Leveraging Business Improvement Strategies to Reduce Costs and Maximise Plant and Mine Reliability

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Bill Holmes

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On the Down Swing

Cost - manning?

Production?

Reliability?

Spare parts?

Training?

Contracts?

Emphasis on best practice?

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On the Up Swing

Cost - manning?

Production?

Reliability?

Spare parts?

Training?

Contracts?

Emphasis on best practice?

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Requires constant and continuous “Best Practice” for high reliability and low cost.

Cycles aggravated by emotion and “gut feel”, or moderated by objectivity and fact.

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SIRF Roundtables Benchmarking for consistency Key drivers / indicators to best business performance Practices seen in the best performing sites from more than 130 studies across 5 continents

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SIRF Roundtables Levels of Engagement Roundtable Meetings Common Interest Work Groups Workshops, Site visits, National Forums

SIRF Roundtable members collectively share knowledge and experience about ‘best practice’

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n e s s f E f e t c I v e Environm ent

Benchm arking

O ur Journey to Asset Effectiveness Production Capability D esign Procure C onstruct Equipm ent Perform ance R estore O perate Predict Prevent Failure W ork Processes .

Behaviours

Self Assessm ent .

M aintenance System s and Tools Im prove

Reliability Im provem ent

Networking Leadership

Uptim e M etric

R e c o g n i t i o n

M ERP CM LT

1987 1990 1992 1994 1995 1996 Source: V J Flynn, DuPont Corporate M aintenance Leadership Team

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DuPont Chemical and Specialties Maintenance Cost Trends

1,200 1,100 1,000 900 800 700 600 500 400 76

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% of Equipment Replacement Value “DO NOTHING CURVE” Maintenance Cost at the 1976 to 1985 Avg. % of ERV

3.60

3.40

$300 Million per Yr. Cost Avoidance 3.20

3.00

Maintenance Costs

2.80

2.60

2.40

US 10K Basis Without OPEBs 2.20

2.00

78 80 82 84 86 88 90 92 94 Source: David Staat, DuPont, SMRP Conference, Indianapolis 2003 9 96 98

Benchmarking Objectives

The studies aim to enable a participating company to:

Analyse existing Understand issues Compare maintenance performance Identify areas of excellence and of improvement opportunity Identify the 'business stake’ Develop a maintenance improvement plan

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BEST OF BEST MAINTENANCE BENCHMARKING Data Collection 1.

Plant/site team

Questionnaire Delivery Normally half a day 6 weeks 2.

Data Validation

Plant/site visit

Normally 2 days Key Activities 6 weeks Study Review 3.

Plant/site visit

Final report Normally half a day

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Data Strategic Plan for Maintenance Development

P & S P P Reliability M Leadership C O N T R A C T HR S T O R E S

Practices

Maintenance Cost as a Percent of Equipment Replacement Value

1 0 6 5 4 3 2 Food Manuf Plant Average Australian Process Plant Average US Best Practice Process Plants European Best Practice Process Plants Japanese Best Practice Process Plants

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Some of the Quantitative Parameters

Ratio: Trades / Maintenance Support Personnel Ratio: Trades / First Level Supervisor Ratio: Trades / Job Planner Ratio: Trades / Maintenance Engineer or Technician Ratio: Trades / Total Site Employees Total: Number of separate craft or skill designations Cost: Training Expenditures / Tradesman Cost: Contract Maintenance / Total Maintenance Cost Productivity: Investment / Tradesman

Working Capital: Spare Parts Investment/ERV

Service Ratio: Stores Requests Filled from Inventory

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Some of the Quantitative Parameters

Ratio: Trades / Maintenance Support Personnel Ratio: Trades / First Level Supervisor

Ratio: Trades / Job Planner

Ratio: Trades / Maintenance Engineer or Technician Ratio: Trades / Total Site Employees Total: Number of separate craft or skill designations Cost: Training Expenditures / Tradesman Cost: Contract Maintenance / Total Maintenance Cost Productivity: Investment / Tradesman Working Capital: Spare Parts Investment/ERV Service Ratio: Stores Requests Filled from Inventory

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What is the norm for the number of Planners vs Maintenance Workers?

The DuPont people were particularly interested in this question and made it a focus of their study. We have been continuing with their process for the last ten years on a very large number of studies so we have strong confidence in saying...

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What is the norm for the number of Planners vs Maintenance Workers?

FIRSTLY

, people must be careful about definitions. Sometimes a person is called a "planner" when in fact they do all sorts of things that are not planning or scheduling. In some cases it is also the case that people without the "planning" title do first class "planning and scheduling". Dangerous to simply use titles that people use. Look at every person who has something to do with maintenance and break their time down into the various categories two of which are "planning" and "tool time or using tools to do work". Talk about the ratio of "Planning/MPP" or "Hours on planning and scheduling work / Tool time".

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What is the norm for the number of Planners vs Maintenance Workers?

SECONDLY

, people who are trying to move from very reactive to planned need a ratio of 1:10 because they have to set up all the procedures and BOMs and work against the existing culture. Sites with good planning practices and systems set up generally need 1:15 or 1:17. Sites that are highly routine in nature with high reliability and all planning in place, i.e. just crank the handle can get by with 1:20 or even leaner.

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What is the norm for the number of Planners vs Maintenance Workers?

FINALLY

, you often see sites that are

reactive

and say they want to planned but have a ratio of 1:25 or 1:30 or leaner. They will

NEVER

environment.

succeed in getting to a planned

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Some of the Subjective Parameters

- Management Philosophies - Contract Maintenance Management - Involvement Methods - Job Planning

- Supervisory Roles

- Material Management - Maintenance Engineering - Training Resources - Maintenance Skills - Operator/Mechanic Concept

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Supervisory Roles

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P L A N N I N G & S C H E D U L I N G

Leadership

P R E V E N T I V E P R E D I C T I V E Reliability C O N T R A C T S

Human Resources Development

M A T E R I A L S

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Data Strategic Plan for Maintenance Development

P & S P P Reliability M Leadership C O N T R A C T HR S T O R E S

Practices

BEWARE of arbitrary targets !!!

The benchmarking process focuses on understanding and comparing maintenance practices and culture. Management are encouraged to

resist the temptation to simply take numerical values in isolation

and use the values as arbitrary targets. The simplistic cost focused approach 15%" – "competition is 15% less on this cost parameter, therefore next year's budget is reduced by – is seen to be counter-productive. The studies encourage participants to use sets of data to form an understanding of the

root cause of good and bad performance

. This understanding is used to form

strategies for improvement

.

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‘Best Practice’ Examples

P L A N N I N G & S C H E D U L I N G

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Leadership

P R E V E N T I V E P R E D I C T I V E Reliability C O N T R A C T S

Human Resources Development

M A T E R I A L S

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‘Best Practice’ Examples – LEADERSHIP

Clear business direction and plan linked to personal objectives Flat organisation No artificial demarcations

Performance focus – substantial bonus Teamwork and co-operation

Communication – open, honest and timely Mutual respect and fair decisions Absolute commitment to safety, health and environment

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‘Best Practice’ Examples – HR DEVELOPMENT

Effectiveness rewarded – not commitment of time

Needs analysis drives training plans Training covers technical skills as well as mandatory safety and statutory training

Skilled workforce

Trade Associate Diploma Degree Performance and development review Absolute commitment to safety, health and environment

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‘Best Practice’ Examples – PLANNING & SCHEDULING

Work identified / notified

Priority is clear and agreed

Planners plan repetitive and shutdown jobs

Repetitive and shutdown jobs are fully developed and list required tasks, labour, parts, tools, time

Technicians plan discrete or one-off jobs

Bills Of Materials and Application Parts Lists are well developed

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Schedule to minimise total costs (include lost revenue)

Production makes equipment available in a clean and safe condition as required by schedule Maintenance returns equipment to service in excellent operating condition by agreed time 7 day schedule is published on Wednesday or Thursday 30 and 90 day look-ahead

‘Best Practice’ Examples – PREVENTIVE & PREDICTIVE

Best lubrication practice

PMs built on RCM principles (understanding failure mode and consequence) PM tasks aims to detect or prevent the failure

PM routines optimised based on operating experience

Operator basic care, Check/tighten belts, parts Oil/lubricate, etc Operators observe changing operating and process characteristics Operators apply basic condition monitoring – look, listen, touch, smell

Condition monitoring

Vibration analysis Oil analysis IR Thermography Ultrasonics Cost avoided are estimated and reported

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‘Best Practice’ Examples – CONTRACTS

Good specifications Continuing review with operations and maintenance for reliability – quality and capability

Fee for performance style of contract aligning contractor goals with company goals – a win gives a win and a loss gives a loss Incentives so the contractor is very active in achieving a better result for the company

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‘Best Practice’ Examples – MATERIALS (SPARE PARTS)

Easy to find parts in catalog

Easy access for efficiency Stock levels related to histories and risk

Quantities as indicated

Parts in good condition Humidity and static control Covered bearings, seals Shelf rotation as needed Proactive coating/covering etc.

Shaft rotation of machinery Inspection of receipted items

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‘Best Practice’ Examples – RELIABILITY

Production operate within basic system capability Production and maintenance work together to solve problems, maximise reliability Loss / delay measurement Top 10 ‘bad actors’ reports

Root Cause Analysis Precision alignment & balancing

Maintainability: access, lifting, monitoring, etc.

Intense application of Operations and Maintenance knowledge base to improve design Use of FMEA/RCM principles in the design Improved vendor specifications Equipment installation commissioning

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In summary

Many examples of best practice in one or two aspects can be found in most companies, so called “pockets of excellence”.

It is rare to find “best practice” across all aspects in one company “To be the best you have to be tenacious” – Ron Moore

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Conclusion

The "Best of Best" Maintenance Benchmarking Study provides an organisation with the opportunity to:

Compare maintenance practices and performance Identify strengths and improvement opportunities Quantify the business benefit Establish comprehensive maintenance improvement strategy Measure performance against a global reference and industry benchmarks

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