Make the business case for predictive maintenance and condition monitoring

Industry guru Jack Nicholas discusses the financial impact of equipment reliability.

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Jack Nicholas has 50 years of experience in industrial maintenance and reliability. A Navy veteran, Nicholas will be one of the keynote speakers at Reliable Asset World and Ultrasound World, co-located conferences being held in May in Clearwater Beach, Florida. He took a few minutes to speak with Plant Services Chief Editor Mike Bacidore about the financial impact of reliability-centered maintenance, working with operations toward increased productivity, the untapped information that can be found in condition-monitoring data, and so much more.

PS: How do you measure the financial impact of reliability practices in a plant or in an organization?

JN: Reliability practices affect not just the immediate organization or a local plant, but many other constituents. Examples include investors, customers, suppliers, neighboring plants, communities, and retirees. So the measure of financial impact may be measured better by the cost of not being reliable. For example, if a customer can’t count on you for a quality product or an on-time delivery, the customer is going to look for an alternative supplier, and it’s going to cost you that revenue and maybe your whole livelihood.

If a plant has an environmental accident that affects nearby residents and businesses, the penalties may be quite severe, reducing the bottom-line profits that benefit stakeholders, to say nothing of the ill feeling of those affected. This can be quite widespread. Consider for example the British Petroleum Deepwater Horizon disaster just about four years ago with financial ramifications that still linger today.

If an investor senses an unreliable operation, that investor is going to sell the applicable stock, even at a loss, which may in turn lower value of the overall enterprise as viewed by the market and all who are counting on that value to remain constant and provide income in the form of dividends or growth in capital worth.

Every one of those mentioned and some I’ve not mentioned are affected by a lack of reliability of processes, practices, and the consequences thereof.

PS: Which people within an organization need to be aware of the effects that reliability-centered maintenance practices are having on profitability?

JN: First, management at the highest level should be aware that RCM is important in the 20% of those systems that have the most impact on profitability and that resources to ensure the most effective outputs of an RCM study are provided. By most effective outputs, I mean non-intrusive, condition-directed tasks to mitigate or eliminate failures before they cause unplanned downtime, poor quality, unnecessary waste of energy, or excessive scrap.

Second, the people closest to the systems should have what I call an RCM mentality. This includes the maintenance personnel but equally the operators, who in many cases are starting to apply total-productive-maintenance-inspired practices by undertaking minor maintenance and lubrication tasks and acquiring a sense of ownership and partnership with maintenance in sustaining the highest level of reliability built into the system by its designers or later added by owners.

Operators and predictive condition monitoring team personnel should have a close working relationship that ensures that machinery is made available for monitoring under conditions of loading that provide the most meaningful information and the earliest indication of the onset of problems. That ensures the problems can be handled when the cost to mitigate is low and the risk of collateral damage can be totally avoided. This also means, when an operator senses something trending in wrong direction, a call is made to the PdM team to see if adverse conditions can be further defined and effort begun to correct it. The PdM team must educate the operators on the capabilities they possess and the operator must be imbued with the concept of early detection as the best way to decide upon, start planning for, and executing corrective action, rather than continuing production to the point of complete failure. This is the best way to keep control in the hands of people around it and not surrender to the whims of the machines.

Those responsible for lubrication must take a comprehensive view of all the best practices that ensure highest reliability such as testing new supplies of lubricants to ensure before use that particle count and moisture content meet or are better than specifications for in-service lubricants. RCM studies that are done well will call for tasks that are lubrication-related, especially when failure-modes-and-effects-analysis steps indicate lubrication cause relationships. Even without an RCM study, however, if personnel responsible for lubrication have the RCM mentality I mentioned, they will take steps like testing lubricants on receipt and invoke other measures to avoid creating problems with best practices that are designed to do so.

PS: Because of their different functions, should a maintenance department and a reliability department be separate groups of people in a plant?

JN: I have observed that the most cooperative arrangement is to have the reliability group reporting to the senior-most maintenance manager, especially in organizations where maintenance and operations, and engineering and stores departments, are co-equal with all reporting to the same senior manager. The maintenance department makes the greatest contribution of time and labor to reliability issues and their resolution — RCM analysis, root cause analysis, reliability reviews of new designs for application of PdM, lubrication best practices, or oversight or actual installations of modifications that improve designs for increased reliability. The senior manager in maintenance can best decide where those personnel in the department should spend their time. Obviously, if they’re constantly in crisis mode, finding time for reliability-improvement initiatives is hard, but the sooner the organization can get ahead of the failure curves and allocate personnel to concentrate on improving reliability, the better life in that organization is going to be. Once on that path, most organizations never want to go back to the old fix-when-fail approach, especially if the organization replaces detrimental incentives, such as rewards for fixing things fast, with those that enhance productivity and reliability.

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