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Multi-criteria decision methodology for selecting maintenance key performance indicators, International Journal of
Management Science and Engineering Management
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International Journal of Management Science and Engineering Management, 2014
http://dx.doi.org/10.1080/17509653.2014.954280
Many key performance indicators (KPIs) can be used for measuring maintenance performance. Companies must implement
a suitable set of KPIs to measure the performance of maintenance services and the influence of practices implemented in
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their activities. Establishing a useful set of maintenance KPIs depends on a company’s maintenance objectives and is highly
related to specific business contexts, strategies, processes, and systems. Maintenance managers deal with the complex tasks
of finding the best performance indicators that can help them to achieve goals. This paper presents a new approach to
selecting relevant maintenance KPIs using a methodology based on the original ELECTRE I, which is a multi-criteria
decision making method. The proposed methodology, which involves decision maker’s preference information, determines
a ranking of possible alternatives following its evaluation according to important criteria. To validate the methodology, a
case study is presented. The results show that this methodology is an effective tool to aid maintenance managers in accurate
KPI selection tasks according to maintenance objectives and strategies. The proposed methodology makes the decision
process more explicit, rational, and efficient.
Keywords: Maintenance; KPI; multi-criteria decision making; MCDM; ELECTRE; SRF
The paper is organized into seven sections. After this large number of indicators to measure each maintenance
introduction, a maintenance KPIs approach is presented in aspect hinders comprehension and the work for which they
Section 2. A review of MCDM is made in Section 3, where are developed.
some studies are highlighted, relating mainly to mainten- Different categories of KPIs and distinct frameworks
ance. In Section 4 a methodology for selecting relevant have been discussed extensively and proposed in the
maintenance KPIs is proposed. The application of the literature to monitor and control maintenance activities.
proposed methodology is undertaken in Section 5. Section However, few publications propose methodologies for
6 reports results and discusses methodology validation to selecting relevant KPIs, especially in the field of
assist the maintenance managers in the KPIs selection maintenance. Muchiri et al. (2011) mention that the
process. Finally, Section 7 summarizes and makes final literature mainly proposes lists of KPIs but lacks
remarks. methodological approaches for selecting them. These
authors are also of the opinion that organizations should
resort to suitable models to identify relevant KPIs for a
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the construction of ‘outranking relations’ by paired key performance indicators for a maintenance manage-
comparisons between the alternatives using the concept of ment framework.
concordance and discordance. ELECTRE I was the first There are several reasons why the ELECTRE I method
decision aid method using the concept of outranking is considered suitable for selecting relevant KPIs. First, the
relations (Roy, 1991) and was originally designed to lead to method has been successfully applied to other ranking
‘choice-type’ results. The ELECTRE approach has evolved problems, as mentioned above. The method is simple to
into a number of variants based on the same concept apply and many authors, such as Yazdani-Chamzini et al.
covering the different types of decision problems described (2013), consider that the ELECTRE logic is rational and
above, see Figueira et al. (2013). A complementary analysis the computation process is systematic and well organized.
to the ELECTRE I method that introduces the calculation of Furthermore, ELECTRE is the most commonly used
aggregate differential concordance and discordance values MCDM method for ranking alternatives (Zandi &
(net concordance and net discordance values), also exists Roghanian, 2013).
(van Delf & Nijkamp, 1976), which allows for the ranking Some authors discuss some advantages of the ELE-
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of alternatives from best to worst. CTRE method when compared to the limitations of other
Some approaches in the literature dealing with the methods such as AHP and ANP. The ELECTRE family of
original ELECTRE I method deserved attention in the methods can deal with heterogeneous scales, i.e. different
current research. For instance, there are authors proposing scales for each criterion. Whatever the nature of the scale,
methodologies of decision making in supplier selection the procedure can run while preserving the original
(Sevkli, 2010; Hatami-Marbini & Tavana, 2011), evalu- performance of the alternatives on the criteria (Figueira
ation of transport sustainability (Bojković, Anić, & Pejčić- et al. 2013). Yazdani-Chamzini et al. (2013) observe that,
Tarle, 2010), bioinformatics investigation of human genes because there is no need to impose a rating scale, the
(Ermatita, Hartari, Wardoyo, & Harjoko, 2011), environ- alternatives keep their original concrete verbal meaning.
mental impact assessment (Kaya & Kahraman, 2011), risk In addition, the decision maker does not make any
assessment in tunnel construction (Yazdani-Chamzini, pairwise comparison, since all the comparisons are carried
Yakhchali, & Mahmoodian, 2013) and tourism manage- out by the procedure itself (Figueira et al. 2013). The
ment (Botti & Peypoch, 2013). In another approach, the ELECTRE method does not allow for compensation of
original ELECTRE I and the complementary analysis performances among criteria, i.e. the degradation of
through the net concordance and net discordance values performances on certain criteria cannot be compensated
were used for selecting appropriate materials (Shanian & for by improvements of performances on other criteria
Savadago, 2006). With regard to maintenance, there is also (Figueira et al. 2013).
a fuzzy model based on the original ELECTRE I method Saaty and Ozdemir (2003) call attention to Miller’s
for solving maintenance strategy selection problems theory (Miller, 1954), wherein seven plus or minus two
(Vahdani & Hadipour, 2011). represents the greatest amount of information that an
Two recent approaches to the application of MCDM observer can give about an object on the basis of
methods are also to be found, both using the Analytic judgement. Thus, an upper limit of seven plus or minus
Network Process (ANP), an extension of the Analytic two elements in AHP analyses is suggested. This is indeed
Hierarchy Process (AHP) method: one, for choosing the a limitation of the AHP, advising against its use in solving
most appropriate practices and KPIs in a supply chain decision problems with a large number of alternatives and
(Cabral, Grilo, & Cruz-Machado, 2012); and the other, for criteria.
helping the maintenance manager in the definition and The ELECTRE method, on the other hand, can deal
selection of the relevant KPIs (Horenbeek & Pintelon, with a large number of alternatives. Hatami-Marbini and
2014). However, these methods have some limitations. For Tavana (2011) mentioned that ELECTRE is the preferred
instance, Cabral et al. (2012) mention that the main method for problems with a large set of alternatives and
disadvantages of their proposed ANP model are the large few criteria.
number of comparisons needed and the inconsistency Within the ELECTRE family methods, the decision
problems. Horenbeek and Pintelon (2014) emphasize that, maker is asked to assign numerical values to the weights of
in the application of their ANP approach, sometimes the the criteria. The calculation of the priority vector of the
decision makers encountered difficulty in expressing AHP is mentioned by many authors as a method to be used
preferences using the defined ratio scale. Another remark for determining the weights of a set of activities or criteria
of these authors is that an ANP approach may require (Horenbeek & Pintelon, 2014; Kaya & Kahraman, 2011;
considerable effort and time from the decision makers. Yazdani-Chamzini et al., 2013). However, Bana e Costa
Decision making in the selection of indicators for and Vansnick (2008) address a critical problem regarding
maintenance performance measurement can be aided by the priority vector and the consistency of the ratio of AHP.
conducting MCDM ranking methods. The values of the priority vector do not always preserve
the order of the respective intensities of preferences,
although the ratio proposed to assess the consistency of
human judgments does not detect disturbances. In other
4. The proposed methodology words, the weights calculated by the priority vector of the
A methodology is proposed herein that makes use of the AHP method may not correctly reflect the intensity of
original ELECTRE I method to select the most important judgments established by the decision maker by compar-
4 C.D.F. Gonc alves et al.
ing pairs of criteria. For that reason, the use of AHP is also set the evaluation criteria according to the predefined
not advised for calculating the weights of the criteria. objectives to be reached by the maintenance department.
For assessing those weights, the proposal here is the It is also necessary to propose a battery of indicators
revised Simos procedure aided by SRF (Simos –Roy – (KPIs) focused on the maintenance aspect to be measured.
Figueira) software (Figueira & Roy, 2002). This method That cluster of KPIs is the set of competing alternatives
attributes an intrinsic weight to each criterion without which are evaluated by the decision maker against the set
dependence on either the range of the scale or on the of criteria.
encoding to express the score on this scale. On the other The evaluation of alternatives represents the convic-
hand, the decision maker has the possibility to express her/ tions of the decision maker, who can mirror her/his
his preferences spontaneously and achieve the outputs in a preferences by assigning a level of importance for each
coherent way without any application of weighted sum alternative. For defining the assessment scale, we followed
aggregation techniques. This means that the value of each the principles presented by Likert (1932) and Miller
criterion is fixed without taking into account the impact (1954). Likert (1932) indicates that the scales to capture
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that other criteria weight can have. Augusto, Figueira, and the perception must present symmetrical options, and
Lisboa (2005) and Figueira et al. (2011) used SRF Miller (1954) complements these guidelines considering
software to determine the weights of the criteria for the that in addition to symmetry, the scales should provide five
resolution of different decision problems through different or nine response options. A Likert scale assessment of nine
ELECTRE methods. response options is proposed with which the decision
Ranking is very different from choice or sorting and maker can specify her/his level of agreement with each
therefore requires the use of specific methods. ELECTRE I alternative in relation to different criteria. The higher the
is a simple method for choice type problems (Roy, 1991). response level in a criterion, the more important is the KPI.
The ELECTRE method is applied in combination with
Nevertheless, their outputs can be worked upon to obtain a
the calculation procedures of the NC and ND values.
ranking of alternatives (Hatami-Marbini & Tavana, 2011;
Ordering the set of alternatives in descending order of the
Shanian & Savadogo, 2006; van Delf & Nijkamp, 1976;
NC values, a ranking list of all alternatives from the best to
Yoon & Hwang, 1995; Zandi & Roghanian, 2013).
the worst is obtained. The final selection should satisfy the
Toward that goal, calculation of the Net Concordance
condition that its NC value is at a maximum and its ND
(NC) and Net Discordance (ND) values is proposed. These
value at a minimum (Yoon & Hwang, 1995). The interest
methods make it possible to rank and select the most
is to find a set of maintenance performance indicators that
relevant maintenance KPIs following their evaluation by a
satisfy the conditions to be accepted, and that means
decision maker. having the highest NC values and the lowest ND values
Methodological procedures are given in Figure 1 in simultaneously.
order to illustrate the steps in the selection of indicators. A sensitivity analysis must be conducted in order to
The conceptual framework is intended to aid decision contrast the position achieved by the different KPIs,
makers using the methodology. considering their value of discordance. Moreover, the
For the selection of relevant indicators, measuring a decision maker must determine if some KPIs that were
particular aspect of maintenance is necessary in order to ranked as being preferred are still of interest and should be
selected, or if the measuring maintenance aspect is ensured
1 by another KPI already selected.
Definition of the maintenance
management objectives The procedures to obtain the weights of criteria by the
SRF software are described in the literature (Figueira &
Roy, 2002; Gonc alves, Dias, & Cruz-Machado, 2014). The
2
Specification of the criteria original ELECTRE I method and the calculation of NC
for evaluation of the KPIs and ND values can also be found in the literature
(Gonc alves et al., 2014; Shanian & Savadogo, 2006; van
3 Delf & Nijkamp, 1976; Yoon & Hwang, 1995). The
Determination of the weights of
criteria using the SRF software
mathematical procedures were programmed in ‘Excelw
VBA’ code to provide computational results. The main
goal is to provide a practical and effective informatics tool
4 for the decision making process with the proposed
Pre-selection of KPIs as
competing alternatives approach.
5
Evaluation of the KPIs
according to each criterion
5. Application – case study
Suppose a maintenance department of an important airport
6 realized that there should be a relevant set of indicators for
Ranking of KPIs using ELECTRE I
and calculation of NC and ND values maintenance service quality measurement of their
facilities. Two maintenance managers find it difficult to
Figure 1. Conceptual framework of the proposed methodology. establish strict preference judgements, due to the vast
International Journal of Management Science and Engineering Management 5
number of alternatives. The fundamental questions are: reality, the data interpretation, and the analysis of
‘Which KPIs must be selected to meet the maintenance results without compromising the effectiveness of
quality measurement needs?’ and ‘How many KPIs must maintenance management in decision making.
be selected to assist maintenance managers?’ The Sharing results (C5): to evaluate how the results of the
proposed methodology was applied to select an optimal KPI are of interest for being shared with other
set of KPIs that best measures the performance of the company sectors, employees, or customers; how the
maintenance sector with regard to the quality of their results of the KPI are of interest for informing and
service and achieving the goals of the organization. The motivating employees; to evaluate the common
decision process for resolving the problem is summarized interest between maintenance and other sectors of the
as follows. company in sharing the results of the KPI.
Step 3: Criteria weights determination. Maintenance
Step 1: Maintenance management objectives. It is managers were called upon to elicit the relative
necessary to understand the needs of the organization importance of criteria in an indirect way by using SRF
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in order to answer the question of which indicators are software. The data required for the revised Simos
relevant to the business and related to maintenance. procedure used by the SRF software algorithm are
In general, the organization’s strategic goals are the given in Table 1. Through this software, the
efficient management of airport infrastructure, ensur- appropriate values for the weights of the five criteria
ing productivity levels and quality of service to were generated, which are also presented in Table 1 as
passengers and airlines, continuously improving the normalized weights.
ideal maintenance service, and lowering costs. Step 4: Pre-selection of KPIs. A set of competing
The main maintenance objectives were defined by alternatives, assuming that all are possible best
the maintenance department and can be summarized as choices, was pre-selected. The same indicators often
follows: provide continuous improvement of the appear repeatedly in the literature. Muchiri et al.
facilities; ensure quality of airport service; optimize (2011) provide a well organized structure of indicators
maintenance activities; allow proactive management identified as key elements to measure different features
and agility; achieve high availability and reliability of of maintenance management. Among them, the
physical assets; provide shared vision of maintenance authors and airport maintenance managers pre-selected
performance among employees; and provide a safe the ones important as alternatives. KPIs were also
work environment with motivated employees.
collected from the standard EN 15341. Airport
Step 2: Specification of criteria. The first way to
maintenance managers have used a pool of KPIs to
approach the problem is to generate appropriate
measure and manage maintenance activities, from
criteria as constraints in evaluating the set of
which some were also collected for the present study.
alternatives. The literature review revealed the
Additionally, the authors developed four KPIs. Table 2
implications in KPI selection. Three maintenance
presents a set of 20 KPIs having possible interest for
management experts were invited to identify the
measuring maintenance performance in terms of
important criteria. In a subsequent analysis with airport
service quality.
maintenance managers, the focus was on the main
Step 5: Evaluation of KPIs against criteria. The two
matters for determining the most important criteria in
maintenance managers of the airport evaluated the pre-
the context of maintenance service quality measure-
selected KPIs against the criteria together. They
ment. From all of this, five decision criteria were
settled on and are described as follows. discussed the importance of each KPI and for each
Maintenance quality (C1): to evaluate how the KPI criterion a Likert scale value was assigned. The
quantitatively measures the quality aspects of main- performance of the 20 alternative KPIs evaluated
tenance service; how it allows measuring and according to the five criteria is also shown in Table 2.
comparing maintenance performance, identifying the Step 6: Ranking of KPIs. Making use of the
strengths and weaknesses of maintenance service. informatics application built into VBA, 20 rankings
Maintenance objectives (C2): to evaluate how the KPI of alternatives were provided. The preference rank
measures the maintenance state in the fulfillment of
established objectives for maintenance and according Table 1. Weights of criteria generated by RSF software.
to company goals; how the KPI assists the manage- Criteria Criteria Blank Non-normalized Normalized
ment in setting goals in a process of continuous code rank cards weights weights
improvement.
KPI influence (C3): to evaluate how the result of the C5 1 – 1 224
– – 2 – –
KPI can influence decision making in maintenance; C2 2 – 8 1791
how the KPI helps to guide future decisions, to track C3 2 – 8 1791
progress and changes over time. – – 1 – –
Understanding and interpretation of KPI (C4): to C1 3 – 1267 2836
evaluate how the KPI expresses a measurement that – – 0 – –
C4 4 – 15 3358
easily translates an obtained or expected real result; to Total – 3 (Z value ¼ 15) 100
evaluate how easily the KPI gives a perception of
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13 Percentage of work orders requiring rework (quality of No. of work orders to rework/Total no. of work orders Muchiri et al. (2011) 9 9 9 8 9
execution)
14 Rate of planned work (planning intensity) Planned work/Total work done Muchiri et al. (2011) 8 3 4 8 8
15 Quality of planning No. of work orders requiring rework due to planning/Total no. of Muchiri et al. (2011) 9 8 8 8 9
work orders
16 Quality of scheduling No. of work orders with delayed execution due to material or Muchiri et al. (2011) 9 8 9 7 6
manpower/Total no. of work orders
17 Execution Index Hours of work orders planned and executed/Expected hours of Developed 7 9 8 7 7
work orders planned
18 Rate of customer complaints due to causes imputed to No. of complaints with cause imputed to maintenance/(No. of Developed 8 7 9 8 9
maintenance (per 1000 passengers) passengers/1000)
19 Maintenance Quality Index Total hours of maintenance/Rework hours Developed 8 9 8 5 8
20 Maintenance Performance Index Expected hours of maintenance/Hours used for maintenance Developed 3 7 6 5 5
International Journal of Management Science and Engineering Management 7
Table 3. Ranking of KPIs by concordance in descending order. work done to ensure that maintenance work is not
left to chance. Work orders are reworked as a result
Net values Ranking
Alternative, of low quality work or work that was initially poorly
N NC ND Rank C Rank D done.
. In third place was ranked the ‘fulfillment rate of
11 152,387 2190,000 1 1
13 122,165 2160,161 2 2 work orders’, which is identified by the standard EN
10 100,673 2128,535 3 3 15341 as an organizational indicator. This indicator
3 82,534 2101,294 4 4 provides the percentage of work executed within the
1 77,981 2 94,813 5 5 scheduled time and that also fulfills the explicit
15 77,390 2 91,803 6 6 tasks in the work orders.
16 47,389 2 50,338 7 8
. The ‘average time to replacement of functionality’
18 41,268 2 52,597 8 7
4 15,745 2 19,931 9 9 and the ‘number of incidents due to causes imputed
5 07,988 2 14,539 10 10 to maintenance per each thousand passengers’ were
17 2 23,510 2 11,079 11 11
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The maintenance managers are in agreement that the maintenance managers, and the results were well accepted.
first eight KPIs measure the main aspects of maintenance A ranking list of alternatives was generated, from the best
service quality in the airport and are also linked to the to the worst, which was considered acceptable by the
organization objectives. To ease understanding in maintenance managers of the airport. The KPIs ranked in
evaluating an aspect of maintenance, Kumar et al. the first eight positions meet the needs of intended
(2013a) hold that a number of indicators greater than measurement, covering the main aspects to be ensured for
eight should be avoided. This belief also derives from maintenance service quality in airports.
Miller’s theory (Miller, 1954). The proposed methodology requires little effort and
Therefore, the eight KPIs ranked highest with respect time from the decision maker. It provides decision support
to the concordance and in which discordance shows no and guidance for the selection of KPIs aligned with the
dispersion in the set were selected as measures. The organization’s objectives. Moreover, it reduces the level of
selected KPIs cover the main aspects for measuring subjectivity with which the decision maker reflects her/his
maintenance service quality, such as the management and preference of relevant KPIs to measure a particular aspect
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