Division of Operation and Maintenance Engineering - Department of ...

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Nov 18, 2013 (4 years and 10 months ago)

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Division of Operation and Maintenance Engineering

Maintenance

cost or profit?


Prof. Diego Galar

Division of Operation and Maintenance Engineering

Importance of Maintenance is Still
Neglected



Each management will tell you that
maintenance is
important:

Without maintenance we will have no
production and no safe working
facilities”


However, in economic downtimes
maintenance is
primarily seen as cost
center


Maintenance manager is not able to show the added
value of maintenance
....


... because he/she does not speak the
language of
the board


With all consequences as such

Division of Operation and Maintenance Engineering

What is the real value of the
maintenance?

Division of Operation and Maintenance Engineering

It’s not just about the asset …

..and services delivered to
the customer.


it’s about what
the asset
does…


Division of Operation and Maintenance Engineering

What is Asset Management?


Management Process Designed to
Optimizes Facility
Performance


Determines Asset contribution to
meeting
Business Objectives


Analyzes Asset performance at levels
consistent with
value

(contribution)


Applies resources to assets in support of
optimal
performance for meeting
business objectives


Engineering, Construction, Purchasing, Inventory,
Operations, Maintenance

Division of Operation and Maintenance Engineering

Defining Asset Management


“an on
-
going
process

which enables
managers to optimize the investment
in their assets resulting in reduced
operating & maintenance

costs and
improved business sustainability”


AM is the alignment of a utility’s
business processes to provide for a
more efficient and effective
operation
& maintenance.

Division of Operation and Maintenance Engineering

Why Asset Management?


Only way to fully meet high level of
operational performance objectives at
the lowest cost to the facility


Enables Risk Management for
consistent performance


Provides complete objective data for
process improvement

Division of Operation and Maintenance Engineering

How does an organization benefit
from Asset Management when it
has maintenance management?


Provides Management with a full
spectrum view of cost and risk
associated with assets


Enables Management to apply the
correct resources at the right time


Provides data that validates the
management decisions and work
processes


Division of Operation and Maintenance Engineering

Asset Life Cycle

DESIGN

FABRICATE

CONSTRUCT

OPERATE

MAINTAIN

REPLACE

RETIRE

Specification

Requirements

Procure

Install

Modify

Rebuild

Monitor

Division of Operation and Maintenance Engineering

Evolution of Maintenance Management




Prior to
50
th
: Necessary evil



50
-
70
: Preventive maintenance



70
th

:
Life cycle costing, RCM and




Productive maintenance.



80
: TPM an RCM



90
th
-
date: Strategic view of
maintenance

Division of Operation and Maintenance Engineering

The Maintenance System

Division of Operation and Maintenance Engineering

Infrastructure Asset Issues


Need to be cost competitive


Aging Infrastructure


Environmental issues


Accounting Changes

Division of Operation and Maintenance Engineering

Asset Management

Goals and Objectives


Provide effective monitoring capabilities
which allow
decision makers to manage identified opportunities


Prevent value destruction
by stabilizing and
positioning the organization for integration and
implementation


Division of Operation and Maintenance Engineering

Asset Management: Goals and
Objectives


Identify, develop or
enhance business
processes that cut
across all business
units


Identify the critical
business areas that
will create value and
illustrate the
probability of
success.

Division of Operation and Maintenance Engineering

Asset Management:

The Connection to Shareholder Value

Asset management directly contributes to

INCREASE REVENUES

DECREASE COST

Product quality and reliability

Process and equipment


availability and

productivity

Cost control/reduction

Equipment/fleet size

Spares/Stockpiles

Return on

Assets

generated

Profit

Capital

employed

Revenue

Costs

Fixed

Working

Price

Quantity

Division of Operation and Maintenance Engineering

Asset Management Objectives


Asset Management Principles


Asset Management Strategy


Maintenance Management
Guidelines

Division of Operation and Maintenance Engineering

ASSET MANAGEMENT

GUIDELINES

OPERATIONAL

GUIDELINES

MAINTENANCE

GUIDELINES

DESIGN
-

ENGINEERING

GUIDELINES

Division of Operation and Maintenance Engineering

Maintenance as a key part of Asset
Management




Maintenance Systems are critical to
organizations in order to meet their goals
and objectives.


Maintenance can be used to provide
competitive advantages.


Maintenance management has evolved
over time. Now days concepts such as
strategic maintenance management are
emerging.


Division of Operation and Maintenance Engineering

Maintenance as a System

Maintenance

System

Inputs

Outputs

Feedback

Enterprise System

Environment

Materials

Labour

Spares

Tools

Money

Technology

Information

Facilities

Capacity

Quality

System Image

Maintainability

Availability

Reliability

Safety

Cost

Adjust

Calibrate

Inspect

Repair

Replace

Division of Operation and Maintenance Engineering

Asset Management & Maintenance Process
Improvement

Business Objectives for Improvement


Manage Asset Operational Risk


Apply O&M resources to meet business
objectives


Ensure facilities are consistently managed to
meet business goals and objectives


Standardize around IT Applications


Apply Process Metrics to validate process
changes and standardization

20

Division of Operation and Maintenance Engineering

Role of Maintenance




Organization objectives


1.
Profitability.

2.

Return on investment (ROI).

3.

Customer service.

4.

Safety and environment

5.

Cost.

6.

Community development.


Division of Operation and Maintenance Engineering

Business Centered Maintenance

BCM

Division of Operation and Maintenance Engineering


Industry is evolving to address complex,
highly specialized asset management


Automation Performance Services takes a
growing trend and applies it to the highly
specialized area of industrial automation


Delivers automation excellence that drives
business performance while optimizing risk


Pay for Asset Performance and Usage

Performance driven industry

ABB

APM

Division of Operation and Maintenance Engineering

Product Life
-
cycle and Dominant
Value Driver

Maintenance

impact

Division of Operation and Maintenance Engineering

Maintenance Value Drivers

Division of Operation and Maintenance Engineering

Identification of core competences

A core competences is a competence that delivers a

direct contribution to the dominant value driver

Division of Operation and Maintenance Engineering

Role of Maintenance


Maintenance has a high impact on business
profitability, through its impact on




Equipment capacity



Availability (A)



Rate (R)



Product quality (QR)



Safety



Health and the environment



Cost of production.




Division of Operation and Maintenance Engineering

The Challenge: Company pain points


Increasing the reliability and availability
of assets, and the services the assets
collectively support


Improving performance of assets to
impact the top and bottom lines


Capturing actual costs for labor,
materials, tools & services


Managing 3
rd

party service providers
interacting with business operations


Reducing the cost and complexity of the
IT environment support the business



Standardizing & enforcing business
processes


ROI, ROA &
Value for
Customers

Risk, Compliance Management


• Regulatory compliance


• Operational control

Operational Excellence


• Productivity & Energy Efficiency


• Reliability

Business Agility


• Process Standardization


• Ability to Adapt


New Business Models

Business Alignment


• Investment Accuracy


• Resource Allocation

Rational System Consolidation


• Modern, Standards
-
based Technologies


• Cost of ownership and Complexity

Division of Operation and Maintenance Engineering

Quantification of the Impact


Maintenance provide productive capacity
(PC).



Productive capacity is a function of
utilization and over all equipment
effectiveness (OEE).



OEE = A *


R * QR



PC = U * OEE where :


U is utilization

Division of Operation and Maintenance Engineering

Maintenance Performance
Monitoring


Management
Challenges


How to see the ‘big
picture’?


How to link day to day
actions to strategy?


How to easily
communicate
performance to the
Board?

Could you expand on
“Oops, looks like
something bad
happened”

Division of Operation and Maintenance Engineering

Typical Monitoring Capabilities


Performance Measures


Asset Inventory / Registers


Life Cycle Management


Optimized Decision Making


Data Collection and Reporting


Asset Valuation and Depreciation


Capital Budgeting


Life Cycle Costing

Division of Operation and Maintenance Engineering


Performance Management


Immediate and Comprehensive way to
manage and maximize consistent
improvement within the organization,


Linking day
-
to
-
day actions with the overall
vision, mission, and strategy of the Utility

Division of Operation and Maintenance Engineering

Strategic Maintenance
Objectives



Maximize Availability



Ensure equipment are operating at full
capacity (rate)



Integrate and continuously improve all
elements to ensure the best quality rate.



Improve equipment utilization.


Division of Operation and Maintenance Engineering

Strategic Maintenance

Strategic maintenance has four dimensions:

1.
Managerial dimension

2.
Technical Dimension

3.
Operational

4.
Commercial and economic

Division of Operation and Maintenance Engineering

Managerial Dimension

Implementation



Aligning maintenance objectives with
organizational objectives.



Performance evaluation



Human resources capacity



Division of Operation and Maintenance Engineering

Operational Strategy



Implementation




Production scheduling



Spare parts inventory



Keeping with technology



Developing competencies

Division of Operation and Maintenance Engineering

Technical Dimension



Functional requirements



Design upgrade



Maintaibility

requirement

Division of Operation and Maintenance Engineering

Maintainability requirement


Knowledge about system and plant condition




Technical know how


Data base



Inspection



Monitoring.



Selection optimal mix of maintenance
polices



Predictive



Preventive



Reactive


Division of Operation and Maintenance Engineering

Commercial Economics

Implementation


Sales and marketing.


Production costs.


Maintenance costs




Division of Operation and Maintenance Engineering

The influence of the market demand on
maintenance strategy

Division of Operation and Maintenance Engineering

Predictive Approach (PA)

Characteristics




Maintenance performed at needed time.



Asses probability of failure



Technology based.



Advantage



Lower costs



Extend equipment life cycle



Assist in identifying root cause



Disadvantage



Requires investment



Requires additional skills

Division of Operation and Maintenance Engineering

Preventive Approach (PA)

Characteristics



Time based.



Forecast and prepares for planned down time.



Advantage



Improves resource planning



Reduces down time



Control budget



Disadvantage



Activities performed regardless of need.



Possibility of statistical and human errors.

Division of Operation and Maintenance Engineering

Reactive Approach (PA)



Characteristics



Run to failure.



NO routine tasks performed.



Advantage



Do not spend money unless you have to.



Disadvantage



Most expensive approach.



Less availability



Longer down time.



Higher capital costs.

Division of Operation and Maintenance Engineering

Planning Strategic Approach


Planning predictive strategy


Creative a proactive culture, long term
commitment and accountability.


Ensure availability of skills and
knowledge


Continuously review new technologies

Planning preventive strategy


Ensure availability of skills and knowledg


Availability of reliability data


Division of Operation and Maintenance Engineering

Planning Strategic Approach




Planning reactive strategy




Establish service providers.



Procedure to limit down time.



Effective inventory management.



Division of Operation and Maintenance Engineering

Capacity planning decisions



The deployment of the strategy
requires providing the right capacity
that include qualified personnel, tools
and equipment.



The competencies needed.



The organization and support.

Division of Operation and Maintenance Engineering

Maintenance Assessment


Asset and Maintenance Management is Important to
meeting business objectives




Management must be certain that it is performed
effectively and efficiently and the use of applications such
as MAXIMO are effectively deployed




The use of information (data) to manage assets and
maintenance is a key to success


Do You Know how effective your
program is?

Division of Operation and Maintenance Engineering

Maintenance Assessment




Maintenance Assessment is the Process of
Appraising, Evaluating and Determining the
Importance or Value of the Maintenance
Function/Activity to the Plant or Company and
includes the review processes and applications used
to support maintenance.





Division of Operation and Maintenance Engineering

Maintenance Assessments


Performed Primarily to Achieve Improvements


Performed to Demonstrate Program Acceptability to Regulators


Performed to Ascertain Program Adequacy


Performed to Identify Program Inadequacies


To Monitor Trends of Existing Programs


Shift Management’s focus from Reactive to Proactive


Evaluate Performance Relative to Competition (Benchmark)

Division of Operation and Maintenance Engineering

Continuous Assessment



Goals and targets.



Performance measurements



OEE



Productive capacity



ROI



Cost



Technology adaptation



Learning and development



Action plans

Division of Operation and Maintenance Engineering

Common

Maintenance Management
mistakes that don
´
t create value


Regulatory Issue


Information Technology Issue


Preventive Maintenance Issue


Who is Responsible


One
-
time Event


If You Ignore it


It Will go Away

Division of Operation and Maintenance Engineering

Mistake
1


Regulatory Issue


If you comply with the
regulations you are
practicing good asset
management.

Division of Operation and Maintenance Engineering

Mistake 2


Information
Technology


IT is the answer


Software


it is just a
matter of having the
right software

Division of Operation and Maintenance Engineering

Mistake 3


Preventive
Maintenance


A preventive
maintenance program
will take care of your
asset management
needs

Division of Operation and Maintenance Engineering

Mistake 4

Responsibility


Asset management is
the responsibility of:


Engineers


Accountants


IT


Management

Division of Operation and Maintenance Engineering

Mistake 5


One
-
time Event


An asset
management report is
the solution!

Division of Operation and Maintenance Engineering

Mistake 6


Ignore it


Asset management is
just another fad


it
too will pass