Some Suggestions & Cautions - web.utk.eduweb.utk.edu/~rmc/Presentations/RM Group.pdf · Eastman...
Transcript of Some Suggestions & Cautions - web.utk.eduweb.utk.edu/~rmc/Presentations/RM Group.pdf · Eastman...
The RM Group, Inc. Knoxville, TN Copyright 2012 Copyright 2014 1
Asset Management (or Maintenance Management Re-branded?)
Some Suggestions & Cautions
November 2015 Copyright 2015
Sources: 1) ISO 55000-1,2,3; 2) PAS 55; 3) Asset Management by Ron Moore
in Uptime Magazine
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ISO 55000 provides a management framework for an asset management system
It does not provide guidance for managing assets for optimal value over their life. In fact, it specifically excludes guidance and specs
An asset is ANYTHING that adds value to the business, not just equipment (Don’t forget - People, processes, procedures, patents, etc. are all assets!)
But, most people reading ISO 55000 are maintenance managers, and focus on physical asset management, i.e., maintenance
Asset Management – Some Cautions
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So, maintenance managers are developing the (physical) asset management strategy
Many use “asset management” and “maintenance & reliability” almost interchangeably
This is a mistake. It is not sufficient. Most asset management strategies are simply maintenance management strategies “re-branded”
So, what’s missing, or poorly addressed? (my comments focus on manufacturing, so analogies must be developed for other businesses, e.g., railroads, hospitals, etc.)
Incidentally, Asset management strategy must be led from the top
Asset Management – Some Cautions
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Does your asset management plan include: Business requirements of the assets over the coming
5-10 years? Production’s role? Design/capital projects’ role? Procurement/Stores’ role? Maintenance’s role? Disposal? Or other roles, based on the organization? Clearly define each role in managing the assets,
adding value, minimizing losses & risks, & de-commissioning
All must be aligned to the business strategy/goals
Asset Management – Some Cautions
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Asset requirements over the coming 5-10 years? Is the business is closing?
Is the business being sold?
Is the business stable, with little or slow growth?
Is the business growing rapidly?
Asset Management – Some Cautions
Each business scenario requires a different asset management strategy
Each requires a different staffing and personnel development strategy
Each requires a different capital allocation strategy
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What is Production’s role in each scenario? In data from 100’s of plants, production controls ~70-90%
of all production losses (value); maintenance controls very little value!
So, production plays a key leadership role day-to-day, and strategically!
Production determines its role in each scenario for supporting business objectives and creating value!
For example, if the business is growing rapidly, production takes the lead in eliminating production losses, (think OEE) before requesting capital investment for growth
Maintenance is a support function in helping identify and minimize the losses and capital requirements
Asset Management – Some Cautions
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What is Design/Capital Projects’ role? Before new capital investment, production must
assure excellence in the use of current assets, e.g., taking OEE from 60% to 80%
Some capital may be required to support maximizing current performance, but no major capital is required
Capital projects works with production & maintenance to develop policies & procedures for applying lowest life cycle cost principles, vs. lowest installed cost
Including an asset registry and maintenance strategy in all capital projects
Data from large companies indicate that 3 months of production are lost during startup; maintenance costs are 25-50% higher in the first two years after startup
Asset Management – Some Cautions
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What is Procurement/Stores’ role? Procurement must apply the concept of Total Cost of
Ownership – only ~25% is price! Much more focus must be given to the ownership
costs, e.g., ease of operation & maintenance, energy consumption, ergonomic issues, quality/ease of supply
Stores must balance the cost of working capital against risk of loss – risk of production losses and risk of maintenance inefficiencies due to lack of spares
Stores must make it easy to do maintenance, while controlling working capital and overhead costs
Asset Management – Some Cautions
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What is Maintenance’s role? Most of you are all over this, e.g.: Asset registry and bill of material Equipment criticality ranking and equipment strategy,
including risk management where appropriate Work management, planning, then scheduling Condition monitoring PM, including addressing specific failure modes Operator care tasks Skilled trades competencies Precision maintenance; quality build plans; etc.
Asset Management – Some Cautions
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What about disposal? Residual value of the assets, if any? Disassembly costs? Abandon in place? Decontamination costs? Hazardous waste disposal costs? Transportation costs? Other costs?
Asset Management – Some Cautions
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If your asset management strategy is maintenance led (most are): You’ll be “pushing on a rope” You’ll only do more efficiently work that you
shouldn’t be doing at all Your ability to “add value” will be limited Maintenance is an enabler for adding
value, much like Accounting, HR, etc. – and they are absolutely essential!
Asset Management – Some Cautions
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Finally, and most importantly, a strong asset management program must address: Effective Leadership/Sponsorship (vs. permission) Alignment of the Entire Organization to the Strategy
(See ISO 55000, 2.4.3)
Teamwork among Functional Groups to the Strategy Systems Level Thinking (“Line of Sight” in ISO 55000) Changing the culture - People do want to change:
IF given compelling reasons, IF there’s something in it for them for the changes, IF they participate in creating the changes!
“Culture eats strategy for breakfast” Peter Drucker
Asset Management – Some Cautions
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Strong leaders will make sure all this happens! According to Terry O’Hanlon, a member of the
ISO 55000 committee: “Financial asset management and ISO 55000 asset management are the same!” I agree!
Asset management is about managing ALL the assets – people, processes, and equipment - minimize risk, while assuring financial success!
It’s about value creation! (not just managing equipment)
Asset Management – Some Cautions
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Asset Management – Some Cautions
Is this enough?
Reliability Web’s Asset Management Model:
The focus!
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Minimum unit cost of Production
Design Store Operate
Defects Defects Defects
Unneeded Work - $$
Asset Utilization &
Necessary Work
The Reliability Process
Root Causes Rate Losses & Downtime
Source: In Cooperation with Andrew Fraser, Reliable Manufacturing Assoc.
Buy
Defects
Install/ Startup
Defects
Maintain
Defects
(Life Cycle Cost) (Cost of Ownership) (“Like a Store”)
(With Discipline) (With Care) (With Precision)
(note where most defects occur)
Injuries (& Env. Events)
Doing better Mtce will not contribute much to Reliability
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Reliability Based Operations
Reliability cannot be driven by the maintenance organization. It must be driven by the operating units, …and led from the top. Charles Bailey, VP of Operations Eastman Chemicals (Retired)
To expect maintenance to “own” reliability is like expecting the mechanic at the garage to “own” the reliability of our cars. Ron Moore
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Of all production losses from ideal (AU/OEE), ~2/3rds are NOT equipment related; ~1/3rd are, but most of these are Ops driven; Only ~ 10% of losses are Mtce driven JIPM: 70% of eqpt. failures are preventable by operators
Equipment RelatedLosses-MaintenanceEquipment RelatedLosses- OperationNon EquipmentRelated Losses
Source: Author experience; Similar findings reported by BASF-UK,
Eastman Chemicals, Whirlpool, and Borg-Warner-US
Changeovers, rate/quality losses, raw material, market demand, production planning, etc.
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Reliability and Safety
18
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Most all organizations say safety is a top priority
They have policies, standards, processes, systems, etc. to support this
They are committed to enforcing these policies
Safety is a Top Priority
19
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Safety Policy Statement All injuries are preventable
No task is so urgent that it cannot be done safely
Management must provide a safe work place
We are each responsible for preventing injuries
Everyone is empowered to stop unsafe behavior
20
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If executives were truly committed to safety…
They would be committed to reliability, and would have similar policies, standards, processes, and systems
They typically are not, and do not Consider a typical sampling of the data
Reliability and Safety Relationship
21
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Injury Rate v. AU/OEE over Time - Company A
15
35
55
75
95
115
135
1 5 9 13 17 21 25 28 33 37 41 45 48 5390
95
100
105
110
115
120
Injury Rate
OEE/AU
Month
OEE
/AU
- % o
f Bas
e
R = 0.80 R2 = 0.64
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Correlation of Corrective & Reactive Work Orders with Injury Rate – Plant No. 1
R = 0.827R2 = 0.684
100
150
200
250
300
350
400
6000 8000 10000 12000 14000
Tota
l Inj
urie
s pe
r Yea
r
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Correlation of PM & PdM Work Orders with Injury Rate – Plant No. 1
R = 0.955R2 = 0.911
100
150
200
250
300
350
400
4000 6000 8000 10000 12000 14000
Tota
l Inj
urie
s pe
r Yea
r
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The More Disciplined Your Maintenance, the Fewer Injuries you have
R = 0.95R2 = 0.90
0
1
2
3
4
5
60 70 80 90 100Inju
ry R
ate
(n
orm
aliz
ed to
a b
ase
num
ber)
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And, is More Cost Effective - Reliability Index v. Production Unit Costs (As reliability increases, costs decrease)
R = 0.632R2 = 0.40
50
60
70
80
90
100
110
120
30 40 50 60 70 80 90
Prod
uctio
n C
osts
$/U
nit
26
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Defects & Process Errors Reduce Reliability and Increase Hazards
20,000 defects
6,500 repair work orders
10 losses
Major Incident
Numerous Minor Process Errors
Process Safety Breach
Loss of Containment
Major
Accident
Operational Discipline is essential to eliminate defects and process errors
Copyright 2015
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From the data we should conclude:
Safety is everyone’s responsibility &
Reliability is everyone’s responsibility
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Establish a Policy Linking Reliability and Safety
All injuries, are preventable
No task is so urgent that it cannot be done safely,
Management must provide a safe, workplace
We are each responsible for preventing injuries,
Everyone is empowered to stop unsafe, behavior A reliable plant is a safe plant, is a cost effective plant!
and failures,
and failures
& unreliable,
and reliably
and reliable
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If you truly believe in Safety, then
Reliability is a MUST
to minimize the risk of injuries, costs, and environmental incidents
(Should be given comparable executive attention
as any high-powered consulting recommendations)
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Strategy for Implementation
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Strategy for Implementation Led from the top- executive sponsorship
is essential (Permission is not sponsorship, or leadership! Active engagement is essential)
Production & Maintenance Partnership- Clear goals and expectations must be set, and reasonably achievable
Shared KPI’s for reliability & business results must be in the annual management appraisal and bonus system
Shop floor engagement process, including cross functional teams, structured improvement time, and a support structure
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Keeping all this in mind,
Is your asset management strategy…
Maintenance Management Re-branded?
Or Holistic Asset Management?
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Appendix - Contact Details Ron Moore Managing Partner The RM Group, Inc. 12024 Broadwood Drive Knoxville, TN 37934 Tel/Fax: 865-675-7647 Email: [email protected] Ron Moore is the author of Making Common Sense Common Practice-
Models for Operational Excellence, 4th edition; of What Tool? When? A Management Guide for Selecting the Right Improvement Tools, 2nd edition, both from MRO-Zone.com; and of Business Fables & Foibles, and Our Transplant Journey: A Caregiver’s Story, both from Amazon.com, as well as over 50 journal articles. Ron’s latest book, Where Do We Start Our Improvement Program? is scheduled for release in September, 2014.