Maintenance

Evaluation &
Benchmarking

Carlos Henrique Arruda

Are you getting a full return on your assets?
How do you compare to world-
How can you optimize class performers?
assets to improve your What has the greatest impact on
financial return? shareholder value for you: asset
effectiveness, or reduced costs?
How do you deliver actual, lasting
improvements?
How can you improve the
reliability and safety of your
operation?
Where are hidden improvement
opportunities; how worthy are
they?
Benchmarking

“Benchmarking is a continuous process for

evaluating the practices and metrics of a
maintenance organization, comparing to
those companies recognized as leaders,
aiming to identify and incorporate the
improvement opportunities regarding cost
reduction and production performance.”
Benchmarking
IT ISN’T IT IS
Primarily to identify the best
Just a search of
practices adopted in word-class
performance indicators
Companies, which leverage them to
from other companies for
high level performance and leading
comparing to those from
position, and implement such
your own Company
practices in your own Company.
A punctual event A continuous process
Copy and imitation A learning process; a pragmatic
search of new ideas
Easy A process that takes time, work and
requires discipline
Just a new fashion A powerful tool that delivers useful
information for a sustainable
improvement of the maintenance
organization
Benchmarking - Objectives
To know the strengths and weaknesses of your
process
To know your competitors
To know the best practices, new ideas and to
incorporate them
To acquire superior performance
Benchmarking – Generic Process
BENCHMARKING

LOOKING FOR REFERENCE PRACTICES LOOKING FOR REFERENCE METRICS

(BEST IN CLASS) (BEST IN CLASS)

DEFINE WAYS FOR REDUCING THE GAP GAP CALCULATION

(BEST KNOWLEGE, BEST PRACTICES, (DIFFERENCE: ACTUAL x REFERENCE METRICS)
BEST PROCESSES) • QHOW MUCH? WHERE? WHEN?

MANAGEMENT COMMITMENT

EMPLOYEES PARTICAPATION

ACTIONS FOR A
SUPERIOR
PERFORMANCE
Critical Success Factors in Maintenance
The effectiveness of Asset Management
Process within World-class companies is
closely connected to:

#$ $ #
%% #%
& ' "

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 Maintenance
Evaluation &
Benchmarking

ABB Approach

Carlos Henrique Arruda

Steps Towards Asset Life Cycle Management
Process &
Products, Systems & Solutions Equipment
Technology

Improvement Maintenance
of Plant / Excellence
Asset Workplace
Performance
Efficiency &
Effectiveness

Benchmarking
Time

Signature and Implementation of WIN/WIN Partnership Agreement

After partnership structure Achieving world- The last step in the
ABB’s approach to class
industrial asset has been agreed, ongoing improvement
workplace efficiency & maintenance process involves
optimization involves standards involves
an integrated step- effectiveness is first technological
improved using state of putting in place innovation and/or
by-step process. industry-specific
Comprehensive the art management process
methods and systems improvement improvements which
benchmarking gives tools and
a clear picture of concerning both enhance the production
maintenance and methodologies performance of an
current overall plant
effectiveness. production operations. already efficient and
reliable plant.
ABB Full Service®
Measurable
MeasurableCustomer
CustomerBenefits
Benefits
–– Significant
Significantreduction
reductionin
inmaintenance
maintenancecosts
costs
–– Measurable
Measurableimprovements
improvementsininproductivity
productivity(OEE)
(OEE)
ABB Full Service®
Totally dedicated to Industrial Maintenance
Consult Collaborate Create Value

We are present in more than

100 countries around the world
The annual turnover of Service
is BUSD 3,5
The total number of Service
employees is about 17.000
We have over 150 Full Service
Partnership Agreements
Industry specific organization:
Minerals, Metallurgy, Pulp & Paper,
Cement, Petro/Chem, Food &
Beverage and Electronics
ABB Full Service® : Metals & Minerals

ABB
ABB
ABB
ABB
ABB ABB

ABB
ABB
ABB ABB
ABB
ABB

JaRo, Finland
CMS, Chile ABB Motors, Finland
BlueScope Steel, Australia ABB Industry, Finland
Hydro Aluminium, Australia ABB Motors, Estonia
Kunda Nordic Cement, Estonia DMS, South Africa
Mondo Minerals, Finland (3 sites) MMC, South Africa
Boliden Harjavalta, Finland Columbus Steel, South Africa
Outokumpu Poricopper, Finland Outokumpu Stainless, Sweden
OMG Harjavalta Nickel, Finland Alcan, UK
Maintenance Performance - Overview
The performance of the maintenance organization can be
expressed by two main ratios:
– Maintenance Effectiveness
– Maintenance Practices

Industry specific Common Practices

Methodologies - Detailed Assessment

, # -)

()$ * $ *
+ ()$ * $ *+
$ $ %* % $ $ %*
%
-. /
Qualitative Analysis

Maintenance Management
• 24 sections
(According to EFQM-model)

Maintenance System Reliability Engineering

• 7 sections
(Asset Registry, Works Orders,
Planning and Scheduling, System
Performance,
Business Processes (IT),
IT (System Features),
Inventory and Procurement)
• 4 sections (Reliability Planning,
Maintenance Plans, Root Cause Analysis,
Precision Maintenance)
Asset Conditions
• 1 section
Gaps Analysis related to the Practices
Innocence Awareness Understanding Competence Excellence

0 - 0,9 Innocence: It means an unknowing level, where there is no idea of what

implies the characteristic or criteria of “Best Practices”.

1 - 1,9 Awareness: It means a level where the characteristics and the benefits
resulting of the implementation of the “Best Practices” are known.

Understanding: It represents a level where the the characteristics and

2 - 2,9 criteria of “Best Practices” are understood, and some benefits are being
achieved based upon initial steps of implementation.

Competence: It means that are well known the criteria, characteristics and
3 - 3,9 benefits already implemented in the company and there is a good control
of the “Best Practices”, enough to spread them throughout the whole
organization.

Excellence: The level of competency on the “Best Practices” is

4-5 comparable to world-class companies and quantifiable and auditable
benefits were achieved as result of those practices.

Converted to percentage for Spider Web graph

Gaps Analysis related to the Practices

Example:

Practice Innocence Awareness Understanding Competence Excellence

KPI’s not KPI’s and its The meaning of The KPI’s are The KPI’s take
defined. targets had the KPI’s fully part of the
How do the Key been clearly starting to be understood and management
Performance Comparison of defined. understood managed. process of the
Indicators the plant (influence plant.
(KPI’s) are performance They had been factors and the
used? against to the used, but are consequence of It has been
other similar not clearly its values). achieved a
ones has not understood for World-class
been everyone. The level.
performed. Benchmarking
process has
been started.
ABB Deliverables: Areas for Improvement
Leadership Role of maintenance
1 Building relationship
Cost Management
0,8
Business Results Maint & Prod Mgmnt
Profitability 0,6 Strategy development & implementation
Effectiveness & efficiency Knowledge exchange & networking
0,4

0,2

People Results 0 People Management

Competence & motivation Competence management
Safety & environment Motivation management

Resource HSE mgmnt

Client Results Finance &
Management cost mgmnt
Client satisfaction
Information mgmnt
Client value
Material mgmnt
Maintenance Functions
Partnership Contractor mgmnt
The studied site
Maintenance concept Facilities, tools, etc
Benchmarking against 75 % level of our Full Maintenance operations
Service sites Plant performance improvements
Shutdown mgmnt
Quantitative Analysis

Financial Data Productivity Data

• Personnel cost • OEE analysis
• Material and spare parts • MPR
• Contracted services • Other Losses

• Other costs (financial costs, etc)

• Maintenance overhead

Maintenance & Supply Data

• Number of maintenance employees
• Number of work-orders
• Spare part stock
• Consumables
• Wastes treatment expenses
OEE - Overall Equipment Effectiveness
“EIGHT BIG LOSSES”
Calendar time (A)

1. Shutdown

Availability
Shutdown 2. Production adjustment Factor
Working time (B) losses (A)
3. Equipment failure

Major
Operating time (C) stoppage 4. Process failure
losses

5. Reduced Speed Performance

Factor
Perfor-
Net Operating mance (P)
time (D) losses 6. Abnormal production

7. Quality defect Quality

Effective Ope- Defect Factor
rating time (E) losses (Q)
8. Reprocessing

Overall Equipment Effectiveness = Availability Factor x Performance Rate x Quality Rate

ABB Deliverables: Productivity analysis
ABB Deliverables: Ratios & Figures

Maintenance Effectiveness M ainte nance Practice s

90.0% 70.0%

85.0%
65.0% 4 3
60.0%
Manufacturing OEE

Maintenance Practices
80.0% 55.0%
75.0% 50.0%

70.0% 45.0%
40.0%
65.0%
35.0%
60.0%
30.0%
55.0% 25.0% 1 2
50.0% 20.0%
3.5%

4.0%

4.5%

5.0%

5.5%

6.0%
1.0%

1.5%

2.0%

2.5%

3.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%
Maint.Spend per RAV Maint.Spe nd per RAV
ABB Deliverables: Comparison
Percentage of equipm. having Percentage of hours worked
preventive or predictive tasks that have been planned
100 100
BM: 80 % BM: 80 %
90 90
80 80
70 70
60 60
50 50
40.1 %
40 40
30 30
20 20
10 10
0%
0 0
Alizay
Actual Specific
Paper All Alizay
Actual Specific
Paper All
industry industries industry industries

Percentage of hours worked No of weeks backlog for the

on PM or PdM maintenance crew
100 50
BM: 40 - 50 % BM: 2 - 3 weeks
90 45
80 40
70 35
60 30
50 25
40 20
30
26.9 % 15
20 10
10 5
NA
0 0
Alizay
Actual Specific
Paper All Alizay Paper
Specific All
Actual
industry industries industry industries
ABB Deliverables: Value Proposition (example)

Operations Development

Development of Increase of Indirect factors

Production Efficiency Cost Efficiency influencing the
(maintenance) Efficiency
Only intangible
3 550 M / 5 years 15 850 M / 5 years
values identified

Year 1 Year 2 Year 3 Year 4 Year 5

OEE 0k 580 k 1 850 k 2 940 k 3 550 k

Maintenance cost 1 100 k 2 720 k 6 270 k 10 280 k 15 850 k

Cumulative Improvement potential: 19 400 k

 Maintenance
Evaluation &
Benchmarking

Best Practices

Carlos Henrique Arruda

Best Practices # 1

THE ORGANIZATIONAL MODEL IN

TEAMS

“ A small group of employees which

responsibility is to self manager
their own routine tasks, as well as to
plan, control and implement
improvements in their work
processes“.
Best Practices # 1
THE
THE Operation / maintenance
ORGANIZATIONAL
ORGANIZATIONAL teams per industrial unit / plant
MODEL
MODELIN
INTEAMS
TEAMS Individual and team targets
Authority, responsibility and
control
Skills and performance based
remuneration
Centralized technical support
Extensively training (on the job
and within the team in
cascade)
Differences: Traditional x Team Structure

TEAM
TEAM ORGANIZATION
ORGANIZATION
TRADITIONAL MODEL BASED
ORGANIZATIONAL STRUCTURE IN TEAMS PER PROCESS

SUPPLY GENERAL SERVICES

PLANT MANAGER TEAM & ADM.TEAM

PRODUCTION
TECHNOLOGY TEAM
OTHERS OPERATION MAINTENANCE TEAM PLANT 6

PLANT
MANAGER
PRODUCTION PRODUCTION
TEAM TEAM
PLANT 1 PLANT 5

PRODUCTION PRODUCTION
TEAM TEAM
PLANT 2 PRODUCTION PLANT 4
TEAM
PLANT 3
Differences: Traditional x Team Structure
TRADITIONAL TEAMS
ORGANIZATION ORGANIZATION

Hierarchical levels Flat structure

Chiefs Leaders
Task based work Process based work
Manager hole to lead Manager hole to train

Hierarchical leadership Shared leadership

Controlled information Shared information

individual recognition Team recognition

Best Practices # 2
SERVICE Pay per Performance based
SERVICEPROVIDER
PROVIDER Contracts
LEAD
LEADTO
TO – Production targets
PERFORMANCE
PERFORMANCE – Productivity improvement
AND
ANDPRODUCTIVITY
PRODUCTIVITY – Implemented cost cutting
Service Provider = Strategic Partner
No incentive for headcount
increasing
Work Progress & Performance
Allows
Reporting
Allowslong
longterm
term
partnership
partnership
– Achievement of planed dates
contracting
contracting – Productivity / Equipment
compatible
compatiblewith
with performance
TEAM
TEAMBASED
BASED
STRUCTURE – Costs of routine services and
STRUCTURE shutdowns
A Sole service provider for all
company, integrating subcontractors
Best Practices # 3
INTEGRATED Continuous Improvement program
INTEGRATED for suppliers
RELATION
RELATIONWITH
WITH Yearly targets of cost cutting
MATERIALS
MATERIALS Stock Management by supplier
SUPPLIERS
SUPPLIERS – Supply and storage functions under
supplier responsibility
– The stock belongs to the supplier
Work Progress & Performance
Reporting
Formal supplier Certification
Process
Boost technical assistance by
supplier
– Technical training
– Preventive / Predictive
Maintenance
– Standardization / alternative
components
Suppliers consolidated base
Best Practices # 4
TOP Proactive and clear involvement in:
TOPMANAGEMENT
MANAGEMENT
SUPPORT – Continuous improvement team
SUPPORTANDAND
– Extensively training for continuous
VISION
VISION improvement, focused on the
business performance needs
– Recognition programs
– Employees appraisal
– HR Selection and recruitment
processes
– Carrier development
– Compliance of SHE standards
Incentive to external benchmarking
surveys
Reliability-driven thinking
Dissemination of positive results
Ostensive exposition of KPI’S and
targets
Best Practices # 5
PROACTIVE Macro planning centralized
PROACTIVE
PLANNING, Scheduling and execution
PLANNING, decentralized
SCHEDULING
SCHEDULING AND
AND Daily, weekly and monthly
CONTROL
CONTROL scheduling
Whole services scheduling
Proactive planning
Formal backlog managing
Compliance of maintenance plans /
programming
On line work request and work
orders follow up
Database and history of
interventions
Maintenance costs follow up and
control
SH&E considered as higher priority
Best Practices # 6
AGILE
AGILEAND
AND Centralized process
EFFECTIVE
EFFECTIVE Prices previously adjusted
PROCESS standardized contracts
PROCESS FOR
FOR
MATERIALS
MATERIALSAND
AND Targets to minimize / rid quotation
SERVICES time for sundries
SERVICES
PROCUREMENT Purchase contracts
PROCUREMENT
Consigned stocks
Suppliers kitting
Utilization of the suppliers capability,
information and technology
Self-service delivery for small value
items
Utilization of web tools to improve
price competitiveness and
decreasing of lead times
Best Practices # 7
INTEGRATION Integrated processes
INTEGRATIONOF
OF
THE – Procurement
THEBUSINESS
BUSINESS
PROCESSES – Accounting
PROCESSES
– Warehouse
– Payroll
– Equipment performance control
– Project management
Management system focused in
equipment reliability
– Equipment historical analysis
– Preventive / Predictive
maintenance
Full cost and manpower
appropriation
Best Practices # 8
TURNAROUND
TURNAROUND Professional leadership
MANAGEMENT
MANAGEMENT Turnaround Management – full
dedication
12 to 18 months of advance in
planning activities
Reliability Engineering has the main
hole in deadline definition
Emphasis in increasing the mean
time between turnarounds
Extensively training at each
turnaround event
Safety performance considered as
basic requirement
Best Practices # 9
DISCIPLINE
DISCIPLINEIN
IN Written procedures and standards
COMPLYING
COMPLYING THE
THE SH&E program involving
SH&E
SH&ESTANDARDS
STANDARDS subcontractors
PPE & protection technology
Systematic training
Accidents and incidents analysis
Planned observation tasks
Daily dialog on SH&E issues (FLM’s)
Emergency & Control Response
Safety & Health Control
Job Safety Analysis
Systematic safety meetings
Systematic auditing
Management of Changes (MoC)
Best Practices # 10
PRODUCTION Team formally applied to predictive
PRODUCTION maintenance and reliability
BASED
BASEDON
ON Systematic approach on prediction
RELIABILITY
RELIABILITY technologies
Equipment and systems classification
100% of preventive plan under CMMS
control
Planned maintenance - 90% minimum
Systematic auditing on preventive /
predictive maintenance
Skills on predicting the equipment
performance over 12 month horizon
Formal process of Root Failure
Analysis
Extensive application of reliability tools
Systematic approach for production
losses accounting / capture process
Metric References: Manufacturing

Process Discrete
Benchmark Comments
Industries Manufacturing
Maintenance craftspeople per first-line
15 16 Indicator of how well first-line supervision is leveraged
supervisor

Maintenance craftspeople per Measure of the emphasis placed on maintenance planning and
28 25
maintenance planner scheduling

Estimated plant replacement value Amount of assets maintained by each maintenance employee;
$4.9 $4.5
($MM) per maintenance craftsperson indicator of maintenance labor effectiveness

Annual training days per maintenance Indicator of management commitment to employee development
9.3 9
craftsperson and functional excellence

Annual training days per maintenance Indicator of management commitment to employee development
7.4 5
supervisor and functional excellence

Indicator of maintenance cost-effectiveness; high values may

Total maintenance cost as percent of
2.2% 2.5% indicate potential for cost reductions; low values may indicate
estimated plant replacement value
milking of assets

Source: Plant Engineering : Values shown were established by the board of directors of the North American Maintenance
Excellence Award as representative of superior maintenance operations. They are not intended as targets to be met or
guidelines to be followed in maintenance evaluation.
Metric References: Manufacturing

Process Discrete
Benchmark Comments
Industries Manufacturing
Unplanned (emergency) manhours as a
percent of total maintenance manhours 7% 18% Indicator of maintenance planning and control levels
worked

PM/PdM manhours as a percent of Indicator of commitment to proactive maintenance and assurance

27% 39%
total maintenance manhours worked of equipment reliability

Planned repairs schedule compliance 87% 87% Measure of performance in completing work as scheduled

Preventive maintenance schedule Measure of performance in completing preventive maintenance

90% 90%
compliance tasks as scheduled

Work order coverage as percent of Measure of maintenance documentation effectiveness. Affects

100% 98%
manhours worked ability to evaluate other factors

Indicator of storeroom management effectiveness and control;

Storeroom annual inventory turnover 1.52 1.53
reflective of materials management policies

Storeroom investment as percent of

1% 1% General measure of stores inventory management
plant estimated replacement value

Source: Plant Engineering : Values shown were established by the board of directors of the North American Maintenance
Excellence Award as representative of superior maintenance operations. They are not intended as targets to be met or
guidelines to be followed in maintenance evaluation.
Metric References: Petrochem

GENERAL COST RATIOS Typical

Mtce cost/ERV 1,2% - 5%
Maintenance cost/ production cost 10% - 30%
Total mtce cost/ total sales 1.5% - 5%
Mtce materials cost/ maintenance cost 25% - 45%
ERV ($millions)/ technician $3.2 - $9.0

MAINTENANCE PERFORMANCE Typical

Work order coverage 50% - 100%
Schedule compliance 35% - 90%
Preventive maintenance (plan compl) 60% - 100%
Unplanned work (emergencies) 5% - 35%
Overall equipment effectiveness 40% - 90%
Availability 85% - 99%
Metric References: Petrochem

LABOR/HUMAN RESOURCES range

OSHA injuries/200,000 hr --
Technicians/supervisor 8 - 25
Technicians/support person 2-8
Technicians/planner 20 - 80
"Wrench time"/Total mtce man-hours 30% - 60%
Overtime 4 – 25%
Annual training days / mtce craftsperson 3,0 – 12,0
Annual training days / mtce supervisor 2,0 – 9,0

MATERIALS MANAGEMENT range

Stores value/ERV 0.3% - 2.0%
Stores turnover 0.3 – 2,5
Service level (stockouts) 0,5 – 4%
Stores inventory accuracy 85% - 100%
Stores disbursements/store personnel $0,5 – 2,0M
Metric References: Pulp & Paper
Metric References: Metals & Minerals