This is the second article in a three-part series on contract MRO services. Part I of this series explained the elements for success that must be present for maintenance tasks to be completed successfully, while this article grapples with the timing, planning, scheduling, and communication required to put these elements in place. In Part III, inventory management will be addressed.
Subcontracting maintenance work can be a good idea, providing exciting results that translate well at the bottom line. Some organizations have shown a 95% reduction in unplanned repairs when equipment condition is covered by vibration monitoring and results are published to the right parts of the organization, says Burt Hurlock, CEO of Azima DLI (www.azimadli.com).
Contractors can add capacity when it’s needed. They can add skills that an organization doesn’t use often enough to keep on staff. They can provide equipment that the firm doesn’t use enough to justify a purchase. But every subcontract brings with it two things that must be managed — a cost premium and an additional communication link.
Cost is a straightforward management issue. Subcontracting can provide the right equipment and the right specialists without creating the need to pay for them year-round. They can also provide the capacity needed to make the best use of shutdown time without the need to constantly carry enough staff for a turnaround. The cost avoidance or reduction provided by MRO support must offset the cost premium for subcontracting. Cost is important, but it is well understood by most of the organization.
Communication is the more difficult issue to manage, says Hurlock. “We’re in trouble when the customer doesn’t respond to information, or when he says, ‘I can’t resolve these conflicts; you fix it.’“ Information needs for contractors are the same as those for in-house teams, and the same tools and behaviors must be used to manage them.
“Three primary components must be present in order to successfully subcontract a maintenance program,” says Jack Ecktman, program manager, storeroom & reliability services, at Rockwell Automation (www.rockwellautomation.com). “The first and most important is the full support and commitment to the success of the program from executive level management. The second is a thorough understanding of the subcontracted activities’ value proposition, both in terms of hard financial benefits and softer value-added benefits. Finally, there must be a clear and definable scope of work, clearly defined roles and responsibilities and appropriate performance measurements, such as specific goals or clearly defined key performance indicators (KPIs).”
There it is — management ownership, a solid financial case for the contract and clear instructions and measurements to cement communication between contractor and client. To make MRO contracting work, these requirements must support the elements for maintenance success.
Management ownership: Each of the elements for maintenance success has an owner. Equipment availability and production support for maintenance are both owned by the production staff. If assets are to be available for condition monitoring and production staff need to be on hand to support maintenance, production managers must make them available. Not only must they be on hand, they must be on hand in accordance with an agreed-upon maintenance schedule. This must happen even if a temporary sacrifice of production is required. Only top management can lay down the strategy for this sacrifice to take place. Top management must also set the strategies for the materials operation to cooperate with maintenance and production so that maintenance materials are on hand at the right time and place for maintenance to occur.
It’s very often true that procurement operations don’t have a close reporting relationship with production and maintenance. Again, it may be that only top management can make this coordination happen. Work instructions and task lists must also be in place, usually provided by the maintenance planning function and engineering. Most of this information should be standardized and stored in the computerized maintenance management system (CMMS) so that it need not be developed for each work order, but it must still be updated and made available in accordance with the schedule.
Skilled technicians and special support equipment may come from contractors, in-house maintenance, or a combination. Whoever owns them, they must be available at the same time as the other elements in order for a successful maintenance operation to happen.
All groups must work in concert to ensure a safe work environment and efficient execution of the maintenance work order. It should be clear by now that only top management, working in accordance with a maintenance strategy developed in advance will be able to put all these elements in place on a schedule approved by the team. This is especially true when we consider that a successful maintenance operation will have a number of these operations taking place every working day. Top management commitment is absolutely essential for success.
Solid financial case: The outsourcing of some or all maintenance activities carries with it the need for an airtight business case. After all, it always adds some expense in the form of additional staffing and coordination. It can also eliminate some, but that should be proven. For anyone proposing an MRO subcontract, the knowledge that nothing unites a management team like a solid profit-making opportunity should make it obvious that this step improves the chances of success.
There is another, more subtle reason for a financial case. It supports transparency. When making any kind of organizational change, if it’s possible to show that the change really makes sense from the standpoint of the company, people have a harder time rejecting it. In fact, a lot of change agents will say that the closer they get to the shop floor, the more sense people make. This can be a powerful engine for change if the change agent does the homework.
Clear instructions and measurements: Human nature, organizational dynamics, and sound engineering all point in the direction of clear instructions and measurements. Any time a transaction is between in-house participants and contractors, this goes double. In a contracting situation there is no shared company culture to provide a lot of things that “everybody knows.” Moreover, even where there are shared beliefs, there’s no way to enforce them if they’re not documented.
Questions such as “Who collects information learned in the performance of a work order?” and “Who enters it to the CMMS?” do not have standard answers. They vary with organizational culture, so they must be documented in the work order. Similarly, who approves completed work and who closes work orders must be determined and documented; otherwise progress reporting will be meaningless.
The documentation required for smooth maintenance function includes a wide range of items. Every work order will require some combination of maintenance history, equipment performance and condition monitoring output, equipment specifications, PM plans, and perhaps even statutory requirements. Add job schedules, work instructions and task lists, and a formidable bundle of information emerges for nearly any work order. A well-populated CMMS can carry a lot of this load, but timely planning will always be essential. This is also the area where more breakdowns occur in MRO contracting than in any other. It’s always true that clear schedules must be created and followed.
This is where the planning function comes in. A job is planned when all of the materials, skills, support systems, work instructions, and other documents are in place so that work can proceed smoothly. This takes time and coordination. Only after it’s planned should a work order be scheduled for work by a maintenance crew.
When a few weeks are made available for most jobs to be planned and proper planning is done, maintenance crews start work with their materials available and complete instructions in hand. The necessary support equipment and specialists are standing by. Permits are prepared in advance and work can start immediately. All of this is accomplished by planners before maintenance crews hit the clock.
The result is a safer, more predictable, and far more cost-effective maintenance operation. When the majority of work is executed with proper planning, the maintenance schedule can be maintained. This means that work can be done as scheduled, instead of having to be cancelled or postponed to make way for daily emergencies. Expediting premium freight for parts and long waits for staff and equipment cease to consume tradespeople’s valuable time.
Proper planning is a huge cultural shift for most operations, but the impact on maintenance cost is worth it. This level of planning is even more essential when some of the work requires teamwork between customers and contractors. Of course, if most maintenance work comes in on an emergency basis, this battle is already lost. Contractors will just add confusion to the situation. They can’t inject order into chaos from the outside.
The role of CMMS
|J. Stanton McGroarty, CMfgE, CMRP, is senior technical editor of Plant Services. He was formerly consulting manager for Strategic Asset Management International (SAMI), where he focused on project management and training for manufacturing, maintenance and reliability engineering. He has more than 30 years of manufacturing and maintenance experience in the automotive, defense, consumer products and process manufacturing industries. He holds a bachelor of science degree in mechanical engineering from the Detroit Institute of Technology and a master’s degree in management from Central Michigan University. He can be reached at email@example.com.|
This need for coordination means that it isn’t possible to ignore the responsibility for maintenance planning, even when the planning function is part of the contractor organization. Coordination with the procurement and production functions still requires that work orders be carefully planned before being scheduled and performed. This work is performed most efficiently with the support of a properly populated CMMS.
“For any maintenance program, the most essential element is the computerized maintenance management system (CMMS) and the processes around which maintenance activities are performed,” says Ecktman. “We have found that there are several key roles required to support the CMMS system. The first is a database or application administrator to define roles and processes, configure applications and develop suitable reports to measure the performance of the maintenance organization. This person should have skill sets in both the database/network world and in the maintenance world. Another key role is that of a maintenance planner, fluent in the maintenance requirements of the production floor to develop and plan maintenance activities. Finally, a maintenance or reliability engineer is needed to provide the technical expertise and business acumen to monitor the equipment performance and help ensure the subcontracted maintenance activities are meeting the predefined requirements of the subcontracted work.”
Whether these people are part of the customer organization or are contractors, they must be in place, and they must have regularly scheduled, properly staffed meetings so they can effectively communicate and coordinate maintenance activities.
Work must be precisely planned and scheduled. Performance to schedule and other measurements must be tracked and the results published. Otherwise progress can’t be measured.
Useful performance indicators should be selected and defined by the organization to measure progress toward selected goals. There are dozens of measurements used by different firms. A few useful ones are listed here to help provide a sense of what might be appropriate.
- Percentage of emergency work — the percentage of the workload that arrives on a surprise basis and must be handled immediately. More than 5% emergency work will interfere badly with scheduling execution.
- Percentage completion of scheduled work — the percentage of the planned workload that is completed on schedule. Ninety percent makes for successful schedule support.
- Quality of estimates — percentage of work that takes within 10% of the estimated time for completion. This should rise above 90% over time.
- Percentage completion of preventive and predictive maintenance — the acceptable percentage is 100%. Execution of planned work is the best way to prevent surprises in the future.
Once the organization determines what it’s trying to achieve, a custom set of performance indicators will suggest itself. They will help the organization define success and then quantify its progress toward the definition.
“Manage and measure,” says Hurlock. “Find a champion. Support your objectives with training; establish your performance indicators with input and buy-in from your team; and communicate, communicate, communicate.”