2007 Best Practices Awards in Management

Feb. 19, 2007
View the winner (and runners up) in the 2007 Plant Services Best Practices award management category.

Winner: Reliability excellence cuts maintenance costs 25% at Alcoa plant

Alcoa’s Warrick Primary Metals has been in continual production since 1960, today producing 265,000 metric tons of primary metals for beverage and food cans and other flat-rolled aluminum products. The plant’s 2003 base-case maintenance costs were high compared to other Alcoa facilities, averaging almost 15% higher on a per-metric-ton basis.

The company’s lean manufacturing system was producing results, but sustainability continued to be an issue because of unreliable equipment and unstable processes. The company engaged Life Cycle Engineering (LCE) and the Ron Moore Group (RM Group) to produce an Alcoa-focused Reliability Excellence Process, deployed in three “waves.”

Wave 1 commenced in June 2003 with RM Group imploring key plant leaders to take an “asset owner” philosophy. This approach focuses on accountability. Wave 2 followed in August 2003 with a full Reliability Excellence assessment using LCE’s Rx Methodology. LCE conducted interviews with more than 90 operations and maintenance constituents, both hourly and salaried. The results were a detailed financial impact analysis, including costs and return on investment (ROI) scenarios related to improvements in maintenance, and an implementation plan designed to close gaps in maintenance processes and practices.

Wave 3 took hold in September 2003 with operations and maintenance teams leading the plan implementation. Operations and maintenance leadership held an employee education program, explaining new roles and responsibilities under the new Reliability Excellence Process. Training workshops on reliability enhancement techniques were held, and maintenance processes and performance measures were established and communicated.

As a result of the three-wave reliability process, Alcoa determined that accountability for asset ownership and plant performance should rest with its operations teams. Overall equipment effectiveness (OEE) measures were established by examining historical plant equipment performance levels to determine optimum capabilities. Operations and maintenance teams worked together to apply OEE measures within each work function in the smelting plant. OEE goal setting identified more than $8 million in potential annual savings.

Alcoa redefined its maintenance planning approach, placing increased emphasis on proactive programs and processes. Operations and maintenance teams met regularly to review needs, determine priorities and schedule needed maintenance. Improved communication enabled operations teams to have direct input into when jobs were scheduled and worked.

Three maintenance schedulers were added to improve the ratio of crafts personnel to maintenance planners from 35:1 to 20:1, further enhancing the company’s ability to carry out proactive maintenance.

The plant also revamped its parts and tools distribution, moving from a decentralized to a centralized model. It now prepares work kits for each maintenance job to ensure that maintenance teams have everything they need to complete a job on schedule.

Alcoa established a documentation section on its information technology server and began to develop “bad boy” lists of equipment with performance issues. This further enhanced planned maintenance activities by enabling operations and maintenance equipment reliability teams (ERTs) to better prioritize maintenance by identifying its effect on production.

The process has reduced maintenance costs 25% from the 2003 base period to 2006, and a cost savings of $5.7 million in 2006 through improved equipment and process stability. Cumulative maintenance and reliability cost savings since 2003 have produced a return on investment of 16 to 1.
Life Cycle Engineering, www.lce.com.

Runners up

Use a service contractor to overhaul practices

Under a pay-for-performance contract at an electronic components factory, MTBF was increased more than 100% from Q1 to Q2; the preventive/corrective ratio average increased 17% year over year; and there were no accidents in the service organization.
ABB Services, www.abb.com/service.

Shop-floor displays communicate with production

Electronic displays at a build-to-order electric motor manufacturer connect operations, engineering, quality and maintenance to communicate production instructions, provide real-time quality alerts and collect operator feedback about production problems and suggestions for improvements.
Baldor, www.baldor.com.

Perform steam surveys with clamp-on flowmeters

The economics of expanding a multiple-building facility depended on a centralized steam system. A survey using clamp-on flowmeters gave the critical information needed to account for any additional development costs without interrupting steam service.
GE Sensing, www.gesensing.com.

Forklift-mounted cycle counting system ends inventories

Inventory checks via mobile computers during normal parts picking improves accuracy and shows potential to eliminate physical inventories. A plastic closure manufacturing facility has gone from quarterly physical inventories (35 people and one day of lost production) to a single year-end inventory.
Glacier Computer, www.glaciercomputer.com.

Rebuild and upgrade instead of buying new equipment

Drive systems and controls on an unreliable horizontal boring machine were redesigned and rebuilt in-house. Compared to a replacement machine at about $500,000, cash outlay for new components was $50,000. Downtime was reduced from 40% to 5% with much higher machining accuracy. Payback was less than one year.
Larson & Toubro, www.larsontoubro.com.

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