Maintenance Managers in the Pursuit of

World-Class Performance

"A savvy maintenance manager can cause organizational change by financial presentations
for resources to introduce proactive implementations. He also can use the daily
management meeting with the proper departmental KPIs to illustrate and teach these
lessons. He will also improve the management and control capabilities of the maintenance
function by using the proper KPIs."

This Article/Whitepaper below outlines in detail how a savvy maintenance manager can cause
organizational change, and why. In today’s competitive economy, those not willing to succeed
will cease to exist. This advanced knowledge and insight is invaluable for Maintenance Manager
career planning.

This article was donated by Certified Plant maintenance Manager (CPMM), Dale Reiter who
wants to encourage readers to contact him about this article dale.reiter(at)alcoa.com
Please Share this article on Twitter

What? MAINTENANCE AND QUALITY ?

INTRODUCTION

Maintenance and quality are two terms usually not associated. Normally, these terms are only
mentioned together when equipment condition effects scrap rates. However, if maintenance
managers become familiar with historical quality philosophies, there are some lessons that can be
applied to maintenance.

As the quality movement grew, many companies mistakenly pursued exceedingly lofty quality
goals. Excessive cost of mistakenly set high quality levels resulted in the inability to compete in
the marketplace. The cost to produce excessive levels of quality eliminated profitability. There
are levels of quality for which the customer will not bear the cost. Customers that purchase
custom-tailored clothes are willing to pay much more for quality than the customer that is
purchasing off-the-rack clothing at a discount store.

Quality definitions then expanded to include customer needs and wants. Quality grew to be
defined as the precise product the customer desired. The customer (marketplace) defined the
level of quality, the acceptable price, and the exact availability of the product.

What if there was a tremendous product developed, with perfect quality, and great availability
(timing) that the customer was not aware? Would that mean that it was an inferior product? The
customer could not identify something they did not know existed. The introduction of cell phone
technology is such an example. It became apparent that allowing the customer to define quality,
in many cases, would require the quality provider/creator to educate the customer.
MAINTENANCE PARALLELS

Contrary to many articles about maintenance, most companies view production/operations as the
sole customer of maintenance. The end product user (product consumer) is only viewed as a
customer of maintenance when asset condition affects final quality. This is the business
environment in which maintenance managers attempt to improve equipment effectiveness and
reliability through the maintenance function.

To excel in these organizations, maintenance managers need to recognize that the

production/operations customer must be educated similarly to the cell phone example mentioned
previously. Most production/operations managers either have a financial or productions
background. There is not an understanding of the maintenance function. The maintenance
manager must strategically educate the customer in ways that do not seem obvious.
Opportunities must also be recognized as they arise.

Ultimately the definition of quality will be high equipment reliability at low cost. The magnitude
of reliability and cost depends on the existing manufacturing environment of operations. The
skilled maintenance manager will need to choose the right strategies for the existing
manufacturing environment.

RELIABILITY IMPROVEMENT

For the maintenance function to improve reliability and lower costs, the maintenance function
must move from a highly reactive organization to a proactive organization. Work identification,
prioritization, scheduling, and planning are processes that move maintenance toward being a
proactive organization. Various tools to use to be more proactive include preventive
maintenance, predictive maintenance, TPM, and conditioned-based monitoring to name the most
popular.

As these various practices are implemented, the maintenance department creeps toward a more
proactive mode. Reliability will increase ever so slowly. Initially, investment in equipment will
increase, and then decrease as it is being restored to a more reliable condition. Operations will
notice the improvement. At the same time, the maintenance manager should be educating the
production/operations customer.

Amazing as it may seem, the operations/production function will unknowingly work to hinder
this maintenance improvement. The greater organizational culture has not been influenced by the
maintenance department’s move toward being proactive. Production/operations still operates in a
highly reactive mode. Maintenance is expected to break prioritized work schedules possibly
resulting in future emergency work because of operation’s (production’s) failure to plan
proactively. The maintenance proactive sub-culture is overwhelmed by the highly reactive
organizational culture minimizing maintenance gains. This makes it imperative for the
maintenance manager to educate the production customer.

EDUCATING THE PRODUCTION CUSTOMER ABOUT MAINTENANCE

QUALITY

In most operations, the maintenance manager is alone on an island. Operations management is

generally unfamiliar with maintenance management. Maintenance is viewed as a necessary evil.
Maintenance only adds overhead and should be minimized to increase profitability. The
maintenance manager must be resourceful.
Educating the customer needs to be done very tactfully. It must be done in a very clear and
concise manner. Operations need to be able to see the cause and effect relationship between a
proactive maintenance organization and a reactive operations organization. If this is done
effectively, the maintenance department will create a positive environment and drive
organizational change toward a more proactive culture.

Many times if maintenance is moving to a new proactive process that requires additional
resources, a business plan and justification will need to be submitted to management. This should
include a PowerPoint presentation. Return on Investment (ROI) calculations based on the many
estimates available in various maintenance writings should be included. Be sure to under promise
on financial return estimates so actual results are over delivered. This presentation is an excellent
opportunity for training. However, if this initial way to training is not a viable option for the
current situation, there are other subtle opportunities for educating the operations/production
customer. If there is no effort to educate the operations/production customer, any maintenance
gains will be minimized.

OTHER CUSTOMER TRAINING VENUES

Most operations have daily morning manufacturing meetings. Manufacturing schedules, quality
problems, production results, manpower shortages, and production efficiencies are often
discussed. In many organizations report boards are used to display pertinent daily data. In some
organizations, although maintenance attends these meetings, only breakdowns are discussed. In
other organizations, maintenance does not attend; it is only a production meeting.

This meeting is an excellent opportunity for a maintenance manager to educate operations. If the
meeting uses a reporting board format, then maintenance should create an effective reporting
board. If report boards are not used, the maintenance manager could drive organizational change
by starting one. Naturally, the operations manager/plant manager should give his blessing to any
changes in reporting boards or additional reporting from maintenance. This is his meeting. An
operations manager that would refuse more accurate information for decision making is not
deserving of his position. This would be the only impediment to educating the operations
customer. In other organizations that use a paper report format, the maintenance manager should
use the same strategy only on a published report.

As with all organizational changes, the change will not be welcome. The maintenance manager
could receive some negative feedback. As the maintenance report shows cause and effect
relationships, other departments will eventually be singled out to improve. However, as the
maintenance manager is recognized for driving positive organizational change, many career
opportunities should become available in good organizations.

MAINTENANCE TRANSPARENCY AND THE DAILY MEETING USING

KPIs

The maintenance organization will have to be totally transparent in the daily report. This is a
calculated risk. There could be a downside for the maintenance manager if operations
management does not recognize the positive change that is taking place. Reporting just the facts,
even if they are bad, does not show departmental failure. Corrective actions and remedies should
become apparent. This drives continuous improvement. Key performance indicators (KPIs) that
do not do this are useless. Occasionally KPIs will need to be redefined to drive future
improvement. What KPIs should be used to create transparency of the interdepartmental
relationships and failures will become apparent to operational managers?

Maintenance Efficiency:

The first and most important KPI needs to show maintenance resource use efficiency. One that is
very effective at displaying this message is:

Maintenance assigned/scheduled work hours completed X 100.

Maintenance Efficiency (%) =
Maintenance hours scheduled to work

The target for efficiency should be 80%. This is based on a rule of thumb for project
management that suggests people are only able to work 80% of the time because of breaks for
lunch, bathroom use, and other normal personal needs. Unplanned/unscheduled/emergency work
that is performed will decrease this figure. This directly shows the effect of highly reactive
demands on proactive work plans.
 Naturally, emergency breakdowns will always take precedence, but this provides the
maintenance manager a forum in the production meeting to daily show the cause and effect.
Include a comments column on the daily report board. Notes on cause and effect can be included
to indicate specific reasons why efficiency is lower. Specifically performed work off-of-schedule
can be listed. The exact percentage change in the efficiency rating can be documented. Break
downs and safety issues should be the only acceptable reason to break a maintenance work
schedule.

In many organizations, operations will expect maintenance to forsake a work schedule to do

work that was not scheduled as it should have been because lack of operations planning.
Examples might include: production requesting maintenance to perform production work; and
maintenance to stand and observe an operation for long periods of times because of production
problems that are not maintenance related. Rush work such as building tooling that was
requested only a short time before it was needed even though the production schedule has been
set for a week. This failure to plan moves this work to emergency work at the last minute. It
exposes operations to future downtime issues. Maintenance is not able to complete the work
assigned from their prioritized work schedule in order to respond to operations unplanned needs.
This is also something that can be included in the comment column.

Start up efficiency:

A start-up efficiency KPI is also very useful. Tracking operational effective efficiency (OEE) for
the first few hours of production is excellent for indicating how efficiently maintenance preps
operations for production. OEE is calculated in the following manner:

OEE =

Number of good items produced/ hour) {1st hr.}+ (Number of good items produced/ hour) {2nd hr} + …..
andard pieces /hour Standard pieces /hour

This should be tracked in ways that are applicable to the individual situation. It is amazing how
focusing on this KPI improves results. It focuses the production meeting on root cause
improvement. Maintenance will naturally work to improve this since it is being measured. The
production meeting will no longer blame maintenance for all start-up issues. Production
problems in startup will become apparent.

Work Backlog:
Another valuable KPI is work backlog. This backlog list should be broken into reliability work,
work that can be performed during production, all other work, and a backlog total that is the sum
of these sub groups. Reliability work should include the following work order types: preventive
maintenance, predictive maintenance, TPM identified work, PM identified work, and PDM
identified work. Work that can be performed during production is usually all the general repair
work that needs to be scheduled but is not pressing and can be done during production. All other
work includes everything else. These backlog divisions can be changed to meet specific
requirements but the most important classification is reliability. This classification is the work
that needs to be performed to increase or maintain asset reliability. It is important to track,
identify, and communicate reasons for negative changes in this specific class of work orders. If
trending is negative, operations then has the ability to make decisions to enable maintenance to
correct this trend.

Backlog should be identified in maintenance department capacity days. A capacity day is equal
to the hours of work a day the department can complete in a planned manner. As a result the
reactionary rate of work performed by maintenance must be factored into this calculation. If the
department has available 100 hours a day and the average reactionary work rate is 20%, then the
department capacity day is 80 hours.

Naturally, targets should be set for backlog. Reliability work order backlog should be less than 7
days. In some cases this target value should be less to avoid breakdowns for identified problems.
Work that can be performed during production should be at least 7 days and not more than 14. If
work during production is too low, maintenance personnel will have nothing to do. If this value
is too large, work order input will lag. Operations will believe it is useless to initiate work orders
as they seem to be ignored. Other work order backlog targets can be set at a point that best fits
the current situation. The total work order backlog should be two to three weeks as a general
rule. This number is used to define maintenance staffing. The work backlog sub-groups will
identify where the staffing is needed.

The maintenance manager will also be able to ask operations to initiate new work orders for
during production as backlog decreases. Again a comments column can give insight as to why
reliability work orders become overdue.

As the cause and effect of disciplined work order execution becomes apparent to operations, a
partnership should start to develop. Opportunities to release equipment to maintenance for
reliability work should provide value to operations as it will make the equipment more reliable.
The education effort of the customer will start to show dividends.

Reactive Work:

Another KPI that is useful in showing departmental proactivity is the reactive and proactive work
percentage. All work that is scheduled by the scheduler from the prioritized work order backlog
list is proactive. It has been identified ahead of time and scheduled in a disciplined manner. All
other work that does not go through the scheduling process is reactive work. This definition
infers that any work that requires a maintenance person to drop or adapt his schedule is reactive
work. Generally, all reactive work orders are written after the fact and do not have CMMS
numbers on them. This fact can be used to get data for this KPI. These should be calculated in
the following manner:

Hours of scheduled work completed X 100

Proactive Work % =
Total hours of work completed

Hours of non-scheduled work completed X 100

Reactive Work % =
Total hours of work completed

(These two figures should add up to 100%)

These figures should have a daily and rolling-year-to-date component. Goals for these should be
based on your operation, but generally world class organizations do 8% or less reactive work. If
the operations culture is such that they believe they can have maintenance personnel do whatever
they desire at the time, the effect on proactive work will readily show this. Naturally a comments
column can be used to define what caused maintenance personnel to break their schedule. Again
breakdowns and safety issues should be the only satisfactory reason. It must be stated here that
maintenance is not refusing to do work for operations; maintenance is just requesting operations
to work in a controlled and planned manner. This planning will give maintenance advance notice
of support needs so they can be planned.

To this point all KPIs discussed are calculated and updated daily. There are a few KPIs that
should be displayed weekly.

Standard Reliability Work Completions:

Weekly KPIs should include completion percentages of standard scheduled reliability work. This
should include PM completions, PDM route completions, proactive work completions and
anything else you may do for reliability on a regular basis scheduled through your CMMS. These
should be calculated weekly in the following manner:

Total PM hours completed X 100

PM Completion % =
Total PM hours due
 Total PDM hours completed X 100
PDM Completion % =
Total PDM hours due

If these numbers are too low, the daily numbers should show reasons for this. Staffing,
operations demanding work not related to reliability, or excessive breakdowns can be reasons.
This displayed on a board should drive the daily production meeting to understand why
organizational dynamics are resulting in lower reliability.

Financials:

Other KPIs to be reported are maintenance financials. Daily updated KPIs would be tremendous
but in many organizations, weekly will be the best that is available. The many and various ways
different operations track cost, will influence use of these. Customization of these KPIs might be
needed to put them in a useful form for the daily meeting.

Repair and Maintenance Parts:

R&M Parts usage should be tracked. One way to track this is:
Amount spent month to date; Monthly Budget; Amount spent year to date; Budget year to date
Other ways to express this is:

Amount spent month to date X 100

Percent Budget Spent Month to date =
Monthly budget

Amount spent year to date X 100

Percent Budget Spent Year to date =
Yearly budget

R&M parts include all parts purchased and used through the storeroom, purchasing for individual
jobs, credit card purchases, standing purchase orders, open purchase orders and any other way an
individual organization may obtain parts. Only Capital purchases are omitted from this category.

Repair and Maintenance Services:

Maintenance financials should also include maintenance services purchased. These KPIs should
be tracked in the same manner as R&M parts above. Again the manner this is done is
organizational dependent.

Maintenance Manpower Costs:

Maintenance manpower costs KPIs should be reported. Usually this will be a weekly KPI.
Popular ones include: overtime percentage, percent budget spent month-to-date, and percentage
budget spent per year. The latter two are tracked exactly like the parts and services financials.
Maintenance overtime is tracked in the following manner:

Overtime hours worked by maintenance X 100

O.T. percentage =
Total hours worked by maintenance

Since financials are measured slightly differently by every organization, the above KPIs might
need some mathematical manipulation to yield information that is recognizable to your
organization. Examples can include ‘cost per manufactured part’ or some other such measure for
operations recognition. Every maintenance manager needs these KPIs in a form as indicated
above to effectively manage his department.

Other useful but non-publicized (on the daily board) KPIs:

In addition to the previously mentioned KPIs, there are some KPIs that can be derived easily
from this financial data for interdepartmental tracking and planning. They should be calculated at
this time for efficiency.

One KPI would be total department costs per man/hour worked.

R&M Parts + R&M Services + R&M Manpower Costs

Total Department Costs/Man-hour =
Total maintenance hours

Operations production run-hours may be substituted for total maintenance hours.

Total Department Costs/Production run-hour = R&M Parts + R&M Services + R&M Manpower Costs
 Total production run-hours

These KPIs can be used for extrapolating department budgets as production is expanded or as the
maintenance function is expanded.

Another such internally tracked KPI would be R&M parts cost per man-hour worked. This is
used for estimating departmental parts usage during planned shutdowns. Storeroom parts and
auxiliary parts that are used over and above the materials specifically purchased for shutdown
projects need to be estimated to properly estimate the cost of the shutdown.

R&M Parts Costs per time period

Cost of parts per maintenance man-hour =
Total maintenance hours per time period

As with all general rules for estimating costs, the longer the data is collected, the better it is for
estimating actual costs. Statistically, unrepresentative swings in the data will have less effect on a
larger population. It is a good idea to track these unpublicized KPIs in a rolling year-to-date
manner so that a highly accurate number is accurate for planning purposes.

CONCLUSION

To achieve low-cost, high-quality maintenance, organizations need to understand the inter-

departmental relationships that result in a world-class manufacturing organization. Organizations
that do not recognize how these inter-departmental relationships affect pursuit of world-class
performance, build cost into their organization. World-class performance will not be achieved
efficiently.

The maintenance function will need more resources to satisfy organizational reactive demands.
Maintenance departments working in a non-scheduled reactive mode can only work at 40-50%
efficiency. Properly scheduled maintenance departments working in a proactive, scheduled, and
planned mode will approach 80% efficiency. The same amount of work needs to be completed to
achieve world-class status. Working at a lower efficiency requires more resources to complete
that work resulting in higher costs.

A savvy maintenance manager can cause organizational change by financial presentations for
resources to introduce proactive implementations. He also can use the daily management
meeting with the proper departmental KPIs to illustrate and teach these lessons. He will also
improve the management and control capabilities of the maintenance function by using the
proper KPIs.

The maintenance manager pursuing this course must realize that it is a two-edged sword. If
operations management is intelligent and understands the change being driven, the maintenance
manager will benefit in future promotions and recognitions. He also must realize the
organizational change he is driving will not be popular. It will force other departments to be
organized and plan or be singled out when maintenance has to break a work schedule to react.
This could result in a cover-your-backside culture if the operations manager is not willing to
control this response. If operations management is uninformed, this maintenance improvement
will be viewed as divisive and not allowed to move forward.

In any case, for the person that has earned the title of maintenance manager, taking this journey
to improve your organization will give you a clear indication of your organization’s will to
succeed. In today’s competitive economy, those not willing to succeed will cease to exist. This
advanced knowledge and insight is invaluable for career planning.

Organizations that do not have the will to succeed will reduce the maintenance budget
continuously as market pressures mount. Maintenance will not be able to improve. The
maintenance manager will be replaced without any immediate future career plans in place. Keep
your career options in your control.