Benchmarking to achieve organizational reliability

April 16, 2015
Make the cultural shift to failure-free operations.

The chemical manufacturing industry is undergoing a paradigm shift with regard to its view toward reliability. Recent trends show an emphasis on creating failure-free cultures where the goal is to detect potential plant and equipment failures before they occur. Making this shift requires the early detection of potential issues, which requires companies to become more proactive and less reactive. This proactive mindset can be cultivated through the use of reliability and maintenance performance-improvement programs that give organizations visibility into their internal structures from the inside out.

Developing a failure-free culture helps achieve what we call “organizational reliability”—an environment that fosters the needed behaviors and culture to begin the journey to failure-free operations. Achieving organizational reliability is significant because organizations frequently only focus on the reliability of their hard assets, failing to realize that organizational reliability drives how those assets perform. Organizations cannot achieve “asset reliability” without first achieving organizational reliability.

Organizations can improve both reliability and performance when they fully understand their asset and organizational reliability performance; only then can they develop strategies to close existing gaps. This level of understanding ones’ performance results in dramatically improved asset reliability, which leads to customer loyalty, employee satisfaction, and most importantly, profitability. While achieving this culture of failure-free operation is not easy, it is achievable and extremely rewarding

Reactive organizations are familiar with most failures because they reoccur; in essence, their implemented solutions fail to prevent future re-occurrences. To change the outcome, an organization needs to change its behaviors and focus on creating a failure-free culture. These behaviors are summarized in the following three phases.

Phase 1 – Eliminating reactive responses

An organization realizes that if it is concerned only with the operations of its assets and how to repair them faster, they will continue to experience repeat failures. Speed of repair is usually their focus in asset reliability. While they will become more efficient in their repair process, nothing fundamentally changes after the repair is made, and the cycle will begin again. This approach to asset reliability leads to repeated failures and the need for more repairs. Consequently, organizations plagued with constant operational disruptions consider them a normal part of business operations.

Eliminating a reactive response to failure requires a recognition and re-evaluation of the metrics used to measure performance. If your organization is not seeing an improvement in equipment failures, then an adoption of new metrics for performance assessment is necessary. Benchmarking, mentioned below in Phase 3, will guide you toward an improvement strategy.

Phase 2 – Embracing preventative and predictive approaches

The next phase toward a failure-free culture involves the organization using various forms of preventive and predictive maintenance to create a higher level of reliability. Unfortunately, when many organizations implement these practices, they automatically believe they have achieved their desired level of reliability; they become complacent and stop looking for opportunities to improve in all areas. Although these practices drive increased reliability, disruptions continue to be dealt with in a reactive fashion because these organizations have a false sense of security, making them less prone to seek out ways to be proactive in solving issues early on.

So, what can eliminate this false security and create dissatisfaction with this level of performance and cause an organization to desire failure free performance? One possibility is the realization that its competition may be much closer to a failure-free culture. Another is the recognition that there is a significant business case for reliability.

Phase 3 – Benchmarking

This last phase often requires an external comparison through benchmarking or other outside comparison for an organization to realize that not only is it lagging behind top-performing companies, but they are generating significant losses in productivity and profitability due to lack of reliability. Once acknowledged, the organization realizes the only way to improve is to not accept so-called normal business disruptions. These organizations begin to believe that a failure-free culture is possible and begin to encourage proactive measures at the earliest signs of failure.

Organizations around the world use benchmarking to assess their performance relative to their peers, and data collected for more than 30 years confirms that benchmarking provides a distinct competitive advantage. A best-in-class benchmarking process begins with in-person and web-based training seminars for data collection personnel. The required data is collected according to the agreed-upon definitions and entered using a web-based data input application. The data is reviewed and the results are provided in workshops designed to maximize the benefits of participation.

By the end of the benchmarking process, organizations should be able to quantify and compare downtime attributable to maintenance and reliability causes, determine lost margin, and express that loss in monetary terms to determine the value of the lost production. Plants most likely to benefit from benchmarking reliability performance are those with mechanical availability under 97%, where unreliability (as characterized by equipment failures) is the largest contributor to downtime.

Taking ownership to achieve change

Jeff Dudley is Senior Consultant for Solomon Associates. Jeff has more than 30 years of experience in chemical manufacturing and operations. He is the project manager for the International Study of Plant Reliability and Maintenance Effectiveness. Contact Jeff at [email protected].

Most organizations—even the reactive ones—have developed sufficient reliability to stay in business. However, when viewing the level of reliability and potential profitability that could be achieved, most are underperforming from their optimum potential and remain behind their competitors. For this type of culture to change, the organization must develop a focus on reliability that encourages everyone to relate disruptions as an abnormal situation verses a normal way of business. Once everyone within the organization adopts this proactive mindset, the journey to failure-free operation begins, and proactive behaviors become the norm.

This type of culture change takes time; disruptions will continue and failures will happen. Steps should be taken to find out what caused the disruption and to determine the earliest indication of that particular disruption. At that point, proactive measures should be taken to understand any failure mechanisms that occurred in the system so that everyone in the organization benefits from those learnings. With this proactive focus applied to every activity, organizational and asset reliability will improve, disruptions will be avoided, and commitments will be met.

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