Measuring and Improving Maintenance Performance

1. Measuring and Improving Maintenance Performance Salih O. Duffuaa Systems Engineering Department King Fahd University of Petroleum and Minerals

2. Presentation Plan • Introduction • Evolution of Maintenance Management • Why Measure • Performance Measurement • Structured Auditing • Key performance indicator • Benchmarking • Improvement process • Case Studies

3. Role of Maintenance • Maintenance is defined as the combination of activities by which equipment, assets or a system is kept or restored to a state in which it can perform its designated function. It is an important factor in product or service quality and can be used as a strategy for successful competition

4. Introduction

5. Maintenance Versus Organization Objectives • The objectives and goals of an organization depends on the organization state, strategy and type of business. Some objectives are • Meet or exceed customer satisfaction • Maximizing profit, Meet set targets • Meet set safety standard, • Zero product defect • Does Maintenance affect these goals?

6. Evolution of Maintenance Management • Prior to 50th: Necessary evil • 50-70 : Preventive maintenance • 70th : Life cycle costing, RCM and Productive maintenance. • 80 : TPM an RCM • 9oth-date: Strategic view of maintenance

7. Why Measure • What can be measured will be understood better. • What can be measured can be assessed. • What can be measured can be managed. • What can be measured can be improved.

8. Measuring Maintenance Performance • What to measure? • How to measure? • What to do with measurement output?

9. Continuous Improvement Develop Measurement System (1) Evaluate Maintenance System (2) Identify most deficient areas (3) Identify root causes of deficiencies (4) Develop and implement corrective and preventive actions (5)

10. Measurement System • Structured Audit • Performance Indicators • Benchmarking ( can be utilized by both)

11. Structured Audit Approach • What is an audit • Standard for the audit ( factors for audit) • Organization of the audit • Expected out put of the audit

12. Structured Audit • The American Heritage Dictionary defines audit as: “an examination of records or accounts to check their accuracy”. • Thomas and Henke (1989), “Auditing is a process in which one person verifies the assertions of an other”. • Carmichael et al (1996), defines audit as : “Auditing is an independent investigation of some particular activity”. • (http://www.columbia) defines an audit as a formal or official examination and verification of the activities of an organizational unit, system, function, or other aspect of the organization's operations. It may include a review of (1) economy and efficiency of operations; (2) effectiveness in achieving program results; and (3) compliance with laws, regulations, and other rules. The audit results in a written report

13. Standard for the Audit • Factors/activities to be examined. • Standard for each factor. • Aggregation of sub-factors and factors.

14. Audit Factors • 1. Strategic Management • Maintenance mission and objectives • Alliance of process with mission and objectives. • Values • Performance measurement • Effective strategies • Strategy assessment

15. Audit Factors • 2. Organization and staffing • Organization structure • Job description • responsibilities and supervision • Polices and procedures • Shops organization • 3. Human resources • Shop manning • Employee motivation

16. Audit Factors • 4. Training • Management training • Planner training • Craft training • 5. Management control and budget • 6.1 Budget planning • Reporting and feedback • Effective control

17. Audit Factors • 6. Work order planning and scheduling • Priority system • Work order system and procedures • Emergency & shutdown scheduling • Planning procedures • 7. Facilities and resources • 8. Stores and material • 9. Preventive maintenance and equipment history • 1o. Engineering Condition monitoring

18. Audit Factors • 11. Information technology • 12. Performance analysis and appraisal • 13. Safety in maintenance • 14. Maintenance and the Environment • The audit program we are using has 90 questions distributed over the above 14 main factors.

19. Audit Plan and Execution • Examine the audit program to reflect plant special characteristics. • Form audit team from consultant in plant personnel. • Regular meeting. • Corrective and preventive actions.

20. A case of a Process Plant in Saudi Arabia : Audit Raw Score

21. Factors Weight Using AHP

22. Audit Analysis

23. ABC on the Table

24. Improvement Actions • Factor 2: Organization and Staffing • Document procedures for PM • Supervisor technician ratio • Establish a suitable planner-worker ratio. • Decentralize some of the maintenance activities. • Factor 13: Safety in maintenance • Include safety within maintenance process • Enforce safety rules • Training program for maintenance personnel.

25. Performance Measures • An alternative or integrated approach with structured auditing ? • It links processes to objectives.

26. Performance Measures • There are literally hundreds of potential indicators • “Appropriate” indicators depend on many factors, such as • Level in the organization to use the information • Existing data collection systems, and how easily modified • Staff availability to develop/maintain systems • Demands of managers &teams for the information, and their level of sophistication (foreman vs. MBA) • Frequency of reporting also is situation dependent • Stratification options by plant, department, machine, product line, etc., are important

27. Managerial Classification • Macro Indicator • Macro-indicators (for upper management, primarily) • Micro Indicator • Micro-indicators (for lower levels of management)

28. Macro Indicator • maintenance expense dollars as a percent of replacement asset value. • maintenance expense dollars per unit produced • maintenance expense dollars as a percent of plant controllable expenses • regulatory compliance indicators • Productive capacity

29. Micro-Indicator • maintenance budget compliance (budget vs. expense) • monthly expense dollars (by equipment type) • percent overtime (3-9% sometimes cited as ideal) • percent emergency work

30. System Classification • Input Measures Primarily Cost Measures • Output measures • Within The System Measures

31. Input Measures • Input Measures are Mostly Related To Cost • Labor : Cost of trades, semi-skilled etc • Materials and spares • Contracts • Shop Service • Equipment Rentals • Maintenance Overhead • Company Overhead

32. Output Measures • Availability : Measure of Uptime • Reliability : Mean-time-between-failure • MTBF = S-d/f , f is number of failures • Mean Time To Repair: Measure of Duration of Repair • MTTR = d/f • Utilization = Scheduled Time/C T • CT = Calendar Time

33. Output Measures • Process Rate (PR) : Measure of the Equipment Cycle Time in The Process • PR = Ideal Cycle Time/Actual Cycle time • Quality Rate (QR) : Measure of equipment Precision • Total Produced - Rejected/Downgrades/ Total • Overall equipment Effectiveness • OEE = A* PR *QR • Productive capacity • OEE * Utlization

34. Measures Within The System • Work Distribution : Time Spent in each work category • Delays : Time spent waiting for instructions • parts, travel,breaks, Start and Quits • Compliance : Measures to Track Compliance with various plans, such as PM, Shutdown schedules etc.

35. Measures Within The System • Backlog : Amount of Work Planned but not Completed by Plant, Area, Craft, etc • Failure Analysis: Tracks improvement analysis, such Number of New PM Routines, Number of Root Cause Analysis of Breakdowns Undertaken.

36. Indicators Selection Criteria • Reflect business objectives. • Impact customer satisfaction. • Quality of product or service • Describe the performance of key process. • Performance of critical equipment. • Safety and environment.

37. Balance Scorecard Approach • Financial • Customer • Internal • Learning and growth

38. Improvement Approach • Identify areas were goals are not met • Use Pareto chart to prioritize areas • Root cause analysis • Corrective and preventive actions • Implement actions • Measure and check

39. Benchmarking • Formal Definition Benchmarking is the continuous, systematic process of measuring our products, services, and practices against the toughest competitors or those companies recognized as industry leaders. Working Definition Benchmarking is a basis of establishing rational performance goals through the search for best industry practices that will lead to superior performance. A Related Definition Benchmark: An industry standard • Descriptive Benchmarks or Practices • Quantitative Benchmarks or Performance Measurements

40. Benchmarking As An Improvement Tool • How Benchmarking Makes Possible Improvements • The gap between internal and external practices creates the need for improvement • Understanding industry best practices identifies what you must improve. • Externally benchmarked practices developed from others give a picture of the endpoint after improvement.

41. Types of Benchmarking • Internal • Similar processes (data is available). • External • Type of industry (competitors) • Best in industry (non-competitors)

42. Benchmarking Process

43. Benchmarking as a Process of Improvement • Know your own operation, both its strengths and weaknesses. • Know those industries that excel at the maintenance processes used in your operation, including competitors, sector leaders, and those in other industries • Set challenging targets for your maintenance performance measures; incorporate the best practices • Measure results and strive continually for superior performance

44. Key Factors for Success • Management commitment for improvement. • Create a culture of Maintenance Kaizen. • People motivation, growth and continuous learning. • Quality circle for process improvement • Reward based performance. • Technology as a means for enabling.

45. Conclusion • Maintenance Should managed as a business unit. • Maintenance performance must be aligned with company strategic directions. • Three approached for improvement are presented- Structured audits, Performance Indicators and Benchmarking.

46. Conclusion • Culture of continuous improvement (C.I) must be created to sustain C. I. • Leadership and management commitment are key to creating the culture of C.I.

47. Thank you for your patience Any Questions or comments.