In the beginning, there was chaos. Workers were inefficient, managers ineffective, machines unreliable and materials inconsistent. Thus, senior management developed strategies, including vision, mission, values, goals and objectives, to take their companies to greater profit. But more was needed to ensure that success was better defined and quantified for stakeholders. And senior management created measurement out of the dark technology, and saw that this was good.
But then arose myriad ways to generate, capture, slice, dice and report on measurements. Technology allows a limitless number of data points to be gathered during a given time period. The shop floor has its solutionsintegrated programmable controllers, HMI (human machine interfaces), MES (manufacturing execution systems) and CMMS (computerized maintenance management system). The executive suite has its ownintegrated ERP (enterprise resource planning), CRM (customer relationship management), SCM (supply chain management), HRM (human resource management), and PLC (product life cycle) applications.
Alas, many companies are sinking in a data ocean, regurgitating a never-ending stream of numbers from countless sources. Not all of it is useful, and much of it is misleading when it is used to measure the performance of the MRO function. But as we learned from the recent Maintenance Performance Metrics survey sponsored by Plant Services and Rockwell Automation, that doesn't keep management from trying. What should they be focusing on? How can it be done? Let's take a look.
The survey tells the story. Figure 1 shows that 78 percent of respondents said "production goals" are very often used by corporate officers for measuring manufacturing performance. This compares with only 56 percent of respondents who felt "uptime" was the key metric.
Figure 1. Importance ratings of measures that corporate offices use for evaluating manufacturing performance. Overall equipment effectiveness (OEE) is lowest.
When asked about priorities for the coming year, survey respondents saw cost-cutting as the corporate mantra, with 77 percent of survey respondents claiming that decreasing expenses was a major priority for the coming year. The #2 priority appeared to be improving uptime rates, with 64 percent of respondents saying it was important. Presumably, increased uptime translates into greater production capability and reduced downtime expense. A third priority was improving overall equipment effectiveness (OEE), which 54 percent of respondents felt was a major priority.
If you combine expense reduction, greater uptime and improved overall equipment effectiveness, you get the overarching objective for the management of assetsasset optimization. Thus, asset optimization can be defined as maximum uptime and overall equipment effectiveness at least cost.
Have we optimized our use of assets? No, we're not even close. So let's break the concept of asset optimization down further and show how a computerized maintenance management system (CMMS) can be a powerful tool for attaining the asset optimization goal. Each part of the definition is described in detail below.
Many phrases are synonymous with this important objective, including maximum asset availability, minimum equipment downtime and maximum equipment capacity. The larger the asset base, the more significant the investment required to compensate for lost production time. Suppose a plant has 10 production lines, each worth $10 million in replacement cost. If each line suffers an average downtime of 10 percent, then it's as if one line is down permanently, which costs the plant $10 million in equipment alone. This is compounded by potentially far greater costs and opportunity losses, such as:
Space and utility requirements for the "extra" production line.
Additional spare parts required to fix the equipment and kept in stock.
Other operating costs, such as equipment vendor support and licensing agreements.
Maintenance labor associated with servicing the downtime.
Operations labor that may be idle for part or all of the downtime period.
Customer service impact in meeting delivery deadlines.
Opportunity loss of production from unused capacity, that is, if you could sell whatever you produce, then more downtime means less sales revenue.
Note that downtime is not necessarily caused by breakdown. Setups, changeovers, cleanup, preventive maintenance and other planned activities may also decrease productive asset availability. Maintenance and operations departments can work together to minimize these disruptions to achieve still further cost reduction.
The role of the CMMS is not only to help monitor the extent and cost of downtime, but, more importantly, to assist in determining the root cause. By analyzing failure codes, using condition monitoring, tracking the history of serialized parts and components, deploying a troubleshooting database, and using other key CMMS features, equipment availability should increase, and the costs and opportunity losses should decrease.
Downtime isn't cheap. Well over half of survey respondents who knew their average cost of downtime estimated it to be at least $1,000 per hour. In terms of impact on the delivery of goods to customers, 43 percent of respondents felt downtime had some effect, and a further 47 percent felt downtime had a major effect. Therefore, for most plant environments, maximizing uptime is a worthwhile objective that can yield significant savings or revenue.
One of the most often overlooked or misunderstood objectives of the maintenance support function is ensuring maximum overall equipment effectiveness, or asset performance. This is, in part, because these terms are often mistakenly assumed to be equivalent to the term "uptime," as if overall equipment effectiveness is achieved by reducing downtime. This isn't necessarily true, nor does it tell the whole story.