate the heat in the hydraulic fluid as it returns to the tank. This cooling function may be enhanced by coolers to lower the temperature of the fluid. If the tank becomes dirty or the coolers become clogged and the temperature of fluid begins to rise. Once it reaches about 140 degrees, the hydraulic fluid will begin rapid degradation. Once study shows that the hydraulic fluid will oxidize twice as fast for every 20 degree F temperature rise above 130 degrees. At 215 degrees F the oil life expectancy will drop to 3% of original design.
As the hydraulic oil reaches the end of its life, it loses its lubricating quality, allowing rapid wear of system components, such as pumps, valves and actuators. This rapid wear produces particles and contaminants that will further damage the hydraulic system and degrade its performance.
Another problem related to overheated hydraulic fluids is inlet air leaks or cavitation. As the air bubbles transfer from the suction side of the pump to the pressure side of the pump, the air bubbles implode, producing temperatures of up to 2100 degrees F.
Regardless of how the oil is overheated, it will take on a varnished and sticky quality. The varnish particles travel downstream through the pump and other components such as control valves and actuators clogging lines and causing sticking valves that burnout solenoids and other components. This results in the system failure and downtime or erratic operation and the related minor stoppages.
Tightening or torquing procedures.
When considering proper torquing procedures, one must first consider the proper tools. In many organizations technicians are observed using crescent wrenches, channel locks, or other improper tools to tighten hex-headed fasteners. The proper tool, of course is a torque wrench. A torque wrench can measure the proper amount of torque applied to a fastener. This is important, since all threaded fasteners are two inclined planes wedging against each other. When a fastener has the proper amount of torque applied, it is distorted, locking the threads so they will not loosen.
If fasteners are not torqued sufficiently, the faster is not deformed, it will not lock, and eventually works loose, creating a vibration, wear, and ultimately failure. Conversely, if a fastener is over tightened, it can exceed the elasticity of the fastener material, deforming the fastener so that is weakened. Then the fastener, when re-tightened will loosen quickly or break.
Also, it is not just enough to understand the amount of torque to a size of fastener, the amount of torque is also determined by the grade of the fastener. There are many grades of fasteners available and even in the same size; each requires a different amount of torque.
Consider how many failures at a plant or a facility have the root causes simply because a mechanical device was not fastened correctly. The fasteners would begin to work lose, creating vibration, creating wear, which increases the vibration, which increases the wear, until a failure occurs. This scenario is all too common in plants today. What percent of all failures at a specific plant or facility could be eliminated by paying attention to proper fastening procedures? One study in the petrochemical industry showed that 50% of all fastener failures occur due to improper assembly and incorrect torque.
Proper lubrication would include the following items:
the right lubricant
the right quantity of lubricant
the right application method
the right frequency of application
The question might be asked, how often do individuals get all four of the requirements correctly performed? Do some individuals use power grease guns to lubricate bearings and continue until the bearing is filled with grease is then forced out of the seals? Is completely full the correct level of lubricant for a pillow block bearing? In reality, a pillow block bearing is designed to be filled only one-third full of oil or grease to allow for heat dissipation during operation. So when the bearings are over lubricated, they over heat, and their life is shortened dramatically.
Lubrication also needs to be monitored for contamination. Any solid contaminants in the lubricant will eventually come between the components in a drive and accelerate the wear on the components.
Water is also a contaminant, but it acts differently. Water has no load carrying capability. As water molecules move between the components of a drive, the fluid film barrier or is ruptured and metal to metal contact occurs. This accelerates wear in the gear case or drive. For example, water content does the following:
.03% water content reduces bearing life to 50% of L-10 rating
.2% water content reduces bearing life to 17% of L-10 rating
1% water content reduces bearing life to 6.3% of L-10 rating
2% water content reduces bearing life to 4% of L-10 rating
By these figures, it is quite easy to see the dramatic impact even the slightest water content has on the life of the lubricated components.
Mixing lubricants can also create problems. Since different vendors use different additives to their lubricants, mixing incompatible lubricants will cause a chemical reaction. This leads to the formation of acids, alkaloids, thinning viscosity, thickening viscosity, coagulation, etc. It is important to always understand the interchange requirements and consequences of mixing lubricants.
So there it is- the first step to zero – How does it apply to your plant or facility? If you were to perform a true root-cause analysis of all of your equipment failures, what percent of them would be related to cleanliness, fastening procedures, and lubrication? What if your technicians suddenly started performing these tasks as described in this blog? Would your failure rate drop? By how much? 50%? 75%? More? Less?
The next blog will discuss step 2 on the journey to zero breakdowns.
Are zero breakdowns really achievable at your plant or facility? Is it conceivable or even desirable to have zero breakdowns? If we think of the quality initiatives, the goal was zero defects. And while most companies never achieved this goal, many developed strategies or methodologies that came very close to the goal. In fact, Six Sigma Quality was the stated goal for many company’s quality programs.
If we compared maintenance to quality, quality focuses on producing a perfect product. Maintenance focuses on providing reliable equipment capable of producing the perfect product. So if zero defects was the goal for quality, could not zero breakdowns be the goal for maintenance? And in reality, most companies would never achieve zero breakdowns, would it be possible to have Six Sigma reliability? And what would Six Sigma reliability cost? When would the cost of that level of equipment or asset reliability exceed the benefits achieved? How expensive would it be to achieve zero breakdowns really?
These questions can only be answered after clearly defining breakdowns, the business objective of the equipment or asset, and the determination of the steps necessary to achieve zero breakdowns.
Asset Utilization – The Business Objective
Asset utilization, commonly referred to as Overall Equipment Effectiveness, is a complete picture of how equipment or assets perform. It involves examining equipment availability, the equipment performance rate, and the quality rate. The asset utilization may also be referenced as equipment capacity. Asset utilization is not just the responsibility of one department.
Asset utilization is the responsibility of the entire company. It has the focus of insuring that nowhere in the world does another company have the same assets and achieves greater capacity from the assets. It is the single focus of being the best at getting the most out of the assets. The measurement of asset utilization is the overall equipment effectiveness. Overall Equipment Effectiveness is a holistic calculation that measures availability, performance efficiency, and quality rate.
Availability is defined as the percentage of time the equipment is available compared to the time that it is required to be available. Of course, breakdowns, equipment malfunctions, setups and adjustments, and even material shortages, are all possible reasons the equipment may not be available.
Performance rate of the equipment compares the current operating rate of the equipment to the actual design capabilities of the equipment. Many companies use some type of targeted performance, which usually fails to optimize the utilization of the equipment.
Quality Rate is the percentage of good product or satisfactory service the equipment provided compared to what the equipment should have delivered. So defects, re-work, off spec product, or unsatisfactory service from the equipment lower the overall Quality Rate.
For equipment to be fully utilized, it is a blend of all three parameters that determine its actual performance. By examining equipment or assets in this manner, companies can avoid a one-dimensional focus on utilization of the asset. In many companies, decisions are made to increase production, which may boost performance rate but yet lower equipment availability due to a decrease in asset or equipment reliability.
On the other hand, if the maintenance department performs too much maintenance and lowers the availability, and then even if the equipment performs as designed, the overall output is lower. This still puts the company in a noncompetitive situation when it comes to asset utilization.
So it is clear that the approach cannot be one dimensional. The true value of measuring the asset utilization in this manner is that it presents a holistic view of the asset or equipment.
With this perspective in mind, what prevents a company from achieving Zero Breakdowns from their assets? There are five main areas and these will be discussed over the next several blog posts.
With the increased interest in asset management, many companies are chasing an asset management certification and neglecting some the basics of their businesses. One example would be not utilizing the proper asset information system to collect the necessary data to manage their assets. One of the major concerns in this area is the lack of support for existing management information systems. For decades CMMS/ EAM systems have been underutilized in most organizations. One of the main reasons for this is the lack of a return on investment in the utilization of these systems. However, that may be changing.
In the Institute of Asset Management’s (IAM) Asset Information Subject Specific Guidelines (SSG) on page 10, the value of asset information is discussed. It is highlighted that studies have shown the impact that asset information has on the efficiency and performance of asset intensive businesses. Organizations operating efficient asset information processes have been found to indirectly spend around 20% of their total annual budget, (both OPEX and CAPEX) on asset information. Businesses with poor asset information processes are found to spend even more, typically as much as 25%.
These figures may appear high, but consider if you include the direct cost of preparing and recording asset information when performing maintenance and overhauls; then the significant hidden costs, such as management and staff time spent searching for information, collating, and processing information from various sources and formats, and perhaps repeating or duplicating the process across multiple business units. The majority of the cost is incurred in the core business processes that are dependent on asset information. If a company can improve the efficiency of how asset information management is performed in the business, it offers a potential improvement for savings which has been estimated to be in the order of 1 to 5% of the total business expenditures. Now this type of information may help raise the priority of properly utilizing an asset management information system.
An even greater benefit can be realized if asset information is used effectively to influence decision-making on business expenditures, such as capital programs to improve asset serviceability or optimum whole life cost decisions regarding maintenance and overhaul choices. Simply stated, the appropriate utilization of asset information will enable the right work to be done on the right asset at the right time. Conversely the lack of reliable asset information can result in poor or suboptimal decision-making which can expose the business to unnecessary cost or risk and adversely affect overall business performance.
In one business vertical, (Utilities) 47% of the executives feel the single most important issue that could improve business performance was the quality and availability of asset and unit cost data. This figure rises to nearly 70% if respondents were asked if they felt asset data was either the most important or second most important issue of the business needed to address. This clearly illustrates the significance of data issues.
A sample of the most basic types of asset data includes:
• Asset information.
o Including the numbers, types, size and purpose of the plant.
• Asset performance and condition data.
• Asset value, unit cost, and refurbishment and repair costs.
• Location information such as grid reference post or ZIP code or operational zone.
Asset information is held in asset registers (typically EAM Systems), while location and connectivity and the network data such as links and material types, are held in GIS systems. Both systems are needed and a degree of integration is necessary. That ensures the GIS holds conductivity, location, and operational boundaries of network/plant while the EAM systems hold the history and service record a particular plants be it unit, pumps, switchgear and transformers of whole facilities, such as pumping stations or treatment works.
Integration of data across systems and the business requires common data structures to be replicated in all major corporate systems. This can be achieved by creating asset hierarchies that define the relationship between tactical asset information and strategic data. The concept, design, and use of hierarchies and the architecture of asset data are some of the most far-reaching decisions utility company can make to increase the effectiveness of the organization.
As organizations continue to investigate the benefits of adopting an asset management strategy, they may find that the benefits are difficult to quantify. This problem could be due to the fact that they do not have the proper asset information to develop this strategy. Perhaps an increased priority of collecting and then utilizing the data typically found in a CMMS/ EAM system will help solve this problem.
There has been a lot of buzz on the internet (particularly in the LinkedIn groups) about the number of maintenance / reliability initiatives available to companies today. There are multitudinous questions arising, such as how to know which initiatives to implement, support, or even ignore. When considering the potential maintenance/ reliability initiatives we really need to stop and ask “Which ones are going to make an impact on the profitability of the company?” These are the ones that should be given the priority. Then, to prioritize the initiatives that are going to make the company more profitable, you should prioritize them by the amount of profit that is projected. Some companies will focus on whether the improvement initiative is going to increase profitability by increasing sales/ revenue or by decreasing expenses.
While this seems to be rather basic, how many companies really prioritize their maintenance/ reliability improvement initiatives by a projected return on investment? In many cases, they decide by looking at their competitors. You may hear statements like “Company A is doing this, we should too.” Or “Our competition is implementing this, we should too.” In other situations, the maintenance and reliability initiatives are decided upon by the “C” level person in the company reading a book about the latest management fad (whether it applies to maintenance and reliability or not) and wants to implement it.
Even in the maintenance/ reliability community, managers get enamored by a presentation on an improvement methodology in a presentation or an article and they want to solely focus on it. We cannot fall into the “Acronym of the Month” trap. If the maintenance/ reliability organization wants to make process improvements, they have to have a process FIRST; then they can improve it. Having a defined process will also allow them to understand the changes that need to be made and track the financial improvements.
At a recent conference, one of the keynote presentations was a CFO of a company, who appeared to have a “real-world” perspective on how companies should be run. One of his most profound statements was “In any business, it is all about the return”.
Do we make improvements in our companies for the sake of just doing something – or do we really calculate the return on investment and then use that to sell the improvement program to the rest of the organization? Perhaps if we had to put a return on investment “sticker” on each of the improvement initiatives that are being promoted throughout companies today, the choices would be easier to make, implement, and support into the future.
Understanding the “Impact” Cost of Reliability and Maintenance
In previous blogs, I have discussed the cost of inefficient maintenance practices and the impact they have on a company’s expenses. In this blog, the focus will change from maintenance costs to what I refer to as “The Impact Cost of Reliability and Maintenance”.
When considering the impact costs, consider this scenario: A production plant in a sold out condition. Everything that can possibly be manufactured is being sold to customer. If a production line or critical piece of equipment fails (unreliability) during the production run, the production is halted until the equipment is repaired and returned to service (reactive maintenance).
What did the production disruption cost the company? Was it the total lost sales dollars or was it only the profit that was lost? First consider the difference between lost sales revenue and lost profits. Profit is usually calculated by taking total income (sales) and subtracting total expenses (salaries, energy, etc.) and what is left are the profits. If the production disruption reduces the total income by lowering the possible sales volume, then lost sales would have to be a factor in calculating the impact of the production disruption. This reduces the numerator in the impact calculation.
At the same time, the expenses may also be increased during the production disruption. There may be overtime for the maintenance technicians making the repair and there could be product loss in quality or quantity (particularly in a continuous process operation). These increased expenses impact the denominator in the impact calculation.
While this may seem simplistic, very few organizations consider all of the parameters when considering the cost of lost production. Visualizing the problem becomes more clouded when a plant is not in a sold out condition. Now the impact on lost sales revenue becomes a matter of debate among managers (especially financial managers). Can the lost production be made up and still meet the customer delivery in a timely manner? If the answer is “Yes”, then the sales volume may not be impacted. However, the profit component of the calculation will still be impacted, since expenses will be increased to make up the production. This is true since the equipment will now have to be operated when it was scheduled to be shut down. So there will be increased labor costs (usually at an overtime rate) and increased energy costs. There is a possible increase in raw material costs, since the supply chain demand will fluctuate. So again, the true profits of a company will be impacted negatively.
There is yet another scenario: What if the company has an extra line or excess capacity? Can the production crew be moved over to the spare line and run the product without any impact on profit? Possibly, but this line of reasoning leads to a much larger problem: A poor financial standing with investors. Why? Simply stated – profits are only part of the picture.
A higher level indicator used to evaluate companies today is Return on Invested Capital (ROIC). This indicator is utilized in Industry Weeks Best Plants program ROIC is – in its simplest form – the profits a company generates versus the invested capital that is being used to generate the profit. A quick analysis of this calculation would show that a company that uses fewer assets to produce the same profits as a competitor would be viewed as a better investment by Wall Street. So back to our position at the start of this blog – Would assets that are more reliable (higher output) and have a lower cost to maintain (lower life cycle cost) be more valuable to a company? The answer would clearly be “Yes”. The impact cost in the form of fewer assets and increased profits (ROIC) would make the company a much more attractive investment for the financial community.
How much of an impact does your reliability/ maintenance organization have on your company’s assets that are utilized produce its product? This is the TRUE impact cost that companies must focus on to maintain a competitive edge.
Maintenance is not Asset Management – Or is it? – Conclusion
In the previous blog (Part 3 of this series) the design phase of an asset’s life cycle was discussed. In this blog, we will finish the topic by considering the next two phases of the asset’s life. These are the:
The Project Phase
The Operations and Maintenance Phase
In the project phase, the design is converted to a commissioned asset. Based on the diagram in part 3 of this blog, this will involve the supplier selection and the project execution. The company may purchase the new asset from a designated supplier or they may purchase all of the components to internally build the asset. The purchasing of the asset is where the life cycle costs begin to escalate.
This is also the point where additional maintenance costs are decided. If the asset is installed so that any maintenance tasks can be easily performed, the Mean Time To Repair (MTTR) will be minimized. However, if the asset is installed in a manner that makes it difficult to perform even routine service on the equipment, the time to perform the maintenance activities will be unnecessarily inflated, which increases the life cycle costs.
For example, if an asset is installed too close to a wall or another asset, the clearances to access the serviceable components will be insufficient. This may require additional disassembly of the asset or nearby structures to perform even routine maintenance. This increase in required downtime to perform the task in addition to the increased maintenance labor that will be required can artificially inflate the design reliability and maintainability calculations. This illustrates the need for careful consideration of the asset installation policies and procedures during the project execution phase of the asset’s life cycle.
This brings us to the commissioning phase of the life cycle. During this phase there is the acceptance test of the asset and the handover of all related documentation. The acceptance testing insures the asset will perform as designed. So the design specifications should be reviewed and the asset should be able to demonstrate that it can perform, meeting those specifications. In addition, suggested spare parts recommendations should also be reviewed and orders placed for sufficient stocking levels to allow the asset to be repaired in a timely manner, meeting the design MTTR.
An additional area to be reviewed is the suggested preventive maintenance tasks that are to be performed on the asset. The time estimates (and frequencies) to perform the PM tasks will help determine the new staffing levels for the maintenance departments to insure the asset can be properly maintained, as specified in the design documentation.
Finally, the asset enters its operational and maintenance phase. This is where up to 90% of the asset’s life cycle cost is incurred. If the organization has carefully followed and documented the design and project phases of the asset’s life cycle, the life cycle costs can be properly controlled. However, if the equipment is operated outside the design parameters or was installed incorrectly, the life cycle costs will be greatly increased, never allowing the asset to achieve the projected return on investment developed during the original business needs analysis (phase 1 of the asset’s life cycle). This ultimately leads the organization to a non-competitive position when compared with another company that could properly manage the same assets.
So after several blogs on the topic “Maintenance is not Asset Management – Or is it?”, it can be seen that maintenance is not asset management. However, competitive asset management could not exist without a maintenance organization that understands its role and performs to a “best in class” standard. If a maintenance organization was not equipped to properly manage the 90% of an asset’s life that it controls, the projected design asset life cycle costs would be quickly exceeded.
Without a maintenance organization that delivers “best in class” service by being efficient and effective, no organization can properly manage their assets. This level of service is achieved by doing the basics. This includes:
MRO stores and purchasing management
Work Order planning and scheduling
Utilization of a CMMS/ or EAM system
Predictive or condition monitoring techniques
Operation’s involvement in routine maintenance activities
When one examines all the services a maintenance department is required to provide, it is easy to see that we should re-word our question into a statement. “Asset management cannot exist without maintenance and reliability management.”
Maintenance is not Asset Management – Or is it? (Part III)
The last blog (Part II) finished with the need to understand the relationship between maintenance and asset management. To achieve a clear understanding, it would be necessary to the various phases of an asset’s life cycle. The following diagram illustrates a common 8 part life cycle.
If we would begin by looking at the reason an asset is created/ procured, it would begin with:
Investment Planning (Needs and Feasibility Assessments for Assets) This phase of an asset’s lifecycle begins with the discovery that there is
(1) a new product or service that can be produced and sold,
(2) a greater demand for an existing product or service, or
(3) another facility location required to meet customer needs.
The demand for new assets may also relate to meeting increased regulatory requirements for existing assets.
The investment planning will likely involve the following studies:
The company direction is to diversify, expanding into new markets.
The company direction is to expand their share of an existing market.
The customer demands modifications or enhancements to existing products or services that requires new assets.
There may be new regulatory requirements that require extensive modifications (new assets) to existing buildings, facilities, processes, equipment, etc.
Project Definition (Design of Assets)
In this phase of an asset’s lifecycle, the scope of the asset(s) is defined. For the asset to meet the market/ customer demand (identified in Phase 1), it will need to meet certain requirements. There are reliability requirements (how long the equipment operates in between maintenance periods), maintainability requirements (how long it takes to restore the equipment to service), projected life and total cost of ownership (TCO) requirements that the assets will need to meet to support the business requirements identified in Phase 1.
It must be kept in mind that the asset at this phase of its lifecycle is still only a document, a drawing, or a blueprint. There have been no major costs (other than studies) done to this point. In fact, the majority of the textbooks written on lifecycle design and costing show that up to 90% of the lifecycle costs are specified (knowingly and unknowingly) by the design engineer. However, the same 90% of asset lifecycle costs are not incurred until the asset is in its operational and maintenance phases of the lifecycle. In fact, the projected maintenance requirements (manpower, materials, etc.) are established at this time. Eventually, these projections are to be turned over to the maintenance department for requesting additional manpower and adjusting spare parts levels when the new assets are commissioned. Most companies (who do not listen to the design engineer) commonly overlook this fact and fail to achieve the profitability projections in the Phase 1 business study. This is due to the increased maintenance requirements being neglected, which (once the asset is commissioned) results in a shift toward reactive maintenance and increasing the overall maintenance costs (labor and materials).
There are three calculations a design engineer will focus on during the design of an asset. They are:
Reliability – A design specification that determines the period of time an asset will perform its intended function without failure. This is typically measured by the Mean Time Between Failure (MTBF) calculation.
Maintainability – A design specification that determines the length of time it takes to restore an asset to its functional state once a failure has occurred. This is typically measured by Mean Time To Repair (MTTR) calculation.
Cost-Benefit Analysis – A design study that shows the profits required from an asset versus the cost the asset will incur throughout its lifecycle. It may be measured by ROIC or ROA calculations.
How do the assets move from the drawing board to the plant floor? How do these calculations impact the asset during the rest of its life? How does a company maximize their return on investment in the asset? This will be discussed in the final blog in this series.
Maintenance is not Asset Management – Or is It? (Part II)
As my last blog finished, we were going to consider areas of asset management that are outside the control of the maintenance organization. There are two articles that have just been published that will highlight one area – BUDGET.
In the USAToday, there were back-to-back articles (February 8 & 9, 2016) that highlight the lack of control that a maintenance organization has over its own budget. The first article -“Park Service Maintenance Backlog Hits a Record High” deals with massive work backlog in the National Parks in the USA. This article shows that the deferred maintenance budget for the Parks was around $12 Billion USD. This article does a good job of explaining deferred maintenance when it said:
“Deferred maintenance is necessary work – performed on infrastructure, such as roads and bridges, visitor centers, trails and campgrounds – that has been delayed for more than one year. Aging facilities, increasing use of park facilities and scarce resources contribute to the growing backlog.”
They clearly defined backlog work as anything delayed for more than 1 year. While this definition may not work for many companies, it works well for governmental agencies, since they budget by that time frame.
Is the $12 Billion backlog situation going to improve anytime soon? Apparently not – since the article continued with:
“While Congress provided increases this year, the annual bill for maintenance in America’s national parks is still almost twice as much as is appropriated,” National Park Service Director Jonathan B. Jarvis said in a statement.”
Let’s see… a maintenance budget that is only 50% of what is required to properly maintain the National Park system’s assets. This is a condition that should sound familiar to most maintenance/ asset managers in the world. Someone in the Park Service has an approximation of what it will take to properly maintain the assets and then someone in Congress who has authority over the budget chooses to fund a study of the African fruit fly over properly maintaining the Park Service assets. Doesn’t that sound a lot like the Plant Manager choosing to fund new construction in the plant rather than fund properly maintaining existing assets? Or perhaps the CFO mandating a 15% cut in expenses across the company regardless how it impacts operational capabilities. Maintenance/ Asset managers seem to face similar problems, whether they are in the public or private sectors.
“Deferred maintenance has been a problem at National Park Service parks, historic sites and other areas for decades. The Government Accountability Office pointed out problems with the parks’ maintenance management system as early as 1984; found a maintenance backlog of almost $2 billion in fiscal 1987, about $4 billion in today’s dollars; reported on $6 billion in deferred maintenance in 1997, about $9 billion today; and then pointed out in 2003 that the agency, which was putting a new system in place to keep track of maintenance needs, had vastly underestimated the amount of upkeep needed.”
This sounds suspiciously like a MASTER DATA integrity problem. There was a system (likely a CMMS/ EAM System) in place back in 1984 that apparently was not acceptable to the GAO (perhaps not fully integrated and having poor data integrity) and then almost 20 years later it is being replaced. In the interim, the maintenance backlog grows from $2 Billion in 1987 to $12 Billon today. Using a baseball analogy, we not only “took our eye off the ball”, we were “beaned” by it. Wouldn’t it seem logical that any organization experiencing an exponentially growing maintenance/ asset management backlog would take action before they go out of business? Maybe changing out the CMMS/ EAM system is the answer; but it is not likely to solve the problem unless we understand why the previous system failed.
The purpose of this blog was not to pick on the US Government or any company, however, the commonality of maintenance/ asset management problems are undeniable. If 80 to 90% of the life cycle cost of an asset is incurred after it is commissioned, wouldn’t companies (and governments) expect to have to properly budget for these expenses?
Perhaps a review of the asset life cycle would be in order to properly understand the relationship between asset management and maintenance management. We will begin this topic with the next blog.
Maintenance ≠ Asset Management – Or is It? – Terry Wireman
Since the development of PAS-55 and even more since ISO-5500x, various departmental managers within organizations have competed for the title of “Asset Manager”. The candidates for the title include the operations, engineering, finance, supply chain, and the maintenance departments. Why is it that there appears to be no clear line of responsibility for asset management through many organizations?
It would be an interesting exercise to poll those who have the title “Asset Manager” or lead a department called “Asset Management”. It may be surprising to find how many of these individuals have a technical (Maintenance and/or Engineering) background. Why is this? It is due to the fact that management (financial and technical) of an asset through it’s life cycle is a major part of asset management. It is also a major part of the financial and technical analysis when acquiring new assets. To understand how maintenance fits in this puzzle, one would need to have a clear definition of maintenance.
To fix broken items – which is reactive tasks or repair actions or item replacements triggered by failures. They call this approach reactive, breakdown, or corrective maintenance.
All activities aimed at keeping an item in, or restoring it to, the physical state considered necessary for the fulfilment of its production function. In this role, maintenance includes proactive tasks such as routine servicing and periodic inspections, preventive replacements and condition monitoring.
This role includes the strategic dimension of maintenance. Maintenance, in this role, covers the decisions necessary to shape the future maintenance requirements of the organization. They include more advanced functions such as equipment replacement decisions and design modifications to enhance equipment reliability and maintainability.
After quoting the Maintenance Engineering Society of Australia (MESA) and their definition of Capability, their text makes this observation:
“The scope of maintenance management, therefore, should cover every stage in the life cycle of technical systems (plant, machinery, equipment, and facilities): specification, acquisition, planning, operation, performance evaluation, improvement, and disposal. When perceived in this wider context, the maintenance function is also known as Physical Asset Management”.
Now I completely agree with their observations and would recommend this text as a reference that should be on the bookshelf of every maintenance manager. However, I would like to offer an additional observation. In my experience, the roles from 1 to 3 listed above can be used to determine the maturity of almost any organization and their approach to maintenance management.
Role 1 is a reactive maintenance organization that is only tasked with failure remedy. Breakdown maintenance and firefighting is the rule of the day. The organization does not value the contribution that maintenance can make to a smooth operational or production process. If a maintenance manager is hired that tries to move the organization to more of a proactive role, it is an uphill battle, since the organization will feel that labor spent on preventive or predictive activities is wasted. Spare part levels are extremely high, since they are trying to insure all breakdowns can be remedied quickly. Maintenance costs will continue to escalate and the overall capacity of the company decreases. It will now be non-competitive with organization that has a more proactive approach to maintenance.
Role 2 is found in a mid-level performing organization. Proactive maintenance is encouraged and respected. Equipment breakdowns will occur, but are manageable. A common benchmark is that 80+% of all maintenance activities are planned and scheduled. This contributes to lower maintenance labor and materials costs. The more condition monitoring that an organization adopts, the more proactive the maintenance activities become.
Role 3 is found in advanced organizations. In these organizations, maintenance is a strategic discipline. It is at this level an organization is capable of practicing true physical asset management. The maintenance organization is a resource that is utilized when planning the life cycle of a company’s assets. Data is transformed into organization knowledge, and this knowledge becomes asset management wisdom as the knowledge is applied to make the best asset decisions possible. Many of these decisions are further enhanced by using many of the mathematical decision making algorithms that are highlighted in the previously mentioned textbook.
So back to the first comment in this blog – “Is maintenance the same as asset management?” It can easily be seen that the answer completely depends on the organization’s definition of maintenance. Even in role 3, there are aspects of asset management that are outside the responsibility of the maintenance organization. We will consider some of these aspects in our next blog.
“Work Execution Management – Time to Move Forward” by Terry Wireman
Work Execution Management – Time to Move Forward
Published on https://reliabilityweb.com December 9th, 2015.
Work execution management (WEM) is the domain where the work activities on assets identified in other domains, such as reliability engineering for maintenance (REM) or asset condition management (ACM), are actually performed. For example, when reliability engineering (RE) or root cause analysis (RCA) identifies activities that need to be performed on an asset to allow it to meet design performance specifications, those activities are planned and scheduled in the WEM domain. Similarly, if out of tolerance conditions are detected through the ACM domain, the work is properly identified and then planned and scheduled in the WEM domain. The interdependencies between the WEM domain and the other domains have a dramatic impact on the overall lifecycle costs of an asset, which ties into asset management.
What has been the progress over the years in WEM? Unfortunately, progress has not been as positive in the WEM domain as it has in the REM, ACM and leadership for reliability (LER) domains. Let’s take a look at each of the elements in the WEM domain and evaluate the extent of progress over the past 30 years.
The most effective preventive maintenance (PM) programs concentrate on the basics of maintaining the equipment, such as good visual inspections, good lubrication practices and good fastening procedures. While these seem basic, a survey in the book, “Maintenance Management for Quality Production,” published in 1984 by the Society of Manufacturing Engineers, states that only 22 percent of the 2,500 organizations surveyed were satisfied with their PM program. That survey was conducted over 30 years ago, but PM activities are still producing substandard results. Organizations still have equipment failures, sometimes just days after basic PM inspections were performed. When a root cause analysis is performed on the failure, it is determined that the cause is due to a problem that should have been found during the PM inspection that was just performed.
While the technology-driven inspections from the ACM domain can assist in proactively finding degrading equipment conditions, a good PM program focused on basic care is key to a cost-effective solution for premature equipment failures.
MRO SPARES MANAGEMENT
The maintenance, repair and operations spares management element (MRO) deals with the cost-effective procurement and utilization of spare parts. Since MRO can comprise 40 percent to 60 percent of an organization’s maintenance budget, this is an important area to consider.
How has the overall MRO function matured in the past few decades? Similar to the PM element, not much progress has been made. In organizations today, there are still an incorrect number of spare parts being stocked, whether too many, which results in excessive costs, or too few, which results in excessive equipment downtime. Organizations simply do not know how to correctly value their MRO.
PLANNING AND SCHEDULING
Planning and scheduling (PS) comprises activities that allow maintenance to be completed efficiently and economically. PS confirms that all logistics for the particular job are completely controlled before the job is executed. This ensures little or no waste as the work is performed. By eliminating waste, the work is now executed at the lowest possible cost.
Planning and scheduling has improved over the years, due to the increased utilization of planners. Companies have progressed from not even having planners to developing a good job/role description and allowing the planners to contribute to increase labor efficiencies and effectiveness. While there is still work needed in the area of the proper ratio of planners to maintenance technicians, as an organization continues to mature its planning and scheduling program, we should continue to see improvements in this area.
COMPUTERIZED MAINTENANCE MANAGEMENT SYSTEM
The computerized maintenance management system (CMMS) is a specially designed database for tracking all equipment maintenance information (see Figure 1). The CMMS has been used by maintenance organizations since the mid-1970s. So what has been the result of CMMS utilization? According to the “CMMS Best Practices Study” published by Reliabilityweb.com in 2011, “work order management was cited by 91 percent of respondents as the most important feature of a CMMS.” Yet, upon close scrutiny, the accuracy of the data in most CMMS databases is severely lacking. In informal surveys, the vast majority of maintenance reliability managers feel the data in their CMMS is too inaccurate to use for financial decision-making.
OPERATOR DRIVEN RELIABILITY
Operator driven reliability (ODR) is the element where operators are utilized to increase the capacity of the equipment they operate or to free up maintenance resources to be utilized on higher level maintenance reliability activities. The goal is to have the operators take ownership for 10 percent to 40 percent of the organization’s PM program. What has been the result of ODR initiatives? Overall, they have proven to be successful in a small number of organizations.
Defect elimination (DE) is a powerful element that builds on the five other WEM elements. The DE element uses cross functional teams to eliminate equipment-related defects, thereby increasing the capacity of the equipment. How successful has DE been for most organizations? Since DE focuses initially on the basics of maintenance and reliability, some organizations have had initial success. However, when the organization is ready to realize the true power of DE and it is applied by trained, cross functional teams, most fall well short of the goal. There are several reasons for this, including lines of jurisdiction between the various departments and proper training for all employees involved.
THE FUTURE OF THE WEM DOMAIN
What is the future of the WEM domain? After briefly reviewing the six elements of WEM, it is clear that if they are utilized correctly, they add great value to an organization’s maintenance reliability functions. But why do the WEM elements fail to achieve their true potential? There are two main reasons:
Lack of understanding the financial impact of the elements.
Lack of proper skills to implement and execute the elements.
When equipment/assets are out of service longer than required for repairs, it is a loss to the company. It impacts the capacity of the equipment/asset. If the organization is in a sold-out market, the lost capacity is a lost sale and, ultimately, lost revenue. Even if the organization has a capped market, the inefficiency in wasting maintenance and operational resources is still an unnecessary expense. It is necessary for all organizations to have a clear understanding of the losses in this area to ensure losses are minimized or avoided completely.
If organizations lack the skills necessary to implement and manage the elements of this domain, they will fail to execute the elements in the most efficient and economical manner. Not only does this lead to labor and material losses, but also prolonged downtime and repetitive delays. These unnecessary losses will impact the profitability of organizations, again from an expense and lost revenue perspective.
If organizations are going to make improvements in the WEM domain in the future, they will need to overcome the two reasons previously noted. If they can resolve these issues, their respective companies will see increased profitability and value delivery from their assets/equipment.
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