Change occurs rapidly and relentlessly. In their quest to remain globally competitive, many organizations seek new initiatives to keep pace with these changes. A few are fortunate enough to find an approach that works well for their particular needs, but most are besieged with a multitude of great-sounding initiatives such as down- or right-sizing, lean production processes, TPM, RCM, customer-led initiatives, JIT, six sigma, kaizen - the list seems endless.
The news of a new management initiative often brings with it the dreaded specter of the latest "flavor of the month." Many middle managers shudder at the thought of being tasked with yet another new initiative while struggling to continue day-to-day operations. Well-intentioned and promising improvement initiatives often fail to achieve anticipated results. The question then becomes "What went wrong here?"
Because maintenance represents an ever-increasing portion of their operational costs, more managers are focusing their attention on maintenance improvements than ever before. They are savvy enough to be concerned with the end results and recognize that improvement initiatives are not cheap in terms of money, time or resources. Of prime concern is whether their chosen initiative will yield an acceptable return on investment (ROI).
Unfortunately, too few managers regard their maintenance department as a resource with the potential to make a significant contribution to the bottom line of the company's Profit & Loss statement. Instead, they subconsciously regard maintenance as a subordinate "fix and repair" organization whose main purpose is to get things running again when a failure occurs. This attitude is one of the primary reasons that many maintenance improvement efforts fall short of expectations.
Dr. Edwards Deming observed that when quality or production are lacking, the blame usually is placed on the workers. He disagreed with that approach and felt strongly that the root cause of these types of problems were the result of the organization's culture and a reflection of management philosophies. He maintained that quality cannot be inspected into a product at the end of an assembly line, but must begin in the boardroom. His contention was that 85 percent of quality problems are the result of management errors, not the workers. When a good worker is pitted against a poor system, the system wins almost every time - and management is the system!
Accordingly, as quality increases, costs should show a corresponding decrease. This sets in motion a chain reaction. Better quality leads to lower costs and higher productivity. Managers must make quality the first priority (after safety, of course) of every department. Productivity and cost improvements are realized for a simple reason: less rework. Defects are expensive. An unreliable automobile is virtually worthless on the side of an interstate highway waiting on a tow truck, regardless of how new it smells or how fancy its seats are. The amenities of the car are minor consolation to the upset owner when its engine won't run.
The True Cost of Poor Maintenance
A major concern of managers primarily involved with operations and/or production is downtime. The primary question is not if the equipment is going to have to come down but simply when. If the manager doesn't make that decision, the equipment will make it for him. It is considerably more expensive, however, when the equipment makes the decision, since the failure also will determine the scope, expense and duration of the needed repairs.
Maintenance can be defined as the work of keeping a building, machinery, etc., in a state of good repair. How would you define maintenance? Nowhere in this definition is there any reference to "fix and repair." Yet this perception continues to prevail in many sectors of commerce. It is indicative of a culture that is subconsciously accepted because "we've always done it that way." The old axiom of "if it ain't broke, don't fix it" is endemic to this culture and carries with it a gross misunderstanding of true maintenance. Too often, the perception of preventive and predictive maintenance is little more than surface dressing, typically involving minimal or ineffective programs for such duties as lubrication and filter changes. This approach also is typical for companies implementing cost cutting measures. Deferring true maintenance with minimal equipment intervention may save in the near-term, but at a heavy long-term price. It is difficult to cost-cut your way into prosperity.
Reactive Vs. Proactive Maintenance
Reactive maintenance occurs when personnel respond to failures and conditions that have already happened. Proactive maintenance is work that precludes unexpected intervention or premature equipment failure. The primary objective of proactive maintenance should be to ensure that equipment operates as expected for as long as designed (also known as the equipment life cycle). Proactive maintenance is an approach that monitors and detects equipment condition(s) to ensure desired and dependable operation. Additionally, this approach prevents and predicts conditions that result in premature equipment failure. Repairs and adjustments can be preplanned and made with a minimal amount of interruption to normal plant operations. A proactive approach also allows sufficient time to procure and stage required parts, equipment and tools.
Below is a list of common problems facing shops today. Are any of these problems occurring in your shop? How much more efficiently could your shop operate if some of these problems could be eliminated?
The last decade has seen a number of improvement initiatives. What is typically one of the largest line items on the Annual Operating Budget (maintenance) often gets the least amount of attention. The potential for the maintenance contribution is neither well recognized nor well understood. Fiscal policy that focuses on short-term profits may realize a considerable ROI for production but complicates the maintenance mission significantly. In the long run, deferring costs and deferring maintenance is just mortgaging the future, and amounts to little more than disinvestment of the company. How does this happen?
Managers, pressured to keep profits up, increase their profit margins by cutting costs, inventory, wages, quality, etc. This short-term practice of artificially increasing profits almost inevitably has costly results in the long run. When these cost-cutting measures are implemented, a number of things usually occur:
It's About the People - Workers and Managers
People may be told that individual improvement in performance is the best way out of the crisis, but nearly everyone is already overloaded. It is simply not physically possible for humans or machines operating in the same system to produce more with less. It is difficult to accomplish anything without sufficient resources, particularly when those resources are already stretched to their limit.
When things go wrong out in the plant, a common response from too many managers is to hold the workers responsible - but management by edict doesn't work very well. It generally only makes things worse. The workers can't change the system; only management can do that.
Programs That Make a Difference
One of the most basic requirements for optimum plant performance is equipment reliability. Product quality, production capacity and profitability are all dependent on the reliability of plant equipment. A number of continuous improvement programs, such as Total Productive Maintenance (TPM) and Reliability Centered Maintenance (RCM), stress equipment reliability. Their approaches, however, are distinctly different. RCM focuses on failure modes, effects analysis (FMEAs) and other statistic-intensive evaluation techniques while TPM stresses the basics of design, procurement and maintenance.
The stark truth of the matter is this - there is no magic fix. Each of these programs provides techniques and approaches that will help improve your maintenance function. Each approach has its strengths, but there are limitations. Don't expect that one approach will cure all of your ills. And since they all cost money, make sure you know what you're getting into before you discover that the program is either not right for your situation or is too costly for your budget.
A viable program must be designed to pay for itself and unless some type of data-driven technique is used to derive a projected ROI, it will be difficult to procure and sustain the needed resources necessary to fund the initiative long enough for it to pay for itself.
A consensus on current status, objectives and goals, and a plan on how to reach those goals, has to reach across all internal organizations. If people have no involvement and participation, they seldom have any incentive for buy-in. Without a projected ROI on the improvement initiative, it is difficult to make budgetary provisions in the Annual Operating Plan for proactive improvements.
What Should the Goal Be?
As a company or corporation, strategically, what should the goal be? World Class sounds great. Why would anyone not want to be world class? Yet how many companies have achieved this kind of status and at what cost? Very few, and the cost usually is significantly beyond their resources. How about Maintenance Excellence? Sounds a bit more achievable and probably less costly, but how is it defined and what is it compared against?
A more practical approach, perhaps, is Best of Market. Companies right size, downsize and undertake any number of other initiatives to position their assets consistent with their "core business." It seems logical then, that a company would compare itself to others who produce or provide like services or products. It makes little sense for a food distribution company to compare itself to a telecommunications company or to a bearing manufacturing company. The only common vein is their need to make a profit so they can stay in business. Outside of that, direct comparisons are minimal. Consequently, a company should endeavor to be Best of Market.
At this point, however, it becomes apparent that one of the challenges is how to convince management of the benefits of pursuing such an approach. The first question that must be asked is, "How effective is my maintenance department?" If you get a reasonable answer for that, then determining associated costs will be much more meaningful. One of the best quantitative measures of labor resource utilization (a measure of effectiveness) is to compare the percentage in the total labor hours as distributed between direct and indirect labor.
Direct labor is defined as actual time spent performing work, or "wrench time." Everything else, such as receiving instructions, obtaining tools and materials, travel time, meetings, etc., is defined as indirect labor. This is important because backlog only can be done using direct labor. The productivity or efficiency of the maintenance department is tied directly to the ratio of direct to indirect labor. The less time and energy wasted, the greater the output.
To illustrate this point, Table I makes a comparison between identical crews of 20 craftspeople in a reactive environment without planning and scheduling as opposed to a proactive environment with planning and scheduling. The results are an eye-opener.
A net productivity increase of 42 percent is realized - an attractive return on any investment by any standards. To those cautious souls who would point out that their own organization might not be able to realize the full 42 percent, the question becomes, "What would be an acceptable level of productivity increase - 35 percent, 25 percent?" There is any number of organizations that would be delighted with a 20 percent increase! Keep in mind that this is just one aspect of the maintenance function. Issues involving worker competency/training, inventory, expendables, use of contract labor, etc., haven't even been addressed.
The point here is that no other single maintenance activity has as profound an effect or as much positive impact on the quest for proactive maintenance as the planning, scheduling and coordination function. Planning must be at the core of the maintenance effort because it provides for reliable delivery of all of the other proactive programs. Reliable maintenance is essential if Best of Market status is to become a reality. Therefore, in this climate of global competitiveness, maintenance effectiveness becomes somewhat of a survival issue.
The old parable about Rome not being built in a day certainly applies here. Nearly all of the maintenance initiatives in vogue at the moment have positive and salient points that have the potential to yield considerable benefits (monetary and intrinsic). Here are several basic principles that may well help with the building process: