Profit-Driven Maintenance for Physical Assets

In the board rooms of most companies the word maintenance typically gives the top management an uneasy feeling. Why is this the case? The main reason is the way in which they think about business. They generally think, speak and discuss about opportunities, profits, risks, new markets, added value and costs for their business. On the other hand, the maintenance manager generally thinks in terms of techniques, failures, technical problems, workforce schemes, and not purely in costs and benefits. Maintenance costs are seen as penalties from above and maintenance as a function is not viewed as a business opportunity for improvements and for creating added value. The main scope of this book is to fill this large gap between these two worlds. We will treat the maintenance function as a pure business-driven process to fulfil the company s main goals and address the challenge of organizing the maintenance activities in the most profitable way for the asset owner. There are a lot of methods available for maintenance management improvement like Asset Management, TPM, RCM, WCM, FMECA, Lean, PAS 55, etc. Profit-Driven Maintenance for Physical Assets provides the reader with an overview of how all these methods can improve the maintenance function and how to leverage the opportunity to utilize them. In addition, the maintenance organization and the competencies of the people involved are important items in this book. For maintenance managers output improvement and operational excellence are high on the agenda. It is important that the maintenance function not only covers technical matters about the physical assets, but that there is also a thorough understanding of the business way of thinking about assets. We can call this Technomics . This approach enables communication with top management to take place on the basis of business terms, such as profit, added value and profitability.

Table of Contents:
Foreword Introduction Guide for the Reader Brief content description based on the eight Operational Excellence aspects 1 House of Excellent Maintenance 1.1 Introduction 1.2 Mission, Vision, Main Goals and Strategy 1.2.1 Main goals of an organization 1.2.2 Some remarks on profit 1.3 What Does Integrated Design and Engineering Mean? 1.3.1 Characteristics of the IDE approach 1.3.2 The IDE domain 1.3.3 IDE as a business process 1.3.4 Role of ICT for IDE in organizations 1.3.5 IDE company model 1.3.6 Conditions for applying the IDE process 1.3.7 IDE company model and maintenance 1.3.8 IDE and personnel 1.3.9 Advantages of working according to the IDE principles 1.3.10 Four main aspects of Integrated Design and Engineering 1.4 What Does Operational Excellence Mean? 1.4.1 Eight aspects or main pillars for Operational Excellence 1.4.2 House of Excellent Maintenance 1.4.3 Quality of the maintenance function 1.5 Asset Management and PAS 55-1 1.5.1 Introduction 1.5.2 What is PAS 55? 1.5.3 Why do we need PAS 55? 1.5.4 Introduction to PAS 55 by John Woodhouse (originally presented at IMC-2006) 1.5.5 Competing interpretations and definitions 1.5.6 Optimisation 1.5.7 The origins of 'integrated, optimised Asset Management' 1.5.8 The PAS 55 definition 1.5.9 Function- versus asset-based organization 1.5.10 The human factor 1.5.11 A preliminary AM checklist 1.5.12 Top-down alignment of objectives 1.5.13 Bottom-up delivery 1.5.14 Meeting in the middle 1.5.15 PAS 55 and Profit Driven Maintenance 1.6 Chapter Summary 1.6.1 Where is the profit? 1.6.2 What did we learn? 1.6.3 Skills and competencies Exercises Literature 2 Selecting the Right Assets to Meet the Company's Goals 2.1 Introduction 2.2 Financial Business Terms 2.2.1 Normal figures for ROI, PBP and AMCF 2.3 Physical Asset Outlines 2.3.1 Functional, financial, technological, technical, size and logistical aspects 2.3.2 Methodology of Kano and asset selection 2.3.3 Asset selection matrix 2.3.4 Assets and Operational Excellence 2.4 Chapter Summary 2.4.1 Where is the profit? 2.4.2 What did we learn? 2.4.3 Skills and competencies Exercises Literature 3 Maintenance Policy 3.1 Introduction 3.2 What is the Function of Maintenance? 3.2.1 Fuzzy situation on maintenance 3.2.2 Explanation of the abbreviations 3.2.3 Core of maintenance 3.3 Total Productive Maintenance (TPM) 3.3.1 Overall Equipment Efficiency 3.3.2 The six big losses 3.3.3 Consolidating results of improvement 3.3.4 Early Equipment Management 3.3.5 Leadership and motivation - how to organize TPM 3.3.6 Dividing or decomposing of production equipment 3.3.7 Education and training 3.4 How Does TPM Help to Achieve Operational Excellence? 3.5 Capacity-Time-Quality-Area Model 3.6 Fleet Utility Factor (FUF) 3.7 TPM, Lean and IDE 3.8 Maintenance Need or Necessity 3.8.1 Maintenance as a continuous process of restoration 3.8.2 Maintenance need required through regular (planned) degradation process 3.8.3 Unplanned Maintenance Need (by failure phenomena) 3.8.4 Total maintenance process figures 3.9 Total Maintenance Costs 3.10 Maintenance Policy 3.10.1 Outsourcing 3.10.2 Key Performance Indicators (KPIs) 3.10.3 Benchmarking 3.11 Chapter Summary 3.11.1 Where is the profit? 3.11.2 What did we learn? 3.11.3 Skills and competencies Exercises Literature 4 Maintenance Concepts and Execution Plan 4.1 Introduction 4.2 Some History of Developments in Maintenance 4.3 Maintenance Repair or Restoration Strategies 4.3.1 Possible maintenance repair strategies 4.3.2 Mix of maintenance repair strategies 4.3.3 Maintenance repair strategy scheme 4.3.4 Examples of typical maintenance repair strategies 4.3.5 Maintenance repair or restore activities 4.3.6 Maintenance repair strategies and normalisation in literature 4.3.7 Maintenance task selection 4.3.8 Maintainable situation 4.4 Maintenance Concepts 4.4.1 Introduction 4.4.2 Prioritizing 4.4.3 Functional thinking 4.4.4 Functional decomposition 4.5 A Simple Maintenance Concept 4.5.1 Four main steps 4.5.2 Standardizing methods and tasks 4.5.3 Standardized maintenance tasks (job cards) 4.6 Reliability Centered Maintenance (RCM) 4.6.1 Failures Mode and Effects Analysis (FMEA) 4.6.2 Preventive maintenance concept on the basis of criticality of functions 4.6.3 Criticality Matrix 4.6.4 Developing a Fc-FMEA 4.6.5 Evaluation of the criticality of functions by Functional Consequences Analysis (FCA) 4.7 Preventive Maintenance Concept by the Fc-RCM Method 4.7.1 Hands on Tool Time (HOTT) 4.7.2 Some remarks on Fc-FMEA and FMECA 4.8 Maintenance Execution Plan 4.8.1 Planning of activities 4.9 RAMSHE and Risk Assessment 4.10 Outsourcing 4.11 Long Life Service Model for Manufacturers of Equipment 4.12 Several Subjects 4.12.1 Social responsibility 4.12.2 Maintenance and insurance contracts 4.12.3 Maintenance costs 4.12.4 Key Performance Indicators (KPIs) 4.12.5 Logistics and spare part management (maintenance repair parts) 4.12.6 Skills and competencies 4.12.7 Maintenance execution plan and business model 4.13 Chapter Summary 4.13.1 Where is the profit? 4.13.2 What did we learn? 4.13.3 Skills and competencies Exercises Literature 5 Continuous Improvement 5.1 Introduction 5.2 Simplified Business Relationship Model 5.2.1 Improvement or innovation agenda 5.2.2 Prioritizing and standardizing 5.2.3 Technomic attitude 5.2.4 Technician attitude 5.3 Low Hanging Fruit or Find Our Gold on the Shop Floor 5.4 TPM, Lean and Small Groups 5.4.1 Small Group Activity 5.5 Lean and the Organization 5.5.1 Lean Improvement Process 5.5.2 Example of a scenario for Lean: a tug-boat company 5.6 Six Sigma 5.7 INK Model and Balanced Score Card 5.8 IDE and Value Engineering 5.9 IDE and Continuous Maintenance Improvement 5.9.1 Engineering maintenance 5.9.2 CE Mark, directive on machinery (Directive 2006/42/EC, 9 December 2009) 5.10 Organizing the Continuous Improvement Activities 5.10.1 Innovation agenda 5.10.2 Continuous improvement and social responsibility 5.10.3 Continuous improvement and long life services 5.10.4 How to organize continuous improvement activities 5.10.5 Maintenance management and continuous improvement 5.10.6 Methodology for improving performance 5.10.7 Implementing an improved process 5.10.8 Analysis methodologies for improvement 5.11 Examples 5.11.1 Hands On Tool Times (HOTT) 5.11.2 Case study: Tammer Company, redesign of failing parts 5.11.3 Case study: metro train, failure improvement 5.12 Chapter Summary 5.12.1 Where is the profit? 5.12.2 What did we learn? 5.12.3 Skills and competencies Exercises Literature 6 Maintenance Information Systems 6.1 Introduction 6.2 Possible Causes for Failure When Implementing a New System 6.3 How to Improve the Implementation Process of a New Information System? 6.3.1 Effectiveness and efficiency of information systems 6.4 Dynamic Information Systems Based on Continuous Improvements 6.5 Structural Models for Business Processes 6.5.1 The role of 3D CAD 6.6 Asset Administration Code System as a Strategic Choice 6.6.1 Financial and engineering descriptions 6.6.2 Maintenance code system 6.6.3 Asset coding structure 6.6.4 Search capabilities of the coding structure 6.6.5 Examples of maintenance coding structures 6.7 Maintenance Information Model 6.7.1 Collecting data 6.7.2 Life time of maintenance data 6.8 Maintenance Management and ICT 6.8.1 Standardization and maintenance management 6.9 Engineering Information Process Engineer (EIPE) 6.9.1 Competencies for an Engineering Information Process Engineer 6.9.2 Skills and competencies of the maintenance department 6.10 Chapter Summary 6.10.1 Where is the profit? 6.10.2 What did we learn? Case studies Exercises Literature 7 The Maintenance Organization as a Business Unit 7.1 Introduction 7.2 Maintenance Functions 7.2.1 Strategic, tactic and operational level 7.3 Organization and Maintenance Needs 7.3.1 Some notes on qualified craftsmen 7.4 Outsourcing and Maintenance Contracts 7.4.1 Maintenance contracts based on effort 7.4.2 Maintenance contracts based on performance 7.5 Small Group Activity and Outsourcing 7.6 Scenarios to Set Up a Maintenance Organization 7.7 Overview of Competencies 7.8 The Maintenance Function Organized as a Business Unit 7.9 Chapter Summary 7.9.1 Where is the profit? 7.9.2 What did we learn? 7.9.3 Skills and competencies Exercises Literature Appendix 1 Investment Calculations for Selecting Physical Assets A1.1 Introduction A1.2 Calculation Methods for Evaluating Investment Proposals A1.2.1 Pay Back Period (PBP) A1.2.2 Present value of money A1.2.3 Pay Back Period* with present value A1.2.4 Methodology of Net Present Value (NPV) A1.2.5 Calculation of the Lifecycle Costs (LCC) A1.2.6 Methodology of Annuity (ANN) A1.2.7 Some common values A1.2.8 Examples of calculations Appendix 2 Functional Decomposition Models A2.1 Introduction: Firstly Develop the Structures and then Generate Codes A2.2 Functional Thinking A2.3 Functional Decomposition A2.3.1 How to develop a functional decomposition? A2.3.2 Functional specification A2.3.3 Comments on the Hamburger Model A2.4 V-model From Systems Engineering A2.5 IDEF-0 Model A2.6 Hierarchical Breakdown Model A2.7 Examples A2.7.1 Mixing unit A2.7.2 Comparison between functional and hierarchical models A2.7.3 Coffee machine Appendix 3 RAMSHE Specifications and Safety Analysis A3.1 Introduction A3.2 RAMSHE Specifications A3.3 Safety A3.3.1 Hazard analysis A3.3.2 Hazard and operability studies (HAZOP) A3.3.3 Rapid ranking (of hazards) A3.3.4 Preliminary hazard analysis A3.3.5 Combined Failure and Hazard Analysis (CoFaHA) A3.4 Reliability and Maintainability Screening A3.5 Safety Integrity Level (SIL) A3.5.1 Introduction to Safety Integrity Levels A3.5.2 What is an SIL? A3.5.3 What is a target SIL? A3.5.4 Standards and regulations relating to SIL Analysis A3.5.5 When should you use SIL? A3.5.6 SIL Methodology A3.5.7 SIL levels A3.6 Summary Appendix 4 Risk and Reliability Assessment A4.1 Introduction A4.1.1 System behavior A4.1.2 Weibull distribution formula A4.1.3 Data collection for failures A4.2 A Continuum of Risk A4.2.1 Probability A4.2.2 Reliability A4.3 Reliability of Systems A4.3.1 Series systems A4.3.2 Parallel systems A4.3.3 Series-parallel systems A4.3.4 Stand-by systems A4.5 Analysis of Failure Modes A4.5.1 Fault Tree Analysis (FTA) A4.5.2 Failure Mode and Effect Analysis (FMEA) A4.5.3 Event tree analysis (ETA) Appendix 5 Condition Monitoring Measurement Methods A5.1 Introduction A5.2 Role of Sensors A5.3 'Ipadding' of Maintenance Data A5.4 Virtual Reality and Gaming A5.5 Role of process data A5.6 Condition Monitoring Methods A5.6.1 Most common methods applied by CBM Appendix 6 Spare Part Logistics A6.1 Introduction A6.2 Right Amount of Spare Parts A6.2.1 Amount of spare parts A6.2.2 ABC methodology A6.2.3 Optimized order quantum (formula of Camp) A6.2.4 Some calculations on investment in spare parts A6.3 Decision Scheme on the Criticality of Spare Parts A6.3.1 Examples: part criticality or urgency Appendix 7 Improvement Methodologies A7.1 Introduction A7.2 Brainstorming A7.3 Pareto Analysis A7.3.1 Selection matrix for alternatives A7.4 Value Stream Mapping A7.5Methodology of Kepner & Tragoe A7.5.1 General approach to the methodology A7.6 The Five Times 'Why Question' Analysis A7.7 Ishikawa or Fishbone Diagram A7.8 Root Cause Failure Analysis (RCFA) A7.8.1 Principal A7.8.2 Methodology A7.9 INK Model A7.10 Balanced Score Card (BSC) A7.11 Methodology of Six Sigma A7.11.1 Process, the basic unit for the Six Sigma improvement process A7.11.2 Process mapping A7.11.3 Process performance and process capability A7.11.4 Six Sigma and process capability A7.11.5 Applying Six Sigma A7.11.6 Six Sigma process improvement A7.11.7 Design for Six Sigma (DFSS) A7.11.8 Lean Six Sigma A7.12 TRIZ Methodology A7.13 Method Multi Moment Time Records A7.14 Benchmarking Appendix 8 Maintenance Contracts A8.1 Introduction A8.2 Why Outsourcing? A8.3 Outsourcing and Maintenance Contracts A8.3.1 Conditions for performance-based maintenance A8.3.2 Differences between effort and performance maintenance A8.3.3 Selection of contracts A8.3.4 Elements of a long life maintenance service contract A8.3.5 Main elements of a maintenance service contract A8.3.6 Maintenance contracts and competencies A8.3.7 How to draw up a maintenance contract A8.3.8 Culture A8.3.9 Measurable added value of the maintenance contract A8.3.10 Where is the profit in a contract Appendix 9 Outcomes of Exercises Index