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World-class maintenance doesn't cost - it pays!

The connection between maintenance functions and a company's profitability is often obscured but can be a positive link if controlled.

World-class performance in the cast metals industry means winning the competitive race. It means running faster and smarter than the competition and never letting up. The marketplace selects the winners by judging performance in manufacturing flexibility, response time, total quality, time to market and value received.

U.S. foundries are struggling with competitors, particularly from Japan and the Pacific Rim countries. Manufacturing and service organizations are using programs such as Just-in-Time, Total Quality Control and Total Employee Involvement to gain competitive advantages in their respective markets. The constant theme is "continuous and rapid improvement," a theme that stresses that all parts of the organization must work toward the goal of being world class.

Maintenance Contribution

How does the maintenance department contribute to this effort? How can it work toward meeting the goals of quality, timely deliveries and low prices?

The results of a recent study by Klaus M. Blache and Renee Landgraff of General Motors Corp. reveal the differences between world-class maintenance levels compared to the actual practices in six industrial classifications in the U.S..

Estimates of reactive maintenance (unplanned repairs made as equipment fails) averaged 54.6% of total maintenance effort. More than half of the companies responded with figures between 41-80% reactive maintenance.
Table 1. Reactive Maintenance
Type of Industry Actual Perceived
(average percentages) World Class
Assembly 69.0% 13.3%
Consulting 58.6% 17.7%
Distribution 33.9% 16.9%
Manufacturing (major) 60.5% 18.8%
Manufacturing (minor) 53.4% 17.5%
Process 49.5% 15.4%
Average 54.6% 17.6%
Table 2. Preventive Maintenance
Type of Industry Actual Perceived
(average percentages) World Class
Assembly 29.0% 53.1%
Consulting 25.1% 44.1%
Distribution 56.0% 53.5%
Manufacturing (major) 29.3% 51.1%
Manufacturing (minor) 34.1% 52.2%
Process 33.5% 41.5%
Average 32.5% 47.4%
Table 3. Predictive Maintenance
Type of Industry Actual Perceived
(average percentages) World Class
Assembly 6.8% 39.4%
Consulting 14.6% 37.8%
Distribution 10.2% 29.7%
Manufacturing (major) 11.5% 29.8%
Manufacturing (minor) 12.0% 31.9%
Process 14.9% 42.2%
Average 13.0% 35.2%


The study revealed that maintenance expenditures expressed as a percent of original investment in machinery and equipment averaged 15.5%. Most of the reporting companies (76%) were below 16%, and 38% were below 5%.

Maintenance expenditures expressed as a percent of sales averaged 5.9%, with 64% of the companies responding with figures below 5%. The responses for reactive, preventive and predictive maintenance are summarized in Tables 1, 2 and 3. Figures are presented for perceived and actual values for industry types. Respective average values for preventive maintenance are 47.4% and 32.5%; predictive maintenance, 35.2% and 13.0%; and reactive maintenance, 17.6% and 54.6%. The various industries were reasonably close in their responses.

Table 4 lists the ratios of maintenance expenditures of respondents to original investment in machinery and equipment with an average of 9.4% as perceived world class and 15.5% actual. Table 5 shows that the ratios of maintenance expenditures expressed as a percent of sales averaged 4.4% for a perceived world-class level and 5.9% for actual practice.

The data implies that a higher level of reactive maintenance results in higher maintenance costs expressed as a percent of original investment in machinery and equipment. It also suggests that a higher level of preventive maintenance results in lower maintenance costs expressed as a percent of original investment in machinery and equipment.

The data also implies that a higher level of predictive maintenance is associated with higher maintenance costs expressed as a percent of original investment in machinery and equipment.

The authors of the study believe this finding is the result of at least two current situations. First, 10--15% of predictive maintenance performed is not enough to have a large effect on overall maintenance costs. Second, many plants are still experimenting and learning how to use the predictive technologies and are having success in specific situations, but the technologies are generally selectively applied.

The findings signify and reinforce the importance of planned maintenance. In addition, if planned maintenance is not performed, product quality and productive uptime decline and costs increase.

If you are in maintenance, you may already have intuitively understood this link. If you are in production, quality control or are a plant manager, this understanding should be part of a total systems approach because world-class manufacturing requires world-class maintenance.

Industrial maintenance is beginning to make the transition from a repair department focus to that of a high-level business function worthy of management concern and attention. In the primary metals industry in 1991, maintenance costs averaged 9% of total manufacturing costs.

Maintenance Costs

Plant maintenance is one of the largest controllable costs in the foundry. The first step in controlling these costs is to realize that plant maintenance does produce a product. That product is capacity. The consequences of having unreliable production capacity severely impacts manufacturing and delivery schedules, quality and, ultimately, profit.

The maintenance function should be considered in terms of the contribution it makes to high-quality product out the door. When production increases from 80% to 95% and quality is improved 5%, many of the recovered dollars drop right to the bottom line. This is the true value of a good maintenance operation, rather than the one associated with the apparent negative costs of people, parts and materials usually held by top management.

As reported by the survey, more than 50% of maintenance activity in many plants is reactive, resulting in significant costs because of unplanned downtime and damaged machinery. With the availability of computers, many companies are implementing computerized maintenance management systems. This approach uses maintenance scheduling software to track and schedule calendar-based maintenance procedures and automatically generates required work orders.

In the late 1980s, advances in technology provided instruments and technologies capable of identifying problem machines by measuring machine conditions and predicting maintenance requirements.

Recently, an additional maintenance approach--proactive maintenance--has begun to be used to enhance preventive and predictive maintenance technologies. This new approach focuses on reducing the total maintenance required and maximizing the life of machinery through the systematic removal of sources of equipment failure.

Maintenance Goals

Goals of a world-class maintenance operation should include:

* elimination of machinery breakdowns;

* the ability to generate current reports on the condition of equipment and status of overall plant capacity;

* a commitment to maintenance minimization by eliminating failure modes that approach a "fixed forever" classification;

* a system for anticipating and planning maintenance needs;

* establishing reasonable and predictable work hours for maintenance employees;

* assurance that maintenance and production functions are partners in scheduling and maintaining production capacity;
Table 4. Maintenance Expenditures Compared to Original
Equipment Investment
Type of Industry Actual Perceived
(average percentages) World Class
Assembly 12.5% 14.0%
Consulting 18.4% 9.0%
Distribution 8.4% 7.2%
Manufacturing (major) 17.0% 11.9%
Manufacturing (minor) 12.5% 7.5%
Process 17.1% 8.9%
Average 15.5% 9.4%


* a significant reduction of plant maintenance costs and increased profits.

Preventive Maintenance

The goal of interval-based preventive maintenance is to provide control of planned maintenance activities rather than allowing machine breakdowns and unanticipated expenses.

Studies have shown that the successful implementation of preventive maintenance can provide a 30% decrease in maintenance costs relative to expenses associated with reactive maintenance. The risk is that a large amount of unnecessary maintenance is performed to ensure that no machine is allowed to fail while in service.

Predictive Maintenance

The goal of predictive maintenance in which breakdowns are anticipated and eliminated is accomplished by applying technologies to measure the condition of machinery, determine what problems are present and decide when corrective action should be performed.

There are several benefits derived from predictive maintenance. Among these are:

* repairs that can be planned and carried out without interrupting production. A 2--10% increase in production availability can be obtained by implementing a predictive maintenance program;

* maintenance needs that can be anticipated and planned effectively. As a result of performing predictive maintenance, plant emergency work orders (the result of reactive maintenance) can be reduced to less than 5% of total work orders and overtime reduced to 3% or less of total maintenance man-hours;

* improved product quality, often adversely affected by mechanically degraded equipment. Because quality is frequently measured as a final process step, substantial off-quality product can be created before a machinery problem is detected. Predictive technologies, such as Statistical Equipment Maintenance Control (SEMCO), vibration analysis and lubricant analysis can measure the mechanical condition of machinery so that corrections can be made before quality is compromised by equipment malfunction;

* safety enhancement due to maintenance activities being anticipated, planned and completed in a nonemergency environment and reducing exposure to hazardous conditions;

* substantial energy savings. The elimination of high-energy vibration sources such as misalignment and imbalance and the proper use of lubricants can reduce machine power consumption by 10--15%.

A properly implemented predictive maintenance program usually will result in savings in the first two years that are 10 to 50 times greater than the total program costs and improve standards for future planning.

Proactive Maintenance

Proactive maintenance can best be described by the old saying, "An ounce of prevention is worth a pound of cure." The goal of proactive maintenance is to apply advanced investigative and corrective technology to extend machinery life. In its ideal form, the goal of proactive maintenance is to eliminate reactive maintenance on a manufacturing component forever.

There are several benefits to be gained from proactive maintenance. Respective problems in equipment design that shorten component life are identified and eliminated. Verification from vendors that new and rebuilt equipment are free of defects, that can shorten equipment life, should be required. This guarantee should include standards for the performance acceptability of vendor products or services and should be closely monitored to assure that standards are met.

It is important to assure that equipment installation is performed to precision standards. This leads to extended equipment life and identifies and eliminates operating factors that can shorten service life.
Table 5. Maintenance Expenditures Compared to Sales
Type of Industry Actual Perceived
(average percentages) World Class
Assembly 3.8% 3.8%
Consulting 5.7% 3.0%
Distribution 4.6% 4.1%
Manufacturing (major) 4.4% 3.9%
Manufacturing (minor) 5.6% 4.4%
Process 7.5% 5.3%
Average 5.9% 4.4%


Proactive maintenance consists of several technologies which, when combined, can lead to consistent life extension of plant components. Implementation of the proposed maintenance program requires a balanced integration of preventive, predictive and proactive maintenance strategies. These improvement strategies are not independent and frequently draw upon each other's strengths to achieve reliable plant capacity.

Success Breeds Success

Usually, programs that have modest beginnings have to beg and borrow for dedicated start-up resources. However, once initial successes are documented, often within the first three to six months, the reliability of the programs is supported and allowed to expand as needed to thoroughly utilize preventive, predictive and proactive maintenance.

In order to keep top management support for a world-class maintenance operation, a strong program of results measurements and documentation should be established that ideally would contain the following performance indicators and trends relative to maintenance activities:

* total monthly cost of the maintenance department;

* total units of saleable product produced per month;

* maintenance cost per unit of production;

* total units of scrap per month;

* percent of scrap versus total product produced;

* number of out-of-tolerance incidents per month;

* overtime as a percent of regular time worked;

* emergency maintenance jobs versus total jobs worked, or emergency hours worked versus total hours;

* percent of equipment downtime (due to maintenance and repair) as a function of total time (availability);

* percent of equipment use-time in relationship to total availability time (utilization);

* number of vibration analysis finds per month;

* number of vibration analysis finds corrected per month;

* accumulated economic benefits;

* percent of plant equipment covered in the predictive maintenance program;

* benefits achieved from the properly implemented maintenance program;

* electrical energy usage per month;

* pounds of steam produced and/or used;

* inventory value of spare parts.

The results and benefits obtained from implementing a world-class maintenance operation should yield a significant improvement in plant profit as well as many intangible benefits such as enhanced customer satisfaction, employee pride and better vendor relations.

Remember to believe that good "maintenance doesn't cost--it pays." And then practice what you believe.

Bibliography

K.M. Blanche, R.M. Landgraff, "North American Benchmarks," Maintenance Technology, pp 28-32 (Nov 1991).
COPYRIGHT 1992 American Foundry Society, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Witt, Ray H.
Publication:Modern Casting
Date:Jul 1, 1992
Words:2101
Previous Article:Solid fluxing practices for aluminum melting.
Next Article:Understanding ISO 9000: its implementation in American foundries and diecasting shops.
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