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Reliability as a Strategic Initiative

To Improve Manufacturing Capacity, Throughput, and Profitability


Article by Dale R. Blann of Marshall Institute -Posted by Maintenance Journal Maintenance suffers from a deficiency of understanding and respect. It is probably fair to say that most people (even management) think the role of maintenance is to fix things when they break. That could hardly be further from the truth! When things break down, maintenance has failed! The maintenance job is to maintain it so that it never breaks. Chronic problems are far too common in most manufacturing plantsmachine downtime, rejects, waste, production delays are rampant in most plants. Effective capacity is lost (increasing capital investment), costs are increased (at a loss of competitiveness), and profits are reduced (at a loss of business viability). A typical manufacturing plant has hundreds, even thousands, of equipment components that can create problems in a myriad of ways. Plant Managers and Production Managers often dont understand the reasons behind these chronic problems and thus miss one of the biggest strategic opportunities available to make improvements in capacity, throughput, and profits! The challenge is to gain recognition, at all levels, in all departments, that maintenance is a strategic tool ...just as JIT, CIM, Six Sigma, Lean, or any of the other world class methods and techniques being implemented to improve a companys competitive edge. Maintenance can play a major role in reducing quality defects, increasing production capacity and throughput, and improving overall plant productivity and profitability, not as an also ran, but as a primary contributor. But for maintenance to make that contribution, it must be recognized as an integral part of the plant production strategy an integral component of the overall plan by which the plant provides its product to the customer at the quality he wants at the price he wants to pay. The pressure to meet production targets causes production to make short term decisions, preferring to keep it running, often having adverse effects on long term overall equipment utilization, product quality, life-cycle costs, and production efficiency. If this situation prevails long, it is only a matter of time before the costs of not doing the required maintenance begin to show up. Remember; more than money is lost when maintenance doesnt get to do its job: product quality suffers (waste and rework increases), overall productivity of the plant is degraded (value-added time is reduced), personnel have little time to do anything other than fix problems (reactive, firefighting mode), and product is delayed to the customer (time is becoming a key competitive factor) - not exactly the formula for World Class status!

https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

The benefits associated with improved maintenance management have been identified and documented for years. A recent study at the management consulting firm A.T. Kearney identified the following benefits from improving maintenance performance1: Equipment downtime reduction Reduced materials costs Maintenance productivity improvement Inventory reduction 20.1% 19.4% 28.2% 17.8%

Other benefits from reduced spare part obsolescence, reduced maintenance overtime, and improved quality, Return On Net Assets and profitability were increased accordingly. In the late 1980s DuPont commissioned A.T. Kearney to benchmark their performance against companies in the US, Europe, and Japan. The findings of that initial study and subsequent efforts since then have come to be known as the BEST of the BEST Maintenance Benchmarking Study. [It has become the mother of all maintenance benchmarking studies...and now forms the basis for an annual award known as the North American Maintenance Excellence Award, a collaboration between A.T. Kearney and Plant Engineering magazine.]

Maintenance Excellence: An Evolution Through Stable Domains of Performance


Dupont developed a Systems Dynamics model from the findings in the A. T. Kearney study that was able demonstrate that manufacturing performance was strongly correlated to maintenance behavior, from Reactive to World Class2. See Figure 1. In fact, DuPont created a strategic business simulation of a manufacturing plant, a hands-on learning lab manufacturing simulation known as The Manufacturing GameTM) that allows the various levels and functions of an organization to experience firsthand the principles of systems thinking, the power of proactively, the importance of defect elimination, and the meritorious effects of reliability improvement on the bottom line. See Figure 2.

1 2

Cited in an article by C. Paul Oberg, President, CEO of EPAC Software Technologies Ledet, Winston P., Proactive Operations as a Strategic Business Advantage, Paper, 1996. https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

Maintenance Maintenance Excellence:


STABLE DOMAINS MANUFACTURING PERFORMANCE

an an evolution evolution through through stable stable domains domains


WORLD CLASS MANUFACTURING

IMPROVED PRECISION PLANNED MAINTENANCE

Continuous Improvement

REACTIVE MAINTENANCE

Improve Efficiency
Fix it before it breaks

Maintain it so it doesnt break (TPM; RCM)

Eliminate Work
Fix it after it breaks RESPONSIVE WORK PLANNED WORK ORGANIZATIONAL DISCIPLINE ORGANIZATIONAL LEARNING

NATURE OF BEHAVIOR Figure 1

THE MANUFACTURING GAME


...a Practice Field for Reliability Improvement
Board Game Simulation CrossCross-functional Cross-functional teams
(3 to 6 per plant)

TM

Teams work together to lead their mediocre manufacturing facility from a reactive, breakdown maintenance mode -... to a pro-active, pro pro-active, zero-failure, zero zero-failure, high-volume, high high-volume, low-cost low low-cost operation...

Cross-functional Cross Cross-functional teams Operations Maintenance Business Services


(3 to 6 per plant) plant)

... without halting production ... and significantly improving


profit!

Figure 2

https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

Admittedly, reactive maintenance organizations are on the low end of the manufacturing performance scale, but it is a stable environment, and some companies are good at it. It can serve the organization well for a long time, and become the paradigm of good maintenance performance. In other words many production people think fast service (from standby mechanics) is good maintenance; its actually lousy maintenance; just fast service. It works until competition heats up, at which time an organization may need to move up the performance curve, which can be done, but only by breaking the paradigm of reactive maintenance. Those who move to a planned domain can have a competitive advantage by systematizing their resource management through planning/scheduling of work, better parts and inventory material control, and establish good work order control systems (among others). In the planned domain, we havent eliminated the defects so much as we are able to deal with them more efficiently, with more productive use of our labor, material, and capital resources. Perhaps the premier example of the planned domain is Alumax Aluminum Company of South Carolina where they have created an environment in which 90% of all work is planned at least one week in advance; only 2% of their maintenance activity goes to breakdown, crisis work. No surprises at Alumax! And this works, too, until competitive pressures require even higher manufacturing performance, forcing us to break the paradigm of planned maintenance and move to what we call the improved precision domain. This is a stable domain in which defects are not just dealt with better, rather defects are eliminated, so as not to have to deal with them at all. Think TPM (Total Productive Maintenance) or RCM (Reliability-Centered Maintenance) as typical methodologies applied at this stage. The motto of TPM is Zero Defect Maintenance or sometimes referred to as Zero Breakdown Maintenance. RCM is similar in focus; it emphasizes if not the elimination of the failure, then at least the elimination of the consequences of failure with ruthless attention to elimination of root causes. The final domain is one weve called World Class Manufacturing. It is reasonable to assume that TPM and/or RCM are not the final frontier and that even better performance is yet to come through continuous improvement.. The behavior required for World Class performance domain is believed to be Organizational Learning. (Consult Senge.3). Its better to look at these improvement concepts and progressions as a journey, not a destination. The biggest obstacle in getting from one domain to another may be success in the current domain. (e.g., those in reactive domain often dont see how they can get better, those good at planning and scheduling at the level of an Alumax Aluminum may have difficulty in seeing better because they are so good at what they are doing now.) Its important not to let any domain become the goal.

Senge, Peter., The Fifth Discipline: The Art and Practice of the Learning Organization, Doubleday, 1990.

https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

Three Steps to WORLD CLASS MAINTENANCE


The term "World Class Maintenance" is perhaps not as definitive as Shoenberger's classic terminology World Class Manufacturing. After all, maintenance is usually recognized as a cost, not a contributor; a necessary evil, not an ally in meeting production objectives. Marshall Institute uses the term to denote a three-step approach to maintenance improvement: 1. Getting Your Act Together Getting the Internal Systems in Place as the Foundation for Improvement. Establish Good Management Practices and Information Systems Getting Beyond the Boundaries Creating the Vision, Sharing the Mission, Creating the Partnership Between Maintenance and Production, Making Maintenance an Integral Part of the Overall Plant Strategy. Fixing the Process, Not Just the Problems Establishing the Zero Breakdown Mentality Through TPM and RCM; Eliminating the Process Disconnects Through Process Improvement PM Optimization

2.

3.

Nothing, of course, is as simple as one, two, three; it would be naive to think so. But in looking at how maintenance can be improved, integrated into the overall organizational mission, optimizing its contribution (rather than minimizing its cost), these three steps are at least a useful framework for constructing the 'vision' and organizing the effort. It is a useful paradigm for making the journey to maintenance excellence. (See Figure 3.)

3 to World Class 3 Steps Steps tothrough World Class Maintenance Maintenance an stable an evolution evolution through stable domains domains

1
MANUFACTURING PERFORMANCE

GET YOUR YOUR ACT ACT TOGETHER


IMPROVED PRECISION PLANNED MAINTENANCE

WORLD CLASS MANUFACTURING

REACTIVE MAINTENANCE

3 2
GET BEYOND THE BOUNDARIES BOUNDARIES

FIX THE PROCESS

RESPONSIVE WORK

PLANNED WORK

ORGANIZATIONAL ORGANIZATIONAL DISCIPLINE LEARNING

NATURE OF BEHAVIOR
Figure 3
https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

Getting Started
It should be made clear early in the process that a primary emphasis of the maintenance department in the foreseeable future will be a major contributor to achieving business objectives. Maintenance will implement systems, procedures, and policies leading to the improvements in management, control, and execution of the maintenance function. Make it clear that the Maintenance organization will henceforth support the manufacture of the highest quality products at the lowest costs by partnering with Production and collaborating with other functions to provide: a properly designed, adequately staffed, diligent organization of competent personnel working in harmony with each other in service to the plant; well developed procedures, methods, and record-keeping techniques to intelligently and effectively control maintenance activities and resources; high standards of quality and uniform procedures for the performance of maintenance activities;

maximum manufacturing capability and plant throughput through optimizing equipment reliability and asset utilization while meeting all marketing, production and compliance requirements
etc.

It is important at the very outset of the journey to conduct a thorough assessment of the current situation in terms of practices and performance. Identify the problem areas and missing elements in the journey to World Class Maintenance. Create a Strategic Steering Group who will structure a logical, stepwise approach to move the organization through the various stable domains and improvement initiatives, and provide the leadership required. Maintenance must be promoted as a contributor, not a necessary evil; its a new paradigm in most plants.

STEP 1 Getting Your Act Together (Reactive to Planned)


Maintenance improvement must start with good management processes. To make maintenance resources more productive requires the implementation of appropriate planning methods, organizational structures, and measurement and control techniques so as to optimally manage and control the maintenance process in terms of its direction, its quality, its quantity, its standards of performance, and its economy and efficiency.

Management guru Peter Drucker says the task of a business, any business, is to make resources labor, material, capital productive. The most significant deficiency associated with the maintenance process in most plants is a "systemic" one. It is not a question of management competence, ability, or oversight, but simply a lack of management practices and systems with which adequately manage maintenance resources (labor, material, capital) productively. At the most fundamental level, there is often a lack of a clear and consistent understanding of the strategic role that maintenance plays in overall plant and business unit performance (through reliability and availability, quality, and lower unit costs).
https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

The key results areas for managing the resources of maintenance, improving its performance and productivity are: Maintenance Requests Maintenance Planning and Scheduling Work Management System; Work Order System Information Management Systems (CMMS) Preventive Maintenance Systems Predictive Maintenance Systems Inventory & Stores (Materials Control) Supervisory/Leadership Skills Training and Development Organizational Structures Maintenance and Reliability Engineering

This is the maintenance sandbox. Maintenance should need no permission to take initiatives in these eleven areas; its in their job description. These eleven areas yield all the methods and techniques needed to focus on such things as:

Providing a highly skilled, efficient and motivated workforce; Exhibiting efficient and effective work planning, communication and execution processes and procedures; Providing tools, supplies, facilities and technical documentation and expertise required to execute effectively and efficiently; Being able to make data driven decisions, based on agreedupon business priorities and goals; Being able to make accurate and meaningful measures of performance;
Using information systems that provide accurate historical data for tracking and analysis.

Having reasonable expectations for continuous improvement;


Practical and efficient Project Management ability; Efficient and effective administration standards and procedures; and

Doing the basics right.

We dont have to reinvent the wheel, here, either. There are tried and proven methods in all these areas to give management all the direction needed to make significant improvements in maintenance performance and productivity.

https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

STEP 2 Getting Beyond the Boundaries (Planned to Proactive)


The ability of a company to achieve 'world class' status depends on how well it can get the various functions to work together to accomplish its business objectives. This is nowhere more true than between production and maintenance. Maintenance must be recognized as an integral part of the plant production strategy by which the product is delivered to the customer at the quality he wants, at the price he's willing to pay. But, remember, maintenance can't do it alone! For maintenance to do its job properly, to accomplish the maintenance mission, requires the cooperation of, and association with, virtually every department (production, procurement, engineering, accounting, human resources, etc.) in the plant but especially with production! Not only must we in maintenance know what our objectives (roles and missions) are, but know how they are related to (and are in fact a derivative of) the larger sets of roles, missions, and strategic objectives of the overall organization. To the degree that these sorts of issues are being implemented in many other areas of the plant, ongoing and continuous "performance improvement" of the maintenance function should now be included as a key element. It is important that the entire plant organization (especially production and maintenance) has a clear understanding of, and commitment to, the roles and missions of the maintenance department. The roles and missions may need to be clearly defined (or redefined and/or re-established). Its relatively easy to encourage maintenance improvement within maintenance organizational lines; that is what Step 1 is all about. It is much more difficult is to get beyond the boundaries; to get other departments to adjust, to work out new, more productive arrangements that sometime cross traditional boundaries, or shift territories or responsibilities, and get different departments or functional groups to even accept each others ideasbut these things are absolutely crucial for worldclass organizations. That is what Step 2 is about. Both production and maintenance share a number of basic responsibilities that each must exercise diligently in concert with each other to get what they all want. Operations needs to have an active role in supporting maintenance and reliability efforts. This can include: Tracking PM schedule compliance (their measure); Participating in joint improvement efforts (equipment improvement teams); Contributing to the maintenance vision and mission; Participating in daily and weekly planning sessions to schedule maintenance activities; Taking direct responsibility for the condition of their equipment, and the total costs of maintenance and operations on critical assets; Perform basic maintenance and care of equipment; Etc.

Production should work with maintenance to reduce dependency on 'stand-by' shift mechanics for emergency and 'just-in-case' maintenance; this is a waste of maintenance resource.
https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

Furthermore, production should work with maintenance to develop performance measures which reflect the maintenance contribution in terms of the overall production objectives, not as a 'cost' but as a necessary 'value-added' resource to best meet production objectives; 'ally' not 'necessary evil'. Some people think it is heresy to say so, but ultimate responsibility for continual good condition of production facilities and equipment rests with Production. This means that decisions on the nature, scope and volume of work should be made by Production management, who can choose from a continuum of options: Maintain equipment in a condition comparable to new factory delivery. Maintain equipment in a condition commensurate with optimum production, plant investment, manpower and material costs. "Run to destruction"

In determining the nature and scope of work, the Maintenance Department shall be responsible for assisting Production to reach decisions by applying technically qualified advice and knowledge, but in the end, an assets performance, costs, and overall utilization is a Production responsibility. They are the asset owner.

STEP 3 Fix the Process, Not Just the Problems (Proactive to Improved PrecisionWorld Class)
Maintenance is as much a strategic tool as JIT, CIM, Six Sigma, Lean Manufacturing, or any of the other "world class" methods and techniques available to management for improving a company's competitive edge, playing a major role in reducing quality defects, increasing production capacity and throughput, and improving overall plant productivity and profitability. By Step 3, its time to get beyond doing the work more efficiently, or doing it partnership with other functions in the plant. Its time to stop doing it at all! Zero breakdown maintenance is the goal. Total Productive Maintenance. The concepts of Total Productive Maintenance (TPM) and Reliability Centered Maintenance have taught us that zero breakdown, is actually attainable, for all intents and purposes. The proof of it is plants that operate with downtime measured in minutes per year, airplanes that simply do not fail (statistically speaking) in any significant way. Total Productive Maintenance is a powerful tool that literally changes the culture on the shop floor. It fully engages the entire organization (especially maintenance and production) in eliminating every possible thing that gets in the way of overall equipment effectiveness (OEEAvailability x Production x Rate x Quality Rate). OEE is a performance measure that, to be maximized, must be shared by both maintenance and production.

https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

TPM is a process to improve machine reliability and efficiency by involving all employees in the care, purchase and improvement of equipment. Its a cradle-to-grave approach, applying some simple, common sense principles: 1. Maintain basic equipment conditions such as cleaning, lubricating and maintaining proper alignment and tightening 2. Maintain proper operating procedures 3. Share equipment maintenance responsibilities 4. Detect impending defects and prevent deterioration 5. Correct design problems early 6. Improve operator and maintenance personnel skill levels The goals of TPM are equally simple: 1. 2. 3. 4. 5. 6. Reducing breakdowns to zero Reducing quality defects to zero Reducing safety losses to zero Reducing minor stoppages to zero Reducing costs of operations and maintenance Maximizing Overall Equipment Efficiency

Reliability-Centered Maintenance. Reliability-Centered Maintenance (RCM) is a systematic, highly structured, disciplined approach to maximize safety and function of equipment assets. RCM uses a rigorous framework for identifying all the potential ways an asset can fail to perform its intended function and/or the consequences of that failure. In a way, its a new way of thinking about maintenance: rather than preventing failure in all cases and at all casts, it rather tries to avoid the consequences of the failure. It combines all the techniques of reactive maintenance (breakdown or run-to-failure), preventive maintenance (PMfrequency or cycle-based), predictive maintenance (PdMcondition-based), and failure-finding (a new category to some people), and seeks to optimally apply these strategies (often in combination) in such a way as to optimize equipment reliability in the most economical way. Reliability-Centered Maintenance studies have shown Equipment reliability is independent of equipment type, process complexity, capacity, and location. Preventive Maintenance programs alone do not ensure equipment reliability and mechanical integrity. Reliability and mechanical integrity can increase while maintenance costs decrease. Comprehensive, workable Reliability and Maintenance programs can be developed for facilities, regardless of age, size or complexity

https://www.marshallinstitute.com/inc/eng/resources/Areas/articles/Body/articles/reliability_str_init.pdf

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Classical RCM focuses on probable or actual failure modes and the effects or consequences of those modes. It seeks to use history, risk analysis, probability functions (statistical methods), and economic considerations to identify the most cost effective methods or strategies to avoid or reduce the consequences of failure. Classical RCM taps into the experience and knowledge of operations and maintenance experts, but can be quite technical and involved. The effectiveness of RCM has been validated, and the results can be well worth the effort; however, there seems to be a growing consensus that its complexity and rigorous methodology means it can be expensive and resource intensive; consequently it requires strong management support and constancy of purpose for success. Successful implementation of RCM can requires significant organizational discipline and leadership. As a result, the last few years have seen the development of a number of streamlined derivatives of RCM; such methods are controversial among practitioners of RCM, but are gaining rapid acceptance as an alternative in certain situations. PM Optimization (PMO) is one such derivative. PM Optimization. RCM and PMO have the same aim, that is, to define effective and economical maintenance requirements of equipment assets. RCM was primarily designed to develop initial maintenance program strategies during the design stages of an asset, whereas PMO has been designed primarily for use where the asset is in use, and for which history is available. For existing assets, where there is a reasonably good maintenance program in place and where there is already a body of experience with the asset in its present context, PMO is far more efficient and flexible in analysis than RCM. In many companies, maintenance practices are somewhat informal, not wellorganized, and not based on best practice approaches. Good systems of work control are either inadequate or not present at all. Breakdowns are frequent and the majority of maintenance activity is reactive. In the pressure of time, maintenance may be subjected to a quick fix mentality, a band-aiding approach that actually exacerbates the situation. In addition, other problems may be present: There is not a consistency of policy, or philosophy for the program; There is no consistency of analysis; symptoms are addressed (over and over), rather than causes being resolved or eliminated; PMs are often redundant, unnecessary, or inadequate, having little or no meritorious effect on the asset; The desire to be risk averse results in some procedures which actually over-service equipment, and/or use overhaul or intrusive maintenance processes, often to the detriment of equipment reliability; There is a lack of systematic process in execution; PM procedures are not well defined, lack detail, or are not followed with consistency in method of execution, standards of judgment, or frequency of execution;

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There is no audit trail; it is impossible to objectively review the program for benefits or effectiveness.

It has been our experience that in many PM programs: Many PM tasks duplicate other tasks; Some PMs are done too often; Some PMs are done too late; Some PMs serve no purpose whatsoever; Some obvious and effective tasks are not in the system at all; Many tasks are too intrusive in their own right; many would be more effective and less costly if they were condition-based; Even some condition-based tasks are overly intrusive, or cause too many stoppages for production, and can be reduced in frequency, based on failure data (that is usually not being gathered); Modern diagnostic tools and technologies offer unrealized opportunities for effective and efficient tasks not now being performed.

In other words, often the PM program is costing too much, and producing too little benefit. PM Optimization specifically addresses these issues with the result that downtime is reduced, maintenance costs are reduced, and the resulting maintenance procedures are actually more effective. PMO, like RCM, is a facilitated process that uses the experience and knowledge of the maintenance and operations staff. Thus, it too, involves people in a high involvement, high commitment approach, but its focus on actual experience, and its lack of probability analysis and statistical methodology makes it imminently more practical, gives it enormous flexibility, and has shown it to be faster that full-blown RCM (Reliability Centered Maintenance) analysis. It has shown itself highly effective at arriving at extremely effective proactive maintenance strategies for existing equipment at reasonable costs. Most of the time, maintenance costs are reduced, reliability and performance are increased, all at the same time!

Conclusion
Virtually every key business functionmanufacturing, procurement, distribution, marketing, product and process development, maintenanceis being challenged to develop strategies for improvementof production, capacity, asset utilization, return on assets, quality, profitability and competitiveness. An alphabet soup of improvement methods has been applied to achieve such improvement objectives: WCM, JIT, TQM, CIM, Lean, Six Sigma, and others, at the cost of millions of dollarseverything but maintenance and reliability. Yet, in many of these same companies, maintenance practices are highly informal, not well-organized, and not based on best practice approaches. Good systems of work control are either inadequate or not present at all. Breakdowns are frequent and the majority of maintenance activity is reactive. In the pressure of time, maintenance may be subjected to a quick fix mentality, a band-aiding approach that actually exacerbates the situation.
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In many plants, maintenance is not perceived as a value-added contributor to such desirable ends such as output, quality, productivity, safety, and environmental security. Its time that enhanced asset reliability is recognized to be a critical element in manufacturing performance and market competitiveness, (maybe even survival) in todays manufacturing environment. Its time management reconsidered the impact and importance of increasing equipment availability and utilization (decreasing downtime; higher production efficiencies), increasing maintenance productivity and resource utilization, and increasing quality and responsiveness of maintenance services in meeting overall goals to achieve World Class status. Its not quite as easy as one, two, threebut perhaps maintenance should be the next strategic improvement initiative in your plant! Its time that maintenance is recognized as a cost to be optimized, not as necessary evil to be minimized.! Reliability As A Strategic Initiative by {Consultant} of Marshall InstitutePosted by Maintenance Journal
For More Information www.marshallinstitute.com blog.marshallinstitute.com info@marshallinstitute.com 1-800-637-0120 or 1-919-834-3722

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