Do you know your way around an SLA?

David Berger says service-level agreements forge solid partnerships with external and internal customers.

By David Berger

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One of the key challenges for asset managers is building a strong partnership with external service providers for achieving common goals. A two-way service level agreement (SLA) formalizes the relationship by establishing the type and level of service expected from the outsourcer, and the quality of input required from your operations department. To achieve performance targets outlined in the service-level agreement, internal and external resources must clarify roles and responsibilities.

This really should be no different if maintenance work is done totally in-house. In fact, a service-level agreement between internal asset managers and operators, complete with performance bonuses and penalties, should be considered no less than mandatory to ensure that expectations are clear and not taken for granted given that everyone is working for the same company. This seems more obvious for formal, third-party, external relationships, but in practice, it should be equally applicable to internal service departments.

A CMMS is critical for developing a plan for executing against the service level agreement, and monitoring progress towards attaining service goals. Most packages at least accommodate measurement of service-level achievements and target variances on a batch basis. More-advanced packages collect service-level data such as downtime and response time in real time and integrate data with condition-based maintenance functionality.

Described below are the key components of a two-way service level agreement with operations. This can be used as a template for developing your own SLA.

Glossary of terms

Different terms mean different things to different people. For example, to maintenance, “downtime” most likely means the time a machine is down due to a breakdown. To operations, downtime may mean the total time a machine is not working due to machine breakdown, scheduled preventive maintenance, lack of parts, lack of operators, and so on.

Furthermore, the start and end of downtime can be controversial. Suppose it takes operations 10 minutes before informing maintenance of a breakdown. Perhaps the breakdown was intermittent. In either case, the start of downtime depends on your definition. Similarly, if operations does not react immediately when told by maintenance that the machine is repaired, then when does downtime officially end?

Thus, the service-level agreement must clarify key terms in the document so that both parties have a common understanding.

Service description

This section of the SLA describes the various services offered by the internal or external maintenance function to operations. Three examples are as follows:

  • Use-based maintenance. Administer program of routine maintenance on each asset (e.g., lubrication, adjustments).
  • Condition-based maintenance. Monitor the health of all equipment on a regular basis in order to identify repair work required. For example, collect data from key assets to determine trends in component wear. Repair or replace components trending outside acceptable control limits.
  • Reliability management. Track the problem reported, the root cause, and the action taken for every case reported. Use data to better maintain the asset base. For example, identify recurring problems, eliminate high-cost root causes, and fine-tune the failure tree to quickly determine the best course of action for a given problem.

Service goals

The maintenance and operations departments share common goals, such as minimizing downtime. Historically, however, efforts to set performance targets for the internal/external maintenance function have been rather one-sided, made without regard for the dependency on operations. To minimize downtime, for example, maintenance requires timely and accurate reporting of the problem.

The SLA must be two-way to be truly effective. Therefore, operations should be given performance targets for quality of input, for example as it pertains to the state of preparedness of the equipment to be serviced.

Let’s look at what maintenance and operations might agree on for, say, emergency repair work on critical assets. The service goal is to respond as quickly as possible to a breakdown and restore the equipment to good working order with minimal interruption.

Outlined below are the performance targets for both maintenance and operations in support of this goal. A good CMMS with condition monitoring and an automated shop-floor data collection system interface is the ideal means of tracking many of these measures.

Maintenance. The target response time for maintenance in answering an emergency call will be within five minutes for class ‘A’ equipment (i.e., critical equipment), 100% of the time. For less-critical equipment, the performance target is within 15 minutes, 95% of the time. Service time for emergency repair of critical equipment will be within 20 minutes, 98% of the time.

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