Asset Management (or Maintenance Management Re-branded?)

Transcription

1 Asset Management (or Maintenance Management Re-branded?) Some Suggestions & Cautions Sources: 1) ISO ,2,3; 2) PAS 55; 3) Asset Management by Ron Moore in Uptime Magazine November 2015 Knoxville, TN 1 Copyright

2 Asset Management Some Cautions ISO provides a management framework for an asset management system It does not provide guidance for managing assets for optimal value over their life. In fact, it specifically excludes guidance and specs An asset is ANYTHING that adds value to the business, not just equipment (Don t forget - People, processes, procedures, patents, etc. are all assets!) But, most people reading ISO are maintenance managers, and focus on physical asset management, i.e., maintenance Knoxville, TN 2

3 Asset Management Some Cautions So, maintenance managers are developing the (physical) asset management strategy Many use asset management and maintenance & reliability almost interchangeably This is a mistake. It is not sufficient. Most asset management strategies are simply maintenance management strategies re-branded So, what s missing, or poorly addressed? (my comments focus on manufacturing, so analogies must be developed for other businesses, e.g., railroads, hospitals, etc.) Incidentally, Asset management strategy must be led from the top Knoxville, TN 3

4 Asset Management Some Cautions Does your asset management plan include: Business requirements of the assets over the coming 5-10 years? Production s role? Design/capital projects role? Procurement/Stores role? Maintenance s role? Disposal? Or other roles, based on the organization? Clearly define each role in managing the assets, adding value, minimizing losses & risks, & decommissioning All must be aligned to the business strategy/goals Knoxville, TN 4

5 Asset Management Some Cautions Asset requirements over the coming 5-10 years? Is the business is closing? Is the business being sold? Is the business stable, with little or slow growth? Is the business growing rapidly? Each business scenario requires a different asset management strategy Each requires a different staffing and personnel development strategy Each requires a different capital allocation strategy Knoxville, TN 5

6 Asset Management Some Cautions What is Production s role in each scenario? In data from 100 s of plants, production controls ~70-90% of all production losses (value); maintenance controls very little value! So, production plays a key leadership role day-to-day, and strategically! Production determines its role in each scenario for supporting business objectives and creating value! For example, if the business is growing rapidly, production takes the lead in eliminating production losses, (think OEE) before requesting capital investment for growth Maintenance is a support function in helping identify and minimize the losses and capital requirements Knoxville, TN 6

7 Asset Management Some Cautions What is Design/Capital Projects role? Before new capital investment, production must assure excellence in the use of current assets, e.g., taking OEE from 60% to 80% Some capital may be required to support maximizing current performance, but no major capital is required Capital projects works with production & maintenance to develop policies & procedures for applying lowest life cycle cost principles, vs. lowest installed cost Including an asset registry and maintenance strategy in all capital projects Data from large companies indicate that 3 months of production are lost during startup; maintenance costs are 25-50% higher in the first two years after startup Knoxville, TN 7

8 Asset Management Some Cautions What is Procurement/Stores role? Procurement must apply the concept of Total Cost of Ownership only ~25% is price! Much more focus must be given to the ownership costs, e.g., ease of operation & maintenance, energy consumption, ergonomic issues, quality/ease of supply Stores must balance the cost of working capital against risk of loss risk of production losses and risk of maintenance inefficiencies due to lack of spares Stores must make it easy to do maintenance, while controlling working capital and overhead costs Knoxville, TN 8

9 Asset Management Some Cautions What is Maintenance s role? Most of you are all over this, e.g.: Asset registry and bill of material Equipment criticality ranking and equipment strategy, including risk management where appropriate Work management, planning, then scheduling Condition monitoring PM, including addressing specific failure modes Operator care tasks Skilled trades competencies Precision maintenance; quality build plans; etc. Knoxville, TN 9

10 Asset Management Some Cautions What about disposal? Residual value of the assets, if any? Disassembly costs? Abandon in place? Decontamination costs? Hazardous waste disposal costs? Transportation costs? Other costs? Knoxville, TN 10

11 Asset Management Some Cautions If your asset management strategy is maintenance led (most are): You ll be pushing on a rope You ll only do more efficiently work that you shouldn t be doing at all Your ability to add value will be limited Maintenance is an enabler for adding value, much like Accounting, HR, etc. and they are absolutely essential! Knoxville, TN 11

12 Asset Management Some Cautions Finally, and most importantly, a strong asset management program must address: Effective Leadership/Sponsorship (vs. permission) Alignment of the Entire Organization to the Strategy (See ISO 55000, 2.4.3) Teamwork among Functional Groups to the Strategy Systems Level Thinking ( Line of Sight in ISO 55000) Changing the culture - People do want to change: IF given compelling reasons, IF there s something in it for them for the changes, IF they participate in creating the changes! Culture eats strategy for breakfast Peter Drucker Knoxville, TN 12

13 Asset Management Some Cautions Strong leaders will make sure all this happens! According to Terry O Hanlon, a member of the ISO committee: Financial asset management and ISO asset management are the same! I agree! Asset management is about managing ALL the assets people, processes, and equipment - minimize risk, while assuring financial success! It s about value creation! (not just managing equipment) Knoxville, TN 13

14 Asset Management Some Cautions Reliability Web s Asset Management Model: Is this enough? The focus! Knoxville, TN 14

15 The Reliability Process (note where most defects occur) Doing better Mtce will not contribute much to Reliability Install/ Design Buy Store Operate Startup (Life Cycle Cost) Defects (Cost of Ownership) ( Like a Store ) Defects Defects (With Discipline) (With Care) Defects Defects Maintain (With Precision) Defects Source: In Cooperation with Andrew Fraser, Reliable Manufacturing Assoc. Rate Losses & Downtime Unneeded Work - $$ Injuries (& Env. Events) Asset Utilization & Necessary Work Root Causes Minimum unit cost of Production Knoxville, TN 15

16 Reliability Based Operations Reliability cannot be driven by the maintenance organization. It must be driven by the operating units, and led from the top. Charles Bailey, VP of Operations Eastman Chemicals (Retired) To expect maintenance to own reliability is like expecting the mechanic at the garage to own the reliability of our cars. Ron Moore Knoxville, TN 16

17 Of all production losses from ideal (AU/OEE), ~2/3 rds are NOT equipment related; ~1/3 rd are, but most of these are Ops driven; Only ~ 10% of losses are Mtce driven JIPM: 70% of eqpt. failures are preventable by operators Changeovers, rate/quality losses, raw material, market demand, production planning, etc. Equipment Related Losses-Maintenance Equipment Related Losses- Operation Non Equipment Related Losses Source: Author experience; Similar findings reported by BASF-UK, Eastman Chemicals, Whirlpool, and Borg-Warner-US Knoxville, TN 17

18 Reliability and Safety Knoxville, TN 18

19 Safety is a Top Priority Most all organizations say safety is a top priority They have policies, standards, processes, systems, etc. to support this They are committed to enforcing these policies Knoxville, TN 19

20 Safety Policy Statement All injuries are preventable No task is so urgent that it cannot be done safely Management must provide a safe work place We are each responsible for preventing injuries Everyone is empowered to stop unsafe behavior Knoxville, TN 20

21 Reliability and Safety Relationship If executives were truly committed to safety They would be committed to reliability, and would have similar policies, standards, processes, and systems They typically are not, and do not Consider a typical sampling of the data Knoxville, TN 21

22 Injury Rate v. AU/OEE over Time - Company A R = 0.80 R 2 = OEE/AU- % of Base Injury Rate OEE/AU Month Knoxville, TN 22

23 Correlation of Corrective & Reactive Work Orders with Injury Rate Plant No. 1 Total Injuries per Year R = R 2 = Knoxville, TN 23

24 Correlation of PM & PdM Work Orders with Injury Rate Plant No. 1 Total Injuries per Year R = R 2 = Knoxville, TN 24

25 The More Disciplined Your Maintenance, the Fewer Injuries you have Injury Rate (normalized to a base number) R = 0.95 R 2 = Knoxville, TN 25

26 And, is More Cost Effective - Reliability Index v. Production Unit Costs (As reliability increases, costs decrease) Production Costs $/Unit R = R 2 = Knoxville, TN 26

27 Defects & Process Errors Reduce Reliability and Increase Hazards Major Incident Major Accident 10 losses Loss of Containment 6,500 repair work orders Process Safety Breach 20,000 defects Numerous Minor Process Errors Operational Discipline is essential to eliminate defects and process errors Knoxville, TN 27 Copyright

28 From the data we should conclude: Safety is everyone s responsibility & Reliability is everyone s responsibility Knoxville, TN 28

29 Establish a Policy Linking Reliability and Safety All injuries, and failures, are preventable No task is so urgent that it cannot be done safely, and reliably Management must provide a safe, and reliable workplace We are each responsible for preventing injuries, and failures Everyone is empowered to stop unsafe, & unreliable, behavior A reliable plant is a safe plant, is a cost effective plant! Knoxville, TN 29

30 If you truly believe in Safety, then Reliability is a MUST to minimize the risk of injuries, costs, and environmental incidents (Should be given comparable executive attention as any high-powered consulting recommendations) Knoxville, TN 30

31 Strategy for Implementation Knoxville, TN 31

32 Strategy for Implementation Led from the top- executive sponsorship is essential (Permission is not sponsorship, or leadership! Active engagement is essential) Production & Maintenance Partnership- Clear goals and expectations must be set, and reasonably achievable Shared KPI s for reliability & business results must be in the annual management appraisal and bonus system Shop floor engagement process, including cross functional teams, structured improvement time, and a support structure Knoxville, TN 32

33 Keeping all this in mind, Is your asset management strategy Maintenance Management Re-branded? Or Holistic Asset Management? Knoxville, TN 33

34 Appendix - Contact Details Ron Moore Managing Partner Broadwood Drive Knoxville, TN Tel/Fax: RonsRMGp@aol.com Ron Moore is the author of Making Common Sense Common Practice- Models for Operational Excellence, 4 th edition; of What Tool? When? A Management Guide for Selecting the Right Improvement Tools, 2 nd edition, both from MRO-Zone.com; and of Business Fables & Foibles, and Our Transplant Journey: A Caregiver s Story, both from Amazon.com, as well as over 50 journal articles. Ron s latest book, Where Do We Start Our Improvement Program? is scheduled for release in September, Knoxville, TN 34