24, 25. MECHANICAL ENGINEERING A Series of Textbooks and Reference Books _ Founding Editor: L.L. Faulkner Columbus Division, Battelle Memorial Institute ‘and Department of Mechanical Engineering The Ohio State University Columbus, Ohio Spring Designer's Handbook, Harold Carlson Computer-Aided Graphics and Design, Daniel L. Ryan Lubrication Fundamentals, J. George Wills Solar Engineering for Domestic Buildings, William A. Himmelman Applied Engineering Mechanics: Statics and Dynamics, G. Boothroyd and C. Poli Centrifugal Pump Clinic, igor J. Karassik Computer-Aided Kinetics for Machine Design, Daniel L. Ryan Plastics Products Design Handbook, Part A: Materials and Components; Part B: Processes and Design for Processes, edited by Edward Miller Turbomachinery: Basic Theory and Applications, Earl Logan, Jr. Vibrations of Shells and Plates, Wemer Soedel . Flat and Corrugated Diaphragm Design Handbook, Mario Di Giovanni . Practical Stress Analysis in Engineering Design, Alexander Blake . An Introduction to the Design and Behavior of Bolted Joints, John, H. Bickford |. Optimal Engineering Design: Principles and Applications, James N. Siddall ‘Spring Manufacturing Handbook, Harold Carlson Industrial Noise Control: Fundamentals and Applications, edited by Lewis H. Bell '. Gears and Their Vibration: A Basic Approach to Understanding Gear Noise, J. Derek Smith }. Chains for Power Transmission and Material Handling: Design and Appli- cations Handbook, American Chain Association Corrosion and Corrosion Protection Handbook, edited by Philip A. Schweitzer . Gear Drive Systems: Design and Application, Peter Lynwander + Controlling in-Plant Airoome Contaminants: Systems Design and Cal- culations, John D. Constance CAD/CAM Systems Planning and Implementation, Charles S. Knox . Probabilistic Engineering Design: Principles and Applications, James N. Siddatt Traction Drives: Selection and Application, Frederick W. Heilich Ill and Eugene E. Shube Finite Element Methods: An, Introduction, Ronald L. Huston and Chris E. Passerello26. Mechanical Fastening of Plastics: An Engineering Handbook, Brayton Lincoln, Kenneth J. Gomes, and James F. Braden I —27,-Lubrication in- Practice: Second Euition, edited by W- 8-Robertson—————~ 28. Principles of Automated Drafting, Daniel L. Ryan 29. Practical Seal Design, edited by Leonard J. Martini 30. Engineering Documentation for CAD/CAM Applications, Charles S. Knox 31. Design Dimensioning with Computer Graphics AP fications, Jerome C. Lange 32. Mechanism Analysis: Simplified Graphical and Analytical Techniques, Lyndon ©. Barton 33, CADICAM Systems: Justification, Implementation, Profuctviy Measurement, Edward J. Preston, George W. Crawford, and Mark E, Goticchia 34, Steam Plant Calculations Manual, V. Ganapathy 38. Design Assurance for Engineers and Managers, John|A. Burgess 36. Heat Transfer Fluids and Systems for Process and, Energy Applications, Jasbir Singh 37. Potontil Flows: Computer Graphic Solutions, Robert H. Kirchhoff 38. Computer-Aided Graphics and Design: Second Edition, Daniel L. Ryan 39. Electronically Controlled Proportional Valves: Selection and Application, Michael J. Tonyan, edited by Tobi Goldoftas 40. Pressure Gauge Handbook, AMETEK, U.S. Gauge Division, edited by Philip W. Harland 41. Fabric Filtration for Combustion Sources: Fundamentals and Basic Tech- nology, R. P. Donovan 42. Design of Mechanical Joints, Alexander Blake 43. CAD/CAM Dictionary, Edward J. Preston, George W. Crawford, and Mark E. Coticchia 44. Machinery Adhesives for Locking, Retaining, and Sealing, Girard S, Haviland 45. Couplings and Joints: Design, Selection, and Application, Jon R. Mancuso 48. Shaft Alignment Handbook, John Piotrowski 47. BASIC Programs for Steam Plant Engineers: Boilers, Combustion, Fluid Flow, and Heat Transfer, V. Ganapathy 48. Solving Mechanical Design Problems with Computer, Graphics, Jerome C. Lange 49. Plastics Gearing: Selection and Application, Clifford E. Adams 50. Clutches and Brakes: Design and Selection, William C. Orthwein 51. Transducers in Mechanical and Electronic Design, Harry L.. Trietley 52. Metallurgical Applications of Shock-Wave and High-Strain-Rate Phenom- ena, edited by Lawrence E. Murr, Karl P. Staudhammer, and Marc A. Meyers 53. Magnesium Products Design, Robert S. Busk 54. How to Integrate CAD/CAM Systems: Management and Technology, William D. Engelke §5. Cam Design and Manufacture: Second Edition; with cam design sofware for the IBM PC and compatibles, disk included, Preben W. Jensen 58. Solid-State AC Motor Controls: Selection and Application, Sylvester Campbell 57. Fundamentals of Robotics, David D. Ardayfio 58. Belt Selection and Application for Engineers, edited by Wallace D. Erickson 59. Developing Three-Dimensional CAD Software with the IBM PC, C. Stan Wei 60. Organizing Data for CIM Applications, Charles S. Knox, with contributions by Thomas C. Boos, Ross S. Culverhouse, and Paul F. Muchnicki61, 62. Computer-Aided Simulation in Railway Dynamics, by Rao V. Dukkipati and Joseph R. Amyot Fiber-Reinforced Composites: Materials, Manufacturing, and Design, P. K. Mallick Photoelectric Sensors and Controls: Selection and Application, Scott M. Juds Finite Element Analysis with Personal Computers, Edward R. Champion, Jr., and J. Michael Ensminger ». Ultrasonics: Fundamentals, Technology, Applications: Second Edition, Expanded, Dale Ensminger inite Element Modeling: Practical Problem Solving for Engineers, Jeffrey M. Steele . Measurement and Instrumentation in Engineering: Principles and Basic Laboratory Experiments, Francis S. Tse and Ivan E. Morse . Centrifugal Pump Clinic: Second Edition, Revised and Expanded, !gor J. Karassik Practical Stress Analysis in Engineering Design: Second Edition, Revised and Expanded, Alexander Blake ). An Introduction to the Design and Behavior of Bolted Joints: Second Edition, Revised and Expanded, John H. Bickford . High Vacuum Technology: A Practical Guide, Marsbed H. Hablanian . Pressure Sensors: Selection and Application, Duane Tandeske . Zinc Handbook: Properties, Processing, and Use in Design, Frank Porter . Thermal Fatigue of Metals, Andrzej Weronski and Tadeusz Hejwowski . Classical and Modem Mechanisms for Engineers and Inventors, Preben W. Jensen . Handbook of Electronic Package Design, edited by Michael Pecht ‘Shock-Wave and High-Strain-Rate Phenomena in Materials, edited by Marc A. Meyers, Lawrence E. Murr, and Karl P. Staudhammer ._Indusirial Refrigeration: Principles, Design and Applications, P. C. Koelet Applied Combustion, Eugene L. Keating Engine Oils and Automotive Lubrication, edited by Wilfried J. Bartz - Mechanism Analysis: Simplified and Graphical Techniques, Second Edition, Revised and Expanded, Lyndon O. Barton Fundamental Fluid Mechanics for the Practicing Engineer, James W. Murdock. 5 Fiber-Reinforced Composites: Materials, Manufacturing, and Design, Second Ealtion, Revised and Expanded, P. K. Mallick ‘Numerical Methods for Engineering Applications, Edward R. Champion, Jr. Turbomachinery: Basic Theory and Applications, Second Edition, Revised and Expanded, Earl Logan, Jr. Vibrations of Shells and Plates: Second Edition, Revised and Expanded, Werner Soedel . Steam Plant Calculations Manual: Second Edition, Revised and Ex panded, V. Ganapathy Industrial Noise Control: Fundamentals and Applications, Second Edition, Revised and Expanded, Lewis H. Bell and Douglas H. Bell |. Finite Elements: Their Design and Performance, Richard H. MacNeal Mechanical Properties of Polymers and Composites:.Second Edition, Re- vised and Expanded, Lawrence E. Nielsen and Robert F. Landel . Mechanical Wear Prediction and Prevention, Raymond G. Bayer92, 93. 94. 95. 96, 97. 98. 99. 100. 101. 102. 103. 104. 105. 106. 107. 108. 109, 110. 111. 112. 113, 114, 415. 116. 117. 118. 119, . Mechanical Analysis of Electronic Packaging Systems, Stephen A. 121. 122. 123. 124. 125, 126. Mechanical Power Transmission Components, edited by David W. South ~and-Jor-R; Mancuso So Handbook of Turbomaghinery, edited by Earl Logan, Jr. Engineering Documentation Control Practices and Procedures, Ray E. Monahan Reffactory Linings Thermomechanical Design and Applications, Charles A. ‘Schacht Geometric Dimensioning and Tolerancing: Applications and Techniques for Use in Design, Manufacturing, and Inspection, James D. Meadows An Introduction to the Design and Behavior of Bolted Joints: Third Edition, Revised and Expanded, John H. Bickford Shaft Alignment Handbook: Second Edition, Revised and Expanded, John Piotrowski Computer-Aided Design of Polymer-Matrix Composite Structures, edited by ‘Suong Van Hoa Friction Science and Technology, Peter J. Blau Introduction to Plastics and Composites: Mechanical Properties and Engi- neering Applications, Edward Miller Practical Fracture Mechanics in Design, Alexander Blake Pump Characteristics and Applications, Michael W. Volk Optical Principles and Technology for Engineers, James E. Stewart Optimizing the Shape of Mechanical Elements and Structures, A. A. Seireg ~ and Jorge Rodriguez Kinematics and Dynamics of Machinery, Viadimir Stejskal and Michael ValaSek Shaft Seals for Dynamic Applications, Les Horve Reliability-Based Mechanical Design, edited by Thomas A. Cruse Mechanical Fastening, Joining, and Assembly, James A. Speck Turbomactinery Fluid Dynamics and Heat Transfer, edited by Chunill Hah High-Vacuum Technology: A Practical Guide, Second Edition, Revised and Expanded, Marsbed H. Hablanian Geometric Dimensioning and Tolerancing: Workbook and Answerbook, James D. Meadows Handbook of Materials Selection for Engineering Applications, edited by G. T. Murray. Handbook of Thermoplastic Piping System Design, Thomas Sixsmith and Reinhard Hanselka Practical Guide to Finite Elements: A Solid Mechanics Approach, Steven M. Lepi Applied Computational Fluid Dynamics, edited by Vijay K. Garg Fluid Sealing Technology, Heinz K. Muller and Bemard S. Nau Friction and Lubrication in Mechanical Design, A. A. Seiteg Influence Functions and Matrices, Yuri A. Melnikov McKeown Couplings and Joints: Design, Selection, and Application, Second Edition, Revised and Expanded, Jon R. Mancuso Thermodynamics: Processes and Applications, Earl Logan, Jr. Gear Noise and Vibration, J. Derek Smith Practical Fluid Mechanics for Engineering Applictions, John J. Bloomer Handbook of Hydraulic Fluid Technology, edited by George E. Totten Heat Exchanger Design Handbook, T. Kuppan127, 128. 129. 130. 131, 132, 133. 134, 135, 136. Designing for Product Sound Quality, Richard H. Lyon Probabilily Applications in Mechanical Design, Franklin E. (Fisher and Joy R. Fisher Nickel Alloys, edited by Ulrich Heubner Rotating Machinery Vibration: Problem Analysis and] Troubleshooting, Maurice L. Adams, Jr. \ Formulas for Dynamic Analysis, Ronald L. Huston and C. Q. Liu Handbook of Machinery Dynamics, Lynn L. Faulkner and Earl Logan, Jr. Rapid Prototyping Technology: Selection and ‘Applicaton, Kenneth G. Coo, per Reciprocating Machinery Dynamics: Design and Rangwala [ Maintenance Excellence: Optimizing Equipment Life-Cycle Decisions, edited by John D. Campbell and Andrew K. S. Jardine Practical Guide to Industrial Boiler Systems, Ralph L. Vandagriff Additional Volumes in Preparation | », Abdulla S. Lubrication Fundamentals: Second Edition, Revised and Expanded, D. M. Pirro and AA. Wessol . ; Reliability Verification, Testing, and Analysis in Engineering Design, Gary S. Wasserman 1 Mechanical Life Cycle Handbook: Good Environmental Design and Manu- facturing, Mahendra Hundal Mechanical Engineering Software Spring Design with an IBM PC, Al Dietrich ‘Machanical Design Failure Analysis: With Failure Analysis ‘System Software for the IBM PC, David G. Uliman.Preface For the last 30 years, maintenance management has become increasingly sophisticated, at its highest levels becoming physical asset management. Physical asset management is seen as part of an interdependent system, a part that has a significant impact on profit, personnel, and the environment. As organizations seek to produce more, in less time, using fewer resources, physical asset management takes on a more central importance, requiring the management of a variety of factors to optimize asset life-cycle decisions. Second, sweeping changes in information technology have enabled a better, more complete interrogation of data, such that specialized software can efficiently transform that data into meaningful information through specific mathematical models. In an environment of global competition, organizationswv Pretace need to draw on specialized knowledge more than ever before. Specialists need to provide best practices to those organiza- tions, and so need to be familiar with all aspects of physical asset management: why certain problems occur, what to do about those problems, and how to develop an organization’s strategies to get the best results. With the advances in physi- cal asset management, discussed above, we have seen the op- portunity for a new level of service to organizations that can make best use of the latest methodologies to optimize their operations, to find the best practices to get the best results. In seeking to provide that level of service, we have synergized our strengths into a constructive balance: one of us (Campbell) has extensive expertise in maintenance management consul- tation, with a focus on developing and applying systems that will best serve an organization; the other (Jardine) has a back- ground as an innovator of the models needed to drive mainte- nance optimization. Together, and with some of the leading consultants at PricewaterhouseCoopers, we have been able to consolidate the talents and knowledge of a variety of individu- als from around the world (including the contributors to this text) so that the service we deliver is at the leading edge of physical asset managemént concepts and methods. One result of that consolidation is the creation of this text. The general aim of the book is to communicate an aca- demic rigor with a practical direction. Applying physical asset management requires two key elements for the on-site man- ager: education and training. This volume is a tool to accom- plish the former, providing a clear, thorough, and accessible expression of the theories and methodologies that are key to physical asset management. The appendices provide the mathematical explanations for those concepts, ensuring that the reader has the full picture, if required. With the back- ground provided by the text, the manager may then have staff trained for the specific needs of his or her organization: ongo- ing trouble-shooting and the assessment of methodologies in pursuit of best practices. Alternatively, a manager could ob-Preface eae sieeWiaes tain external support to provide those services and to provide knowledge on the latest advances throughout the world. The chapters provide focus to many key aspects of the field, as you will see. We trust that it will facilitate the task of any Physical Asset Manager in creating a path to mainte- nance excellence: John D. Campbell Andrew K. S. JardineAcknowledgments We gratefully acknowledge the efforts of many dedicated col- leagues in business and industry who contributed to the cre- ation of this text. Some of those colleagues work within the Pricewater- houseCoopers global family. Phil Upshall in London provided his wealth of experience in the large, complex worlds of utili- ties and public-sector organizations, including the postal ser- vices and defense. Rex Honey in Sydney, who has seen more mining operations around the world than I am sure he wishes to count, lent that expertise for our fleet and fixed-plant mate- rial. Michael Hawdon in Singapore has been applying reli- ability-based maintenance solutions to manufacturing and processing, integrating with just-in-time and total quality business environments. Finally, James Warner in the United vilvill Acknowledgments Kingdom and Mike Stoneham, Ralph Gardiner, and Tudor Ne- grea in Canada provided much-needed encouragement and support for the physical asset management practice. The assistance of our business partners and maintenance management and reliability engineering professionals has been crucial to presenting an important balance in this book. Plant Engineering and Maintenance Magazine, by Clifford- Elliot Publishers, allowed us to use previously published materials by our authors and editors from their Reliability Handbook. We also received important contributions from in- dividuals at some of the leading Enterprise Asset Manage- ment system vendors, notably Neil Cooper at Indus, Ted Mac- Donald at WonderWare, and Nick Beaton at Mincom. In addition, we express our deepest appreciation to. our clients for providing the battleground where these concepts, methods, and tools received their trial by fire before being pre- sented to the business world at large. We offer special thanks to Mel Williams at Cardinal River Coal for his foresight in beta-testing EXAKT for CBM optimization, and Ram Thulasi- ram, a reliability engineer with Campbell’s Soup Company Limited, for his successful experiences in applications of Finally, I must thank my personal editor, Andrew Tausz, for ensuring that we have all been singing from the same song sheet and not mixed too many metaphors. John D. Campbell Organizing a text of this nature is an exercise in synthe- sizing ideas into a coherent piece of work, involving theory, practical application, and clarity of expression. Many individ- uals, in addition to those listed above, contributed to the devel- opment of this volume, to both the structure ofits presentation and the academic research behind its theories. For some of the writing and editing, David Cope provided suggestions andAcknowledgments ix organized material for a number of the chapters. Graham Oli- ver offered valuable insights about optimization criteria and in his marketing material for the RelCode, PERDEC, and AGE/CON software packages. As well, Greg Lemaich had the unenviable task of carefully reviewing the complete text, in- cluding the mathematical details of the appendices, and pre- paring the drawings in final form. He did a fine job, and any errors that remain should be seen as mine. The development of ideas in this text as a whole relies in no small way on the academic work of the past as it is rede- fined in the present. Readers may recognize some of the mod- els used here from Maintenance, Replacement and Reliability, one of my own texts from some years ago. Looking back at that time, I would like to acknowledge the wonderful inspiration of Professor D. J. White and the late Professor S. Vajda; the former introduced me to field of maintenance optimization and the latter, among other roles, was editor of the series of books in which my book appeared. More recently, my ideas in the optimization of maintenance decisions have been sharpened through annual meetings of the International Foundation for Research in Maintenance (IFRIM), founded in 1986 by W. M. J. Geraerds, Professor Emeritus of Eindhoven Univer- sity of Technology in the Netherlands. Those meetings are at- tended by a fine group of academics from around the world whose teaching and research are focused on physical asset management. Finally, I would like very much to acknowledge the value of almost daily discussions with colleagues in the CBM Labo- ratory at the University of Toronto, especially Professor V. Makis and Dr. D. Banjevic. Andrew K. S. JardineContents Preface Acknowledgments Contributors 1. Introduction Maintenance Management Fundamentals Maintenance Management Methodologies Measurement in Maintenance Management Data Acquisition 7A BN Materials Management Optimization tii xD ii 37 95 125 xtadi Managing Equipment Reliability Assessing and Managing Risk Reliability by Design: Reliability-Centered Maintenance 8. Reliability by Operator: Total Productive Maintenance Optimizing Maintenance Decisions 9. Reliability Management and Maintenance Optimization: Basic Statistics and Economics 10. Maintenance Optimization Models 11. Optimizing Maintenance and Replacement Decisions 12. Optimizing Condition-Based Maintenance Conclusion 13. Achieving Maintenance Excellence Appendix 1: Mean Time to Failure Appendix 2: Median Ranks Appendix 3: Censored Data Appendix 4: The Three-Parameter Weibull Function Appendix 5: Confidence Intervals Appendix 6: Estimating (Fitting) the Distribution Appendix 7: Kolmogorov-Smirnov Goodness-of-Fit Test Appendix 8: Present Value Appendix 9: Cost of Capital Required for Economic- Life Calculations Appendix 10: Optimal Number of Workshop Machines to Meet a Fluctuating Workload Contents 147 183 221 239 269 289 323 367 379 381 385 387 391 395 397 401 407 413Contents ‘Appendix 11: Optimal Size of a Maintenance Workforce to Meet a Fluctuating Workload, Taking into Account Subcontracting Opportunities Appendix 12: Fuzzy Logic Appendix 13: Neural Nets Appendix 14: Optimal Interval Between Preventive Replacements of Equipment Subject to Breakdown Appendix 15: Optimal Preventive Replacement Age of Equipment Subject to Breakdown Appendix 16: Optimal Preventive Replacement Age of Equipment Subject to Breakdown, Taking into Account Time Required to Effect Failure and Preventive Replacements Appendix 17: Optimal Replacement Interval for Capital Equipment: Minimization of Total Cost Appendix 18: The Economic-Life Model Used in PERDEC Appendix 19: Economic Life of Passenger Buses Appendix 20: Optimal Replacement Age of an Asset, Taking into Account Tax Considerations Appendix 21: Optimal Replacement Policy for Capital Equipment, Taking into Account Technological Improvement—Infinite Planning Horizon Appendix 22: Optimal Replacement Policy for Capital Equipment, Taking into Account Technological Improvement—Finite Planning Horizon Appendix 23: Optimal Inspection Frequency: Minimization of Downtime Appendix 24: Maintenance Strategic Assessment (MSA) Questionnaire Index xiit 415 421 423 429 433 437 441 445 447 455 457 465 467 479Contributors Contributors J. D. Campbell (Chapters 1 and 13) A. K. S. Jardine (Chapters 10 and 11) J. Kaderavek (Chapter 6) M. Petit (Chapter 5) J. V. Picknell (Chapters 2 and 7) J. Shanahan (Chapter 4) B. Stevens (Chapter 3) D. Stretton (Chapter 8) G. Walker (Chapter 6) M. Wiseman (Chapters 9 and 12)xvi Contributors ~ BIOGRAPHIES ~ J.D. Campbell John Campbell is the Global Partner of PricewaterhouseCoopers’ Physical Asset Management prac- tice, based in Toronto. Mr. Campbell is a professional engi- neer. He graduated from the University of Toronto with a de- gree in Metallurgical Engineering and Materials Science, and is a Certified Management Consultant in operations manage- ment, Specializing in maintenance and materials manage- ment, he has over 20 years Canadian and international con- sulting experience in the assessment and implementation of strategy, management, and systems for maintenance, materi- als, and physical asset life-cycle functions. He authored the book Uptime, published in 1995, and is a coauthor of Planning and Control of Maintenance Systems: Modeling and Analysis, published in 1999. A. K.S. Jardine Andrew Jardine is a Professor in the De- partment of Mechanical and Industrial Engineering at the University of Toronto and principal investigator in the De- partment’s Condition-Based Maintenance Laboratory, where the EXAKT software was developed. He also serves as a Senior Associate Consultant in the PricewaterhouseCoopers’ global practice in Physical Asset Management. He has a Ph.D. from the University of Birmingham, England. Dr. Jardine is the author of the AGE/CON and PERDEC life-cycle costing soft- ware that is licensed to organizations including transporta- tion, mining, electrical utilities, and process industries. He also wrote the book Maintenance, Replacement and Reliabil- ity, first published in 1973 and now in its sixth printing. In addition to being a sought-after speaker, he is a recognized authority in the world of reliability engineering and in the op- timization of maintenance decision making. Dr. Jardine was the 1993 Eminent Speaker to the Maintenance Engineering Society of Australia and in 1998 was the first recipient of the Sergio Guy Memorial Award from the Plant Engineering and Maintenance Association of Canada, in recognition of his out- standing contribution to the maintenance profession.Contributors vii J. Kaderavek Joe Kaderavek is a Senior Consultant in the PricewaterhouseCoopers’ global practice in Physical Asset ‘Management, based in Sydney, Australia. He is a professional engineer and holds a BEng. degree from Sydney University, an M.B.A. degree from Deakin University, and postgraduate qualification in Reliability Engineering. He has over 10 years of experience, primarily in aircraft maintenance and logistics, but also including consulting in facility and plant mainte- nance management, strategy development and implementa- tion, benchmarking for best practices, maintenance process redesign, life-cycle management, maintenance diagnostic as- sessments, and Computerized Maintenance Management Sys- tems (CMMS) evaluation and implementation. He has worked with a range of industries including aerospace, defense, trans- port, mining, and consumer goods manufacturing. M. Petit Monique Petit is a Senior Consultant in Pricewat- erhouseCoopers’ global practice in Physical Asset Manage- ment, based in Calgary. She has 20 years of experience in Ma- terials and Production Management in various industries, and has spent the last 8 years on installation and process reengin- eering for numerous clients implementing Materials Modules of EAM (Enterprise Asset Management) Systems. She has a B.A. from the University of Lethbridge and has completed the Pulp and Paper Technician and Object-Oriented Client-Server Development certificate programs at NAIT. Ms. Petit has ex- perience in process reengineering, physical warehouse layout, Material Management Operations optimization, and imple. menting inventory control best practices. J.V.Picknell James Picknell is a Director in the Pricewat- erhouseCoopers’ global practice in Physical Asset Manage- ment, based in Toronto. He is a professional engineer and hon- ors graduate of the University of Toronto with a degree in Mechanical Engineering, with further postgraduate studies at the Royal Naval Engineering College, the Technical Univer- sity of Nova Scotia, and Dalhousie University. He has over 21aviil Contributors ~~ years of engineering and maintenance experience, including international consulting in plant and facility maintenance management, strategy development and implementation, reli- ability engineering, spares inventories, life-cycle costing and analysis, strategic diagnostic assessment, benchmarking for best practices, maintenance process redesign, and implemen- tation of Computerized Maintenance Management Systems (CMMS). Mr. Picknell has worked in a range of industries, including defense, aerospace, marine, pulp and paper, water utility, automotive and consumer goods manufacturing, postal services, petrochemical, pharmaceutical, facilities manage- ment, mining, health care, and higher education. J. Shanahan | John Shanahan is a Principal Consultant at PricewaterhouseCoopers working in the practice area of Phys- ical Asset Management (PAM). He is a Chartered Electrical Engineer and a Member of the Institute of Electrical Engi- neers (U.K.) and the Project Management Institute, and holds an M.B.A. postgraduate degree. Mr. Shanahan is responsible for all Enterprise Asset Management (EAM) systems aspects of the PAM practice from strategic planning to postimplemen- tation audits. Typical services packages offered by the practice include business case development, functional requirements definition, system selection, process mapping and optimiza- tion, preimplementation readiness assessments, complete im- plementation services, postimplementation audits, and bene- fits realization. Mr. Shanahan has an extensive background in large project proposal development and project management, deriving from a career in Electrical Engineering Systems and Information Technology projects. He has managed projects in many industry sectors including heavy construction, utilities, military logistics and maintenance, and Information Tech- nology. B. Stevens Ben Stevens is a Managing Associate in Price- waterhouseCoopers’ global practice in Physical Asset Manage-Contributors xix ment. He was educated at the University of Sheffield, En- gland, is an honors graduate in Economics and Accounting, and holds a Master's degree in Managerial Economics. He has over 30 years of experience, with the past 12 dedicated to the marketing, sales, development, selection, justification, and implementation of Computerized Maintenance Management Systems. His prior experience includes the development, man- ufacture, and implementation of production monitoring sys- tems, executive level management of maintenance, finance, administration functions, management of reengineering ef. forts for a major Canadian bank, and management consulting. He has worked in and with a range of industries, including CMMS, defense, petrochemical, health care, waste manage- ment, pulp and paper, high tech electronics, nuclear, textile manufacturing, and finance. He is a frequent speaker at con- ferences and training sessions, and he chaired the Interna- tional CMMS conferences in Dubai in 1996, 1997, 1998, and 1999. D. Stretton Doug Stretton is a Senior Consultant in Price- waterhouseCoopers’ global practice in Physical Asset Manage- ment, based in Toronto. He is a Professional Engineer and an honors graduate of Queen’s University, Canada, in Mechani- cal Engineering. After gaining valuable work experience he returned to Queen's University and earned an M.B.A. He has 10 years of experience in progressive positions in Mainte- nance, Engineering, and Manufacturing Engineering. Mr. Stretton has specialized in turnarounds of maintenance de- partments and production lines using Total Productive Main- tenance (TPM) and continuous improvement (CI) techniques. He has worked in a variety of industries including steel, food, consumer household products, printing, and nonferrous metals. G. Walker Geoff Walker is leader of PricewaterhouseCoop- ers’ Physical Asset Management practice in Europe, the Mid- dle East, and Africa, which integrates maintenance manage-x Contributors ment with spares management and procurement to provide integrated solutions for asset intensive industries, particu- larly those with widely distributed networks of assets such as the utilities and defense sectors. He has helped a wide range of organizations to improve performance and reduce costs through adopting best practice across the entire engineering supply chain. Before joining Coopers & Lybrand, Geoff Walker spent 12 years in Engineering and Production Management in the chemicals industry, which included Maintenance, New Projects, and Technology Development in a range of chemical plants. His experience covers the entire range of chemical pro- duction from initial laboratory synthesis through pilot plant and small scale manufacturing to full-scale chemical synthesis and final formulation, filling, and packing into sales contain- ers. He is a chartered mechanical engineer, and holds an M.A. degree in Engineering from the University of Cambridge and an M.B.A. from the University of London. M. Wiseman Murray Wiseman is a Principal Consultant in PricewaterhouseCoopers’ global practice in Physical Asset Management, based in Toronto. He has been in the mainte- nance field for more than 18 years. His previous responsibili- ties and roles include maintenance engineering, planning, and supervision, as well as founding and operating a commercial oil analysis laboratory. He developed a Web-enabled Failure Modes and Effects Criticality Analysis (FMECA) system con- forming to MIL STD 1629A, in which he incorporated an ex- pert system as well as links to two failure rate/failure mode distribution databases at the Reliability Analysis Center in Rome, New York. Mr. Wiseman’s particular strength and in- terest are in the CBM optimization area, applying modeling techniques when the RCM process signals that condition mon- itoring is the appropriate tactic. Mr. Wiseman holds a B. Eng. Mech. degree from McGill University, Montréal, and is a mem- ber of the Pulp and Paper Institute of Canada.Maintenance Excellence1 Introduction Maintenance excellence is many things, done well. It’s when a plant performs up to its design standards and equipment operates smoothly when needed. It’s maintenance costs track- ing on budget, with reasonable capital investment. It’s high service levels and fast inventory turnover. It’s motivated, com- petent trades. Most of all, maintenance excellence is the balance of per- formance, risk, and cost to achieve an optimal solution. This is complicated because much of what happens in an industrial environment is by chance. Our goal is exceptional perfor- mance. That isn’t made any easier by the random nature of what we're often dealing with.2 Chapter 1 Maintenance management, though, has evolved tremen- dously over the past century. As Coetzee (1) has said, it wasn’t even contemplated by early equipment designers. Since then, Parkes (2) has described how maintenance evolved initially from uncomplicated and robust equipment to built-in obsoles- cence. From Kelly (3) we learned the progression from preven- tive and planned maintenance after World War IT to industrial engineering, industrial psychology, reliability, and operations research in the ’60s and ’70s to condition monitoring, comput- erization, and life-cycle management in the ’80s. Moubray (4) described how our expectations have changed with the genera- tions, and how safety, environmental, and product quality is- sues are now as important as reliability. Campbell (5) has shown us the way in which equipment changes have advanced maintenance practices, with predominant tactics changing from run-to-failure to prevention, then prediction and eventu- ally reliance. It’s the reliance tactic that is the focus of this book. Many organizations developed a systematic approach to maintenance planning and control in the late ’70s and early ’80s, only to abandon it as we shifted to a global marketplace and major economic harmonization. Today we must start over. We must first rebuild basic capabilities in maintenance man- agement, before we can prove the value of reliability manage- ment and maintenance optimization. There are three types of goals on the route to mainte- nance excellence: * Strategic. First, you must draw a map and set a course for your destination. You need a vision of what maintenance management will be like in, say, three years. What is the plant condition, the availability, the maintenance cost structure, the amount of planned work compared to unplanned reactive work, the work environment? You must assess where you are today, to get where you are going. This way, you will knowIntroduction \ 3 i the size of the gap to be closed. Finally, you must de- termine the human, financial, and physical resource requirements, as well as a timeframe, to make your vision real. 1 + Tactical. Now, you need a work mandgement and ma- terials management system to control the mainte- nance process, Ideally, this is a computerized mainte- nance management system, an énterprise asset management system, or a maintenance module in an enterprise resource planning system. Maintenance planning and scheduling—for job wdrk orders, plant and equipment shutdowns, and annual budgeting ex- ercises, and for creating a preventive and predictive program—is most important. Also, measure perfor- mance at all levels, to effectively change people's behavior and to implement lubrication, inspection, condition-monitoring, and failure-prevention activi- ties. * Continuous improvement. Finally, if you engage the collective wisdom and experience of your entire workforce, and adapt “best practices” from within and outside your organization, you will complete the jour- ney to systematic maintenance management. But con- tinuous improvement requires diligence and consis- tency. To make it work, you need a method, a champion, strong management, and hard work. MAINTENANCE EXCELLENCE FRAMEWORK As you read on, you will learn how to manage equipment reli- ability and to optimize maintenance—the life cycle of your plant, fleet, facility, and equipment. The purpose of this book is to provide a framework. It is divided into four sections: Maintenance Management Fundamentals; Managing Equip- ment Reliability; Optimizing Maintenance Decisions, and Achieving Maintenance Excellence.4 Chapter 1 Maintenance Excellence Achieving Excellence Optimizing Decisions aa Maintenance ® Fundamentals Reliability Management Figure 1-1 Components of maintenance excellence. PART I: MAINTENANCE MANAGEMENT FUNDAMENTALS Chapter 2 provides an overview of the basic strategies, pro- cesses, and approaches for managing equipment reliability through work management and leading maintenance manage- ment methods and tools. Chapter 3 explores the concept that if you can’t measure it, you can’t manage it. You'll learn how to monitor and control the maintenance process. We discuss the top-down approach, from setting strategic business plans to ensuring that mainte- nance fully supports them. We also look at the measures needed on the shop floor to manage productivity, equipment performance, cost management, and stores materials manage- ment. When you pull it all together, it becomes a balanced scorecard. Chapter 4 discusses the latest computerized maintenance management and enterprise asset management systems. We describe the basics of determining requirements, then justi- fying, selecting, and implementing solutions that realize theIntroduction 5 benefits, Materials are the single biggest expense for most maintenance operations, so it’s no wonder that poor maintain- ability is usually blamed on a shortcoming in parts, compo- nents, or supply. Chapter 5 describes how you can manage maintenance procurement and stores inventory to support effective and ef- ficient work management and equipment reliability. We show you how to invest the limited parts inventory budget wisely to yield both top service levels and high turnover. PART Il: MANAGING EQUIPMENT RELIABILITY Chapter 6 is about assessing risks and managing to interna- tional standards. We begin by looking at what equipment is critical based on several criteria, then develop methods for managing risk. To help you develop guidelines and easily as- sess the state of risk in an enterprise, we describe relevant international standards for managing risk. Chapter 7 summarizes the Reliability-Centered Mainte- nance methodology as the most powerful tool to manage equip- ment reliability. This often misunderstood yet incredibly pow- erful approach improves reliability while helping to control maintenance costs in a sustainable way. Chapter 8 examines reliability by the operator—what many leading companies are calling their total productive maintenance programs. We describe how equipment manage- ment and performance is everyone's job, especially the opera- tor’s. PART Ill: OPTIMIZING MAINTENANCE DECISIONS Chapter 9 provides the basics for using statistics and asset life cost in maintenance decision making. We hear about a company’s 6 sigma quality management program, but the link6 Chapter 1 between sigma, or standard deviation, and maintenance man- agement is often subtle, at best. In this chapter, we show that collecting simple failure frequency can reveal the likelihood of when the next failure will happen. While exploring failure probabilities, we guide you through the concept of life-cycle costs and discounting for replacement equipment invest- ments. With the fundamentals in place and ongoing effective re- liability management, Chapter 10 begins the journey to opti- mization. Here we explore the use of mathematical models and simulation to maximize performance and minimize costs over equipment life. You'll find an overview of the theory behind component replacement, capital equipment replacement, in- spection procedures, and resource requirements. Various algo- rithmic and expert system tools are reviewed along with their data requirements. Chapter 11 focuses further on critical component and cap- ital replacements. We include engineering and economic infor- mation in our discussion about preventive age-based and condition-based replacements: Chapter 12 takes an in-depth look at how condition-based monitoring can be cost-effectively optimized. One of the big- gest challenges facing the Maintenance Manager is figuring out what machine condition data to collect, and how to use it. We describe a statistical technique to help make practical decisions for run-to-failure, repair, or replacement, including cost considerations. PART IV: ACHIEVING MAINTENANCE EXCELLENCE In the last chapter, Chapter 13, we show how to apply the concepts and methods in this book to the shop floor. This in- volves a three-step process. The first is to determine your cur- rent state of affairs, the best practices available, and your vi- sion. You need to know the size of the gap between where youIntroduction 7 are and where you want to be. The second siep involves build- ing a conceptual framework and planning the concepts and tools to execute it. Finally, we look at the implementation pro- _ cess itself, and all that goes into managing change. THE SIZE OF THE PRIZE We could debate at length about the social and business man- date of an organization with a large investment in physical assets. But this is sure: if these assets are unproductive, it becomes irrelevant. Productivity is what you get out for what you put in. Maintenance excellence is about getting exemplary performance at a reasonable cost. What should we expect for investing in maintenance excellence? What is the-size of the prize? Let’s look at capacity. One way to measure it-is: Capacity = Availability x Utilization x Process rate x Quality rate If the equipment is available, being used, running at the de- sired speed, and precise enough to produce the desired quality and yield, we have the required maintenance output. ‘Now look at cost. This is a bit more difficult, becanse cost can vary depending on many things: the working environ- ment, equipment age and use, operating and maintenance standards, technology, etc. One thing we know: a breakdown maintenance strategy is more costly than linking mainte- nance actions to the likely failure causes. But by how much? Here’s a helpful rule of thumb to roughly estimate cost-saving potential in an industrial envi- ronment: $1 Predictive, Preventive, Planned = $1.5 Unplanned, Unscheduled = $3 Breakdown8 Chapter 1 Accomplishing “one unit” of maintenance effectiveness will cost $1 in a planned fashion, $1.50 in an unplanned way, and $3 if reacting to a breakdown. In other words, you can pay now or you can pay more later. Emergency and breakdown maintenance is more costly for a number of reasons: * You must interrupt production or service. © The site isn’t prepared. © Whoever is available with adequate skills is pulled from his or her current work. * You must obtain contractors, equipment rental, and special tools quickly. * You have to hunt down or air-freight in materials. * The job is worked on until completed, often with over- time. © There usually isn’t a clear plan or drawings. For example, if the total annual maintenance budget is $100 million and the work distribution is 50% planned, 30% un- planned and unscheduled, and 20% breakdown: (50% x 1) + (80% x 1.5) + (20% x 8) = 50 + 45 + 60 = 155 “equivalent planned units” Planned work costs Po x $100 million = $82 million, or §.645 million per unit Unplanned work costs # X $100 million = $29 million Emergency work costs 2 X $100 million = $39 million To compare the difference, imagine maintenance improve- ment yielding 60% planned, 25% unplanned and 15% break- down:Introduction 9 “Planned work costs $.645 X 1 X 60% = $39 million” Unplanned work costs $.645 x 1.5 x 25% = $24 million Emergency work costs $.645 x 3.0 X 15% = $29 million ‘Total = $92 million Savings potential = $100 million —$92 million = $8 million The challenge of maintenance excellence, and the goal of this book, is to develop tactics that will minimize breakdowns and maximize the rewards of planned, preventive, and pre- dictive work. REFERENCES 1. Jasper L, Coetzee. Maintenance. South Africa: Maintenance . Publishers, 1997. 2, D, Parkes, Maintenance: Can it be an exact science? In: A. K. S. Jardine, ed. Operational Research in Maintenance. Manchester University Press/Barnes and Noble, Inc., 1970. 3. A. Kelly. Maintenance and Its Management. Farnham, En- gland: Conference Communication, 1989. 4. J.M. Moubray. Reliability-Centered Maintenance. 2d ed. Ox- ford, England: Butterworth Heinemann, 1997. 5. Jobn Dixon Campbell. Uptime: Strategies for Excellence in Maintenance Management. Portland, OR: Productivity Press, 1995.2 Maintenance Management Methodologies Today’s maintenance and physical asset managers face great challenges to increase output, reduce equipment downtime, and lower costs, and do it all with less risk to safety and the environment. This chapter addresses the various ways to ac- complish these objectives by managing maintenance effec- tively, within your organization’s unique business environ- ment. Of course, you must: make tradeoffs, such as cost versus reliability, to stay profitable in current markets. We show how to balance the demands of quality, service, output, costs, time, and risk reduction. This chapter also examines just how main. tenance and reliability management can increase profits and add real value to the enterprise. 1"12 Chapter 2 We discuss the levels of competence you must achieve on the road to excellence. There are clear evolutionary develop- ment stages. To get to the highest levels of expertise, you must ensure that the basics are in place. How can you tell if you are ready to advance? The charts that follow will help you decide. "The final sections of the chapter describe the methods used by companies that truly strive for excellence—Reliabil- ity-Centered Maintenance, Root Cause Failure Analysis, and Optimization of Decision Making. This sets the stage for mate- rial presented later in the book. 2.1. MAINTENANCE: THE CHALLENGE Smart organizations know they can no longer afford to see maintenance as just an expense. Used wisely, it provides es- sential support to sustain productivity and fuel growth, while driving down unneeded and unforeseen overall expenses. Ef- fective maintenance aims to: * Maximize uptime (productive capacity) * Maximize accuracy (the ability to produce to specified tolerances or quality levels) ¢ Minimize costs per unit produced (the lowest cost practical) * Minimize the risk that productive capacity, quality, or economic production will be lost for unacceptable periods of time Prevent safety hazards to employees and the public, as much as possible e Ensure the lowest possible risk of harming the envi- ronment In fact, in today’s competitive environment, alll of these are strategic necessities to remain in business. The challenge is how best to meet the above demands. In many companies, you have to start at the beginning—put the basics in place—be- fore your attempis to achieve excellence and optimize deci-Maintenance Management Methodologies 13 sions will be successful. The ultimate aim is to attain a high degree of control over your maintenance decisions, and this chapter explores various maintenance management method- ologies to help you get there. 2.2 METHODOLOGIES Optimization is a process that seeks the best solution, given competing priorities. This entails setting priorities and mak- ing compromises for what is most important. Maximizing profits depends on keeping our manufacturing assets in work- ing order, yet maintenance sometimes requires downtime, taking away from production capacity. Minimizing downtime is essential to maximize the availability of our plant for pro- duction. Optimization will help you find the right balance. Even though increasing profit, revenues, availability, and reliability while decreasing downtime and cost is all related, you can’t always achieve them together. For example, max- imizing revenues can mean producing higher-grade products that command higher prices. But that may require lower pro- duction volumes and therefore higher costs per unit produced. Clearly, cost, speed, and quality objectives can compete with one another. An example is the improved repair quality from taking additional downtime to do a critical machine alignment correctly. The result will probably be longer run time before the next failure, but it does cost additional repair downtime in the short term. The typical tradeoff choices in maintenance arise from trying to provide the maximum value to our “customers”. We want to maximize: * Quality (e.g., repair quality, doing it right the first time, precision techniques) © Service level (e.g., resolution and prevention of fail- ures) * Output (e.g., reliability and uptime)4 ‘Chapter 2 "At the same time, we want to minimize: © Time (e.g. response and resolution: time and Mean Time to Repair (MTTR)) ] © Costs (e.g., cost per unit output) | + Risk (e.g., predictability of unavoidable failures) Management methods seek to balance these factdrs to deliver the best possible value. Sometimes, however, you must edu- cate the customer about the tradeoff choices you face, to en- sure “buy-in” to the solution. For example, a production shift supervisor might not see why you need additional downtime to finish a repair properly. You have to convince him or her of the benefit—extended time before the next failure and downtime. i Maintenance and reliability are focused on sustaining the manufacturing or-processing assets’ productive eapacity. By sustaining we mean maximizing the ability to produce quality output at demonstrated levels. This may mean production lev- els that are beyond original design if they are realistically sus- tainable. 2.3 WHERE DOES MAINTENANCE AND RELIABILITY MANAGEMENT FIT IN f TODAY’S BUSINESS? \ ‘The production assets are merely one part of an entire product supply chain that produces profit for the company. It is impor- tant to recognize that maintenance priorities may not be most important for the company as a whole. In a very basic manufacturing supply chain, materials flow from source (suppliers) through primary, and sometimes secondary, processing or manufacturing, then outbound to customers through one or more distribution channels. The tra- ditional business focus at this level is on purchasing, materials requirements planning, inventory management, and just-in- time supply concepts. The objective is to minimize work in pro-Maintenance Management Methodologies 15 cess and inventory while manufacturing, to ship for specific orders (the pull concept). To optimize the supply chain, you optimize the flow of information backward, from customers to suppliers, to pro- duce the most output with the least work in process. Supply chain optimizing strategies are to: Improve profitability by reducing costs Improve sales through superior service and tight inte- gration with customer needs Improve customer image through quality delivery and products Improve competitive position by rapidly introducing and bringing to market new products Methods to achieve these include: . Strategic material sourcing Just-in-time inbound logistics and raw materials management Just-in-time manufacturing management Just-in-time outbound logistics and distribution man- agement Physical infrastructure choices Eliminating waste to increase productive capacity Using contractors or outsource partners Inventory management practices Business processes that are involved include: Marketing Purchasing Logistics Manufacturing Maintenance Sales16 Chapter 2 ¢ Distribution ¢ Invoicing and collecting At the plant level, you can improve the manufacture part of the process by streamlining production processes through just-in-time materials flows. This way, you'll eliminate wasted efforts and reduce the production materials and labor needed. In the past, maintenance received little recognition for its contribution to sustaining production capacity. It tended to be viewed only as a necessary and unavoidable cost. Even at the department level today, managers typically don’t view the big picture—the entire plant—they focus only on their depart- mental issues. Unfortunately, maintenance is often viewed only within the context of keeping down costs. In accounting, maintenance shows up as an operating expense, one that should be minimized. Disregarding the cost of raw materials, maintenance is typically only a fraction of manufacturing costs (540%, depending on the industry). Similarly, those manufacturing costs are a fraction of the products’ total selling price. Reducing maintenance expenses does indeed add to the bottom line directly but, since it is a fraction of a fraction of the total costs, it is typically seen as less important, command- ing less management attention. Most budget administrators don’t seem to fully understand maintenance, judging it by his- torical cost numbers. When you reduce a maintenance budget, service ultimately declines. Also, output is usually reduced and risk increased when there isn’t enough time or money to do the work right the first time. Of course, the accounting view is one-dimensional be- cause it looks only at costs. When you consider the value that maintenance delivers, it becomes much more important. By sustaining quality production capacity and increasing reliabil- ity, you generate more revenue and reduce disruptions. ‘This requires the right application of maintenance and reliability. Of course, doing maintenance properly means be-Maintenance Management Methodologies 7 ing proactive and accepting some amount of downtime. Effec- tive maintenance methods are needed to the best possi- ble use of downtime and the information you cdllect to deliver the best value to your production customers. ; it i 2.4 WHAT MAINTENANCE PROVIDES TO | THE BUSINESS Maintenance enhances production capacity apd reduces fu- ture capital outlay. It does this by: i * Maximizing uptime * Maximizing accuracy, producing to specified toler- ances or quality levels * Minimizing costs per unit produced * Sustaining the lowest practical and affordable risk to loss of production capacity and quality * Reducing as much as possible the safety risk to em- ployees and the public ¢ Ensuring the lowest possible risk of harming the envi- ronment Notice the emphasis on risk reduction. This is why insurers and classification societies take a keen interest in their clients’ maintenance efforts. Your maintenance reduces their expo- sure to risk and helps keep them profitable. Nearly every time a major accident involves a train, airplane, or ship, there is an in-depth investigation to determine whether improper maintenance was the cause of the disaster. Maintenance can also provide a strategic advantage. In- creasingly, as companies automate production processes and manufactured goods are treated like commodities, the lowest- cost producer will benefit. Automation has reduced the size of production crews while increasing the amount and complexity of work for maintenance erews. Maintenance costs will there- fore increase relative to direct production costs. Even low-cost18 Chapter 2 producers can expect maintenance costs to rise, That increase must be offset by increased production. You need less down- time and higher production rates, as well as better quality at low unit cost—that means more effective and efficient mainte- nance. Achieving all this requires a concerted effort to manage and control maintenance rather than letting the assets and their random failures control costs. In today’s highly competi- tive business environment, you cannot afford to let that hap- pen. Unfortunately, many companies do just that, allowing natural processes to dictate their actions, By operating in a “firefighting” mode, they merely respond to rolls of the dice, with random results. Without intervening proactively, these companies can only react after the fact, once failures occur. The consequences are low reliability, availability, and produc- tivity—ingredients for low profitability. 2.5 READY FOR EXCELLENCE? Optimizing your effectiveness cannot be accomplished in a chaotic and uncontrolled environment. Optimization entails making intelligent and informed decisions. That involves gathering accurate and relevant information to support deci- sions and acting in a timely manner. As the saying goes, “When up to the rear in alligators, it’s difficult to remember to drain the swamp.” You must have your maintenance system and process under control before you can optimize effectively. You need to tame the alligators with good maintenance man- agement methods, followed in a logical sequence. Campbell (1) teaches that several elements are necessary for maintenance excellence to be achieved. They fall into three major areas: Exercise leadership at all times. Without it, change won't be successful.Maintenance Management Methodologies 19 * Achieve control over the day-to-day maintenance op- eration. * Apply continuous improvement, once you have con- trol, to remain at the leading edge of your industry. Leadership includes: * Organization structure and style. It must fit the busi- ness environment and the strategy you're implement- ing. It can be centralized along shop lines, fully dis- tributed along area lines, or some blend of the two. It must be consistent with business objectives. If effec- tive teamwork is called for, the structure must reflect the methods to achieve it. Of course, the number of maintainers you use must match the workload. If your organization is understaffed, you'll be stuck in a reac- tive firefighting mode. If you overstaff, it will be too expensive. * Aclear future vision for the organization, with a high- level plan to achieve it. Know your objectives before making changes. Make sure that the entire mainte- nance department, along with operations and engi- neering, understands them too. You need good com- munication so that employees buy into the vision. If they don’t, implementing it successfully will be nearly impossible. Strategy is what gets done, not what is said. * A method to manage the transition to the future. Change is always difficult to achieve successfully. We all get used to the way things are, even if they could be better. You have to be able to motivate your people. They need to understand why it is important to change and what the impact will be. They need to see management’s commitment to making it happen, as well as measurements that show progress. Finally, they need to know what's in it for them personally.20 Chapter 2 To paraphrase Kotter (2), leaders make change happen and managers keep things running smoothly. To improve and optimize maintenance management, you need a strong leader to champion change. Control entails: * Planning and scheduling practices to manage service delivery. Through careful planning, you establish what will be done, using which resources, and provide support for every job performed by the maintainers. You also ensure that resources are available when needed. Through scheduling you can effectively time jobs to decrease downtime and improve resource utili- zation. * Materials management practices to support service delivery. Part of the job of a planner is to ensure that any needed parts and materials are available before work starts, You can’t make a schedule until you know for certain the materials are available, To minimize operations disruptions, you need spare parts and maintenance materials at hand. Effective materials management has the right parts available, in the right quantities, at the right time, and distributes it cost- effectively to the job sites. * Maintenance tactics for all scenarios: to predict fail- ures that can be predicted, prevent failures that can be prevented, run-to-failure when safe and economical to do so, and to recognize the differences. This is where highly technical practices such as vibration analysis, thermographics, oil analysis, nondestructive testing, motor current signature analysis, and judicious use of overhauls and shutdowns are deployed. These tactics increase the amount of preventive maintenance that can be planned and scheduled and reduce the reactive work needed to clean up failures.Maintenance Management Methodologies 21 * Measurements of maintenance inputs, processes, and outputs to help determine what is and isn’t working, and where changes are needed. We all behave ac- cording to the way we are measured. We adjust our driving speed and direction to signs and gauges. We manage our investments to minimize income taxes. In maintenance, we deploy more preventive and pre- dictive methods to reduce the volume of reactive work. By measuring your inputs (costs) and outputs (reli- ability or uptime), you can see whether your manage- ment is producing desired results. If you also measure the processes themselves, you can control them more closely and adjust them to increase your success. + Systems that help manage the flow of control and feed- back information through these processes. Accounting uses computers to keep their books. Purchasing uses computers to track their orders and receipts and to control who gets paid for goods received. Likewise, Maintenance needs effective systems to deploy the workforce on the many jobs that vary from day to day, and to collect feedback to improve management and results, Continuous-Improvement RCM and TPM methods are described in detail in Chapters 7 and 8. ‘The degree to which a company achieves these objectives indicates its level of maturity. A maturity profile is a matrix that describes the organization’s characteristic performance in each of these elements. One example appears as Figure 1-5 in Campbell’s book (1). Figure 2-1 here presents another example of a profile that covers the spectrum of elements needed for maintenance excellence. It is presented in a series of profiles, with supporting details for a cause-and-effect dia- gram. Every leg of the diagram comprises several elements, each of which can grow through various levels of excellence:2 Chapter 2 Elements of Excellence [asireenance] Purcesing/ Contacting Ousou Seton ‘watoas & Toomey Processes New elements are added and performance of existing elements improves as excellence is achieved Figure 2-1 Elements of maintenance excellence. Novice Foundation Apprentice Journeyman Mastery Figures 2-2 to 2-7 describe every level for each element from Figure 2-1. The color (gray scale) intensity expresses degrees of excellence, with the deeper shades representing greater depth and breadth. Leadership and people are the most im- portant elements, although they are not always treated as such. ‘As you can see, the organization moves from reactive to proactive, depends more heavily on its employees, and shifts from a directed to a more autonomous and trusted workforce. Organizations that make these changes often use fewer people to get as much, or more, work done. They are typically very productive,Maintenance Management Methodologies 23 Leadership and People sonata ree Figure 2-2 Leadership and people elements (who does it all). ‘The next most important elements are usually the meth- ods and processes, These are all about how you manage main- tenance. They are the activities that people in the organiza- tion actually do. Methods and processes add structure to the work that gets done. As processes become more effective, peo- ple become more productive. Poor methods and processes pro- duce much of the wasted effort typical of low-performing main- tenance organizations. Because of the extent of coverage, expertise, and capability needed, these levels of excellence are shown in two figures (2-3 and 2-4).24 |. Chapter 2 = imaheaRamen ae sa Feats : ae issnyonesat Figure 2-3. Methods and processes (what gets done): the basic levels. In Figure 2-5, systems and technology represent the tools used by the people implementing the processes and methods you choose. These are the enablers, and they get most of the attention in maintenance management. Some organizations that focus tremendous energy on people and processes, with only basic tools and rudimentary technology, still achieve high performance levels. Other organizations, focused on the tools shown in Figure 2-5, haven’t. Generally, emphasizing technol- ogy without excellence in managing methods, processes, and people will bring only limited success. It’s like the joke about needing a computer to really mess things up. If inefficient or ineffective processes are automated, and then run with inef-Maintenance Management Methodologies 25 Figure 2-4 Methods and processes (what gets done): the top levels. fective and unmotivated employees, the result will be disap- pointing. Ultimately, how well you manage processes, methods, and the people who use them comes down to the materials and physical plant you maintain. Figures 2-6 and 2-7 depict levels of excellence. It is in the physical plant and materials area where you can best judge maintenance management effective- ness, which is why these descriptions are more detailed. ‘You can see that in these basic levels, plant and materials support to maintenance are in rough shape. Because capital management operates reactively, things are left to run down.26 Chapter 2 Figure 2-5 Systems and technology (the enablers). In Figure 2-7, you can see that maintenance management is moving in a proactive direction and the plant is being sus- tained far better. Optimization technologies and methods appear at the “journeyman” and “mastery” levels of excellence. It is unlikely that optimization would be successful at other levels, at least overall. You may need to undergo fairly broad change to gain control and introduce continuous improvement, as described in Ref. 1. Just as you must learn to walk before you run, you must be in firm control of maintenance before you can successfully begin continuous improvement. You do this by incrementallyMaintenance Management Methodologies \ 27 i | i ans | bates Pyles “seiraseyest || Nant Finan oe ee I Teese Senate Htng Sng Soar. eames sete ashe g See Be ae ee See SS 3 = = g 10 Figure 2-6 Materials and physical plant (the result): basic levels. changing what maintenance is doing, to strengthen choices that will optimize business objectives. Methodologies are the systematic methods or procedures used to apply logic principles. The broad category of continu- ous improvement includes several maintenance methodolo- gies covered in depth in this book: * Reliability-Centered Maintenance (Chapter 7). RCM focuses on overall equipment reliability. It appears at the journeyman and mastery levels in Figure 2-3, un- der Reliability Management.28 Materia & Physical Pe Apprentice, Joureyiman, Mastery ‘Lele Tah Shoe ces Spe ‘looted ape. cote items. Sen Sea oe Someoeeee TB Some crite eeeaes eae E oe oat tena Sa ae Figure 2-7 Materials and physical plant (the result): top levels. ide gaye "PRM Solect 7 Identity Failure, an Equipment Define a fone oar Tactes Refine (Asst Functions Functional Modes & using the ace * Failures am ni RCM Logic / Maintenance cnet ‘Coin /consonances Figure 2-8 The basic steps of RCM.Maintenance Management Methodologies 29 © Root Cause Failure Analysis (see next section). * Total Productive Maintenance implementation (Chapter 8). TPM focuses on achieving high reliability from operators and maintainers. * Optimizing maintenance and materials management decisions (the entire book). 2.5.1 RCM Reliability-Centered Maintenance aims to achieve maximum system reliability using maintenance tacties that can be effec- tively applied to specific system failures in the operating envi- ronment. The RCM process uses equipment and system knowledge to decide which maintenance interventions to use for each failure mode. That knowledge includes: * System diagrams and drawings * Equipment manuals * Operational and maintenance experience with the system * Effects of individual failures on the system, the entire operation, and its operating environment. The RCM basic steps are listed in Figure 2-8, which shows that RCM results in a maintenance plan. The various deci- sions made for each failure are put into logical groupings for detailed planning, scheduling, and execution, as part of the overall maintenance workload. For each task, it is stated what must be done to prevent, predict, or find specific failures, and there is a specified frequency. Optimization techniques are used to determine the best frequency for each task and decide on corrective actions. This is based on monitoring results from the planned maintenance program, covered in Chapters 10, 11, and 12. 2.5.2 Root Cause Failure Analysis Root Cause Failure Analysis (RCFA) is one of the basic reli- ability-enhancement methods. It appears at the journeyman30 Chapter 2 level of Reliability Management in Figure 2-4. RCFA is rela- tively easy to perform, and many companies already do it some using rigorous problem-solving techniques and some in- formally. Later in the chapter, you'll learn about a formal method based on easy-to-follow cause-and-effect logic, but first we look at informal and other problem-solving techniques. In all methods, the objective is to completely eliminate recurring equipment or system problems, or at least substantially di- minish them. Informal RCFA techniques are usually used by individu- als or small groups to determine the best corrective action for a problem. Typically, this involves maintenance tradespeople, technicians, engineers, supervisors, superintendents, and managers. Drawing heavily on their own experience and infor- mation from such sources as trade periodicals, maintainers from other plants, and contractors, they often have immediate success. There are plenty of pitfalls, though, that can impair the informal approach: * Ifonly tradespeople do the RCFA, their solutions are often limited to repair techniques, parts and materials selection, and other design flaws. * Arestrictive engineering change control or spare parts (add to inventory) process can derail people who aren’t skilled or accustomed to dealing with bureaucracy. * Ifonly senior staff do RCFA, they can miss out on tech- nical details that the tradespeople would catch. * Some organizations have a tendency to affix blame rather than fix the problem. In short, informal techniques can work well but they have lim- itations and it can be hard to develop long-term solutions. All RCFA techniques face the same challenges, but they're greater if the process isn’t formalized in some way.Maintenance Management Methodologies at More formal problem-solving techniques can be used very effectively. Consulting and educational organizations teach several techniques, two of which we examine here. 2.5.2.1. What, Where, When Problem Solving The first problem-solving process is relatively straightfor- ward: . * Establish the problem, noting what has actually changed from “normal” to unacceptable. * Describe the problem, asking what, where, and when questions to determine the extent of it. Quantify what went wrong and be specific, so that you solve the prob- lem only where it exists. You need to understand what is and is not happening now, as well as where and when. © Identify possible causes. * Identify the most likely cause, Test these possible causes against the IS and IS NOT criteria for the “what, when, and where” of the problem statement. * Verify the cause. Test any assumptions you have made, looking for holes in the argument. * Implement a solution that addresses the cause. ‘These formal problem-solving techniques, usually performed in a structured group with a facilitator, are very effective. To use this approach, set up a weekly or monthly meeting to iden- tify and prioritize problems that need solutions. Although day- to-day maintenance and equipment issues will figure promi- nently, your mandate will likely extend beyond them. Problem-solving groups should include a cross-section of interested stakeholders such as production, finance, human resources, training, and safety representatives as well as maintenance. Because its purview is so broad, the group is often most effective broken into smaller task teams. Hach is assigned a specific problem to analyze, and usually made re-32 Chapter 2 sponsible for solving it completely. These teams report to the problem-solving group on progress and solutions. Formal problem-solving groups usually produce credible results because of their broad representation and rigorous for- mal analytical processes. This thorough approach ensures so- lutions that work over the long term. 2.5.2.2 Cause and Effect The second RCFA technique we examine is based on cause- and-effect logic. Theoretically, all events are the result of po- tentially infinite combinations of pre-existing conditions and triggering events. Events occur in sequence, with each event triggering other events, some being the failures that we are trying to eliminate. Think of these sequences as chains of events, which are only as strong as their weakest link. Break that link and the chain fails—the subsequent events are changed. Even if you eliminate the failure you're targeting, though, you could also trigger some other chain of events. Remember that the solu- tion to one problem may well turn out to be the cause of an- other. To perform a cause-and-effect RCFA, you need to: © Identify the unacceptable performance *. Specify what is unacceptable (like the what, when and where of the previous method) * Ask “what is happening?” and “what conditions must exist for this event to happen?” * Continue to ask this combination of “what” questions until you identify some event that can be controlled. If that event can be changed to prevent the failure re- occurring, you have a “root cause” that can be ad- dressed * Eliminate the “root, cause” through an appropriate change in materials, processes, people, systems or equipment.Maintenance Management Methodologies 33 By repeating the what questions, you usually get a solution within five to seven iterations. A variation of this process asks why instead of what—both questions work. Because it is performed formally, with a cross-section of stakeholders exercising complete control over the solution, the success rate of cause and effect is also high. 2.6 OPTIMIZING MAINTENANCE DECISIONS: BEYOND RCM Managing maintenance goes beyond repair and prevention to encompass the entire asset life cycle from selection to disposal. Key life-cycle decisions that must be made include: * Component replacements * Capital equipment replacements * Inspection result decisions « Resource requirements To make the best choices, you need to consider not only technical aspects but historical maintenance data, cost infor- mation, and sensitivity testing to ensure you meet your objec- tives in the long run. Jardine (3) describes several situations that can be dealt with effectively: * Replacements when operating costs increase with use © Replacements when operating costs increase with time ° Replacement of a machine when it is in standby mode * Capital equipment replacements to maximize present value * Capital equipment replacements to minimize total cost ¢ Capital equipment replacements considering technol- ogy improvements over time * Optimizing replacement intervals for preventive com- ponent replacement34 |, Chapter 2 I * Optimizing replacement intervals that minimize downtime + Group replacements l * Optimizing inspection frequencies to maximize profit or to minimize downtime * Optimizing inspection frequencies to m: ability * Optimizing inspection frequencies to mihimize total costs © Optimizing overhaul policies + Replacement of monitored equipment baséd on inspec- tion, cost, and history data ‘imize avail- All these methods require accurate maintenance history data that shows what happened and when, Specifically, you need to make the distinction between repairs due to failures and ones that occurred while doing some other work.-Note that it is the quality of the information that is important, not the quantity. Some of these decisions can be made with relatively little information, as long as it is accurate. RCM produces a maintenance plan that defines what to do and when, It is based on specific failure modes that are either anticipated or known to occur. Frequency decisions are often made with relatively little data or a lot of uncertainty. You can make yours more certain and precise by: using the methods described later in the book, and in Jardine’s work (3). Along with failure history and cost information, these decision-making methods show you how to get the most from condition-monitoring inspections, to make optimal replace- ment choices. All these decisions can be made with sufficient data and, in several cases, computerized tools designed for the purpose. These currently tend:to be standalone tools used primarily by engineers and highly trained technicians. At the time of writ- ing, combining them with computerized maintenance manage- ment and condition-based monitoring systems is being ex-Maintenance Management Methodologies 35 plored. Maintenance management systems are growing beyond managing activities and the transactions around them, to becoming management and decision support systems, Eventually, this will make the job of monitoring personnel much easier. For more information, see Chapter 4, on data acquisition, and Chapter 10, on modeling. REFERENCES 1. John Dixon Campbell. Uptime: Strategies for Excellence in Maintenance Management. Portland, OR: Productivity Press, 1995. 2. Jobn P. Kotter. Leading Change. Boston: Harvard Business School Press, 1996. 3. A. K. S, Jardine. Maintenance, Replacement and Reliability. Pitman/Wiley, 1973.3 Measurement in Maintenance Management Performance management is one of the basic requirements of an effective operation. Doing it well, though, isn’t as straight- forward as it may seem. In this chapter, we discuss effective tools to help you strengthen your maintenance performance measurement. To start, we summarize measurement basics with an ex- ample that shows how numeric measures can be both useful and misleading. Measurement is important in maintenance continuous improvement and in identifying and resolving con- flicting priorities. We explore this within the maintenance de- partment, and between Maintenance and the rest of the orga- nization. We look at hoth macro and micro approaches, using a738 |, Chapter 3 a variety of examples. At the macro level, this|includes the Balanced Scorecard; at the micro level, shaft-ali history. Maintenance performance measurement is|then subdi- vided into its five main components: productivity, organiza- tion, work efficiency, cost, and quality, together with some overall measurements of departmental results.) You'll learn about consistency and reliability as they apply |to measure- ment. A major section of the chapter is devoted to individual performance measures, with sample data attached. We sum- marize the data required to complete these meastires, for you to decide whether you can use them in your own workplace. We also cover the essential tie-in between performance mea- sures and action. i The chapter concludes with a practical look at using the benefits/difficulty matrix as a tool for prioritizing actions. You will also find a useful step-by-step guide to implementing per- formance measures. 3.1 MAINTENANCE ANALYSIS: THE WAY INTO THE FUTURE There is no mystique about performance measurement. The trick is how to use the results to achieve the needed actions. This requires several conditions: consistent and reliable data, high-quality analysis, clear and persuasive presentation of the information, and a receptive work environment. Since maintenance optimization is targeted at executive management and the boardroom, it is vital that the results reflect the basic business equation: Maintenance is a business process turning inputs into useable outputs. Figure 3-1 shows the three major elements of this equation: the inputs, the outputs, and the conversion process. Most of the inputs are familiar to the maintenance department andMeasurement in Maintenance Management ~ Equipment ~~ Materials - Outside services ~ Technical over- head ~ Management Process ~ Facilities - Training ~ Availability ~ Process Rate = Quality ~ Maintainability ~ Reliability ~ Equipment effect- iveness - Utilization + Life-cycle cost ~ Retum on investment Measures of Process Effectiveness ~ Work Order backlog; Work Order lead time ‘of work that is preventive maintenance-driven = % of preventive maintenance work completed on schedule = % of work that is planned work; number of emer- gency Work Orders ~ % of work that is predictive maintenance-——" Outputs ate Tf cost Tf production constrained, constrained, start here start here Figure 3-2 Maintenance optimizing: where to start. can profitably sell all it produces, it is production-constrained. It’s likely to achieve the greatest payoff from maximizing out- puts through asset reliability, availability, and maintain- ability. 3.1.1. Keeping Maintenance in Context As an essential part of your organization, maintenance must adhere to the company’s overall objectives. and direction. Maintenance cannot operate in isolation. The continuous im- provement loop (Figure 3-3), key to enhancing maintenance, must be driven by and mesh with the corporation's planning, execution, and feedback cycle. Set Set Devetop Plan Mission Objectives Strategy Tactics Feedback Measure Execute Results Results Tactics Figure 3-3 The maintenance continuous-improvement loop.Measurement in Maintenance Management 43 Disconnects frequently occur when the corporate and de- partment levels aren’t in synch. For example, if the company places a moratorium on new capital expenditures, this must be fed into the equipment maintenance and replacement strategy. Likewise, if the corporate mission is to produce the highest-quality product possible, this probably doesn’t corre- late with the maintenance department’s cost-minimization target. This type of disconnect frequently happens inside the maintenance department itself. If your mission is to be the best-performing maintenance department in the business, your strategy must include condition-based maintenance and reliability, Similarly, if the strategy statement calls for a 10% reliability increase, reliable and consistent data must be avail- able to make the comparisons. 3.1.2 Conflicting Priorities for the Maintenance Manager In modern industry, all maintenance departments face the same dilemma: which of the many priorities to put at the top of the list? Should the organization minimize maintenance costs or maximize production throughput? Does it minimize downtime or concentrate on customer satisfaction? Should it spend short-term money on a reliability program to reduce long-term costs? Corporate priorities are set by the senior executive and ratified by the Board of Directors. These priorities should then flow down to all parts of the organization. The Maintenance Manager must adopt those priorities; convert them into corre- sponding maintenance priorities, strategies, and tactics to achieve thé results; then track them and improve on them. Figure 3-4 is an example of how corporate priorities can flow down through the maintenance priorities and strategies to the tactics that control the everyday work of the mainte- nance department. If the corporate priority is to maximize product sales, maintenance can focus on maximizing throughput and equipment reliability. In turn, the mainte-Corporate Priority ‘To maximize product sales i ‘To maximize product throughput Maintenance Priority and equipment reliability Implement RCM program and Maintenance Strategy Condition-based monitoring U ‘Complete reliability assessment on critical ‘Maintenance Tactie equipment, do weekly CBM based inspections, track results Figure 8-4 Interrelating corporate priorities with maintenance tactics. nance strategies will also reflect this, and could include, for example, implementing a formal reliability-enhancement pro- gram supported by condition-based monitoring. Out of these strategies flow the daily, weekly, and monthly tactics. These, in turn, provide lists of individual tasks that then become the jobs that will appear on the Work Orders from the Enterprise ‘Asset Management System (EAMS) or Computerized Mainte- nance Management System (CMMS). Using the Work Order to ensure that the inspections get done is widespread. Where organizations frequently fail is in completing the follow-up analysis and reporting on a regular and timely basis. The most effective method is to set them up as weekly Work Order tasks, subject to the same performance tracking as preventive and repair Work Orders. Trying to improve performance, you can be confronted with many, seemingly conflicting, alternatives. Numerous re- view techniques are available to establish how your organiza-Measurement in Maintenance Management 45 tion compares to industry standards or best. maintenance practice. The most effective techniques help you map priorities by indicating the payoff that improvements will make. The review techniques tend to be split into macro (covering the full maintenance department and its relationship to the business) and micro (with the focus on a specific piece of equipment or a single aspect of the maintenance function). The leading macro techniques are: ° Maintenance effectiveness review—involves the over- all effectiveness of maintenance and its relationship to the organization’s business strategies. These can be conducted internally or externally, and typically cover areas such as: Maintenance strategy and communication Maintenance organization Human resources and employee empowerment Use of maintenance tactics ‘Use of reliability engineering and reliability-based ap- proaches to equipment performance monitoring and improvement Information technology and management systems Use and effectiveness of planning and scheduling Materials management in support of maintenance op- erations e External benchmark—draws parallels with other or- ganizations to establish how the organization com- pares to industry standards. Confidentiality is a key factor, and results typically show how the organiza- tion ranks within a range of performance indicators. Some of the areas covered in benchmarking overlap with the maintenance effectiveness review. Additional topics include: Nature of business operations Current maintenance strategies and practices Planning and scheduling46 Chapter 3 Inventory and stores management practices Budgeting and costing Maintenance performance and measurement Use of CMMS and other IS (information system) tools Maintenance process re-engineering Internal comparisons—measure a set of parameters similar to those of the external benchmark, but draw from different departments or plants. They are gener- ally less expensive and, if the data is consistent, illus- trate differences in maintenance practices among sim- ilar plants. From this, you can decide which best practices to adopt. Best Practices Review—looks at maintenance’s pro- cess and operating standards and compares them against the industry best. This is generally the start- ing point for a maintenance process upgrade program, focusing on areas such as: Preventive maintenance Inventory and purchasing Maintenance workflow Operations involvement Predictive maintenance Reliability-Based Maintenance ‘Total Productive Maintenance Financial optimization Continuous improvement Overall Equipment Effectiveness (OEE)—measures a plant’s overall operating effectiveness after deducting losses due to scheduled and unscheduled downtime, equipment performance, and quality. In each case, the subcomponents are meticulously defined, providing one of the few reasonably objective and widely used equipment-performance indicators. Table 3-2 summarizes one company’s results. Re- member that the individual category results are mul- tiplied through the calculation to derive the final re- sult. Although Company Y achieves 90% or higher inMeasurement in Maintenance Management 47 "Table 3-2 Example of Overall Equipment Effectiveness ‘Target (%) eee ¥ (%) 90 Availability 97 ; | Utilization rate 97 | 92 2 i Process efficiency 97 95 x f Quality 99 | 94 Overall equipment effectiveness 90 { 74 each category, it will have an OEE of only 74% (see Chapter 8 for further details of OBE). This means that by increasing the OEE to, say, 95%, Company Y can increase its production by (95 — 74)/74 = 28% with minimal capital expenditure. If you can accomplish this in three plants, you won't need to build a fourth. These, then, are some of the high-level indicators of the effectiveness and comparative standing of the maintenance department. They highlight the key issues at the executive level, but more detailed evaluation is needed to generate spe- cific actions. They also typically require senior management support and corporate funding—not always a given. Fortunately, there are many maintenance measures that can be implemented that don’t require external approval or corporate funding. These are important because they stimu- late a climate of improvement and progress. Some of the many indicators at the micro level are: © Post implementation review of systems to assess the results of buying and implementing a system (or equipment) against the planned results or initial cost justification * Machine reliability analysis/failure rates—targeted at individual machine or production lines48 Chapter 3 Macro External Benonnare [> 1 Maintenance costs per ton are 1. Set targets for reduction 2. Implement means of tracking 15% above industry standard oe costs to equipment & jobs. re 3. Analyse breakdown of costs among Imemnal Actions [> | > Shipment obs and co pes 4, Examine and compare repair methods 5. Apply “Best Practice” in all areas Figure 3-5 Relating macro measurements to micro tasks. * Labor effectiveness review—measuring staff alloca- tion to jobs or categories of jobs compared to last year * Analyses of materials usage, equipment availability, utilization, productivity, losses, costs, etc. All these indicators give useful information about the mainte- nance business and how well its tasks are being performed. You have to select those that most directly achieve the mainte- nance department’s goals as well as those of the overall busi- ness. Moving from macro or broad-scale measurement and op- timization to a micro model can create problems for Mainte- nance Managers. You can resolve this by regarding the macro approach as a project or program and the micro indicators as individual tasks or series of tasks. The example in Figure 3-5 shows how an external benchmark finding can be trans- lated into a series of actions that can be readily implemented. 3.2. MEASURING MAINTENANCE: THE BROAD STROKES To improve maintenance management, you need measure- ment capability for all the major items under review. How-Measurement In Maintenance Management 49 ever, as previously mentioned, there usually aren’t enough re- sources to go beyond a relatively small number of key indicators, The following are the major categories that should be considered: ¢ Maintenance productivity—measures the effective- ness of resource use * Maintenance organization—measures the effective- ness of the organization and planning activities ¢ Efficiency of maintenance work—how well mainte- nance keeps up with workload * Maintenance costs—overall mainténance cost vs. pro- duction cost ¢ Maintenance quality—how well the work is per- formed ¢ Overall maintenance results—measures overall re- sults Measurements are only as good as the actions they prompt—the results are as important as the numbers them- selves. Attractive, well-thought-out graphics will help to “sell” the results and stimulate action: Graphic layouts should be informative and easy to interpret, like the spider diagram in Figure 3-6, Here, the key indicators are measured on the ra- dial arms in percentage achievements of a given target. Each measurement’s goals and targets are also shown, with the per- formance gap clearly identified. Where the gap is largest, the shortfall is greatest—and so is the need for immediate ac- tion. The spider diagram in Figure 3-6 shows the situation at a point in time, but not its progress through time. For that, you need trend lines. These are best shown as a graph (or series of graphs) with the actual status and the targets clearly identi- fied, as in Figure 3-7. For a trend line to be effective, the re- sults must be readily quantifiable and directly reflect the team’s efforts.50 Chapter 3 Sa Game Mm| The B=! Performance Figure 8-6 Spider diagram showing performance gaps. 3.2.1 Balanced Scorecard Each of the examples above shows only a single measure of performance. The Balanced Scorecard concept broadens the measure beyond the single item. Each organization should de- velop its own Balanced Scorecard to reflect what motivates its business behavior. 25 a ho oSSSS ——— 1 Se == 05 ° Jan Mar = May = Jul. Sep, Nov dan Mar Figure 3-7 Trend-line of quality results.—rework per 100 jobs; ~-= target.Measurement in Maintenance Management 51 Table 3-3 shows an example combining the elements of the input—process—output equation referred to earlier, with leading and lagging indicators, and short- and long-term mea- surements: © Leading indicators—the change in the measurement (hours of training, for example) precedes the improve- ments being sought (decreases in error rates). ‘Typi- cally, you see these benefits only at a later date. ‘Table 3-3 Example of a Balanced Scorecard Inputs Process Outputs Short-term Long-term Leading indicators Lagging indicators Money spent on Labor Materials Services Backlog of Work Orders Compliance of actual work with planned Work distribution among shifts or trades Rework required on Work Orders Reliability Availability Maintainability OEE Number of breakdowns Number of on-time Work Order completions Number of stock-outs Number of daily Work Orders Maintenance costs as % of replacement asset value MRO inventory turns ‘Number of PMs reviewed Organizational levels Number of training hours % of Work Orders driven by CBM ROM use Parts rationalization Amount of time lost through injuries and absences Total maintenance cost variance from budget Emergency WOs as % of total WOs Staff turnover52 Chapter 3 * Lagging indicators—the change in the measurement (staff quitting, for example) lags behind the actions that caused it (overwork or unappreciative boss). For each of these elements, four representative indicators were developed. Although each indicator shows meaningful information, the Balanced Scorecard provides a good overview of the effectiveness of the total maintenance organization (Ta- ble 3-3). In a later section of this chapter, we examine some of the pros and cons of this increasingly popular measurement technique. ‘The broad performance measures are essential to under- stand the overall direction and progress of the maintenance function. But within this broad sweep lie multiple opportuni- ties to measure small but significant changes in equipment operation, labor productivity, contractors’ performance, mate- ial use, and the contribution of technology and management. ‘The next section examines some of these changes and provides examples that can be used in the workplace. 3.3 MEASURING MAINTENANCE: THE FINE STROKES To understand individual elements of maintenance functions, you need analysis at a much more detailed level. To evaluate, predict, and improve the performance of a specific machine, you must have its operating condition and repair data, not only for the current period but also historically. Also, it's use- ful to compare data from similar machines. Later in this chap- ter, we examine the sources of this data in more detail. For now, you should know that the best data sources are the CMMS, EAM, CBM, SCADA (Supervisory Control and Data Acquisition Systems), and Process Control systems currently in widespread use. Among the many ways to track individual equipment per- formance are the measurements of reliability, availability, productivity, life-cycle costs, and production losses. Use these techniques to identify problems and their causes so that reme-Measurement in Maintenance Management 53 dial action can be taken, An interesting case study examined a series of high-volume pumps to establish why the running costs (i.e., operating and regular maintenance costs) varied so widely among similar models. Shaft alignment proved to be the major problem, setting off improvements that drove the annual cost ‘per unit down from over $30,000 to under $5000, as shown in Figure 3-8. Despite this remarkable achievement, the company didn’t get the expected overall benefit. After further special analysis, two additional problems were found. First, the O&M costs excluded contractor fees and so should have been labeled “Internal O&M Costs.” Then, the subcontractor’s incremental cost: to reduce the vibration from the industry standard of 0.04”/sec to the target level of 0.01’/sec (see Figure 3-9) was unexpectedly higher than predicted from earlier improve- ments. When the O&M costs were revised to include the subcon- tractor fee, the extra effort to move from 0.04”/sec to 0.01’/ sec was at a considerably higher cost than the savings in the operating costs. The optimal position for the company was to maintain at 0.04”/sec (see Figure 3-10). * s 2 25 3 § 20 | 58 & 915 eacecaad) ~ ge “10 2 B 5 3 o 0.20 0.10 0.06 0.04 0.01 Amplitude of Vibration - ins/sec Figure 3-8 Internal pump operating and maintenance costs.Running + Balancing Costs - $000 35 25 Chapter 3 Actual Balancing Cost at 0.01 ——_____—__, 30 > eee Expected — 20 ( Baltneing fea Cost at 0.01 10 Cost to Balance Pumps - $000 a 0.20 0.10 0.06 0.04 Amplitude of Vibration - ins/sec Figure 3-9 Subcontractor cost of pump balancing. = a 0.20 0.10 0.08 0.04 0.01 ‘Amplitude of Vibration - insisee Figure 3-10 Total pump O&M costs. 0.01 Internal O&M Costs oc Balancing Costs Total O&M Costs _Measurement in Maintenance Management 55 This type of quasi-forensic analysis can produce dramatic savings. In the case summarized above, the company had 50 of these pumps operating and was able to reduce costs from $1.6 M to $750,000, saving 53%. By taking the final step to refine the balancing from 0.04 to 0.01, the company spent an extra $200,000 for no additional tangible benefit. You can use similar investigative techniques to evaluate and improve labor and materials consumption. Variable labor consumption among similar jobs at a number of plants can identify different maintenance methodologies and skill levels. By adopting the best practices and adding some targeted training, you can achieve significant improvements and avoid sizeable problems. In one example, a truck motor overheating was traced back through the CMMS Work Order to a badly seated filter. The miaintenance technician responsible for the work had insufficient training for the task. Emergency recalls were issued for six other trucks on the highway that he had fitted the same way, and each one was fixed without damage. The technician received additional training and got to keep his job. Variations in materials usage can be tracked from the Work Orders and the inventory records, leading to standard- ized methods. More recently, multiplant operations have been able to access data from multiple databases for analytical and comparative purposes. Parts specification has become stan- dardized, creating huge savings through bulk buying and cen- tralized storage. There are several examples in which a combi- nation of reduced inventory, reduced supplier base, better negotiated prices, and the removal of many hidden purchasing costs through improved productivity has generated savings well above 15% in the inbound supply chain. In this chapter, we have introduced a wide variety of top- ics to set the scene for later and more detailed examination. The core issues are the same throughout this book—what should the Maintenance Manager optimize and how should it be done?56 Chapter 3 3.4 WHAT’S THE POINT OF MEASURING? Organizations strive to be successful, to be considered the best or the industry leader. In an earlier section of this chapter; we reviewed how objectives cascade from the corporate level to the maintenance department and get translated into action- able tactics. It’s assumed through this process that there is a common set of consistent and reliable performance measures that “prove” that A is better than B. This is actually not the case, but through the work of Coetzee (1), Wireman (2), MI- MOSA (3), and others, common standards are starting to emerge. A major driving force for performance measurement is the goal of achieving excellence. There must be effective mea- surement methods to withstand the scrutiny of the Board of Directors, shareholders, and senior management. As the mis- sion statement cascades down to the maintenance depart- ment, so does the demand for accurate measurement. This is reason enough to measure maintenance performance. ‘There are many other reasons, though, to make improve- ments, including: * Competitiveness—regardless of whether the goals are price-, quality-, or service-driven, you must compare to establish how competitive you are. * Right-sizing, down-sizing, and up-sizing—adjusting the size of the organization to deliver products and services while continuing to prosper becomes mean- ingless if you can’t realistically measure perfor- mance. ¢ New processes and technologies are being introduced rapidly—not only in manufacturing but also in main- tenance. To produce the expected improvements, you must keep careful track of the results. * Performance measurement is integral when deciding to maintain or replace an item. An example of life-Measurement in Maintenance Management | ; 57 Set Set Develop Pla | Mission >| objectives — >| strategy — > ra ~ Feeback ‘Measure. Execute Results... << o Results, |

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