How To Manage Maintenance B0006F5GYY

About This Course
As one course among many offered in the American Management Association's curriculum, How to Manage Maintenance has been designed for the manager whose time is at a premium. It provides self-paced, individualized study; learning and self-evaluation through in-text exercises.
Edward Hartmann is a registered professional engineer (P E.) and past president of several chapters of the Institute of Industrial Engineers (IIE). He has served as director of the Management Division and as chairman of the IIE Maintenance Task Force. Mr. Hartmann initiated and chaired the 1984 and 1985 International Maintenance Conference and has served on its Program Committee ever since. He has conducted Maintenance Management and TPM seminars for business and professional organizations in the United States and overseas, among them the American Institute of Plant Engineers (RIPE), the Institute of Industrial Engineers, the Institute for International Research (IIR), the Norwegian Society of Professional Engineers, CIDES in South America, and the APRC in Singapore and Malaysia. Donald J. Knapp graduated in civil engineering from Georgia Tech. After Navy service, he obtained a graduate degree in industrial engineering at the University of Southern California. He has worked in aerospace manufacturing, at Univac, in computer services, data communications, facilities operation and construction, testing and inspection, plant maintenance, manufacturing systems, operations management, and information management. He has held such titles as: engineer, technical supervisor, project manager, director of engineering, director of plant engineering, director of computer systems, vice president/ sales and marketing, vice president/general manager, and president. He currently consults in the United States, Canada, South America, Europe, and the Pacific Rim area. He is a licensed professional engineer (PE.).
xi
xii
How to Manage Maintenance
Joseph J. Johnstone, a management consultant specializing in manufacturing management and training, was corporate manager of engineering services for Armour Foods and Armour Dial before founding Engineering Management Systems, Inc. Mr. Johnstone has also served as an advisory editor to Training magazine, a member of the advisory editorial board for Factory magazine, and a fellow and former national president of the American Institute of Plant Engineers. Kenneth G. Ward spent over 20 years in various management positions at IBM before becoming a vice president of Engineering Management Systems, Inc., a management consulting firm. Mr. Ward has held numerous leadership positions in regional and national affairs for the American Institute of Plant Engineers and has written extensively on engineering and maintenance topics. The publisher wishes to thank Salvatore T. Cordaro, president, Cord Associates, and Professor Lawrence J. Mann, Department of Industrial Engineering, Louisiana State University, for their help in reviewing the manuscript of this course.
How to Take This Course

flexstudy.com courses consists of text material accessed over the internet. The course may be completed entirely on-line or printed and maintained in a binder. Either way the American Management self study courses are recognized excellence in management training, providing the professional the ability to develop and maintain skill sets needed in today's global economy. In order to complete a flexstudy program you must have access to the Internet and be using Adobe Acrobat Reader. The site is best viewed in Internet Explorer or Netscape. All the needed software is available free and can be down loaded from the respective Internet sites. Each of the sites gives detailed information as to installation and use. The flexstudy.com courses consist of written course work with chapter review questions an a post-test. Recommended Steps in taking course: 1. Insure you have all the appropriate software on your computer. 2. Log on through the member section on the Home page and proceed to "My flexstudy". 3. Begin the chapter readings as recommended below. 4. At the end of each chapter you will find review questions. Complete these questions and review your answers. 5. Continue through the course in a methodical way, reading each chapter and answering the review questions. 6. When you complete the chapter reading and are ready to take the post-test, make sure you have reviewed your responses to the questions. The post-test questions are presented at the end of the text. Print the question and have your answers ready when you go on line. The Text The most important component of this course is the text, for it is here that the concepts and methods are presented. Here you have the ability to print each chapter and read at your leisure. You are not tied to the computer, but have the ability to maintain the course work in a binder or in such a way that you are comfortable.
We suggest you read each chapter twice. This will increase the likelihood of your understanding the material. We also recommend that you work on this course in a systematic way. Only by reading the text and working through the exercises at a regular and steady pace will you get the most out of this course and retain what you have learned. In your first reading, concentrate on getting an overview of the chapters contents. Read the learning objectives at the beginning of the chapter first. They will act as guidelines to the major topics of the chapter and enumerate the skills you should master as you study the text. As you read the chapter, pay attention to the headings and subheadings. Find the general theme of each section and see how that theme relates to others. Dont let yourself get bogged down with details during the first reading; simply concentrate on remembering and understanding the major themes. In your second reading, look for the details that underlie the themes. Read the entire chapter carefully and methodically, underlining key points, working out the details of the examples, and making notations as you go. Complete the exercises. In-Text Exercises Interspersed with the text in each chapter you will find a series of brief exercises. These take a variety of forms, including fill in the-blanks, matching, quizzes, and short cases. Answers are provided at the end of each chapter so you can measure your understanding of the material and track your progress. These exercises are especially useful because they call on you to think about what you have learned and how it applies to your own work environment. Practical information you can use and apply. The Review Questions After reading a chapter and before going on to the next, work through the review questions. Answering the questions and comparing your own answers to those given will assist you in grasping the major ideas of that chapter. If you perform these self-check exercises conscientiously, you will develop a framework in which to place material presented in later chapters. This building of a mental model will help clarify the reading and, most important, will help you to apply what you have learned to your particular work situation. Case Study Exercises At the end of some of the courses you will find case study exercises. These exercises are provided to help cement the material that you have learned. You should review the case and give careful consideration as to how you would approach the problem presented.
Write out your solution and then compare your solution to that given in the solution part of the exercise. The Final Exam The final exam is made up of a series of straightforward questions on what you have studied in both the text and the review questions. Answer the questions in the same manner as you completed the review questions. Here you only get one try, so first print the questions and review your answers carefully. Then log on to "My flexstudy" and complete the post-test. You will receive an e-mail with your grade and, if applicable, a certificate awarding CEU and/or CPE credit provided you have answered 70% of the questions correctly. Grading Policy flexstudy.com will continue to grade examinations and tests for one year after the course was purchased. If you have any questions regarding the tests, the grading, or the course itself, e-mail us at service@flexstudy.com.

Second Edition

Second Edition
Edward Hartmann Donald J. Knapp Joseph J. Johnstone Kenneth G. Ward
Contents
About This Course How to Take This Course
xi xiii
1 Organization Structure
Introduction Organization Charts and Reporting Levels
Very Small and Small Organizations Medium Organization Large Organization
Managerial Objectives Resources to Manage

Human Resources Financial Resources Physical Resources Information Resources
Maintenance Costs Maintenance Department Objectives Maintenance Department Functions The Maintenance Manager The Maintenance Supervisor Staffing the Maintenance Function Personnel Ratios Use of Primary Skills Area Organization Rules and Regulations of the Organization Summary Review Questions
vi
2 The Maintenance Budget

Introduction The Chart of Accounts The Expense Budget
The Operating Expense Statement The Value of the Expense Budget
23
The Capital Budget

Overstaffing
Deferred Maintenance Assigning Accountability for the Budget Preparation of the Budget Summary Review Questions
3 Systems for Control

Introduction The Work Order
Cost Information Source of Communication
37
The Service Order

Small Jobs Emergency Service Orders
Open Work Orders Work Order Procedure Flow

Work Order System Advantages
Priority Systems
The 1,2,3,4 System The Alpha Numeric System
Reporting Systems
Record Keeping Systems Computer Versus Manual Systems
Summary Review Questions
4 Inventory: Parts and Materials

Introduction The Maintenance Inventory Ordering and Inventory Costs
The Economic Order Quantity (EOQ Need Versus Cost
57
The Role of Purchasing
Maintaining the Stock Stores Catalog

Technical Database
vii
Control of Inventory Level Free Use Items Storage Location

Pre-kiting of Parts Inventory Accuracy Lubrication Materials
Measuring Stores Effectiveness Summary Review Questions
5 Maintenance Support Programs

Introduction History of Preventive Maintenance (PM) Categories of Maintenance Support Programs (MSP)
Reliability Improvement Programs Planned Maintenance Programs Unplanned Maintenance Programs
73
The Cost of Maintenance Support Programs (MSP) Measuring the Risk of Maintenance Support Programs Equipment Inspection
Equipment Identification Inspection Procedures Inspection Frequency
PM Work Order Scheduling and Routing

Scheduling PM Routing PM
The Manager's Role MSP Reports

Uptime Report Compliance Report Ten-Most-Critical Report Work-Generated Report Graphical Data
6 Planning and Scheduling

Introduction The Key Elements of Planning and Scheduling
Identification of Jobs to Be Planned Authorizing Work Orders Assigning Priorities
93
The Planning Process

Estimating Labor Hours Providing Information: Sketches, Prints, and Special Tools
viii
Parts and Materials Needed Planning Sheet for Larger Jobs Ordering Materials Scheduling Work Scheduling Small Jobs Scheduling Large Jobs
Execution of Work Review of Work

Measuring Effectiveness Records Upkeep
Selecting the Planner and Scheduler

The Planner The Scheduler
7 Craft Training
Introduction Training Needs Analysis Documenting Training Needs Skills Analysis Job-related Training Functional Training Hands-on Training Instructors Upgrade Training Training Materials Existing Programs Summary Review Questions
109
8 Measuring Effectiveness
Introduction Safety Measurements Budget Variance Maintenance Cost per Unit Maintenance Cost as a Percentage of Capital Investment Additional Measures
Percent of Uptime Workload Backlog Overtime Ratio Emergency Work Ratio Labor Versus Material Ratio
123
Work Measurement
ix
Estimated Time Versus Actual Time
Work Sampling Summary Review Questions
9 Computerized Maintenance Management Systems (CIVIMS)

Introduction What Should CMMS Do? How Do CMMS Work?
Basic System Features System Modules Functions Included in Modules System Operating Details
137
CMMS Implementation
User Training Evaluation of the Facility Data Entry
System Operation Reports

Report Samples
Benefits of Using CMMS

Identifying Benefits and Savings
Summary Review Questions Bibliography Post Test Case Study Case Study Solution Selected Readings Index 159 163 171 179 195 233
Organization Structure
Learning Objectives By the end of this chapter, you should be able to: Define the need and structure of a formal organization in managing the maintenance function. List the three elements comprising the plant engineering function. List four resources that must be managed by the maintenance organization. Define and list your maintenance department's goals and objectives. List eight criteria for selecting a maintenance supervisor. List three methods for determining the staffing level of a maintenance organization. Define three concepts of area organization in maintenance.
INTRODUCTION Driven by competitive markets and new management methods, maintenance managers face the challenge of adapting to new and better ways of doing things. The central structure for providing direction to the maintenance operation is its form of organization. An organization is the administrative and functional structure of any endeavor, whether it is a department, a business, or even an army. Each has it own purpose and objective for existing;
1
that is what causes the organization to come into being. The administrative and functional elements are necessary to sustain the prime purpose of the endeavor. They formulate the regulations, operating procedures, and basic guidelines for interpersonal relationships; they set controls and lines of authority. Organizations permit managers to achieve the end result of any endeavor, namely to get the job done through efficient and maximum utilization of all available resources. Commercial businesses strive to make a reasonable profit; public and non-profit activities strive to operate in a cost-effective manner. Either way, the businesses must deliver products or services at optimum cost and on schedule in order to be judged effective. When one thinks about world class businesses, however, other factors enter the picture. Factors such as product quality, environmental obligations, energy management, and the expanding role of government and regulatory agencies in the workplace are a few of the newer topics that maintenance managers must deal with directly. The maintenance manager plays a significant and growing role in pursuing these and other issues. Still, in the final analysis, businesses must create a market for their products or services, and from this market, operating, manufacturing, and marketing costs are funded. In simplest terms, what remains is the gross profit, which is increasingly influenced by the impact of activities performed by the modern maintenance function. Increasingly, traditional organizations are giving way to new concepts of structure. Self-directed work teams, quality circles, multi-skilled technicians, cellular work groups, and similar terms are used to describe some of the changes. More and more, decision making is being pushed down to the levels where work is actually done on equipment and systems. Knowledge and training are becoming crucial to the ability of maintenance personnel to keep up with modern complex equipment and systems. Maintenance managers, then, become essential in keeping the cost of products and services at an optimum level through effective management of the resources for which they are responsible. More than that, to effectively manage support resources, maintenance managers must not only become part of the senior management team and play an expanding role in fulfilling the objectives and strategy of the business, they must also provide ongoing leadership in implementing modern management techniques in the maintenance function itself. This may be a novel concept to some maintenance managers who have previously operated at some distance from policy-making levels or have followed traditional methods of organization and authority. However, the changing impact of the maintenance function is more evident each day. The purpose of this course, then, is to develop insights into how best to achieve this role. In this chapter we will discuss the importance of organization as an instrument for managing resources and achieving objectives, and the importance of maintenance management in controlling resources. Because people are undeniably the most important resource, the manager's role in this regard will be emphasized. We will also look at the many functional responsibilities common to both large and small organizations.
ORGANIZATION CHARTS AND REPORTING LEVELS In structuring an organization, many factors must be taken into consideration. No single structure applies to every situation, or even to activities that are similar. Two of the factors are: 1. Organizational objectives should shape the way an organization is set up. The organization should be built around the functions that best serve the mission of the business or enterprise. But an organization is dynamic; it is made up of people. One cannot continually change boxes on an organization chart and expect productive results. Rather, the manager should develop the people, make them responsible, and gain maximum utilization. Then the manager should design the organization's functions to realize the potential of the people making up this collective activity. 2. The size of an organization dictates the need for a certain minimum number of management personnel. The distribution of functions can also change in organizations of the same size. However, regardless of size, an organization must employ the necessary management functions for control and a cost-effective operation. Very Small and Small Organizations Very small and small maintenance organizations have fewer people (from 2 to 30), so management systems must be streamlined to reduce work activity and paperwork. The work order is the key to all controls; consequently, a very small plant might keep all completed work orders in a file as equipment history. Engineering design might be contracted out. Typically, the individual responsible for maintenance is a supervisor (most often referred to as foreman), possibly a working supervisor. Budgeting is the responsibility of the superintendent or manager of support services. Smaller maintenance organizations typically report to the manufacturing manager, although experience suggests this is an organizational error; better results ensue when maintenance and manufacturing report to the same management level. Exhibit 1-1 shows an organization chart for a very small manufacturing plant, and Exhibit 1- 2 shows a typical small manufacturing plant. A small or even very small plant should have a formal planning and scheduling function. To justify a planner/scheduler, the organization might have the individual perform other duties, such a managing stores, purchasing items for maintenance, and expediting deliveries. The maintenance superintendent and/or supervisor could carry a share of the planning and scheduling function as well. (The organization charts shown in Exhibits 1-1 through 1-4 are typical but not hard blueprints for designing an organization.) Medium Organization A typical medium-size manufacturing plant organization is shown in Exhibit 1- 3. The maintenance group would typically have 2 5 to 40 people.
In this example, the maintenance work is still centralized, but there is also a central shop. There are more personnel to manage various support functions, and the maintenance organization reports to a plant engineer, not to manufacturing. Construction and some engineering might still be contracted out. This is a practical organization because the natural affinity of engineering and maintenance is effective. Large Organization In much larger plants, the engineering department might be pulled out of maintenance to stand alone, and larger support activities might be administered by business-oriented managers instead of engineers. Maintenance could be a department of 100 people or more. A large plant might do all of its own maintenance work, as well as small to medium construction work and only contract out large projects to avoid building up too much internal construction capability. An organization chart for a large plant is shown in Exhibit 1-4. Clearly, large plant maintenance contains many more organizational functions, and work is typically set up along geographic or functional areas to interface with production units. The maintenance support functions in a large plant might include engineering, purchasing, and stores. These might report to maintenance or another department depending on which activity is the chief user of the functions. In very large organizations, these services are widely used by all and are better utilized if discharged through a central organization.
MANAGERIAL OBJECTIVES It is not enough for a manager of a department to excel technically. Because most maintenance managers are technical persons, management already assumes they excel in technical areas. A maintenance manager is also expected to increase productivity and improve the technical excellence of the organization. It takes exceptional management skills to accomplish this. The transition from being a technical expert to a manager of a technical organization is shown in Exhibit 1-5. For a smooth transition, a manager must understand the overall objectives of the organization. The objective should not simply be to get the job done: It should be to do :a better job by knowing why the job is being done. As in technical trouble shooting, it is important to look past the effect and find the cause. For example, top management might include the following in this year's overall company objectives: A. Establish annual growth of 15 percent. B. Expand market area to include Europe. C. Introduce a new product. D. Change corporate image (community involvement). E. Obtain a 2 percent or smaller reportable accident level, as reported to the Occupational Safety and Health Administration (OSHA).
The transition from a purely technical responsibility to the management of that technical group, right up to a company's top executive, is well illustrated in this exhibit. The vertical lines intersect the division of technical responsibilities and managerial responsibilities to indicate how management skills take precedence over the technical skills as a person becomes more involved in higher levels of responsibility. These vertical grids, numbered one through six, might be identified as follows: 1 Technician (or hourly mechanic). In this position there is some need to manage both work and time. 2 Engineer (accountant, nurse, and so on). Each position requires some type of technical responsibility that demands some management of time, work, and important decisions. 3 Engineering Manager (first-line manager, foreman, accounting supervisor, and floor charge nurse). Each of these positions manages a highly technical activity with a direct technical responsibility, and there is an increase in managerial requirements. 4 Functional Manager (maintenance manager, plant engineer, accounting department head, hospital head nurse, and production superintendent). The scope is increased over that of grid 3, though there is often overlapping of 3 and 4. With the increased scope comes the increased need to manage all of the resources assigned to these positions. 5 Middle Manager (plant manager, assistant controller, division manager, hospital administrator, and division, or corporate, engineering manager). The scope of responsibilities has now increased to include the responsibility of other functional organizations. The technical knowledge required includes an understanding of many technical functions. It becomes even more important to administer and make decisions affecting many areas. 6 Top Executive (has a background in one of the other disciplines). Must manage (lead) all other functions and develop the strategies of long- and short-term business planning. Like any other manager, the top executive must know how to manage the human resources who provide the i nput for the major decisions to be made.
10
Of course, many more objectives could be shown, such as quality and productivity improvements, increases in equipment uptime, facility improvement, reorganization plans, etc. And those listed above may require even more involvement to achieve their ends. For example, expanding markets to Europe may necessitate certification that the plant has implemented the provisions of ISO 9000, a standard published by the International Standards Organization, concerning manufacturing operations and materials sourcing. The maintenance function would play a major role in getting the plant certified to comply with this standard. These sample objectives relate to key business activities and can be associated with the eight key areas for which management author Peter Drucker suggests an organization must set objectives. These are: 1. Marketing 2. Physical resources 3. Innovation 4. Productivity 5. Human resources 6. Social responsibility 7. Financial resources 8. Profit requirements
These eight key areas can be matched with the five company objectives previously listed, possibly as: A=6, 7, 8; B=1, 3, 6, 7, 8; C=1, 5, 6, 7, 8; D= 2, 4; E= 2, 3, 4. Once the manager understands and identifies with the company's overall goals, true management takes shape. At this point, no matter what function is undertaken, the manager begins to run a business. Understanding and identifying with the overall goals or objectives is not the responsibility only of the maintenance manager or other functional managers. A true test of top management is found in how effectively the organizational goals are developed and communicated to all levels of subordinate management. A company that clearly defines "where it is going" sets guidelines that can motivate all sectors of the organization. This is important because an organization doesn't just grow by itself it grows because of people who bring it into being and who are the main reason it sustains itself.
RESOURCES TO MANAGE The usual resources connected with an enterprise include: Human (personnel, intellectual talent) Financial (capital, budget, cost) Physical (plant, equipment, land, materials, parts, etc.) Information Good management of each of these resources is vital to successfully achieving overall goals and objectives. However, the individual who successfully comprehends and manages the complexities of the human resources usually manages all of the resources well.
11
Human Resources Human resources are people-complex and different from one another. They are by-and-large capable and proud and want the same respect the manager desires. They need to be clearly shown what is wanted, and they will do the job. People are generally motivated; the manager's job is to create an environment in which people can achieve and, when they do, reward them with recognition. A good manager also shows genuine concern for people, which leads to their trust and commitment to managerial decisions and leadership. Personnel at all levels have a great desire to be part of the decisionmaking process. This is especially true in newer types of organizations mentioned earlier in this chapter. Maintenance managers must strive to involve maintenance workers in the decision processes affecting their daily work lives. This involvement is primarily a matter of communications, but also it requires re-thinking issues of trust and respect among the various levels of the organization. Financial Resources A good manager is concerned with the costs of getting the job done and instills in the workforce the same concerns. To get the maximum contributions from others, a manager plans and schedules work, develops standards of measurement and productivity, and makes sure the true costs of activities are known. Financial control requires exercising effective leadership as well as developing and enforcing firm but fair discipline. Physical Resources The heart of the maintenance function, the reason for its existence, is the physical resources. A maintenance manager who feels responsibilities beyond day-to-day problems is more likely to achieve the major role of assuring the vitality of all physical assets. This larger role is another exciting aspect of managing an organization: it is not only more interesting than the necessary daily routine work (which managers must do well), but it gives a manager the satisfaction of contributing to the overall objectives of the organization. Information Resources Our entry into the information age has been accompanied by an explosion of facts, figures, and large amounts of data that may or may not assist the manager in getting the job done effectively. Information is generally regarded as helpful; however, one of the skills a modern manager must achieve is to study large amounts of information and determine which items are truly helpful in achieving the objectives of the maintenance function.
MAINTENANCE COSTS The costs of maintenance can vary from 5 to 40 percent of the total cost of producing a product or service. The wide range derives from the nature of
12
the enterprise, the way costs are recognized and accumulated, and the efficiency with which work is carried out. Yet maintenance is only one of the costs associated with total costs. In a manufacturing process, for example, functional areas beyond maintenance claim portions of the total costs, including: Production Marketing and sales Distribution Plant operations Inventories Employee benefits Environmental issues Raw materials Administration Materials handling Research and development Management Regulatory compliance Obsolescence
Every unit that is produced contains a share of these costs. This is why each manager has an important responsibility to control costs. A maintenance manager is primarily concerned with controlling labor, materials, and overhead costs. In a labor-intensive industry, the overall costs of maintenance will generally be lower than in a capital-intensive industry where there is more equipment to maintain and support. Yet each situation, large or small, requires the same managerial functions within the maintenance function to keep costs under control. Another effect of maintenance on overall costs is that poor equipment reliability and poor equipment performance combine to affect product quality and rate of production. Thus, inadequate maintenance can generate production costs that are many times greater than those attributable to maintenance labor, materials, parts, and overhead.
MAINTENANCE DEPARTMENT OBJECTIVES The objectives that govern the existence of the maintenance organization should also guide the functional activities of the department. At the same time, the maintenance department's objectives should reflect the overall goals of the business. A sample of one departmental objective might be to effectively develop and utilize available resources to preserve physical assets while safely providing continuous availability of production equipment at the most economical level. This objective presents a challenge to any maintenance manager. It provides a guide to long-term and short-term needs, and applies to all resourceshuman, financial, physical, and informational. The most important part of this objective is to get the job done effectively. To successfully implement such an objective, the maintenance department must develop various functions and activities. Additional objectives will surely include some of the more current concepts, such as continuous improvement, total quality, total productive equipment maintenance, energy and environmental upgrades, information and cost improvement, and so forth.
13
MAINTENANCE DEPARTMENT FUNCTIONS Earlier, we said an organization is the administrative and functional structure of any endeavor and that it is made up of people. Within every organization there are functions and activities that are required for its successful operation. Many functions are universal to all organizations; some relate to a role that a specific organization performs (for example, maintenance production). However, a review of many well-run organizations reveals there are more universal functions than unique ones. Below is a list of typical functions for the maintenance organization: Repairs Engineering Preventive maintenance Safety Planning and scheduling Estimating Stores control Work management Plant operations Quality Assurance Employee relations Training Record keeping Energy management Regulatory compliance Data base management Budgeting Reports and analysis Financial planning Construction and remodeling
Other functions could be added to the list. The point is that many of these functions are universal to any organization. Some maintenance departments will be more involved than others in these, depending on their size and the critical nature of their responsibilities. In this list, the activities unique to maintenance are repairs, engineering, preventive maintenance, and work management. In some cases construction/remodeling is also included. These are the basic technical functions of the maintenance department. The remaining functions on the list are generally performed in any well-managed organization. Unfortunately, some maintenance organizations focus on the technical areas only. Management activities (or tools) that support management functions, include: Operating procedures Work orders Management reports Tracking of current and future work Data and information retrieval Priority setting Regulations
In recent years, we have seen these activities communicated or carried out through computer-based management systems, allowing managers to spend more time in actual supervision of maintenance work, as opposed to devoting a lot of time to paperwork.
14
A maintenance organization, regardless of size, must to some degree develop and support all of these functions and activities if it is to be effective in achieving its objectives. The chapters that follow will discuss these prerequisites of good management in more detail. Finding a sufficient number of people to carry out all the maintenance functions is an ongoing task. Management must agree to the principle of developing these functions and activities and apply them to the overall objectives. Then management must determine how to divide individual responsibilities among its people. The smaller the maintenance organization, the greater the share of functional responsibilities and accountability for each individual. THE MAINTENANCE MANAGER The maintenance manager is first a professional manager with a good technical background whose mission it is to direct the maintenance function. In small to medium-size plants, the manager might be an engineer or a technically trained person who has come up through the ranks. In most large organizations, the manager generally is a degreed engineer. As organizations become larger and the demands of professionalism become higher, the maintenance manager title becomes interchangeable with plant engineer. Plant engineering combines the functions of engineering, maintenance, plant operations, and management. People occupying the plant engineer function are often registered professional engineers (P E.), and some strive to become designated as certified plant engineers (C.P.E.). Some professionals in this field join the American Society of Plant Engineers, which is called an umbrella society because different institutions refer to plant engineers by different titles. Hospitals use the term "hospital engineering manager"; universities typically use "facilities manager"; large corporate organizations often use titles that include the manager's engineering discipline (electrical, mechanical, maintenance, chemical). Basically, all perform the same general functions that make up plant or facilities engineering.
TIME MAINTENANCE SUPERVISOR Maintenance supervisors (often referred to by the traditional title of "foremen") occupy one of the most important managerial functions in a maintenance organization: the day-to-day responsibility of personally directing a group of employees. The supervisor is the management's direct representative and sees that all management policies and procedures are implemented at the working level. The supervisor's position is also the main entry level for hourly employees who want to enter management. It is essential that a good selection process be employed in filling this position. Too often, the main criterion is the individual's technical skills. Selecting people with technical skills is extremely
15
important, but a supervisor must also possess non-technical skills, abilities, or knowledge, including: Leadership skills. Demonstrated planning skills. Understanding of such systems as work orders and priorities. Personal communications skills (both verbal and written). Ability to sketch or diagram work to be done. Respect for peers, subordinates, and superiors. Ability to grasp and analyze figures. Innovation skills. Understanding of human nature and motivation. In selecting a supervisor, it is important to make objective appraisals of the candidate. This can be done best by using the same criteria for all candidates and by including other managers within the organization in evaluating new candidates. Some organizations occasionally appoint young or inexperienced engineers to the supervisor position in an attempt to give them some exposure and seasoning in maintenance. But before moving into the supervisor's position, the engineer should spend time in other departments to gain experience in the overall nature of the enterprise, its processes, and its people. Other organizations select supervisors from technicians or mechanics who have come up through the working ranks. Each plan offers unique opportunities for training in maintenance theory and know-how. To gain better results from the supervisor arrangement, a clearly defined job description should show the position's duties, objectives, responsibilities, authority, and relationships to other management functions.
STAFFING THE MAINTENANCE FUNCTION There are no hard-and-fast rules for determining the number of skilled and non-skilled personnel a maintenance organization requires. Over time, most managers arrive at a mix and number of personnel who achieve maintenance objectives at an acceptable level of cost and efficiency. Historical patterns and the company's type of production (or work process) will point to which types of skills are needed. But the number of skilled personnel needed is more difficult to determine. Several methods can be utilized: One method is to multiply the replacement value of equipment by the factored maintenance estimate. As a general rule, total maintenance costs vary from as low as 1 percent (for a labor-intensive industry) to as much as 15 percent (for a capital-intensive industry). It must be decided by estimate or experience (sometimes arbitrary) where the facility and its equipment falls on this scale of 1 through 15 percent. Below is an example using $20
16
million dollars of equipment replacement value and 8 percent as the total estimated maintenance cost: Capital Replacement Value x Estimated Maintenance Cost (%) = $20,000,000 x.08 = $1,600,000 Total Mtce. Cost/Yr. Next, the historical portion of labor as a percentage of the total maintenance cost is applied. If it is, say, 33.3 percent of the yearly total costs, then $533,333 labor costs can be projected ($1,600,000 divided by 3). If a weighted average skilled trades wage is $18.21 and benefits are another 22.3 percent, then 11 mechanics can be hired. Labor plus fringes x hours ($18.21 + 4.06) x 40 $890.83 x 52 weeks $533,333 -F-$46,323.33 = Weekly labor costs = $890.83 = $46,323.33/Yr. =11.51-skilled workers
Another method used to. determine staffing requirements is to compare needs with another plant or organization that has substantially the same operation. Care must be taken to look for hidden differences that can affect staffing needs. A third method is to research the cost of maintaining similar pieces (or groups) of equipment and to infer certain cost estimates based on these data or on personal experience of the manager, supervisors, or consultants. What is striking about these three approaches is their arbitrary or subjective nature and their imprecise basis for determining the required number of direct personnel. Over time, the true needs for keeping the equipment and facilities maintained in optimum condition emerge. As each work site is unique, and its problems and equipment are also unique, the manager must study and analyze all facets of the staffing challenge, both from a historical and from a theoretical angle. Accumulation of costs by discrete activity is essential, as is data on estimated maintenance costs for new equipment and even for planned items not yet installed. The manager's responsibilities do not end with determining the skills and numbers of personnel required. The manager must also manage those skilled personnel efficiently. Unfortunately, there are some managers who try to solve all problems, both technical and managerial, by simply adding more people in the maintenance work place. PERSONNEL RATIOS One of the questions frequently asked is: "What should the ratios be for supervisors (or other supervisory personnel) to skilled or non-skilled, hourly personnel?" Once again, the type of enterprise and equipment involved creates ratios that are unique to the case being evaluated. The ratios within a plant can vary, too. For example, a machine shop in a central location, sup-
17
porting the maintenance function, may have twice the number of hourly machinists for each supervisor as an electrical shop that is dispatching electricians to various parts of the plant. The obvious reason might be that all machine shop supervisors are supervised from one location, while the electricians work in many locations. Similarly, a very specialized skill, such as electronic instrumentation, might require fewer hourly employees per supervisor because of their greater technical expertise, even though their work might be performed in just one shop location. The following ratios are for typical work situations. Each example represents one supervisor. Number of hourly people 12-15 8-10 15-20 6-8 10-15
Concentrated area supervisor Supervisor dispatching plant-wide Machine shop supervisor Specialty/high-tech supervisor Average (excluding planner/estimators)
Planner/estimators, and planner/schedulers, although not direct supervisors, generally are responsible for 15 to 25 workers, in terms of work planned, estimated, and scheduled. The number of workers they can accommodate depends on the unique work they handle from the planning aspect. Experienced workers and their supervisor might plan, estimate, and schedule certain repetitive jobs, while more complicated jobs and projects are generally designated for separate handling by the planner/estimator/scheduler position. It should be noted that the extremely complex facilities found in many sites today cause the planner's workload to increase by a large measure. In these cases the planner probably can handle no more than 12 to 15 workers, depending on the sophistication of the technology and the resources at the planner's disposal. For plant-wide ratios of supervisors, the two ends of the 8 to 10 average range shown above would indicate that 7 to 10 supervisors would be needed for a total of 100 workers. This range could be checked against the type of industry involved. Typically, the more complex or more capital-intensive sites require more supervisors. To determine the ratio of management personnel to first-line supervision, a ratio of .2 manager to 1 supervisor is often used. This adds 2 managers to an organization with 10 supervisors, and 3 managers to an organization with 15 supervisors. Remember there are many variables (a scale of 1 to 15 percent of equipment replacement cost, for example) and no set rules. The staffing tables of a maintenance organization must be critically evaluated on an ongoing basis because technical requirements and priorities are constantly changing. USE OF PRIMARY SKILLS Frequently one hears the comment, "A multi-skilled technician is what we need." This term overlooks employee relations. The individual's primary skills should always be used to the fullest extent possible. It would be inefficient to
18
do otherwise. It is helpful if a worker who repairs a motor bearing can also use simple skills to remove a guard, disconnect motor leads, remove the motor from its mounting, and return it to the shop. In such a case the worker uses primary skills to actually replace the bearing. However, use of multi-skills could be a delicate situation in some work environments, particularly in a unionized organization, because this practice might threaten the job security of other workers. Breaking the overall job into many smaller pieces, with each piece accomplished by a separate person or skill, is highly inefficient. Often this arrangement is not even a part of the established labor agreement, if there is one; many times it is merely the result of shop practices and precedent. This is but one example of why the employee relations function must be understood by both the maintenance manager and the supervisor. A more appropriate evaluation of skills usage in modern facilities might center on the need to hire workers who possess trouble-shooting and diagnostic abilities rather than traditional craft knowledge. Newer equipment requires workers who can analyze complex problems involving a variety of technologies (e.g., computer, hydraulic, mechanical, and electronic) and direct responses from a team of varied support personnel. Straight craft work, once the backbone of most maintenance organizations, is giving way to generalists and specialists who can work together to solve problems quickly and efficiently. Modem technicians require training in recognizing modes and causes of failures; data collection and analysis; and new technologies for equipment surveillance and condition monitoring.
AREA ORGANIZATION Many maintenance organizations have some form of area assignment. Line assignment. A technician is permanently assigned to maintain a specific production line (such as a product assembly or an automated "cluster area"). Generally this type of area assignment does not effectively utilize the worker; moreover, in certain cases it may overtax the worker. Furthermore, this assignment mode often leads to the creation of historical precedent under which the workers refuse to do work other than on the line to which they are assigned. Overstaffing can result. Area Responsibility. A single technician is given responsibility for an area of the plant or facility. If a top priority arises in that area, that person must respond immediately, whether or not engaged in other work. Area assignments are usually employed in smaller plants or within a classic area organization. Area assignments are considered superior to line assignments because they encourage dedication to a particular activity while they promote increased productivity by providing other general work assignments beyond those of the area responsibility. Classic Area Assignment. An organization is assigned to a physical plant or facility area. The members are responsible for the day-to-day repetitive
19
work, routine repairs, preventive/predictive maintenance, and some emergency work. Staffing of this type of organization should be lean, with additional support supplied as needed from central shops. Here again, there is the danger of setting precedents of overstaffing. This type of organization is usually seen in very large plants where one area may be as large as many small- to medium-size plants. The major advantages of any area assignment are familiarity, dedication, pride in ownership, reduction in travel time from central shops, better team effort, more thorough knowledge of equipment, faster response time, and easier coordination. The main shortcoming is the potential for overstaffing, generally expressed by uncontrolled loyalty to the area or process. Priorities may be overlooked and more services provided than are economically justified. Often it is more feasible to assign area cognizance to supervisors only and let them draw on central shops for support within a solid priority system. Thus, supervisors can provide the dedication necessary to get the work done, while avoiding the establishment of an overly large permanent working group.
RULES AND REGULATIONS OF THE ORGANIZATION Every organization has rules and regulations that govern its activities and the relationships between people, as well as certain procedures on how to operate each function. One procedure may regulate behavioral functions, another the methods by which a job is done. Rules, regulations, and procedures must be written concisely for clear understanding by all. It is important that members of an organization know what is expected of them. To be implemented successfully, all rules and regulations must be treated as standards that apply to everyone, although some defined differences may exist in their administration. Rules for managers might vary somewhat from those that apply to hourly workers; however, the principles should be similar. For example, chronic absenteeism should be treated uniformly for all employees, and penalties should be enforced regardless of the classification of employee. On the other hand, a manager might get an afternoon off with pay to conduct personal business, partly because the manager works additional hours without pay. An hourly worker who is paid for all hours worked, including overtime, may be docked for time off to handle personal business. Similarly, if the manager or hourly employee abuses the personal business procedure, there would be potential for disciplinary actions in either case. Besides the personal on-the-job rules and regulations governing personal conduct, there are regulations or laws with implications of a larger magnitude, and these must be rigidly enforced. Typically, these are regulations or laws promulgated by various agencies such as the Equal Employment Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA), the Environmental Protection Administration (EPA), and various other entities. Also, a host of federal, as well as state and local, statutes govern much of what is done in maintenance. Top management and
20
operating managers must become familiar with these areas and implement the provisions of the rules and regulations as effectively as possible. Moreover, systems used to manage maintenance (such as work order, priority, data retrieval, etc.) must have written procedures if they are to be universally and effectively implemented. Many routine job tasks (such as preventive maintenance, equipment shutdown, safety policies, planning, etc.) must also have procedures. For example, safe replacement of a motor might require technical procedures dealing with motor shutdown, lockout, and tagging. Many rules and regulations apply to all functions in a plant and can be written by others; however, the day-to-day maintenance operating procedures should originate within the maintenance organization, usually with the individuals responsible for the activity or function. Some maintenance procedures affect other organizations, as well, so their input should be included. The easiest way to develop maintenance procedures is to write them down simply and attach a flow diagram, showing each step as a numbered statement. The preparer should never assume that someone else knows or understands what is being described; all essential details should be defined and described. SUMMARY Maintenance management is essential to facilities that wish to keep their equipment running smoothly and their costs down. Today's maintenance managers are expected to adapt to the challenges of increasing productivity and improving technical excellence, while keeping up with ever-changing markets and management methods. The key to achieving this goal, whether in small or large organizations, is to establish the appropriate organization for managing the maintenance function and for maintenance managers to become part of the senior management team: maintenance managers must understand the overall objectives of the organization. Effective management of an organization's resources-human, financial, physical plant, and information-is also key. It is not enough for a maintenance manager to simply get the job done; he or she must motivate the work force, assure the vitality of the plant's equipment, and wisely use the information resources available today. And because maintenance costs can run from 5 to 40 percent of the total cost of producing a product or service, it is especially important for the maintenance manager to control costs. Inadequate maintenance can generate production costs that are many times greater than those attributable to labor, materials, parts, and overhead. All of this can be achieved by setting maintenance department objectives, which should guide the functional activities of the department and reflect the overall goals of the organization. But the most important part of the objective is to get the job done effectively, to do so, the maintenance department must codify the various functions and activities typical to its organization. And, of course, it is important to select the right people, in the right numbers and with the right skills, to carry out the maintenance function-from the maintenance manager (sometimes called the plant manager) to the maintenance supervisor to the skilled and nonskilled maintenance personnel.
21
1. The four resources maintenance must manage are: (a) human, financial, physical, and information resources. (b) plant, equipment, energy, and personnel. (c) human, regulations, safety measures, and energy. (d) contractors, personnel, plant operations, and budget. 2. A manager who is effective in managing the is usually effective in managing all resources. (a) financial (b) human (c) planning and scheduling (d) skilled trades resource
1. (a)
2. (b)
3. The elements of a maintenance manager's primary concern with costs are: (a) employee benefits, administrative jobs, new equipment. (b) company cost and departments control. (c) labor, materials, and overhead costs. (d) safety and regulatory compliance. 4. An overall company objective is not simply getting the job done, but also: (a) assigning the workload properly. (b) designing an appropriate organization chart. (c) knowing why the job is being done. (d) none of the above.
3. (c)
4. (c)
22
5. To determine which skills are needed in an organization, one can evaluate and analyze the: (a) maintenance costs vs. projected sales growth. (b) type of production process and historical patterns. (c) lines of authority and relationship between people. (d) facility's capital investment and estimated cost of labor. 6. creates ratios of first-line managers to hourly employees and all other personnel unique to every organization. (a) The type of industry activity and equipment (b) The number of skilled personnel already working (c) The number of trainees thought to be needed (d) The annual budget for maintenance work
5. (b)
6. (a)
7. Assigning people responsibility for the day-to-day maintenance work of a physical plant area is called: (a) line assignment. (b) classic area organization. (c) area responsibility organization. (d) tiger team organization. 8. A(n) position is the main entry to management for hourly employees. (a) supervisor's (b) superintendent's (c) engineer's (d) skilled trade person's 9. The best way to prepare organizational procedures is to: (a) draw a flow diagram and write statements for each numbered step. (b) invite input from other departments. (c) give the department manager authority over its preparation. (d) study competitor approaches and duplicate them. 10. An administrative and functional structure of an endeavor is called: (a) an organization. (b) systems and procedures. (c) an information pipeline. (d) a management hierarchy.
7. (b)
8. (a)
9. (a)
10. (a)
The Maintenance Budget

Learning Objectives By the end of this chapter, you should be able to: Define the two parts that make up the total maintenance budget. Identify the six items that should be considered when preparing the maintenance budget. Identify the format and content of the chart of accounts related to the maintenance budget. Distinguish between the two systems for assigning accountability for preparing the maintenance budget. Explain the differences among three terms: budgeted amount; actual expenditure; and variance.
INTRODUCTION The maintenance budget is the instrument for controlling important financial resources that are necessary for running the maintenance department. Budget administration employs various accounting procedures and computer-based systems to help manage, control, and measure departmental effectiveness. Budgeting can also be used as an effective planning tool for the coming year's activities as well as for pinpointing responsibility. Every department within an organization-production, maintenance, administration, services, marketing, sales, and others-should have a budget to determine the overall cost of doing business. Some of the more traditional budget activities will be discussed in this chapter. As facilities become more automated and equipment more complicated, maintenance costs become a larger part of the cost of operations. At the same
23
24
time, labor costs tend to fall, in terms of unit of product produced or service rendered. The maintenance budget, therefore, becomes increasingly important in the financial planning of most organizations. To reflect these changes, maintenance budgets are gradually evolving from collections of line item accounts that show planned expense and capital spending, to more specific types of documents oriented in a variety of ways to better display and evaluate spending plans. These might include budgets for cost centers, profit centers, single or combined programs, new technology applications, selected customer sector activities, and other specialized budgets for pinpointing certain cost or investment targets. However, the maintenance manager should bear in mind that the maintenance budget should be tied to the overall organizational objectives of the business. This means that future plans or strategies must be considered in formulating the total funding that maintenance needs for developing and delivering proper support for the departments outside of the maintenance area. The aim of integrating maintenance with overall budget planning is to avoid maintenance shortfalls that might impact production or service costs in other areas of the business. THE CHART OF ACCOUNTS The costs of goods and services are listed in the budget under a number of categories called the chart of accounts. Each category is called a line account, a line item, or simply an account. Each account defines an individual type of expense, such as labor, salaries, fringe benefits, fuels, electricity, repair parts, lubricants, and so on. TBE EXPENSE BUDGET One of the most important responsibilities for the maintenance manager is the expense budget. This is a detailed financial plan that shows expected costs for the goods and services that will be needed each month or accounting period. The dollar amounts represent the labor, parts, utility service, tools, overhead, and other items required on a current basis for the maintenance department to do its job. It also projects the department's share of the cost of each unit produced or, in the case of services, the cost of individual services or programs delivered. This budget contains mostly historic, fixed costs for operating the maintenance function year to year; however, the budget is also influenced by such variable costs as increased or decreased production or service demands, growth, and seasonal and regulatory situations. Exhibit 2-1 shows a sample yearly expense budget for a maintenance department in a small plant. The dollar values are only examples, but the various line items give an idea of the maintenance manager's budget responsibilities. In this exhibit there are nine major account groupings, indicated by numbers at the right of the descriptions. For example, look at number 12, to the right of Salaries. Under this heading, there are various line items related to salaries. Further down, the last two groupings, 89 and
25
26
27
98, are Distributive Expenses. Eighty-nine is Distributive Expenses-Debit: the share of the so-called motive power (that is, steam, space heat, compressed air, vacuum, etc.) that maintenance uses and pays for. Ninety-eight is Distributive Expense-Credit: a redistribution or transfer of maintenance costs to other appropriate departments (such as production). These credit show up as line item debits in the budgets of other departments that use maintenance services. Labor is also broken down into several categories. Note that the expense portion of Maintenance Labor-Projects (account number 5260) is included in the total, but Capital Labor has been transferred out (line accounts 5269 and 5290). In this sample budget, Fringe Benefits are shown at approximately 25 percent more than labor and salary costs. Under Repairs-Materials (45), the last four items are material costs redistributed or charged out to the maintenance department itself for materials used in the work the department performed for its own needs. Refer to the subtotal after the first six groupings. The two columns of figures to the left of the heading represent the totals for day-to-day operational
28
costs in the period , reported in this sample budget scheme. One column of numbers is the budgeted amount, the other is the variance. There is also a Year to Date actual and variance to the right of the Subtotal heading. The minus sign in the variance columns represents overspending; therefore, if there is a negative sign in the variance column, it means "over budget." A negative sign in the actual column means a redistribution or transfer to another plant account. Next, look at the figures in the actual and variance columns under Period. Add the actual (20,048) to the variance (2,893). (Add because there is no minus sign.) Multiply this total by 13, the number of accounting periods. This amount will be equal to the total for the actual and variance under Year to Date. Remember, this sample is a year-end report. The Year to Date variance, therefore, indicates that $30,226 of the operational monies budgeted were not spent at the end of the year. After redistributing all appropriate accounts (Distributive ExpenseCredit) to various other plant departments, the actual Year to Date cost (Grand Total) chargeable to the maintenance department was $12,946, and was still $23,207 under budget (Year to Date variance) for the end of the year. Although this is a sample budget for a small plant, it is the same type of budget that would be applicable in a larger plant. The various ratios appear normal (labor to fringes, labor to overhead, labor to material, etc.). The amounts budgeted in each o the accounts are estimates, and the actual expenses can be expected to vary as the expenses are incurred during the periods. The size of the variances in the line accounts and the grouping subtotals are often used as a measurement to determine trends, reflecting how well the maintenance function is being managed. Using a specific account to quantify the cost of labor helps to identify areas of excessively high or low activity. For example, a high expense portion of capital work could be jeopardizing the preventive maintenance program. In this sample, the plant's overall energy budget is controlled outside of the maintenance department. The more usual case is that the plant's utilities are part of the maintenance budget. When this is so, they must be treated as a maintenance responsibility, but should be redistributed to the various departments on a pro-rata share of the projected annual usage. Thus, a more accurate picture of every department's cost in the manufacturing of each product, or in providing a service, is given. When the budget has been completed, approved, and placed in operation, each maintenance expense is charged against one of the line accounts. This accounting is extremely involved because of the relatively large number of accounts needed to properly reflect the maintenance activity. Since the maintenance function will report work and materials used, and the accounting function will charge the dollars to the budget, it is necessary that both departments understand the definitions of the line accounts. The first thing to do when preparing a budget is to check the definition of each item in the chart of accounts and make sure estimates are based on mutual understanding.
29
The Operating Expense Statement A report called the Operating Expense Budget Statement (or a similar name) is generally produced each month or accounting period. For each line item it shows the annual Year to Date and Current Period budgets, and the expenditures against those budgets. The amount of detail in these reports will vary according to local needs. These reports are an invaluable aid for the maintenance manager, and are useful as a tool to monitor and control costs of selected line items, or groupings of line items. The format is similar in appearance to that of the expense budget shown in Exhibit 2 - l, but may not display Fixed Asset and Redistributive Costs. The Value of the Expense Budget The expense budget is normally of great value to the maintenance department's daily activities. As stated earlier, it is a detailed plan of financial activities over the budget planning period, usually a year. Preparing an expense budget is the best way to estimate funds required each month (or period) to carry on planned maintenance activities. Considerable planning is needed before these dollar amounts can be determined. The planning process is one of the chief advantages of preparing the annual budget. Plans for production (or services) and other operating departments served by maintenance must be reviewed before a credible operating plan for maintenance can be produced. There are many things that will affect maintenance budgeting, such as expected levels of production, new products or services, and the introduction of new equipment anywhere in the facility. Special maintenance plans, such as new management programs, major overhaul or remodeling projects, expected overtime requirements, new tools and equipment, additional management responsibilities, and expected cost reduction programs, must also be considered and reviewed so that their effect on the budget can be properly estimated and included. Expense budgets usually include a staffing forecast, by skill or category, that supports the proposed budget. This could be a simple headcount number by month, or it could be much more sophisticated. The budget itself may require several line items that specify regular salaries, hourly wages, premium pay for shift time or overtime, and fringes. These figures might be displayed by "fixed" (minimum) staffing and "variable" staffing related to certain programs that may or may not be approved. Detailed planning for the funds estimated for outside contracted services for projects (or to reduce in-house staffing requirements) is also required.
THE CAPITAL BUDGET The capital budget is usually compiled and administered by a senior management office, though maintenance may be assigned to formulate major portions of it because of the large amount of the total the department might control. The capital budget provides funds for non-recurring projects such as major renovations, construction, additional space, installations of major equipment,
30
technology implementation, and other special projects that add to the corporate financial investment (capital). This budget does not contain funds for the day-to-day cost of doing business. The capital budget consists mainly of defined projects, their priority and estimated cost, and expected start and completion dates. Detailed information is often attached for supporting documentation. The budget is used for planning and as a tool for obtaining approval for special funds for these projects in the future. The capital budget provides an overview of approved requests and is included in corporate financial planning. Local accounting personnel should be consulted for assistance in defining which projects are considered capital and which are considered expenses. Overstaffing The capital budget is variable and changes from year to year. If some maintenance personnel are scheduled for capital work, it is important to guard against overstaffing resulting from deferment of capital work. Conversely, understaffing of critical maintenance activities can result from diversion of labor to capital projects. Once new capital expenditures are completed, it is not often possible to retain workers hired to perform capital project work as regular maintenance employees. Exhibit 2 -2 shows the effect of this situation. DEFERRED MAINTENANCE Deferred maintenance includes capital projects and regular maintenance work that is needed but has not been done for a number of reasons. It may include repairs, preventive maintenance, and routine tasks in addition to capital work. For instance, when capital work is performed by workers who are "budgeted" to perform regular maintenance, this is considered deferred maintenance. Or, if the existing workforce simply does not get a job done, either because of a staff shortage or because the group knowingly put it off, this is also considered deferred maintenance. A good way to avoid deferred maintenance is to plan for capital work by outside contractors, thus preserving existing staff for regular maintenance work.
ASSIGNING ACCOUNTABILITY FOR THE BUDGET Assigning accountability for the budget is another factor that will have an effect on budgeting funds. Two general systems are used, each with a different department held accountable. There are many variations to each system. In the first system, the production department (or major services in non-production organizations) is accountable for the budget. In this system, the maintenance budget includes funds for maintenance of the "customer" function. When maintenance work is done for the customer, the costs are charged there and the maintenance budget is credited. The customer department must therefore bear more responsibility for high maintenance costs. (Refer to Distributive Expenses-Credit, the last item in Exhibit 2-1.)
31
Fixed maintenance costs would be the historic efforts required for the predictable daily equipment, building, and grounds maintenance. Fixed costs would include utilities and the annual rate of inflation. Variable maintenance costs would include activities such as a project (expense or capital) that the maintenance department might become involved in on a periodic basis. There are unpredictable elements, so it is difficult to accurately staff for this activity. In addition, these variable elements have irregular beginning and ending periods, which result in demands for labor as indicated in the sawtooth curve. At the apex of the sawtooth curve, the fixed maintenance must give way to the variable demand for labor. This is when the preventive maintenance program suffers. Because of the irregular demands, even if variable and fixed costs are budgeted for and the staff is on the payroll, overstaffing occurs when the project is completed (bottom of sawtooth curve). One solution is to contract all of the major variable activities.
Utility accounts, such as fuel, water, and electricity, may be charged to all departments or left in the maintenance budget only, depending on company policy. In the second system, the maintenance department prepares the budget and is accountable for the maintenance costs of the entire facility. In this case, the maintenance department must bear more responsibility for high maintenance costs. Both systems require close consultation between the maintenance department and its customer departments while the budget is being developed. Many variations on these two systems are possible. Most organizations wind up with a hybrid responsibility arrangement for preparing the budgets. The main goal should be to develop a budgeting system that works for the organization in question and provides the right amount of accountability along with visibility.
32
PREPARATION OF THE BUDGET The actual preparation of the budget should begin when the operating plan for the total organization (including the maintenance function) begins to take shape. Existing and planned budget line items should be reviewed to assure they are clearly defined and understood. Questions should be resolved quickly. For example, a typical question might be whether a special fuel used only in a certain manufacturing process should be charged to maintenance or to production. If it is charged to maintenance, how should the effect of excess production levels be handled? All line items must be carefully considered when preparing the maintenance budget. When line items are settled, dollar amounts should be assigned for each accounting period (usually one month, or four weeks) in the coming budget year. Generally, the total amount is spread evenly over each accounting period, but is adjusted for seasonal or event-driven considerations such as snow-removal in the cold months. Maintenance budgets usually have many more line items than do other functions of the business, due to the many services the maintenance department performs and the large number of equipment items it maintains for other functions. The following list of considerations should be applied when estimating each budget account: Variances from the year-to-date and monthly budget amounts in the current budget should be reviewed. If they are significant, explanations for this should be sought in order to avoid underestimating next timeunexpected events or incorrect charges might be the causes. If funds were underexpended, the account should be reduced next time. Remember, the budget is the best estimate of projected actual requirements for funds and should not be set so high that it takes care of major breakdowns or other possible extreme occurrences. Another series of budget accounts should be set up for gathering charges for these situations. It is also a good idea to compare average period charges in the line account with individual charges to determine possible trends. An account may increase or decrease from period to period and significant differences might indicate a mischarge or a special technical problem. For example, a sudden period increase for parts might signal a price change or, perhaps, an impending wear-out situation. Either way, the cause for the change in charge activity should be investigated. The future budget might have to be adjusted. The effect of variables (such as special projects mentioned earlier) on each line item must be considered when reviewing and preparing each account. Changes may be required in the amount budgeted for each line item account. For example, it might be determined that an additional pick-up truck will be needed at mid-year. Therefore, it would be wise to increase the accounts that will be charged for gasoline, oil, and other maintenance services for the last six months of the year. Overall price changes caused by fluctuations in the economy can have a significant effect on the accuracy of the maintenance budget. A mainte-
33
nance manager is not expected to predict the movement of the economy, but should be aware of possible trends when preparing the budget. Corporate or top management offices often provide planning assumptions. These may relate to wage and fringe projections or even include other items such as energy, taxes, or equipment and parts pricing assumptions. Timing of salary and wage increases can be important and changed values should be plugged into the budget. The effect of assumed inflation changes must be taken into account as well. Capital projects sometimes contain an "expense" component that is easily overlooked. For example, on a renovation project, demolition of the old walls might be judged to be an expense item properly chargeable to an ongoing maintenance work expense line item. If a major capital project is contemplated where this sort of judgment call might be involved, it should be reviewed and budgeted with care between the expense and capital budgets. If there is a good system in place now to record the accurate charges and history of maintenance activities, the new budget projections for next year will also be more accurate. This is discussed in more detail in Chapter 3. A budget may be a good planning tool, but it is not an effective measure by itself. Other measures and regular reports are needed, which will be discussed further in Chapter 8.
SUMMARY Once the budget has been prepared and approved, it becomes a valuable management tool. The process of preparing a budget leads to preparation of detailed action plans for implementing its various parts. Even if these plans are informal, they will present a clearer picture of forthcoming activities and their costs, and will help the manager comply with the budget. As the budget year unfolds, variances from the budget will be one of the first clues to show if spending is being controlled. Moreover, examination and correlation of actual versus budget by line item codes each month is an excellent way to use the principle of management by exception. Unexpected variations can be significant in more than just a financial way. For example, if Preventive Maintenance-Labor is well below budget, either the work is not being done, or, worse yet, it is being charged in error to the routine repairs account. A large cost variance for parts might signal some serious mechanical deterioration, or it might only reflect a new motor being mischarged to expense when it should have been charged to a capital equipment account. Any large departure from budget is cause for investigation until a reasonable explanation for the variance is found. Maintenance costs are often substantial and maintenance personnel are highly visible in the facility. Therefore, to avoid a great deal of comment and criticism about the maintenance function, it is wise to spend time preparing and using an accurate budget to demonstrate effective management of a complex and costly operation.
34
1. The budget deals with the everyday cost of doing business, while the budget provides funds for non-recurring projects. (a) expense ... capital (b) expense statement.. . facility (c) working ... contracted (d) personnel . . . plant operations 2. Which of the following is not used to describe a single category of expense in the maintenance budget? (a) A line account (b) A capital account (c) A chart of accounts (d) A line item 3. Quantifying labor accounts by account helps identify areas of excessively or activity. (a) technical ... manual (b) critical ... routine. (c) high ... low (d) hands-on ... administrative 4. Predictable day-to-day routine maintenance is a cost influenced by costs that reflect increased or decreased production and capital expenditures. (a) fixed ... variable (b) unavoidable ... hidden (c) fixed ... installation (d) variable ... regulatory 5. The maintenance expense budget is usually prepared by the department. (a) accounting (b) financial (c) maintenance (d) production
1. (a)
2. (c)
3. (c)
4. (a)
5. (c)
35
6. Actual charges to the line accounts in the expense budget are made by the department. (a) benefiting (b) accounting (c) personnel (d) maintenance 7. If additional personnel are hired to complete a special project and remain on the payroll thereafter, the results can lead to: (a) deferred maintenance. (b) overstaffing. (c) fixed maintenance. (d) none of the above. 8. Preparation of a new expense budget requires careful consideration of (a) expected inflation and price changes. (b) capital projects. (c) staffing projections. (d) all of the above. 9. Monthly examination and correlation of actual and budgeted amounts for each line item is a way of practicing: (a) management by exception. (b) micromanagement. (c) effective cost control. (d) delegation of responsibility. .0. The maintenance budget is a that shows the expected cost of labor, materials, and associated charges required each month (or period). (a) detailed financial plan (b) management policy statement (c) legally required document (d) manager's vision statement
6. (b)
7. (b)
8. (d)
9. (a)
10. (a)
Systems for Control

Learning Objectives By the end of this chapter, you should be able to: List the seven primary steps in the flow of a maintenance work order system. List four primary advantages of using a work order system. State the chief difference between a regular work order and a service order. List the three major sources of information in maintenance record keeping. State the difference between the two major types of maintenance priority systems.
INTRODUCTION Use of the basic work order, priority, and record keeping systems is a prerequisite for effective maintenance management. All three are closely related and using all three together in a disciplined systems approach is one of the fundamentals of maintenance management control. Although most maintenance organizations now use computer-based management systems, the basis for good management control is still universal. The manager should carefully analyze the maintenance control challenges in the particular organization and design systems that most effectively meet those challenges.
THE WORK ORDER Like any other organization, the maintenance organization has many functional responsibilities and uses a number of systems and procedures to manage
37
38
those functions. Each system is integral to the overall control program. When one system is neglected, the effectiveness of the others is reduced. But the one system that interfaces with all others, and influences the others the most, is the work order system. The work order may be used for planning, communicating, directing, recording, and tracking the majority of maintenance work activities. All essential elements of good management are tied up in this single document. Work orders, whether produced manually or by computer, are similar in appearance. Exhibit 3-1 shows an example of a typical non-computerized work order format. If not produced by a computer, a work order generally is issued in several copies, each copy usually different in color. Typically, copies go to the person (or team) doing the job, the supervisor, and the work control office; others may go to the originator of the request or people associated with accomplishing the work. In the example shown, four copies are indicated: originator, open copy, closed copy, and work copy. They are used as follows: The originator starts the request by entering all pertinent information and submitting it to maintenance. The originator keeps a copy for follow-up. (In computerized systems, this copy may be eliminated in favor of a report listing open work orders by client department.) The open copy is reviewed and completed by the maintenance supervisor, the coordinator, or planner. In manual systems, it is kept in a backlog file of open orders; if computerized, it is passed to data entry to generate open order/backlog reports. The closed copy is retained by the supervisor, coordinator, or planner until the work is completed. Information supplied by the person(s) doing the job (such as cause, effect, downtime, work done, parts used, and completion details) is entered. In modern computerized systems, the worker who does the job might enter this information directly into the computer, and the supervisor or others could review and add other pertinent details before closing out the order. The work copy serves as the actual order to perform the work and provides instructions for the worker who does the job. It generally contains sufficient information to act as a plan for the job. For larger jobs, however, a planning sheet and drawings (discussed in Chapter 6) accompany the work order. Work orders are used to communicate requests to perform specific jobs. The requests come from many sources, both outside as well as within the maintenance department. Work orders authoritize that jobs may be under taken and that expenditures may be made. They indicate the location where the work should be done, the equipment (or thing) that should be worked on, and the method to follow. The specific method may simply allow mechanics or technicians to apply their knowledge, or it may be described in specific detail if more complex jobs are involved. Finally, the work order indicates the priority of each job.
39
40
It is desirable to have at least 80 percent of all assigned work covered by formal work orders, although ideally, every job request should be converted into a written work order. To achieve this would require commitment from every level of management within the facility. Realistically, this commitment will come only if the advantages of using work orders can be demonstrated. Some of the advantages written work orders provide are: Job identification and follow-up. Accurate cost data for departments, jobs, equipment, and the entire facility. Means of accumulating backlog and work load for planning and scheduling. History (cause and effect) of what was done and the methods and tools used. Methods to measure estimating effectiveness. More accurate assignment of jobs, by priority. Cost estimates and technical approval of the work. Work order numbers (or authority numbers) are used to track work requests. For larger jobs, the work order number can be adjusted or modified with suffixes to identify and assign different elements of a job or project (such as utilities, piping, construction work, or electrical shop). These suffixes can also be used to identify the points on project management diagrams, such as those generated by CPM or PERT systems (computerized work scheduling programs). Cost Information Cost information related to work order activity generally comes from two separate documents. These are the job card (or labor ticket) for labor expended; and the stores issue slip for materials used. (The job card and labor ticket might be two separate documents in some organizations.) In any event, it is the work order number that pulls the information from these sources together. This allows costs for material and labor to be distributed to accounts such as: type of work, cost center, crafts, equipment, department, or capital projects. For example, the job card or labor ticket shown in Exhibit 3-2 is filled out by each person who has worked on the job order. (For on-line, real-time computerized systems, workers might do the same thing by entering the information on a computer terminal located somewhere in the facility.) The work order number, employee number, and skill code identify what job is being reported on and who did the work. The supervisor usually reviews and verifies the information before it is sent forward; the planning function might also review it to check estimated times. Overtime is segregated by type (such as time-and-a half, double time, etc.), as it might require special authorization or review.
41
42
In simple one- or two-person jobs, the work order itself can be used for capturing the actual time and skill codes used. If the job is more extensive, the job card or labor ticket method of recording information is more successful. As with labor, material usage information might also be entered in a computerized system. If not, a stores issue slip, shown in Exhibit 3-3, is prepared. It shows the unique work order number, the material issued, and the cost allocated. Some computerized systems store the price of each item, so only the part number (or kinds/amounts of materials used) and work order number are
43
required. Again, review by the supervisor or the planning department might be part of the procedure. A final comparison of job estimates with the actual times and, materials needed to perform the job provides a way of determining the effectiveness of estimating. Source of Communication As noted earlier, active work orders communicate to all parties what jobs are to be done, when, where, and by what method. When jobs are finished, a completed work order serves as a form of communication for updating historical data files. It is important to capture relevant information concerning equipment items on which work has been performed. The more complete and accurate the information, the better the planning and scheduling is for future work. In-process work orders (for jobs scheduled but not yet completed) serve to communicate time allocations for the skills needed to complete upcoming jobs; they also serve as a source of backlog information for the entire future maintenance load in the facility. Exhibit 3-4 shows a typical work order flow diagram. It shows, for every request made, the steps taken and the personnel involved in completing and filing a work order. (The one major exception to the rule of "a work order for every request" would be when a request for a response to an emergency is received. An emergency is defined as an interruption of vital equipment or services or a serious safety situation. In that case, the maintenance response should be started without a work order, and documented later as time permits.) Exhibit 3 -4 depicts the flow of a manual work order system; a computerized system would be similar, but some of the "flow" might be accomplished within the computer, thus saving time, effort, and cost. Many maintenance managers complain that producing a work order for every job performed creates a blizzard of paperwork, particularly since the majority of jobs are small. Further, they allege it "takes more time -. to prepare and document a work order than to do the work." Studies coonductedin dozens of plants over a 10-year period show that the type of industry has an impact on the difference in hours required for large or small jobs. Indeed, on the average, 60 percent of work orders represented only 10 percent of the time spent in getting all work done. Exhibits 3-5 and 3-6 show the results of two such studies. The argument to remember in favor of work orders is that they help management guarantee plant integrity; protect investments; help ensure safety; follow government regulations; avoid legal liability; and promote good management principles, training, and quality guidance. These and other strong reasons support the goal of having most, if not all, work directed via a well-designed work order system.
THE SERVICE ORDER Some organizations use service orders to complement their work order system. Service orders can be issued as substitutes for separate work orders;
44
45
they usually relate to small jobs. Generally, the service order is a formal request for work to be done by authority of a standing work order for a given department or cost center. While the request itself is important for maintaining control and discipline, it also provides some flexibility in ordering the work to be done. Service orders should be scheduled like any other work to maintain control and avoid an overabundance of emergency requests. And they should be closed out like regular work orders to provide visibility on labor and cost distributions and pertinent history entries to equipment files.
Small Jobs Each service order should be identified by a unique number that ties it to a larger, or standing, work order. The requester need only use the assigned
46
service order number to initiate the job, get required approvals if necessary, and describe what work or task is being requested. To effectively employ service orders, each organization must decide what size job or task is to be covered by each service request. Generally, the service order is used for jobs that represent about 10 percent of the total hours, yet account for more than 50 percent of the paperwork. In all probability, these are jobs requiring one to four hours or less of labor. In one plant, 70 percent of the work orders may represent 18 percent of the workload, and those jobs usually take less than four hours each.
Emergency Service Orders Service orders are often used as a request for emergency work although this may or may not be an appropriate use of the service order concept. Few of these small emergency jobs provide significant historic data for the files, but if they do, the information should be captured through the review process after the work is completed, and the pertinent information should be placed in the cost and equipment history records. OPEN WORK ORDERS Open work orders may also be called standing work orders. Often they are confused with the maintenance backlog (scheduled jobs that have not yet been done). Understandably, these terms of reference are confusing. To clarify, an open work order is a pre-approved work authorization that may be accessed when needed by a requester or by the maintenance department. These open work orders tend to become catch-alls for any and all work, leading to a loss of management control. However, control can be regained by establishing that a fixed percent of the total hours of work in a given area or department should be represented by open order work. Once that level is exceeded on a weekly, monthly, or other monitored basis, the maintenance manager is alerted to the possible loss of control and can take corrective measures. For backlog purposes, the fixed percent of open order work becomes a constant in the forecast, although sophisticated managers might adjust the figures as a result of production, seasonal, or other factors.
WORK ORDER PROCEDURE FLOW Shown below is a general outline of the flow of a typical work order. The procedure and personnel responsibilities might vary between manual (noncomputerized) and computerized maintenance systems. Use Exhibit 3-4 as a reference. I. Originator: A. Prepares work order request and completes all information available or pertinent at the time.
47
B. Retains copy for follow-up or reference. C. Obtains or provides authorization or approval. II. Maintenance Manager (or assigned personnel): A. Screens for pertinent information. B. Approves/reviews with originator or management (if necessary). C. Approves for scheduling in the work order system. III. Planner or Scheduler (or other assigned personnel): A. Assigns work order number, if needed, and authority number. B. Plans method, materials, drawings, external services. C. Estimates labor and material. D. Reviews work order for all pertinent information. E. Prepares a work schedule for the job. 1. Thinks in terms of backlog, preventive maintenance, and service orders. 2. Integrates into daily, weekly, monthly, etc., schedules. 3. Reviews with supervisors, craft workers, stores. F Orders/arranges/expedites materials. G. Places the work into the backlog file or data base. H. Reviews completed work order for completeness and compares with estimates. I. Monitors progress of work in process vs. schedule. J. Prepares management information reports. Examples include: 1. Backlog. 2. Equipment history, downtime, etc. 3. Overtime. 4. Work completion, project status, variance analysis. 5. Special reports as directed. IV Supervisor (foreman): A. Reviews scheduling and planning and details of job. B. Assigns work to a selected employee. C. Supervises work, serves as resource, expedites changes. D. Ensures job is completed to the satisfaction of the customer. E. Reviews completed work order, returns it to control center. E Reconciles labor charges with proper jobs. G. Reviews weekly reports and seeks performance improvements. V Mechanic (technician): A. Performs work directed by the work order. B. Records time and materials used on correct forms. C. Writes comments and delay information on the order. D. Requisitions additional materials as needed. E. Records completion date, downtime, cause and effect, and other appropriate information. F Reviews work with supervisor, requester, and other appropriate personnel who are involved with the job or its effect.
48
VI.
Materials Department (or storekeeper): A. Reviews supply documents to provide relevant materials information to the planner, mechanic, and others. B. Adds cost information and forwards materials usage information to work control center or accounting. C. Generates oversight reports as directed for management.
VII. Accounting: A. Distributes expense information against designated accounts, cost centers, programs, areas, user departments, etc., as directed by management. B. Reviews cost and budget information and variances. Work Order System Advantages To review, the primary advantages of work order systems are: They provide an efficient means of requesting, assigning, and following up on work done by maintenance personnel. They provide a method of transmitting written instructions on how work is to be done. They provide a method of estimating and accumulating actual maintenance costs by machine, facility, cost center, and department; and support issues of planning, quality, and cost control. They provide the data needed to prepare management information reports, upon which corrective action may be taken.
PRIORITY SYSTEMS Priority systems help establish the importance and, consequently, the order in which maintenance jobs should be performed. It is evident that a well-run maintenance function cannot operate effectively without a priority system to which all affected parties have agreed. To maintain support and commitment, the system must be developed with input from all sections of the facility. This leads to more objective thinking in the assessment of priorities and type of work values, and in the order in which work will be done. Even the simplest priority system is better than none. The most important aspect of a priority system is the frame of reference it provides for scheduling work. Jobs that are most important or critical to the operation of the facility or plant should be done first. Logically, jobs that are necessary, but do not require immediate attention, should be scheduled for a future date. Central to every priority system is some concept of safety, and safety-related jobs must be assigned top priority. In most maintenance priority systems an identifying number or symbol is used to designate a period of time during which a work order request is to be completed.
49
Emergencies that threaten lives or could cause serious injuries. Work required immediately because it affects scheduled operation of equipment, building, or utilities. Immediate attention. Important day-to-day repairs that are necessary for equipment or building preservation. No immediate threat of equipment or building failures, but potential threat of deterioration with neglect (for example, slow leaks, signs of wear, and minor rearrangements). This category would include PM schedule and safety items that require correction, but do not present an immediate hazard. It also includes routine, repetitive work done daily, or in cycles, during the current week. One to five days after work order is received. Jobs similar to urgent routine (except PM), but also includes minor rearrangements, alterations, new safety devices, and modifications. Seven to ten days after work order is received. Equipment or building modifications that can be scheduled. These would include project work, jobs waiting for materials or those that require engineering, and planned equipment overhauls. They would also include any alterations or cosmetic improvements of safety devices that are sufficient for current conditions. Three to five weeks after request. However, the priority would become No. 1 on the day it was scheduled to begin.
The 1,2,3,4 System One of the most widely used priority systems is the 1,2,3,4 System. Exhibit 3-7 illustrates one example of this system. There are several "time-to-complete" definitions of the 1,2,3,4 System. A popular one is: 1. 2. 3. 4. Emergency-now. Urgent-within five days. Routine-five to ten days. Deferred-two to five weeks.
50
The major shortcoming of the 1,2,3,4 System of priorities is that no matter how it is defined, it is not completely objective, nor does it set values to determine which emergency in which department or area should be handled first. Compounding this problem, most clients using maintenance services consider their need to be the most pressing. This can lead to abuse of the priority system and to excessive requests for emergency service. However, a written definition of each priority category inhibits the number of emergency requests. While the 1,2,3,4 System does not define which request is most important, maintenance managers can rely on their own knowledge of plant responsibilities and operations to determine relative rank of problems. The drawback to this type of subjective judgment is that it frequently favors the client who complains the loudest. There are a number of more objective priority systems that use a combination of comparative equipment values, plus values that represent the type of work to be performed (such as emergency, routine, project, preventive maintenance, or deferred). For example, adding a comparative value to a piece of equipment helps determine which pieces should be worked on first, and the 1,2,3,4 System can then set values for indicating when to do those jobs. There are many variations of these dual value systems. Some use two sets of numbers to identify work and equipment, while others use an alpha numeric system. The Alpha Numeric System In the Alpha Numeric System, the classification of work to be done is shown by an alpha symbol, such as: A equals Safety/Emergency; B equals Urgent; C equals Routine; D equals Deferred; E equals Future Schedule. The priority is then shown by a number from 1 to 10, with 10 representing the highest priority value based on the importance of the equipment to the operation of the plant. A process pump that has no in-line replacement might rate a priority of 10. The same pump, if it had a parallel pump in-line for back-up, might rate a priority of 8. Sidewalks and grounds might rate a priority of 3, since no great adverse impact would occur if repair work to these were delayed. Thus, the selected priorities for these examples might be expressed as B-10, C-8, and D-3. Even so, judgment still enters into the priority process. No matter what the numerical value of the work order request, if it is an "A/Safety" request, it should receive immediate response because a safety problem could pose a hazard or be a serious threat to life if not corrected immediately. However sophisticated a priority system is, the experience and judgment of the maintenance manager and supervisors must be applied to the work schedule. For example, an A-7 job might be the job to be done first, but the supervisor might decide to temporarily bypass the situation by roping off the area and posting a security guard. This would permit the allocation of critical skills to an important job in production first, and returning to the safety task later.
51
REPORTING SYSTEMS Effective management requires the use of current and historical information to assist in making technical and business decisions in maintenance. Good information helps avoid guesswork. Reporting systems are the channels through which appropriate information flows to the people who need it to make informed decisions. The nature of maintenance is such that reporting systems figure heavily in daily activities. Every level of management uses information in making decisions. Some examples of decisions related to maintenance activities might be: High-level decisions to replace a production process line because of high operating costs. The production department's decision to call a planned shutdown because of excessive downtime losses. An engineering decision to rebuild, redesign, or replace certain plant equipment. The financial department's decision to recommend replacing certain equipment because repair costs are exceeding depreciation reserves. A plant manager's decision to review maintenance staffing needs due to a reduced backlog of work requests. A top management decision to embark on a continuous improvement program because of increased automation and robotics. These decisions are aided considerably by accurate and pertinent support data. Better decisions result from better information. A discussion of reports that relate specifically to maintenance management issues will be found in Chapter 8. The section that follows deals with reports that are based on data that maintenance gathers on an ongoing basis. Record Keeping Systems Most maintenance managers maintain either a manual (noncomputerized) or a computerized record keeping system. Central source information comes principally from: 1. The work order. 2. Material and parts usage (stores issue slip). 3. Labor expenditure records (labor ticket). These sources provide a wide array of detailed information that form the basis for routine or special reports, including: Costs. These are recorded and distributed many ways. Engineering Data. Cause and effect of breakdowns. The visibility from this information alone often justifies the entire work order record keeping efforts.
52
Effectiveness Measures. Actual time and costs versus estimates, on a job-byjob, cost center, product area, project, or entire facility basis. Skills Required and Skills Used. It is important to know how much of each skill is required and how much is available, both currently and in the future. Log of Maintenance Work. Control and listing all maintenance work is important for reference and tracking progress. Types of Maintenance Activity. Divided by types of activity and skills used. The types usually include: preventive maintenance; predictive maintenance; routine maintenance; project work; cycle work; emergencies; rearrangement work; and other tasks unique to the facility in question. The type categories help flag a review of high demands in any account. Equipment History. The total activity and costs can be determined for each piece of designated equipment, system, integrated line, or other defined item. Such data can lead to a critical review of any equipment item that costs more to operate and repair than it's worth, in terms of its current depreciation reserve. Priority Reporting. A proper distribution of priorities is essential to the control of schedules and completion of planned jobs. Reporting on this basis helps to identify the areas where realistic priorities need closer attention. Service Orders. Controls on service orders require records so that management can see when the acceptable level for these is exceeded. Downtime Records. By definition, downtime is "the interruption of scheduled operations due to some unplanned event or failure." To plan corrective action that leads to more uptime, a record of downtime information is necessary. Computer Versus Manual Systems The difference between computerized and manual (noncomputerized) systems is not only the degree of sophistication, but also the amount of time consumed to acquire and process decision-making information. It is often the question of whose time is involved. The less clerical time used, the more time a highly paid professional must spend massaging the data for specific decision making. Computerized systems rapidly process input information in many ways and present a variety of management "looks" that aid in making decisions. Computerized maintenance management systems are almost universally used in maintenance functions today. However, they are not absolutely necessary to achieve a first-rate maintenance capability. What is more important is to have a vision of what is needed to manage maintenance at a particular site and then develop systems of operation and controls to achieve the desired goals. Computerized systems unquestionably are an asset when they are well-conceived and correctly supported. Such systems are useful in creating graphics that show the impact and trends of designated activities. To track trends, a series of small graphs or bar charts are helpful, such as those shown in Exhibit 3-8. By reviewing two or three pages of such graphs, it is possible for managers to see exactly what is happening in the areas that interest them most. The graphs are even more meaningful when they indicate established goals, as shown in Exhibit 3-8.
53
54
SUMMARY The maintenance organization has many functional responsibilities and uses a number of integrated systems and procedures to manage those functions. The basic work order, priority, and record keeping systems are fundamental to maintenance management control. Whether these systems are computerized or manual is simply a matter of degree of sophistication, although today most maintenance departments do use computerized systems, which can rapidly process information. Work orders are usually used for planning, communicating, directing, recording, and tracking work activities, and may come from sources both within and outside of the company. They give the maintenance staff such information as where the work should be performed, what method to use to get the job done, and what priority each job deserves. Work orders also provide information on scheduling and cost and are helpful in compiling management information reports, upon which corrective action might be taken. Priority systems are used to establish the importance and, thus, the order in which maintenance jobs are performed. Typical priority systems are the l, 2, 3, 4 System and the Alpha Numeric System. Central to both of these systems is the concept of safety; safety-related jobs are always assigned top priority, followed by jobs that are most critical to the operation of the facility. Even the simplest priority system leads to more objective thinking about the order in which work should be completed. Record keeping, or reporting, systems are channels through which appropriate information flows to the people who need it most. These systems allow managers to rely upon historical data regarding staffing, equipment operating costs, work order requests, and so forth, when making maintenance decisions and preparing routine or special reports.
55
1. The work order request most essential to maintenance management controls is initiated by the: (a) production manager. (b) maintenance manager or supervisor. (c) superintendent. (d) any of the above. 2. To maintain the discipline of the work order system, a written work order should be issued for each job. An exception to this rule occurs when: (a) there is an emergency. (b) the work will be done by outside contractors. (c) the president requests the work. (d) there is overstaffing. 3. is required to ensure success of a disciplined work order system. (a) Total management commitment (b) Daily collection of data (c) A forceful foreman (d) A computerized management system
1. (d)
2. (a)
3. (a)
4. A service order is used for: (a) large jobs. (b) special projects. (c) small jobs. (d) everyday, routine work. 5. The work order system is the chief source of all historic data. This helps in decisions concerning: (a) costs and budgets. (b) design and replacement needs. (c) schedules, estimating, and planning. (d) all of the above.
4. (c)
5. (d)
56
6. The most popular priority system is the: (a) 1,2,3,4 System. (b) Alpha Numeric System. (c) Requester Choice System. (d) High Value Equipment System. 7. Some priority systems are more objective because they the equipment used and the type of work performed. (a) estimate the prices of (b) place comparative values on (c) place a limit on (d) carefully identify 8. Effective maintenance management requires information for making decisions of an economic and technical nature. (a) historic and current (b) detailed (c) engineering (d) breakdown 9. The three sources of maintenance record keeping are: (a) the work order, labor usage, and materials usage. (b) the priority system, labor usage, and materials usage. (c) the service order, graphic illustrations, and materials usage. (d) computer reports, work orders, and required drawings. 10. A basic element of priority systems is that jobs involving must be scheduled for earliest possible completion. (a) production (b) personnel comfort (c) safety (d) large projects
6. (a)
7. (b)
8. (a)
9. (a)
10. (c)
Inventory: Parts and Materials

Learning Objectives By the end of this chapter, you should be able to: Calculate the economic order quantity (EOQ for items that are held in the maintenance inventory. List eight important features of a maintenance inventory system. Define the two main elements of a maintenance part, or stock, numbering system. Define the relationships among maximum and minimum stock levels, safety stock, reorder point, and delivery point. List seven important indexes of the effectiveness of stores management performance.
INTRODUCTION If labor is available but parts and materials are not, necessary work cannot be performed, contributing to costly downtime. On the other hand, an overabundance of materials in inventory can be costly, running as high as 20 to 40 cents on the purchase dollar each year. So optimal purchase and storage efforts are valuable considerations. Typically, stores follow the 80/20 rule: 80 percent of the items stored represent 20 percent of the total inventory value. Conversely, 20 percent of the items represent 80 percent of the value. How to control and optimize this distribution is a key concern. Maintenance managers must manage inventory with an understanding of inventory control methods, storage techniques, and a knowledge of what, when, and how much to order and hold in stores.
57
58
THE MAINTENANCE INVENTORY It is certainly true that more of a manager's time is spent on equipment problems and directing people than on matters pertaining to parts and materials. However, it is just as certain that an effective maintenance operation must have the correct physical inventory on hand when needed. The challenge is to determine what a correct inventory should be and how to manage it. Although it would be nice to have on hand a large quantity of everything needed so that any work could proceed without delay, obsolescence, investment costs, and storage costs make that uneconomical. The opposite effect-too little inventory-is even worse because of lost time on high-priority repairs, expensive emergency buying, lost operational or production time, and inefficient work by maintenance staff. Neither too little nor too much inventory can be tolerated if a truly effective maintenance operation is desired. Maintenance stores can be set up in a variety of ways: (a) as a separate entity within maintenance; (b) as part of a facility-wide common inventory; or (c) combined with the production or operations department stores. Maintenance stores might also be centralized, distributed to various geographic locations, or a combination of both that best suits the functions and tasks maintenance must support. Maintenance management must be involved in and responsible for decisions concerning the maintenance inventory. Let's review some typical items found in a maintenance inventory. Exhibit 4-1 shows a list of items kept on hand in maintenance plus a list of
59
outside resources, or vendors, where other kinds of items are kept in stock. This example is limited. For a large maintenance organization responsible for many kinds of equipment (plant, production, laboratory R&D, and other equipment and systems), the list could contain hundreds of categories and thousands of items.
ORDERING AND INVENTORY COSTS To have the highest level of inventory on hand, rules and guidelines that work best for each organization should be established. Those who order and store items for maintenance must follow them and improve them where possible. What are the real costs that pertain to items in the inventory? First is the purchase cost of the item plus the costs of shipping, receiving, unpacking, inspecting (if applicable), and getting it into stores. Next is the cost of capital needed to finance the inventory, which can add as much as 15 percent to inventory costs. Then there are overhead costs of the procurement function that processed the order. Ordering a larger quantity of the item results in a lower unit cost but higher storage costs, which might wipe out the purchase savings. Storage costs include occupancy costs, such as utilities, cleaning, and the cost_ of the space itself. Special requirements, such as security, storeroom attendants, and inventory management systems are cost factors. On an annual basis, the costs of maintaining an inventory can range anywhere from 20 percent to 40 percent of the value of the items stored. The Economic Order Quantity (EOQ) An optimum number, called the economic order quantity (EOQ) can be determined for each item desired in the maintenance inventory. The EOQ takes into account the reduction in price for ordering larger quantities, turnover (the rate of use over time), and the cost of space where the item will be stored. It may also be necessary to consider the shelf life and required delivery time (lead time) of the item. The EOQ can change over time as the result of changes in the elements of the procurement situation. The traditional formula for calculating EOQ is: 2 AS IC
EOQ = where: A S I C = annual demand in units (n) = cost per purchase order ($) = inventory carrying cost (%) = the average unit price ($)
60
The EOQ formula can be used to determine the most economical quantity for the purchase of equipment, parts, or materials. For example, using the following values, the EOQ for an order of spare parts is: A S I C = 1,000 units demanded (required) annually = $20 cost (average) per purchase order = 20 percent of unit purchase price = $5 unit price
The calculation shows that the most economic purchase quantity would be 200 units:
Some organizations keep a fixed quantity of items on hand as safety stock. Others figure an amount into the annual demand on the same basis. For instances of high value or critical items, close evaluation or judgment calls might be needed to determine safety stock quantities. Need Versus Cost Balanced against the cost of purchasing and storing is the degree of need to keep the items in stock. That need can best be determined by considering the extent of the trouble that would result if an item were not available when required. It is more economical to store a supply of frequently used nuts and bolts than to send someone to the supply house every time some are required. On the other hand, a spare drive motor for a large production machine might cost thousands o dollars and be stored for years before a need develops. What is the effect of not having a motor on hand if one fails catastrophically and production ceases? Can one be obtained quickly and with certainty? If your manufacturer is close and always has them in stock, you might take the chance and not keep one on hand. But if the motor must be obtained from Europe, it would be reasonable to buy and store one onsite despite higher inventory costs. It might be possible to negotiate with a local supplier to keep some items in stock because other customers in the area might also need them. When you need one of the items, the order could be awarded to the supplier at an arranged price and delivery commitment. The Role of Purchasing In most organizations, the purchasing department works closely with maintenance to assist with handling the maintenance inventory. Included in such help is development of economic order quantities; determination
61
of lead times and delivery schedules for purchases; location, qualification, and negotiations with vendors; and arrangements for alternate sources of supply. In most cases, purchasing actually does the buying for maintenance, although some maintenance organizations perform this task themselves.
MAINTAINING THE STOCK A maintenance inventory constantly changes. Each day, a range of items is removed from stock to be used and replacement items arrive. To keep control of the flow, a detailed system of record keeping should be set up to assist the manager to: Record items issued or removed from inventory. Maintain records used in machinery history and financial reports. Maintain a record of how many or how much of each item is currently in stock. Record items that are received and put into stock. Record and update the unit price of each item in stock. Provide security for the inventory in general and particularly for valuable items and those requiring proper authorization. Record dates and details of purchase requisitions. Record delivery dates of new items or shipments received. For proper inventory control, it is necessary to assign a number to each item. Modern computerized inventory management systems do not need precisely formatted numbers to keep track of inventories. However, non computerized organizations can benefit from formatted numbering schemes to identify the types of items, such as electrical, mechanical, and so forth. Regardless of the scheme, the numbers should be cross-referenced with manufacturers' part numbers to simplify future ordering and to avoid duplication of parts manufactured by different sources. If formatted part numbering is adopted, it might follow the system described in Chapter 5. That system works as follows: The first digit describes a generic, or primary, group; the next two digits can represent up to 99 groups or subgroups within the family; the last three digits can represent up to 999 items within the group. Large, diverse inventories may require larger and more varied numbering systems. Computerized control systems can accommodate a great variety of numbering schemes and can keep track of the geographic location of parts so that the efficient use of space and optimum routing within the stores area is possible. For manual systems, the part number might also serve as a clue to the location of the item. For effective operation of the inventory, the assigned numbers must be used diligently to establish pinpoint control of what is issued, used, returned, and replaced.
62
Bar coding is useful for identifying items in the inventory, as well as for identifying equipment and systems throughout the facility. This technique is virtually error free and is easily integrated with computerized programs for inventory control. Bar codes permit positive, errorless data capture of transactions in the storeroom and in the field. There is a substantial cost for setting up a bar-code program, but that investment is quickly offset by better control of the inventory, more accurate transaction data, fewer mistakes in part usage, and more confidence in the contents of the inventory.
STORES CATALOG The storeroom organization can provide a parts and materials catalog that enables users of the maintenance inventory to define more accurately what is required. These catalogs are frequently an assemblage of machinery manuals, brochures, cut sheets, lists of items held in the storeroom, and related documents. No description fits every organization's stores catalog. Some organizations have a computerized catalog on a video display terminal, which provides the same or even more information. Either way, the user is able to get better information about what is located in the inventory, get descriptions of the items, and learn details of technical specifications, properties, operating information, and related matters. To simplify retrieval, the user should be able to access and update the catalog in various ways-for example, by using manufacturer's part numbers, inventory numbers, generic numbers, alpha descriptions, key words, or system groupings. Technical Database The stores catalog should not be confused or combined with the technical database found in many organizations. The technical database, manual or computerized, contains information about equipment, systems, and installations that maintenance personnel and engineers may have to refer to over time. Included in such information might be manuals, specifications, drawings, schematics, operating procedures, safety procedures, engineering change orders, customer bulletins, and a variety of related or helpful information. Where applicable, the technical database may also include some generic information about safety, environmental issues, hazardous materials, and other topics.
CONTROL OF INVENTORY LEVEL An inventory level should be established for each item in the inventory. As mentioned earlier, this level depends on the value of the item, expected or historical use , the importance of maintaining the stock, and the cost of storage. Actually, designating a maximum and a minimum stock level is necessary for administering stock levels properly. The maximum stock level represents the EOQ plus a safety stock quantity. The minimum stock level represents the
63
number below which we encounter an unacceptable risk and is equal to the safety stock quantity. The reorder point is the stock level at which a purchase must be made to get replacement stock on board before the safety stock is breached. In setting a reorder point, maintenance managers should consider the use of the item and the expected lead time associated with reordering. Exhibit 4-2 illustrates the relationship of these stock levels. Any of many available computerized systems can facilitate a well-disciplined system of reporting withdrawn and added stock items. Bar coding is a modern technique for ensuring accuracy of stock transactions. Computerized systems are even capable of automatically generating replacement purchase orders when the reorder point is reached. Addition or withdrawal of parts can also generate much of the basic data needed for management reports pertinent to inventory management. Maintenance organizations that are not computerized can maintain control manually. Exhibit 4-3 shows a typical form for this purpose. An appropriate method of recording use and stock levels and for indicating the time to reorder is necessary to prevent stockouts. In manual systems (see Exhibit 4-4), the source information is the material requisition
64
65
The back side is used to track purchasing information-when part was requisitioned (REQUISITION NO.), when the purchase order was written (PURCHASE ORDER NO.), amount ordered, balance on hand when ordered, vendor from whom ordered (VEN. NO.), and other pertinent data. This card can even be used as a traveling requisition. As such, the requisition for parts and data is entered by the stores attendant. The purchasing department places the order; enters the P.O. number; date, vendor, amount, and price; then returns the card to the storeroom.
66
This is a three-part form used for a computerized stores system whenever material or parts are used for a job, whether it is material from stock or material that is spot-purchased to complete the job. The cost of the materials used are brought back to the total job cost and identified separately from the labor required.
slip or its electronic equivalent for computerized systems. To tie material or parts costs to a piece of equipment or job or project or customer department, the work order number must be indicated clearly on all maintenance materials transactions.
FREE USE ITEMS Determination of maximum-minimum levels, reorder points, and so on for each item stocked and the need to account for each item added or removed seem to be a heavy administrative load. They are necessary, especially when the items are expensive or the risk of being out of stock is high. One way to reduce record keeping is by using free use bins, a system under which low-cost; expendable items, such as nuts, bolts, screws, nails, washers, common gaskets, and belts, are located in bins outside the secure stores area. These are for free use as needed by maintenance workers. This system successfully reduces the overall cost of supplying these items. Typically, a supply equal to the EOQ of each item is kept in the store room, which can be placed in the appropriate free use bin when the previous supply is used up, at which time another EOQ is ordered. It should be a matter of training that when these free items are consumed in a significant repair task, they should be recorded by the worker on that job so that the information finds its way into the machinery history when the work order is closed out. Referring again to the 80/20 rule: Don't give
67
much time or control to stores items that probably represent only a fraction of the total value of the inventory, no matter how many there are.
STORAGE LOCATION Generally, maintenance stores should be centrally located to reduce workers' travel time when obtaining parts and supplies for jobs. However, some exceptions apply where the geographic spread is large or where islands of activity exist, such as cellular manufacturing or R&D work. For economy and security, it is also worthwhile storing safety stock, seldom-used high value items, and other unusual item in a more remote storage area. Large items and materials may be stored more economically outside the buildings if climate and security factors can be satisfied. It is important to have complete records of the locations and quantities of remote items. In large facilities, a regular delivery system for requisitioned materials and parts may be more efficient than requiring maintenance workers to get them. Some plants might require satellite storerooms in various locations, especially if they operate satellite shops. Inventory control at the satellite is still required, although an attendant may not be justified. Items kept at the satellite are usually supplied and controlled from central stores. These are typically free use items, frequently used spares, and items requisitioned for use every day or week. Control can be maintained just as it is with a central stores activity, although the maintenance personnel in the area must pay extra attention to which items are used or returned to stock. Pre-kiting of Parts Pre-kiting is a way to organize and provide all the parts and materials needed for a job, scheduled or not. In Chapter 6, we note that pre-kiting of parts can be called for and scheduled by the planner. This is important because it assures parts availability and reduces requisition writing, travel, waiting, and returns for forgotten items. Storeroom personnel are essential in this process. Inventory Accuracy It is important to make sure that inventory records accurately reflect what is held in stores. Many modern maintenance organizations confirm their inventory by audits on a cyclic basis. This method permits more frequent counts and better control of critical or valuable inventory items. It also helps to prevent stockouts of important inventory items. This is another example of applying the 80/20 rule. Although every item in the inventory may not be physically counted each year, the important items are checked more frequently. A physical count is usually done with such an audit, although spot-checking a computerized system is often just as effective. Many maintenance organizations opt for the more traditional audit method of an annual or biannual physical count of all items in stores. This may be satisfactory but often leads to surprises when discrepancies are found between items counted and quantities shown on the records.
68
Regardless of the audit method, the purpose of the inventory audit is to verify that the inventory control system is operating correctly and to bring attention to unusual usage rates of items. Such audits often show that some items are overstocked or understocked for their usage, while others may have become obsolete and should be removed from the stores. Somehow, it always seems easy to procure and stock new items but hard to reduce or eliminate those that are rarely used or obsolete. Storage of excess items is expensive and dilutes tight control of items that are needed. Avoiding overstocking requires constant study of current needs, usage, risk factors, and procurement opportunities. Lubrication Materials Storage and use of lubrication materials is an important maintenance function and needs to receive proper attention from management. Some management issues involve health, safety, environment, regulatory agencies, equipment warranties, and insurance. An effective lubrication program can contribute heavily to gains in productivity and quality, prolong equipment life, and cut untimely failures. Oils, greases, solvents, and other lubricant types pose special storage and handling problems. They require properly designed, safe, and, if possible, remote storage locations. People who handle or use lubricants should have special training. It is also important to use the correct lubricant for each situation, so training in handling, proper application, and knowledge of each lubricant's purposes is a high priority. A competent survey of actual needs can usually reduce the number of lubricants stored. Stocking fewer types permits buying larger quantities of those needed, with possible savings in purchases, as well as in the labor for applying the lubricants.
MEASURING STORES EFFECTIVENESS Because smooth supply of parts and materials is essential to maintenance excellence, measurements of storeroom performance effectiveness are needed. Some of these measurements are: Stockouts. How often are parts requested but not in stock? This can be expressed in terms of percentage of parts not in stock. A good goal is 3 to 5 percent. Service level (corollary of Stockouts). How often are stocked items available? A good goal is 95 to 99 percent. Availability of a substitute. If a substitute is available, a stockout can and should be avoided. Service time. How long does it take to pick a part and get it to the requester? In most cases, an average time is calculated and used as an indicator of responsiveness. Some organizations calculate times that reflect important conditions, such as routine requests, emergencies, production items, planned work, and unplanned work.
69
Transaction volume. How many requisitions are processed during the day, by shift, by maintenance function, by skill, by equipment types, or other groupings? Number of items per requisition. There might be 100 requisitions but a total of 1,250 requested items. Therefore, transaction volume should be qualified by the size of the request to determine staffing needs for optimum service. Other activities, such as receiving, pre-kiting, returning parts to stores, and record keeping, must also be considered in staffing decisions. Turnover rate. The number of times the initial inventory is replaced each year. Because the annual cost of maintaining inventory is 20 to 30 percent of value, it is important to turn over most items several times a year, with the exceptions of critical spares and perhaps safety stock levels. A small turnover rate or too much turnover might signal a need for a review of EOQ and reorder points.
SUMMARY One of the challenges of effective maintenance management is determining the optimum level of inventory. The level depends on a number of related factors, such as the value of a given item, expected or historical use, how i mportant it is for the item to be readily available, and the cost of storage. Several methods can be employed to guide maintenance managers in this determination. The economic order quantity (EOQ), for instance, tracks inventory on an item-by-item basis. The need versus cost method is used to decide which items must be accessible at all times. No matter what method is used for determining the appropriate inventory level, an accurate inventory management system is crucial to controlling the flow of inventory and to set reorder points. A computerized stock numbering system is typically employed for this purpose although some organizations continue to keep these records manually. Equally important is a system for storing and delivering requisitioned materials; this is especially true in large organizations. Once these systems are in place and distribution is controlled and optimized, the effectiveness of storeroom performance should be continually monitored to ensure a smooth supply of parts and materials.
70
1. It is necessary to develop an economic order quantity for: (a) all maintenance inventory items. (b) only the most expensive items. (c) only safety stock items. (d) only items in remote storage areas. 2. The risk factor in deciding what level of inventory to retain is the: (a) cost of storage. (b) amount of savings from ordering big quantities. (c) cost incurred by not having an item available. (d) damage done in shipping delicate items. 3. Part numbers or stock numbers are used to: (a) facilitate identification of a part. (b) allow parts to be stored by packaging appearance. (c) allow substitution of different parts. (d) facilitate filling out requisition slips. 4. The inventory level of an item should be expected to: (a) fluctuate between the maximum level and the reorder point. (b) always be greater than the reorder point. (c) always be greater than the stockout point. (d) never fall below the maximum level. 5. The part numbering system suggested in this chapter allows parts to be located by: (a) packaging size and appearance. (b) location in the storeroom. (c) location of the equipment for which the part is intended. (d) price of the item. 6. The department usually assists maintenance in running the maintenance inventory. (a) sales (b) accounting (c) purchasing (d) operations
l. (a)
2. (c)
3. (a)
4. (c)
5. (b)
6. (c)
71
7. The delivery point is always (a) higher than (b) lower than (c) the same as (d) more important than
the reorder point.
7. (b)
8. Perhaps the most important part of keeping maintenance inventory under control is: (a) establishing remote storage areas. (b) having several vendors for each item stocked. (c) limiting the amount of free use items people can take. (d) keeping accurate records. 9. Removal of items from stock can be reported in either of two ways: and . (a) by requisition . . . by computer entry (b) by supervisor ... by mechanic (c) by storeroom clerk ... by accounting (d) by telephone ... by requisition 10. In addition to numbering a part, it is important to give it: (a) an alpha description. (b) an easily accessed location. (c) an indicator of who supplied it. (d) a weight and color symbol.
8. (d)
9. (a)
10. (a)
Maintenance Support Programs

Learning Objectives By the end of this chapter, you should be able to: Explain 12 types of maintenance support programs. List two kinds of risk factors associated with evaluating maintenance support programs. Distinguish between two actions that characterize inspections in preventive maintenance. Explain the difference between reactive and proactive maintenance programs. List the two essential elements for scheduling preventive maintenance work. Discuss five types of management report for monitoring effectiveness of maintenance support programs.
INTRODUCTION Modern maintenance departments, regardless of size, face increasing pressure to be characterized by (1) equipment and systems operating at nearperfect reliability and (2) maintenance so effective that equipment and system breakdowns and other problems are virtually nonexistent. This challenge has forced a change in management concept from reactive to proactive maintenance. Reactive maintenance has meant that efforts are made to keep equipment and systems in satisfactory operating condition through a modest level of servicing and preventive maintenance, responding to breakdowns or trouble calls when something happens. In today's competitive climate and high technology facilities, the direction involves proactive maintenance activities characterized by programs of continuous
73
74
equipment improvement and measurement of equipment performance so that potential problems can be predicted and avoided. Proactive maintenance is supported by management programs that embody principles of continuous improvement in all aspects of maintenance work. Two such examples are total quality management (TQM) and total productive maintenance (TPM) programs. Some of the earlier techniques, such as preventive maintenance (PM), still apply and are central to support efforts by today's maintenance functions. By incorporating newer techniques over the past few years, maintenance organizations offer a variety of responsive proactive services to meet the challenges of competitive operations in the global marketplace.
HISTORY OF PREVENTIVE MAINTENANCE (PM) In the early 1960s, the term preventive maintenance (PM) became widely known. This is not to say that work of this sort had not been going on before, but the effort had not been organized in this formal manner. The concept behind PM is that periodic scheduled inspections, minor repairs, and parts replacements and repairs, adjustment, lubrication, calibration, and so on, would increase the time between overhauls and eliminate costly unscheduled failures of equipment or systems. The idea was sound and was eagerly received. For a time, PM was practiced so much that its cost approached that of the breakdowns it was intended to avoid. Over time, the concept has been refined and expanded to include other programs mentioned in this chapter. When used with discipline and judgment, these programs save millions of dollars yearly and reduce equipment breakdowns:
CATEGORIES OF MAINTENANCE SUPPORT PROGRAMS (MSP) In the dynamic maintenance field, programs are being developed and announced all the time. They seem to fall into three categories: Reliability improvement Planned maintenance Unplanned maintenance These programs and others that are. constantly emerging are available to the maintenance function to assist in addressing the problem of support for the increasingly complex modern facilities. The problem is that too few organizations adopt or follow these programs, and the poor performance of their plants offers mute testimony to this. Increasingly, more professional maintenance managers are using these programs to get closer to
75
equipment and analyze problems in a sharper way. The result is usually fewer but more focused maintenance efforts coupled with constant i mprovement activities that eliminate or diminish the occurrence of failures over the long term. As an example, in 1991 the National Research Council, an arm of the National Academy of Sciences, published "The Competitive Edge: Research Priorities for U.S. Manufacturing." The report urged manufacturers to shift from breakdown and preventive maintenance to predictive maintenance to keep up with worldwide competitors. It looked at research needs in five areas, one of which was equipment reliability and maintenance. Maintenance was described as in the backwater of manufacturing research and needed to be brought to the forefront. The report said: "Predictive maintenance, in use in U.S. industry for only a few short years, is usually understood to involve the use of sensors, analysis, and computer software to detect conditions that might eventually lead to equipment failure. Predictive maintenance is a littleused approach that has great potential." Newer strategies help maintenance managers ensure that the right maintenance technicians do the right thing to the right equipment and system at the right time, using the right techniques, tools, parts, and methods. Reliability Improvement Programs Reliability improvement programs are generally considered proactive in nature because they focus on continuously improving the reliability of equipment and systems. Some of these programs follow: Predictive Maintenance (PDM) This is a performance-based surveillance method that depends on measured parameters to reveal wear or performance that must be corrected before poor operations, quality losses, or breakdowns occur. Often sensors are used so that continuous observation of equipment is possible. Other data might be obtained by periodic observations. Still other information might be obtained by subsequent analysis of data gathered in the field, for example, oil sample analysis. A number of factors are taken into account to determine what is currently happening to the equipment and what should be done to correct problems that are happening or might happen in the future. Because most measurements are taken while the equipment is operating, this surveillance does not require as much equipment shutdown as do most PM inspections. Corrective actions suggested via PDM may take the same form as in PM. For example, restorative actions, such as lubrication, adjustment, replacement, and certain calibration, may be required. The chief difference is the timing of these actions. PM calls for a regular schedule; PDM is on a demand, or predicted, basis. Predictive maintenance provides some clues to the causes of problems, most often by analyzing equipment history and current operations, sensing trends, diagnosing undesirable conditions, indicating possible causes of these
76
conditions, and making this information available to appropriate people or control devices so that maintenance action can be taken before the situation gets beyond desirable limits. Although analysis may be done by hand or direct observation, a computer program is most likely to be the main tool used. Contributors to PDM systems range from the human operator on the line to automated sensing and monitoring points in the equipment or system, even to expert or intelligent control systems. But, with all the potential of predictive maintenance systems, it is evident that they are little used by many organizations that invest heavily to implement automated factories and advanced facilities. Almost any investment in predictive maintenance efforts offers the possibility of great returns. Reliability-centered Maintenance (RCM) RCM systems are specialized management systems that optimize preventive and predictive maintenance efforts to achieve high levels of sustained operations and reliability, such as those found in nuclear power plants, public utilities, commercial aircraft, space craft and their launch facilities, and hazardous chemical processing plants. RCM depends heavily on analytical methods and structured decision logic to determine maintenance tasks and schedules necessary to maintain equipment at the highest level. These systems are also dependent on good, reliable, and contemporaneous information concerning each component in the system and focus greatly on the timely, thorough completion and documentation of each element of prescribed maintenance work. Total Productive Maintenance (TPM) TPM improves the organization by improving the personnel and equipment and systems of the plant-as one of the founding developers of TPM put it, "changing the basic culture of the organization." The title is misleading because TPM involves everyone in the facility concerned with high levels of equipment performance. A more descriptive term might be: total productive equipment management (TPEM). The focus of TPM is on the equipment. Simply, TPM permanently improves the overall effectiveness of equipment by actively involving operators and all others directly concerned with that goal (this could mean top management to workers on the floor, even vendors). Started in Japan in 1971, TPM has spread throughout the industrialized world, and its revolutionary results in improved productivity and quality currently enjoy much favor. TPM has five features. 1. It maximizes unit equipment effectiveness, improving overall system effectiveness. 2. It establishes a total system of preventive and predictive maintenance covering the entire life of the equipment. 3. It covers all departments, such as equipment users, planners, maintainers, and all related operations or administrative activities. 4. It requires participation by all staff members from top management to workers at the machines. 5. promotes productive maintenance through small group activities that are more responsive to motivation.
77
There is no question of the success of a carefully planned TPM system i mplementation. In the final analysis, TPM-oriented systems encourage employees at every level to take responsibility for the equipment, process, quality, productivity, and all information involved with what is going on at their location. The three ingredients of TPM are: Equipment utilization Equipment performance Equipment availability Implementing TPM is a long-term effort that may span three to five year, and involves the following phases: Improvement of existing equipment. Maintaining improved or new equipment at a higher level of performance and availability. Procurement of new equipment with high levels of performance and availability. Because TPM is organic and long-term in nature, it may be undertaken as a stand-alone program or in concert with related management efforts, such as computerized maintenance management systems, training programs, and others. Complete details of TPM programs and implementation may be found in the bibliography at the end of this course. Total Quality Management (TQM) Books and courses have been published on this popular topic. Application of TQM to maintenance practices and problems has been widely used. TQM contributes heavily to improvements in almost every sector of the maintenance function. It should be pointed out that total productive maintenance (TPM) and total quality management (TQM) complement each other: they do not compete or overlap. The chief difference is that TPM focuses entirely on improving all aspects of equipment operations; TQM focuses on the people and processes by which things get done. Together, these two programs afford the maintenance manager powerful means for improving maintenance performance across the entire function. Planned Maintenance Programs Planned maintenance programs are based on some concept of fixed scheduling, although in some cases the schedule may be flexible to a degree. Planned maintenance programs are considered to be reactive in nature, although some latitude is necessary because proactive activities are part of some planned maintenance work. The following programs fall into this category: Preventive Maintenance (PM) Preventive maintenance is planned, scheduled inspection, assessment, adjustment, and minor repair of equipment. It is most often characterized by a prescribed interval (frequency) of activity, which may be altered. Performance of
78
the PM inspections and other tasks may require that machinery be shut down. When PM inspections reveal conditions that indicate action needs to be taken, a maintenance function is performed to restore the equipment to a satisfactory level. This work may be done at once or scheduled for a later time if conditions permit. This restoration work gives people confidence that the machine will perform adequately until the next scheduled PM activity. PM may also be referred to as routine maintenance. However, routine maintenance is generally ongoing or repetitious, involving daily lubrication, monitoring or testing, adjustment, cleaning, and supply of consumables to equipment. Preventive and routine maintenance often include proactive repairs, which, if not done at once, might lead to breakdowns or inadequate equipment performance. Preventive maintenance is usually done by maintenance specialists from outside the manufacturing or operations department; routine maintenance is generally accomplished by personnel who operate the equipment. However, broad exceptions occur in both cases. Lubrication Program Some maintenance organizations assign lubrication throughout the facility to a special group trained in the application, handling, and safety of lubricants. Others might incorporate this function into the preventive maintenance program. The lubrication program is planned and scheduled and may be considered both reactive and proactive maintenance, depending on the nature of the application itself. Periodic Maintenance This is often included in preventive maintenance. But if it is shown as a separate maintenance effort, it typically refers to activities considered bigger than most PM tasks. When bigger tasks are undertaken, such as annual overhauls of major equipment or systems, the equipment may be removed from service for a time. This work might be accomplished by contractor organizations, the company's own staff, or equipment suppliers. Project, or Upgrading, Tasks Project tasks are perhaps overlooked as planned maintenance tools in the continuing quest for maintenance improvement. Projects are almost always planned, estimated, and scheduled. During the life cycle of an equipment item or system, inventions, evolutionary technology improvements, new materials, and process improvements may enter the picture. Some of these items, if incorporated into the equipment or systems, might improve speed, reliability, cost, quality, or life of the system itself. A project task can pay handsomely if it is made a regular part of planned maintenance and organized and pursued with a purpose. Opportunistic Maintenance This type of maintenance is a planned form of response that can be accomplished when almost any unplanned event interrupts the operation of a device, subsystem, or system. For example, if a production department experiences a parts shortage or a machine goes down and thus stops activity at
79
other machines or a power outage occurs, there is an opportunity to use the time thus created as a maintenance opportunity. If a machine or device is down due to some unrelated problem, opportunistic maintenance can be accomplished within the time envelope needed for the primary repair. Realizing good value from opportunistic maintenance requires innovative advanced planning by maintenance planners and schedulers. Preparation by technicians and operators is needed to avoid missing the opportunity or spending more time and effort on the situation than justified. Unplanned Maintenance Programs Unplanned maintenance programs are totally reactive, as one might expect. However, they occupy a large amount of time and responsibility in most maintenance organizations and therefore are important management issues. Some of these programs are: Emergency Maintenance Emergency maintenance is self-explanatory. As stated earlier, any failure that produces downtime in a critical or an automated system is probably an emergency. However, other failures may also be classed as emergencies such as environmental, fire, and accident situations. Resources at every level should be used to respond to a genuine emergency. Avoiding emergency situations is best addressed by design reviews, equipment redundancy, modular devices, preventive and predictive maintenance systems, expert or vision systems, and continuous training of personnel and supervisors. Breakdown Maintenance Breakdown maintenance does not necessarily imply emergency conditions, although almost any breakdown in an automated factory or similar type of facility is a potential emergency. Breakdown maintenance can range from adjusting or calibrating equipment and systems to improve quality or performance to difficult repairs requiring quick response and considerable expertise. Breakdown maintenance usually results from the spontaneous appearance of a problem; it can also result from predictive or preventive maintenance activities, statistical process control analyses, alarms from the control subsystem of an automated system, or complaints of the operator of the affected equipment. Many organizations have special crews or technicians who respond to breakdown situations; others station personnel in specific areas, such as production departments, to tend equipment on a continuous basis. Corrective Maintenance This term is often confused with breakdown maintenance and other programs named above. Anything done to equipment can be regarded as a correction. However, used here, corrective maintenance refers to a maintenance engineering approach that seeks causes of failures. This effort is used when failures are frequent, costly, or significant in terms of quality or environmental impact. Engineering and technician efforts are put to the study and analysis of the failures, causes are determined, and possible fixes are developed and tested. If the
80
elimination of a failure can be confirmed and economically justified, corrective action is taken or installed. This program contains an element of planning but generally comes about because of unplanned problems. It might be argued that corrective maintenance can be both reactive and proactive.
THE COST OF MAINTENANCE SUPPORT PROGRAMS (MSP) In this course, maintenance support (MSP) refers to programs or activities discussed in the earlier sections of this chapter. There is no fixed basis for indicating how much effort or money should be spent on maintenance support programs. The cost of maintenance support programs can be compared with the cost of an insurance premium. As with an insurance policy, when the premium cost exceeds the risk that whatever is being insured against will happen, the amount of insurance and the premium should be reduced. In most cases, an empirical judgment about the costs of MSP versus the reduction of risk of equipment failure is satisfactory. Consider two examples. First, consider a gas-fired unit heater in a large, open warehouse area. There are 20 identical units. If one becomes inoperative but is safe, there would probably be little or no loss of warehouse performance. It would be difficult, therefore, to justify more expense for PM than an annual inspection, cleaning, and adjustment. Now consider a large air-conditioning system that heats, cools, and ventilates a six-story laboratory building. This equipment is more complex than that in the previous example and therefore more likely to have problems. The critical nature of its role in the facility and the lack of redundancy make failures more serious. A more comprehensive and frequent PM schedule plus some PDM and other advanced technology attention are justified because the risk of failure is greater than the cost of responsive maintenance support. The same kind of reasoning is required for each item included in maintenance support programs, reactive or proactive. For larger, complex equipment, accessory items or equipment units may be considered separately and assigned more frequent or more comprehensive attention.
MEASURING THE RISK OF MAINTENANCE SUPPORT PROGRAMS It is possible to work out a numerical rating system to help assess comparative risks and to determine to what extent MSP should be applied. Because the cost of individual support tasks, such as PM, can easily be determined, the scheduling decision hinges on the size of the risk involved. Risk, used here, consists of two factors: the probability of a failure occurring without MSP or with very low or no attention, and the severity of the problem that results if the failure occurs. A hierarchy of numbers, on a scale of 1 to 10, is assigned to each of the two risk factors and then combined. A numerical
81
assessment of the comparative risks results. A maximum total risk of 20 means the highest levels of MSP would be indicated for an item of equipment or system. Examples of typical numerical assessments are shown in Exhibit 5-1. To simplify further discussion and examples of maintenance support programs (MSP), we will use the preventive maintenance (PM) program as representative of MSP
EQUIPMENT INSPECTION Maintenance support programs, regardless of type, usually include periodic inspections of equipment or they generate orders for inspections in response to ongoing conditions. The frequency of these inspections varies to accommodate the nature of the equipment, its usage, and its importance. The schedule can be developed for 12 months in advance, with work orders issued on a weekly or demand basis.
82
Inspections usually include an audio-visual (listen and look) inspection of the equipment while it is operating, combined with the use of instruments to determine specific indicators, such as power consumption, speed, vibration, pressures, and so on. Other items are checked, such as condition of filters, belts, tolerances, lube levels, and so on. Typically, minor problems or repairs are handled immediately if they can be done within a limited time. If more time is required, a standard maintenance work order is requested by the inspector or someone in the supervisory chain. In many cases, the lubrication program is considered to be a part of the PM program, although it may be handled with a separate schedule and perhaps by different personnel, who follow a prescribed route to service equipment. Equipment Identification Whether using a manual or computerized system, establishing maintenance support programs need not be difficult. Using a preventive maintenance (PM) program as our example, setting one up requires a considerable amount of effort but is really straightforward. First, each item of equipment included must be selected, evaluated, and identified; any method of accomplishing this may be used, but several pitfalls should be avoided. A usual tendency is to identify every component, which greatly swells the database, complicates scheduling, and makes for voluminous reports. It is best if only major or critical components have a separate identity. Computerized or not, the PM system needs item numbers to keep track of items. If using a computerized system, the number can be simple; manual systems might work better with a formatted number. One equipment numbering system can use six digits to identify pieces of equipment or their major components. The first digit identifies a generic or primary grouping, such as plant mechanical system. The next two digits identify subgroups within the primary group, such as boilers. The last three digits identify individual units within the subgroup. An example of an equipment numbering system is shown in Exhibit S-2. Many computerized PM management systems suggest numbering schemes that are more applicable to their systems as applied to individual sites or industries. Inspection Procedures When the equipment has been identified, the inspection procedures should be developed and written. This is best done by the technicians, supervisors, and engineers most familiar with the condition and use of the items. Some help may be obtained from manufacturer's manuals and typical industry practices, but customizing to the unique needs of the local site is best. Inspection procedures should be as specific and detailed as the importance of the equipment or the inspection dictate. They should be objective (test valve pressure for 20 lb. minimum-30 lb. maximum), not subjective (check valve for proper operation). As a guide, the total annual prescription for dealing with the item should be considered first. Then periodic tasks such as tests, filters and parts
83
replacements, adjustments, calibrations, and so on, can be grouped by frequency, by whether the equipment is running, and finally organized into separate work packages for optimal scheduling. Maintenance management should establish a periodic review of inspection procedures so that pertinent changes and improvements can be made. To do this well, feedback from the maintenance support systems will be needed. Inspection Frequency The frequency with which components are inspected can be scheduled according to the type of inspection. Most computerized systems contain a powerful scheduling program that organizes inspections by craft, geographic location, risk factors, elapsed time of equipment usage, and such overriding factors as production schedules or hours of business operations. The gas unit heaters discussed earlier would be included, although the frequency might be very low unless a safety issue were involved. In fact, they might be treated as one complete group of items and the inspection of all of them covered by one work order instead of 20. As discussed earlier, many items should not be included in the PM program because the risk of failure does not justify the cost (safety items excepted). However, they should be included in the overall equipment history file because when work is done on them, the work should be recorded against the proper equipment item. It may be best to begin a PM program on a small scale so that sufficient time can be given to the problems of detailing inspection and scheduling. As experience is gained, decisions on expanding and including additional equipment will become easier. The frequency of PM varies: It can be based on judgment by the local staff, on the manufacturer's recommendations, or on other criteria. Better yet are indications of past problems found in the machine history records. After frequencies are set and the program has been in operation for a time, frequencies should be reviewed and adjusted up or down. If frequencies can be reduced safely, the cost of the PM program is also reduced. A candidate for
84
increasing time between inspections would be a PM work order that documents few adjustments or repairs required over several consecutive visits to the equipment. Again, an important part of inspections is to observe how the equipment is running and to estimate if frequency should be increased or stretched out for best effect on the equipment in its own operating environment.
PM WORK ORDER SCHEDULING AND ROUTING A simple PM work order, as shown in Exhibit 5-3, can be used for instructions and scheduling. It lists all pertinent equipment information, location, description of what is to be done, frequency, time required, and a method of indicating what was actually done, with verification of work completion. If a computerized, on-line system is used, the work order can be delivered to and closed out by the employee by means of a computer terminal in the field or shop. Scheduling PM Scheduling is almost universally done through computerized programs. But many competent maintenance organizations schedule PM work by hand. Either way, the job of scheduling depends on two elements: a defined method for the task and an estimate or historical time budget for doing it. If the scheduling is done manually, the PM work orders should be listed in the months in which they are to be done, then shifted into weeks within the months so that the workload is balanced. It is important not to divide the tasks on one piece of equipment into different weeks. For large organizations, it might be necessary to go to a daily breakdown. Some PM jobs may be repetitive and show up regularly throughout the year. Others might be sensitive to seasonal or production influences and fall irregularly throughout the year. Continue to list the jobs until all are in the yearly schedule. Then some decisions can be made about combining, based on skills, areas, systems, or other logical designations. Computer-based scheduling programs allow flexibility in achieving an optimal PM schedule. They permit a master schedule to be produced at the beginning of each week, accompanied by detailed work orders. Routing PM Routing PM becomes a simple task of organizing the schedules according to the proximity of one piece of equipment to another. Again, this can be done by computer or manually and indicates the sequence of PM jobs. In some facilities, routing can be complicated by having to avoid interrupting the operation of critical equipment units. For example, PM may not be allowed during a production run of a chemical process line. Therefore, the routing of the PM job will indicate that the work should be done during down time or perhaps during a product changeover or on an idle shift. Another complicating factor is the routing of trades or contractors who must coordinate their
85
86
services in performing combined PM so that equipment is interrupted or out of service as little as possible.
TIE MANAGER'S ROLE The manager must ensure that inspections are performed on schedule and must continuously review the preventive maintenance program to make certain that the results meet technical and economic goals. The manager does this by supervising the work in the field to see that it is properly executed and by generating reports informing maintenance and other organizations about the performance and cost of the PM work.
MSP REPORTS Several types of reports help the manager monitor the effectiveness of maintenance support programs. The reports discussed in the next sections are general suggestions; a facility may well develop unique reports that make sense in meeting local needs. Uptime Report One of the objectives of the maintenance function is to reduce downtime. Records should be maintained to measure how effective MSP is in reducing it. Downtime is defined as the interruption of scheduled operating time because of failure or poor performance of the equipment. Uptime would be the inverse of that definition, or the percentage of time that the equipment is operating or ready to operate. The term is positive and easy to measure and understand. Scheduled downtime, such as PM, does not count against uptime evaluations. A good way to measure the effectiveness of MSP is to record and analyze the uptime of the equipment. Uptime percentages can be maintained for individual units, averaged for a small number of critical units, or for the entire list of equipment in a department included in the PM program. Uptime reports shed visibility on pockets of downtime and show trends that might signal potential downtime in particular areas, systems, or units. Marginal or substandard uptime implies that excessive costs are being incurred because of downtime. However, determining the cost of downtime can be daunting. If a conveyor fails and 20 people are idled, the cost of labor could be greater than if a drill press with only one operator fails. But the parts lost or delayed by the drill press failure may have a greater impact because of missed shipping dates than the conveyor line mishap. Extensive analysis may be needed to determine the true cost of a downtime situation. But the existence of downtime itself is usually enough of a signal to maintenance that action should be taken. This is why we concentrate on the critical few and try to record the actual productive time this equipment is idle.
87
Compliance Report A portion of available labor hours each week must be devoted to whatever maintenance support programs are in operation and that the work be distributed as evenly as possible. When scheduled MSP inspections are missed, they are difficult to make up, and the benefit of that work can be lost. The affected equipment is put at risk for wear and reduced quality of output. A compliance report indicating the percentage of scheduled MSP work that was accomplished each week or month reveals the current performance of work by craft, shop, geographic area, and critical equipment and takes into account other desired standards of compliance. Ten-Most-Critical Report It may be worthwhile to produce an uptime report for the 10 most critical pieces of designated equipment (or some other useful quantity). In fact, this is a good place to begin reporting uptime on equipment. In time the report can be expanded to include all important units. Work-Generated Report Another way to monitor maintenance support programs is to determine the ratio of repair work orders generated as a result of MSP-related inspections. These results can then be graphed to illustrate trends. Initially, inspections will generate more remedial work. After the various inspection efforts settle down and the repair work is taken care of, the amount of generated repair work will decrease. At this point, inspection frequencies for individual equipment can be adjusted up or down to obtain maximum benefit from the dollars spent on the PM program. The work generated report, if used carefully, can be a great aid to the manager in fine-tuning inspection activities in three ways: Adjusting frequency and timing of the inspections. Changing the content of work included in the inspections. Reviewing the work order process to ensure the remedial orders are properly handled. When work generated by MSP decreases, it is a signal that management oversight of inspection activities is needed. Graphical Data It is helpful to display the data contained in MSP reports in a series of graphs or curves, as shown in Exhibit 5-4. For example, the relationship between the amount of PM work done, the amount of remedial work generated by PM, and the resulting percentage of equipment uptime are good visual indicators of the effectiveness of the PM program.
88
89
SUMMARY In this chapter we discussed programs broadly referred to as maintenance support programs (MSP). Although much maintenance work may not be included in maintenance support programs, it still can be planned and scheduled in advance by way of regular work orders or standing work orders. This work might include routine filter changes, belt replacement, delivery of supplies, seasonal changeover of equipment, cleaning of equipment spaces, and other routine jobs. When the various maintenance support programs are implemented and stabilized, consideration should be given to including these tasks in MSP Whether by manual or computerized means, all jobs worth doing, large or small, should be scheduled and covered by a work order to ensure that they are done properly and on time. Well conceived and established maintenance support programs can be accurately costed into the maintenance budget. Analysis of budget variances provide yet another measure of how well the programs are doing throughout the year. Management should monitor results and make timely changes to the support programs based on feedback from the field and changes in the number and type of equipment. Close and careful attention to MSP pays off in achieving maximum results for the dollars spent on them.
90
1. Measuring the risk of equipment failure consists of two factors: the and the of failure(s). (a) consistency ... number (b) scheduling ... identification (c) probability ... severity (d) cost ... physical effects 2. Inspection of equipment should include listen and look inspections when the: (a) equipment is operating. (b) equipment is shut down. (c) piece of machinery has failed. (d) work order is requested. 3. The first step in setting up a PM program is to: (a) identify the pieces of equipment. (b) get management funding and approval. (c) determine if a program is feasible. (d) find out legal obligations for having one. 4. The last three digits of an equipment number such as shown in this chapter identify the: (a) individual units within a subgroup. (b) manufacturer of the unit. (c) equipment purpose or function. (d) general class of the equipment. 5. In a PM program, identification numbers should be assigned to: (a) every component of every machine. (b) major components of every machine. (c) large equipment units only. (d) machines that need daily attention only.
1. (c)
2. (a)
3. (a)
4. (a)
5. (b)
91
6. When the frequency of PM has been established, it: (a) remains the same on an annual basis. (b) may change as conditions involving the equipment vary. (c) should be increased every six months. (d) cannot be modified unless there are equipment failures. 7. If inspections can be safely reduced, the: (a) cost of the PM program is also reduced. (b) probability of more failures increases. (c) equipment experiences uptime improvement. (d) effect on equipment performance is adverse. 8. Routing PM work refers to issuing scheduled work according to: (a) the identification numbers on the equipment. (b) the generic grouping of the equipment. (c) the proximity of one piece of equipment to another. (d) the day's schedule of other activities. 9. Downtime is the interruption of scheduled equipment performance because of (a) the failure of the PM program. (b) minor parts replacements. (c) the installation of field upgrades in the unit. (d) degradation, or mechanical failure, of the equipment. 10. A compliance report indicates the: (a) percentage of uptime. (b) percentage of downtime. (c) number of maintenance employees needed for PM inspections. (d) percent of scheduled PM work accomplished during a designated period.
6. (b)
7. (a)
8. (c)
9. (d)
10. (d)
Planning and Scheduling

Learning Objectives By the end of this chapter, you should be able to: Identify jobs or projects that require planning and scheduling. Identify the six elements of planning and scheduling. Identify the four methods used in estimating times that jobs should require for completion. Identify the contents of information contained on job planning sheets. List the nine items typically included in job schedule reports. Know the characteristics of planners and schedulers, and criteria for selecting them. INTRODUCTION Planning and scheduling are the means by which maintenance work is efficiently organized and prioritized and available resources-labor, materials, equipment, and time-are assigned to accomplish the tasks in the most efficient, timely, and economical manner. To establish an effective planning and scheduling system, as much work as is economically possible should be done via planned, scheduled, written work orders.
THE KEY ELEMENTS OF PLANNING AND SCHEDULING The six key elements of planning and scheduling shown in Exhibit 6-1: Note that the complete cycle includes not only planning and scheduling but also
93
94
execution of work, even if supervised and completed by others; a review of results; and records that develop a history of what was done. A good planning and scheduling system should allow for control of each step along the way as a job is authorized, planned, estimated, scheduled, executed, recorded, and reviewed by management. PER (planning, execution, and review) is an acronym for remembering the key elements. Identification of Jobs to Be Planned When the maintenance department receives a work order or work request, including self-generated work, it should time stamp and log the request. It is virtually impossible to plan and schedule 100 percent of all jobs requested. However, the intent should be to plan and schedule at least 80 percent of jobs considered to be in need of such treatment. The remainder might be handled more efficiently through standing work orders or in unplanned field visits by maintenance staff responsible for the area or equipment. The response to all jobs, planned or unplanned, should be monitored or controlled by the planning-estimating function because even unplanned jobs might provide clues regarding more serious work needs or safety issues that should be addressed. As a rule, the more jobs planned and scheduled, the better results one might expect in terms of efficiency, cost, response time, and user satisfaction. A job should be planned and scheduled if it requires any of the following: purchase of equipment or supplies, interruption of a
95
vital system or production, more than two craft hours to complete, multiple crafts or outside contractors. Management should determine policies and definitions that describe the type or class of jobs that must be planned and scheduled. Authorizing Work Orders Authorization of work orders can be achieved in a number of ways. Planners may be delegated authority to permit routine work. Limits on dollar amounts or labor hours should be designated as a measure of authorization for work that is not routine. Because the preventive maintenance program is planned, it can be given a blanket authorization via budget approval. Repetitive work can be handled with standing work orders. The levels of management might be given different levels of authorization. Requesters of work should provide the planner with the proper authorization for jobs they submit. Most large jobs are high profile and probably will already be authorized by management before they reach the detailed planning stage. Assigning Priorities Planners are usually delegated authority for assigning priorities to work requests if priorities are not indicated. In the planning stage, a priority system (Chapter 3) is essential. Priority designations should be formal written definitions that are well thought out and clear, simple, and concise. The system should be flexible because plant problems can cause changes in the urgency of in-process requests. All areas served by maintenance should agree to definitions and priorities.
THE PLANNING PROCESS Planning is a broad, inclusive term indicating that work is organized and set forth in written sequential steps. Instructions, special advisories, and drawings are given, parts and materials are listed, and an estimate of time for completing the job is shown. It has been said that good planning, as opposed to doing no planning at all, has the effect of doubling the impact and productivity of a maintenance staff. Estimating Labor Hours Planners must provide an estimate of the type and number of labor hours needed to accomplish the job so that they can schedule it properly. This estimate can be arrived at via any of the following methods: A historical estimate for routine or similar jobs that have been done many times before and for which data are present in an active data bank. An engineering estimate by which the job is broken into its logical components and required time for each component is estimated from experience
96
or from tables of standard times. In this method, the total time is then added up. A so-called slotting technique, which involves the broad classification of jobs into one of several slots, such as "2 to 4 hours." The average time reported for jobs in these slots is then the new estimate for each new job put into the slot in the future. Engineered time standards, or standard data. Although accurate, this method is difficult and expensive to apply to maintenance work because so much of it cannot be defined before it is done. This type of estimate is compiled by using predetermined accurate times for elements of the work. The size of the elements varies between different collections of standard data but is generally small in relation to the time required for the entire job. Standard allowance for travel, fatigue, delays, and other factors are applied, and the sum of the time elements becomes the job time estimate. Packaged job estimates, used by the U.S. Navy public works organization or from commercially available estimating manuals, offer standard data for everyday use. Any o these types of estimates can be used by planners for work orders. The larger, more complex jobs require more accurate estimates. An estimate of time to complete each job is essential before the scheduling step can be taken. The exception to this rule is emergency jobs, which should be done immediately-with or without a time estimate. Providing Information: Sketches, Prints, and Special Tools The planner is also responsible for obtaining or providing information needed by the crafts to accomplish the assigned task as quickly and safely as possible. This may involve working through others, such as engineering, vendors, and contractors. The information may involve sketches, drawings, instruction books, special safety instructions, and special tools. It is not necessary to list every tool, but special tools should be indicated. For example, if electrical power circuits are being repaired, then approved equipment shutdown and tag-out procedures should be provided with the work order, and required special safety locks should be listed. Parts and Materials Needed It is the responsibility of the planner to ensure that necessary parts and materials to complete the work are available before the job is scheduled and released for execution. This task may involve working through the purchasing and stores and materials organizations. One way to increase the effectiveness of the maintenance organization is to pre-kit the necessary parts, supplies, special tools, drawings, and other items. This involves gathering in the maintenance storeroom all necessary items for doing the job before it is released. This assures parts availability for the crafts, reduces requisition writing, and reduces mobilization time at the work site. The degree of effort
97
to pre-kit could be relatively high, but substantial reductions in labor and confusion at the job site are possible. Planning Sheet for Larger Jobs It makes sense that larger jobs are better accomplished if an agreed course of action is set forth in advance of the job. The way to do this is by using a planning sheet that is at once a means to forecast, communicate, and measure what is done. These sheets usually provide the following: Forecast of labor, material, tools, equipment and costs. Communication of job method, job elements, time estimates, safety and permit requirements, and performance data requirements. Measurement of actual cost and performance of job, and completion data. Planning sheets generally include pertinent information about the job's definition and scope, location, priority, method to be followed, materials, special tools and equipment, skills and number of craft personnel needed, and estimated labor hours. Requirements for recording actual performance are also stated. It should be noted that these planning sheets do not replace work orders. Ordering Materials In the maintenance operation, it is usually the planner's responsibility to determine what materials are to be used for jobs and projects. The ordering might be handled by others, such as storeroom personnel or the purchasing department, or might be initiated by the planner. The aim in materials and services procurement is to obtain them from competent, reliable sources at reasonable, but not necessarily the lowest, costs. Scheduling Work Almost any maintenance organization can afford to operate a computerized planning and scheduling system. However, it is not necessary to have such a system to carry out first-rate efforts. Manual methods have been used successfully for years. Scheduling jobs, large or small, begins by putting them in a priority sequence. This list must then be altered to conform to: Available staffing each day or for the period of the schedule. Availability of parts and materials. Special labor skills needed from in-house staff or contractors. Scheduled equipment shutdowns or other important activities. Availability of special tools and other unique needs.
If a low priority job is scheduled for a date in the future, its priority does not automatically change to a higher rating as the days pass. For example, a lowpriority job promised for a week in the future may not get done on that day.
98
A review may be in order to determine if its priority should move up or remain as is. The planner should prepare for the maintenance manager a schedule for the next day's job activities. This schedule, which probably will change as each day unfolds, will include preventive maintenance, routine jobs, projects that are underway, and work orders. (The next section of this chapter deals with a daily listing of small jobs.) Some jobs must be scheduled well in advance. For example, utility shutdowns must be well planned and coordinated, and the equipment to be worked on during the event made available by the host or using departments. Every effort must be made to complete the daily schedule of jobs. Those left over may be considered for carrying forward to future days. The planner and scheduler should meet briefly with the craft supervisors) the afternoon before to plan the next day's work schedule. Based on information about how the current day's work is progressing and about emergencies that have developed, they can decide which of today's jobs, if any, will have to be carried over. This provides the scheduler with an idea of remaining work possibilities for the following day. By comparing the new schedule with the old schedule (leftover work and expected labor hours available), a final schedule can usually be agreed upon quickly. If the maintenance control system is computerized, a log of open work orders can be analyzed and an updated scheduling sheet generated, as shown in Exhibit 6-2. Below is a list of items on the typical scheduling sheet: Priority-any priority system may apply. Authority number-work order number or charge number. Job description-brief statement of the work to be done. Skill requirements-what crafts are needed to do the job. Days of week-when the work is scheduled. Note that each day is divided. The upper half is intended to show the scheduled hours; the lower half may be used to show the actual hours used. The actual hours should be filled in by the field supervisor; the planner-scheduler transfers this information to the master copy of the schedule where it eventually winds up in the historical and estimating databases. Total estimated time-total estimated time to complete the specified work. Planner's name-planner's name or initials. Assignment-craft or person's name assigned to the job. The master copy of the schedule eventually shows who performed the job. Completion date-date the work order was completed. Remember that the scheduler is responsible for deciding when the job should be done while the craft supervisor is responsible for determining who will do the job. The scheduler's objective is to assign sufficient work to each department or craft to ensure that 100 percent of the labor hours each day are used. Some maintenance organizations are small and unsophisticated and may not be computerized. In such cases, a visual system may suffice. A popular
99
one is a rack with pigeon holes of sufficient size to hold a number of work orders. The work orders are placed in the proper pigeon hole as they are assigned. A running account of committed and uncommitted labor hours is kept with a grease pencil in the space provided above each pigeon hole, as shown in Exhibit 6-3. As changes in the day-to-day schedule occur, jobs can be reviewed by the supervisor or scheduler and shifted from one pigeon hole to the other. An effective maintenance department also provides a means of notifying a customer when jobs or projects are delayed or rescheduled because of emergencies, parts shortage, labor unavailability, and other problems discovered as the job progresses. If the scheduler is aware that a craft will be required because of special skills or knowledge, the job should be discussed with the affected supervisor to confirm the availability of the craft or outside contractor.
100
Scheduling Small Jobs Small jobs are the mainstay of daily activity in most maintenance organizations. Much care should be exercised in ensuring that daily work is effectively carried out and that all personnel and assets are used as much as possible. It is recommended that schedulers prepare a daily schedule of small jobs, similar to the overall daily schedule previously described, and that they review and reissue the schedule each work day. Small job scheduling is driven primarily by the availability of craft skills, labor hours, and priorities. Some flexibility is necessary to find ways to get the most small jobs completed during a shift or work day.
101
Scheduling Large Jobs Smaller jobs are, by far, the most numerous. Larger jobs that take several days or even weeks and months represent the bulk of hours expended in most organizations. Therefore, these jobs definitely should be scheduled with some precision, and there are several techniques for doing this. All the techniques described here are available in computerized form and easily implemented; however, manual approaches are also effective. First, and perhaps the most widely used technique, is the Gantt, or bar, chart. Exhibit 6-4 illustrates how a Gantt chart can be used to schedule the removal and rebuilding of a sump pump in a large central sewage system. The job includes rebuilding all valves, replacing insulation, and rebuilding the pump itself. This method allows elements of a job to be scheduled or overlapped as desired, or as possible, so that proper work sequence is provided and the duration of the job is minimized. In this case, the Gantt chart is adequate and easier to develop than the next technique. The next technique, called the critical path method (CPM), can be used to prepare detailed schedules for projects or large jobs. This may be done manually or, preferably, by computer. A variation of this technique is the pro gram evaluation and review technique (PERT). The CPM method allows the relationship of all elements in a project or individual job to be diagrammed, as shown in Exhibit 6-S. The critical path is indicated by the dotted line. Note that the arrows in the diagram indicate the necessary sequence of work. In effect, each element must have something done ahead of it before the element can be started. The critical path is determined by the combination of critically related elements that requires the most time to complete. Because the critical path represents the longest combined time, with no lag between elements (each starts only after the previous one is completed), great flexibility is possible in completing the elements of the job that do not lie along the critical path. However, it should be noted that any delay in the elements situated along the critical path will delay the entire job, creating conditions that might cause a new critical path to occur. CPM and. PERT allow managers to focus on the important elements of a job and to make decisions about using extra efforts to stay on schedule or to achieve earlier completion dates, if desired. The application of a Gantt chart or a CPM diagram can be fit into the work order system by using a prime work order number for the entire job and then identifying each element with a suffix number.
EXECUTION OF WORK The execution of work is the responsibility of line management rather than planners and schedulers. The execution phase of work generally consists of the performance of the jobs by the crafts, supervision and coordination of the work by managers, and checking on the progress of the work. However, it is important that pertinent information, such as the time spent on a job, problems encountered, supplies and parts used, and whether the job was completed or
102
not, be captured and returned to the planning function so that records may be completed, job orders closed out, and estimates of accuracy checked and improved. Planning must devise means of capturing these data in an accurate, simple, and complete manner. The availability of on-line computer systems, optical character recognition (OCR) devices, and bar-coding equipment offer
103
The critical path method uses the same elements to diagram the sump pump job as does the Gantt chart in Exhibit 6-4. The critical path is indicated by the dotted line. The beginning of each arrow represents the time when work begins on that element, and the arrow's point represents the time when this element is completed. The number located above the arrow represents the number of days or hours needed to complete this element. The arrow points to a circle, or node, inside of which is a number that identifies the next element. Below each node are two numbers. For example, below node No. 9 are the numbers 4 and 10. The left-hand number, 4, indicates the earliest starting day for this element. The right-hand number, 10, means that this element must be completed by the tenth day. The number 20 is above the arrow. These three numbers taken together mean that this particular element of the sump pump job can be started as early as the fourth day, must be completed by the tenth day, and will require 20 hours of work. Elements outside the critical path depend on elements within the path, but there is much more flexibility in scheduling them. Probably, this particular job would not be placed on a critical path, but it serves as a way of illustrating the CPM technique.
opportunities in this area at relatively low cost. Information must then be stored and compiled by the planning function and necessary reports produced. REVIEW OF WORK Review of work may be thought of as closing the loop on work done by maintenance. It is a way to measure effectiveness, collect data for improving the operation, report to management, and support future plans. The two main areas of review are measuring what is done and recording information in various databases for further use. Measuring Effectiveness Any well-run maintenance function should gather data on what is done in the areas in which maintenance is active. Comparison with what had been planned and scheduled reveals how effective ongoing activities are. A number
104
of commercially available software programs are available for accumulating and presenting this information. By paying steady attention to this information, management can aim for continuous improvement in the maintenance function. Records Upkeep The nature of the maintenance function necessarily generates the need to maintain appropriate databases to achieve control of the operation. These databases might be numerous and large, requiring a lot of time and effort for their support. Provision for this should be built into the maintenance budget. Not only should routine accounting information be collected, but also important information regarding job times, methods, parts, materials, skill needs, estimating and scheduling, standards for job planning and estimating, equipment histories, new technology files, energy planning factors, training profiles, and other data relating to the unique needs of the organization.
SELECTING THE PLANNER AND SCHEDULER Criteria vary for selecting who should plan and who should schedule. A key factor involves training in the appropriate planning and scheduling skills needed to carry out the duties. Logical thinking and an even temperament are also important in the planner and scheduler role. Generally, individuals with experience in the craft or work involved are chosen. However, many examples of nontechnical personnel who are excellent planners and schedulers have been reported. The planner and scheduler are generally different individuals or functions. However, in some situations, especially in small organizations, the position may be combined, or the supervisor or manager of the maintenance organization might even perform the duties. The need for these two functions remains, no matter what the size or scope of the organization. If the operation is small enough to be handled by one person acting as both planner and scheduler, someone with craft experience should be selected because these skills can be taught more easily than craft skills. The Planner Planner duties are different from those of line supervisors. The primary responsibility of the planner is to aid, advise, and assist craft personnel in getting jobs done in the shortest amount of time and in a high quality manner. Ideally, the planner should be an individual who is from the craft or skill represented by the work and with sufficient experience in the plant to be familiar with most of the equipment, areas, and problems that have to be addressed. Experience is important because there are not many opportunities for on-site observation before or during the work execution. The planner spends a lot of time at a computer, a feature of the job that may not be desirable to people who formerly worked in the crafts, and handles paper-
105
work on a daily basis. The planner selection process can be simplified by use of the factors listed below: Good craft skills, meaning the individual merits the respect of workers who must perform the work. Good verbal, computer, and written communication skills. Good administrative skills, meaning the person is able to handle paperwork with ease. Good design comprehension and sketching ability. Good understanding of priorities, work orders, and schedules. The Scheduler The scheduler must match job time estimates, labor hours, and priorities. the scheduler, therefore, should be proficient in abstract problem solving rather than having a great deal of craft skills or on-site experience. Computer programs can provide assistance in the science of scheduling, but a certain amount of broad vision is involved in producing schedules that are truly responsive to the organization's needs. Some of the factors that help identify good schedulers include: Ability to solve abstract problems. Ability to integrate maintenance schedules with production and operations requirements. Good verbal, computer, and communication skills. Understanding the relationships between the crafts.
SUMMARY Of the many administrative activities associated with the maintenance function, planning and scheduling work has by far the most profound effect on the timely completion of the work. Without an effective planning and scheduling operation, it is virtually impossible to properly manage the scope of the maintenance organization. Planning and scheduling, when performed well, multiplies the effect of maintenance work.
106
1. To establish an effective planning and scheduling system, all maintenance work should be represented by: (a) historical records. (b) work orders. (c) job cards. (d) stores issue slips. 2. A job estimate that is broken into several components, with a time estimate for component, is called: (a) an engineering estimate. (b) a historical estimate. (c) a slotting technique estimate. (d) a standard data estimate. 3. The decides when a job will be done; the decides who will do it. (a) line manager ... planner (b) scheduler ... laborer (c) supervisor ... scheduler (d) scheduler ... supervisor 4. The scheduler should try to schedule labor hours available each day. (a) 10 to 20 (b) 30 to 50 (c) 70 to 80 (d) 80 or more 5. percent of the
1. (b)
2. (a)
3. (d)
4. (d)
permits scheduling different elements of the job, allowing them to overlap if desired. (a) The Gantt chart (b) The critical path method (c) The pigeon hole schedule method (d) The PERT system
5. (a)
107
6. Execution of the work is the responsibility of the: (a) scheduler. (b) planner. (c) line supervisor. (d) production department. 7. The should make sure all necessary parts and materials are available before a job is released for execution. (a) line supervisor (b) planner or scheduler (c) storeroom clerk (d) production manager 8. Ideally, the should be an individual with skilled craft experience, while the should be proficient in abstract problem solving. (a) craft supervisor ... planner (b) scheduler ... production foreman (c) planner ... scheduler (d) production foreman ... craft supervisor 9. The responsibility for assigning priorities to a work order lodges with: (a) the planner. (b) the top management. (c) the maintenance manager. (d) any of the above 10. are responsible for providing craft workers via a work order with all the information they need to complete a job quickly and safely. (a) Field supervisors (b) Maintenance managers (c) Planners (d) Design engineers
6. (c)
7. (b)
8. (c)
9. (d)
10. (c)
Craft Training
Learning Objectives By the end of this chapter, you should be able to: State the three main areas of maintenance training concerns. Prepare a skills analysis for designated crafts. List five types of training most often followed in maintenance. State three classifications of vendor training programs. List two kinds of controls that can improve existing on-the-job training programs.
INTRODUCTION The increasing technological direction of facilities, systems, and equipment over the last decade places greater demands on the maintenance function to keep pace. One of the main signs of this phenomenon is that maintenance technicians are spending more time on trouble shooting and problem solving and less time applying their basic craft skills. The changing knowledge requirements for maintenance workers is reflected in: The move from single craft to multicraft knowledge. The migration of technicians from basic skills or crafts to higher technologies involving computers, electronics, and system analysis. The rapid rate of obsolescence of equipment and technology and of the knowledge requirements that go with them. The aging of the maintenance work force and the knowledge voids that occur unless training is conducted on a continuous and planned basis.
109
110
In most organizations, the training task is assigned to the personnel or industrial relations functions. But managers of maintenance should be aware of the training needs of their own departments. There are three areas of training concern: supervisory training craft and support personnel training and technical and managerial training. Although training professionals may design and present training programs, these efforts will be more effective with input from the maintenance function itself. Specifically, recommendations for the training needs analysis, technical content of courses, proper instructors, and appropriate case examples are best made by the maintenance department. The essential thing to remember is that any training program is only as good as the maintenance manager's input and participation. An organized, continuous training program enhances the effect of learning curves. This means that repeating a task reduces the time needed to do the task next time because the task has been learned. Good training shows the worker the better way to do the task, enhancing the potential for faster learning and greater progress on the learning curve. In this chapter, we will focus on training needs analysis, skills analysis, and types of craft training.
TRAINING NEEDS ANALYSIS Craft training programs are often developed from four-year apprentice programs in use elsewhere. Some programs are excellent and applicable to training needs. But many are generalized and do not relate to needs of a particular maintenance department. Moreover, programs that are too complicated, academic, or esoteric often fail. Programs are needed that are practical and applicable to the unique situations found at the job level. Local input makes the training program job-related and functional, which is why training needs analysis is important.
DOCUMENTING T RAIIVING NEEDS When the skills and staffing distribution and the optimum number of people required to run the department have been determined (Chapter 1), the next task is to determine the number and type of people who should be trained over the next five years. Assessing the training needs over a five-year period helps the maintenance manager anticipate appropriate lead times for training new, as well as replacement, personnel. The program should be reviewed annually and an updated five-year forecast issued. Without training programs, factors such as nonavailability of skilled help, union commitments, and introduction of advanced technology equipment and systems loom large as critical management challenges. Where there are no formal training programs in progress, it is necessary to hire higher-paid, experienced workers to replace personnel who leave or retire. The training profile should encompass entry levels through highest skill levels and continue on to include support personnel, supervisors, and managers. Therefore, knowing the predicted
111
personnel turnover and retirement rates is important. To determine the number of employees who will leave, retire, or transfer during the next five years, a form such as Exhibit 7-1 should be used. This form estimates the number of currently employed skills and the number anticipated to leave each year. The normal rate of attrition can also be established this way. Local definitions of personnel attrition and retirement are necessary. Historical information may be helpful in estimating future events, but this should be used with some care because organizations are constantly changing in mission, products, growth, and composition. Exhibit 7-2 is a form that may be helpful in reviewing past history and projecting future attrition. As the bottom line shows, the number of replacements can be determined by adding the average level of attrition to the number of retirees of each year of the five-year period. Replacements can come through hiring new staff who are qualified or by training personnel already on staff. It is usually best if this forecasting is based on a plantwide policy so that all departments approach the subject uniformly. After a determination is made on how many skilled employees should be hired, the remaining slots are filled by trainees. This projection suggests a fairly long-range program with objectives that will fill the department's
112
113
unique training needs. It shows the number of personnel each year who must be trained and the crafts that are involved. The projection also shows those years in which a projected high number of retirees might offset requirements of planned staff reductions. Some care should be taken to ensure that the right number of crafts are retained rather than a straight head count tally. Informed decisions about staffing and training are essential.
SKILLS ANALYSIS Skills analysis assists in determining the training needs for crafts by providing an outline for an entry level training program, or apprenticeship, or for evaluating the skills of more experienced workers. Skills analysis is developed by plant personnel who ensure that it reflects the needs of the plant. Consultants often assist or validate these efforts, but the overview of skills is a management responsibility. A skills analysis represents the many tasks and tools that pertain to a skill. The tasks are then related to unique jobs in the plant. Some skills are general, such as "knowing the function of and trouble-shooting circuit breakers." Others, such as "analyzing synchro-control systems and effectively making repairs on them," might be specific to the local plant. Some tasks require more experience and knowledge than others, but they are all part of a single skill, defined by the organization performing the analysis. In fact, an accumulation of smaller tasks is usually necessary to successfully accomplish one of the larger ones in a defined skill. A skills analysis can be accomplished through a series of interviews with craftpeople and knowledgeable supervisors. Each task they handle is listed and described in detail. This leads to a master list of tasks, which is reviewed by supervision, management, training, and engineering, where appropriate. Such reviews might result in additions and deletions to the tasks, greater emphasis on certain tasks, or tasks broken down into more appropriate elements. Finally, the skill may be stratified to show different grades of experience, such as junior, senior, specialist, master, and so on, needed for accomplishment. A final list can now be compiled for all the tasks that make up a skill. A typical page from a skills analysis is shown in Exhibit 7-3. A group of tasks common to all crafts is then added. Some of these might include: Familiarity with safety rules that apply to each job. Understanding of tools, instrumentation, and equipment items involved with the craft. Ability to interpret sketches, blueprints, schematics, or specification documents that might apply to the craft work. Ability to make sketches and write up descriptions to communicate the needs of jobs undertaken by the craft. The finalized skills list, as agreed from the analysis, provides a guideline for developing a craft training program. Because the skills analysis determines
114
Is able to adjust chain drives. Is able to troubleshoot pump installations. Understands workings of centrifugal, reciprocating, and rotary pumps. Uses books, catalogues, and company manuals to determine parts, materials, and equipment operations. Knows how to disassemble, repair, and install hydraulic and pneumatic cylinders. Knows the principles of mechanical seals and stuffing boxes, lantern rings, and O-rings. Is also able to install, repair, and so on. Does shaft alignment within indicator reading of .002 Does layout work within close tolerances with detailed print. Is able to repair a complex gearbox or gearhead motor, such as a double reduction gearbox. Uses shop math to make or sketch cams, angles, threads, radii, circumferences, and so on. Knows how to identify types of bearings and how to use bearing identification number for interchanges. Knows all tagging procedures in plant, such as electrical safety. Determines proper belt and pulley speeds in FPM feed. Uses transit and level in making layouts for long conveyor runs.
the real needs, the training program can now be a functional, job-related, and hands-on product.
JOB-RELATED TRAINING Job-related training means that the results of the skills analysis are reflected in training programs designed to meet the requirements for craft training of assigned workers. If part of a trainee's instruction is provided by a local technical school, it is important that the courses are applicable to the job the trainee does or will be doing at the plant. However, circumstances and budgets frequently make it impossible for those schools to provide specific training. General training is acceptable if two properties are met. First, the training should relate to the craft-electrical, mechanical, electronic, and so on. Second, the course should stick to the designated subject matter-for example, blueprint reading should be just that, not preparing mechanical drawings. Training within the plant is usually more focused in terms of jobrelated emphasis because the course contents are under strict local direction.
FUNCTIONAL TRAINING Functional training takes job-related training one step further. A functional electrical blueprint reading program applies universal electrical symbols and
115
basic schematic practices to the electrical needs within the local plant. Using this approach, the trainee learns principles of universal electrical blueprint reading along with the functional application of this knowledge to situations within the plant. Functional training cannot be learned in the classroom or on the workbench alone, and for this reason, it is a valuable element of the training program. HANDS-ON TRAINING Job-related functional training is further reinforced by hands-on training or doing the job as part of the customized training. A good example is blueprint reading. Job-related electrical blueprint reading deals with, say, motor controls and transformers used in a plant, not home wiring. It becomes functional when we use the actual line diagrams, schematics, and prints that pertain to the plant. Theoretical aspects of electrical blueprint reading are further reinforced by hands-on assembly and disassembly of actual units, or si mulators, shown on the blueprints. Hands-on training is a continuous, repetitive application of the task to reinforce what has been taught. This type of training is more effective than on-the-job training (OJT), with which it is often confused. OJT requires a trainee to tag along with a more skilled worker, watch what is done, and perform some tasks under supervision. OJT generally lacks the formal, planned aspects of hands-on training. INSTRUCTORS Some of the best instructors can be found in one's own organization. Engineers can teach math and blueprint reading; supervisors can teach craft skills; experienced workers can teach techniques or topics. If there is sufficient demand, a local technical school staff member can be brought in. The identification and selection of instructors is important and should be done early. Each instructor represents another resource to become involved in the program, from needs analysis through the design and implementation stages of the training program itself. Vendors and suppliers are another source for instructors. They are not used as much as they could be. Training by these outside sources can be classified into three groups: Original equipment manufacturer (OEM). These organizations provide major or critical equipment. Most of them run training programs at their own sites, although many provide training at customer locations. Component vendors and suppliers. These sources generally provide training programs at customer sites. These include vendors of bearings, pumps, lubricants, hydraulics, electronics, and computer devices. Specialist vendors and suppliers. These sources also provide training programs at local sites and include suppliers of ultrasonic testing, vibration analysis, electrical testing, environmental monitoring, computer system operation, electronic devices, and so on.
116
Entire customized programs for skill, crafts, and specialist training can be designed around vendor and supplier training. However, some care should be exercised in deciding how much plant personnel training should be given over to outside organizations that are motivated to enhance their own products and points of view. Overview by the maintenance manager is essential.
UPGRADE TRAINING To keep pace with changes in the field of maintenance, workers and supervisors need focused, formal training to continuously upgrade their skills and knowledge. New technology, which is being introduced into industry and facilities of all kinds, presents continuing challenges in training. New skills have been developed but greater emphasis is also being placed on some old ones. Maintenance managers and skilled workers need a broader knowledge of electronics, computer-based devices and controls, environmental and pollution technology, automated equipment, and solid-state components. Moreover, some new metals and nuclear-related materials require advanced knowledge and skills for operations, maintenance, and repair. Mechanical systems now use hydraulic and pneumatic components that had not been dreamed of a decade ago. Some organizations, such as chemical and pharmaceutical firms, have complex, automated continuous processes that present new dimensions to the maintenance and support responsibilities. In the near future, repairs to robots and repairs accomplished by robots will be part of daily routines. International, federal, and state regulations concerning environmental, safety, and accountability matters have proliferated so that it is virtually impossible for maintenance personnel to keep up with them, let alone comply. In-plant training programs have not always kept abreast of these many changes. In many cases, self-originated, informal, on-the-job training among the maintenance personnel has saved the day. Skills analysis provides an approach to meeting upgrade training requirements. This can be done by adding a rating column to the listing of all tasks that make up a skill. Exhibit 7-4 shows how to use the skills analysis task listing to rate the needs in upgrade training.
TRAINING MATERIALS Some of the best books and materials on the market today for maintenance craft training are programmed instruction, or self-paced learning, manuals, written in an easy-to-comprehend style. Many are accompanied by audiotapes or videotapes. These materials make self-study or group study easier and more effective. However, when selecting such materials, it is important to compare what is offered with the training requirements of the local organization. Some providers sell only those portions of the materials that apply to the needs of the maintenance function. Finding sources for training materials is not difficult. Many companies and technical organizations offer comprehensive and effective programmed instruc-
117
NAME Rating Code 1 -Training necessary. 2-Upgrade training suggested-not required. 3-Fully proficient-no upgrade training required.
SUPERVISOR
1. Is familiar with safety rules as they apply to each job assigned. 2. Knows how to use shop tools, such as drill presses, arbor presses, pedestal grinders, and so on. 3. Is able to interpret any sketch, blueprint, or specification on job. 4. Is able to sketch parts for shop fabrication with proper tolerances. " This form lists a number of tasks that are part of the skills used by millwrights. These are only four of the sixty tasks used in a millwright's skills analysis. Each individual is not expected to be completely knowledgeable in all the tasks. For upgrade training, each craftperson should be rated on every task listed. The numerical ratings appear at the top of the form. The numbers 1, 2, and 3 are used to rate each task. For example, if No. 3 is placed after task No. 2, then training is not needed in that task. The purpose is not to rate individual performance but to identify tasks or groups of tasks that need training programs or manuals.
tion materials on maintenance. A good cross-section of these can be found by checking advertisements in trade magazines, professional and technical journals, and facilities-oriented publications. Correspondence courses should not be overlooked either. Many are good for specific needs. The American Society of Training Directors (ASTD) can assist in identifying providers of appropriate training materials. The field is dynamic, and new products appear almost daily. Maintenance managers should look to these sources for cost-effective materials for in-house training programs. Earlier, simulators were mentioned as an aid in training. For those who don't care to build simulators, there are a number for sale by vendors. Manufacturers who provide equipment often sell simulators of their equipment for training needs. There are firms in business solely to sell simulators for many kinds for training.
EXISTING PROGRAMS An organization that already has a formalized program for training maintenance personnel will find in this chapter criteria to evaluate and validate those programs. Training for training's sake fails. By reviewing programs
118
periodically and removing things no longer needed and adding new capabilities, costs can be reduced and maintenance personnel trained faster. Trained personnel are more productive, particularly when the trainee's understanding is enhanced by hands-on, programmed instruction in groups run by a supervisor or specialist who knows the material. Organizations that now use some form of hands-on or on-the-job training can improve an existing program by using the following controls: A breakdown of tasks and the number of hours that should be spent by the trainee over the period of the employee's hands-on or OJT program. An example is shown in Exhibit 7-5. A monthly evaluation or check-off of the trainee's proficiency, new skills, effectiveness, and so on. This evaluation can be made by the senior worker or supervisor assigned to the trainee. An example of this is shown in Exhibit 7-6. Hands-on or OJT training is often weakened or doomed by assuming that job training is completed when the trainee is assigned to a more senior worker or supervisor for guidance in field work.
SUMMARY There are three areas of training concern: supervisory, craft and support personnel, and technical and managerial training. Regardless of who is responsible for presenting the training program for these three areas, in order to be successful the program must be practical and applicable to the job or plant, and the maintenance manager must have input into its content. If plans for formal training programs do not exist, and if turnover and retirement rates have not been estimated, factors such as staff shortages and the purchase of new advanced equipment can become major and costly management challenges. One way to determine training needs is to employ skills analysis. Such an analysis allow a trainer to create a master list of tasks, which provides guidelines for creating a training program. Frequently, workers receive general training at a local technical school, although further training within the plant is usually necessary to provide more focused job-related information. Functional training, whereby the worker learns universal task information along with the functional application of the knowledge, is very effective. Taken one step further, hands-on training, in which the worker actually applies the theoretical and functional aspects of training, reinforces what has been taught. This differs from onthe-job-training-in which employees simply learn by doing-because it lacks the formal, planned focus of hands-on training. Of course, the training program is only as good as the training materials used, which are widely available from a variety of sources, and the instructors employed, who can be staff members, teachers at technical schools, or even equipment vendors or suppliers.
119
120
This form can be used to rate work performance and the personal traits of a trainee. The trainee's supervisor should fill in the appropriate box in each area being rated (one for each of the six rating categories). There are six areas to be rated under "work performance" and five under "personal traits." The small numbers are the percentage points associated with the selected rating. For example, in the area of "accuracy," a trainee who "seldom makes mistakes" would receive 18 percentage points, or a rating of very good. The trainee should sign the sheet after a consultation to get an understanding of why each rating was made. Copyright 1981 by TPC Training Systems, a division of Telemedia, Inc. Reprinted with permission.
121
1.
is used to determine the training needs of a specific craft. (a) Training needs analysis (b) Skills analysis (c) Job-related training (d) Functional training
1. (b)
2. The list of tasks in a skills analysis can also be used to determine: (a) upgrade training requirements. (b) safety measurements. (c) optimum staffing requirements. (d) none of the above. 3. A skills analysis is established by interviewing reviewing results with the (a) trainees ... maintenance workers. (b) maintenance workers ... personnel department. (c) maintenance workers ... supervisors. (d) trainees ... supervisors. 4. Applying training programs to a specific job is called training. (a) functional (b) hands-on (c) job-related (d) vendor 5. Job-related blueprint reading should be done for a specific: (a) program. (b) craft. (c) piece of equipment. (d) skills analysis. and
2. (a)
3. (c)
4. (c)
5. (b)
122
6. Simply doing the job as part of a formal training program is a feature of (a) hands-on training. (b) job-related training. (c) vendor training. (d) functional training. 7. Vendor training may be classified as: (a) OEM training. (b) component vendor training. (c) specialist vendor training. (d) all of the above. 8. Blueprint reading may be taught by: (a) the personnel department. (b) the equipment manufacturer. (c) the industrial relations department. (d) the engineering department. 9. New technology increases the need for (a) upgrade (b) basic skills (c) apprentice (d) safety training.
6. (a)
7. (d)
8. (d)
9. (a)
10. An effective training program reflects good cooperation between the and departments. (a) maintenance ... industrial relations (b) maintenance ... engineering (c) personnel ... engineering (d) personnel ... industrial relations
10. (a)
Measuring Effectiveness
Learning Objectives By the end of this chapter, you should be able to: List the two categories of measurements of maintenance effectiveness and activity management. List four important types of measurements that indicate effectiveness of maintenance management. List eight other types of measurements to follow specific areas of maintenance activity. State the five adverse effects that excessive overtime has on maintenance operations. State the three phases in the implementation of total productive maintenance.
INTRODUCTION "How am I doing?" is the question we ask ourselves, and the question others ask us, as well. In this course, we have developed tools to improve efficient and productive maintenance operations. But how effective are they? The answer lies in measuring maintenance efforts. Intelligent measurements provide a basis for making better decisions about managing maintenance. There are a number of ratios and indexes that measure the effectiveness of the organization and management and the activities that affect the overall success of the organization. Each type of measurement contributes solid feedback to the responsible manager, indicating where problems exist and what attention might be needed. These measurements are related. Too much emphasis on cost reduction will eventually result in unacceptable performance maintaining equipment
123
124
and facilities. Other relationships will also be discussed. To understand the maintenance operation and to effectively balance the use of available resources to achieve the most effective program, measurements similar to those that follow should be implemented, reviewed, analyzed, modified, and customized.
SAFETY MEASUREMENTS One of the best measurements of a manager's effectiveness is the ability to run a safe operation. Achieving high levels of safety involves training and use of people. Consequently, a department with a minimum of lost time accidents reportable to the Occupational Safety and Health Administration (OSHA) exhibits managerial concern for people in the department and demonstrates overall management effectiveness. A safety audit of such a department would show a set of safety policies and standards, a daily review of hazardous conditions, a record of periodic safety orientation meetings, and appropriate discipline meted out to violators of safety requirements. These activities can be measured and reported on a continuous basis.
BUDGET VARIANCE Budget variance is a simple measurement of how well maintenance expenditures conform to estimates in the budget or to references such as industry averages for similar activities. Variance should be monitored for expense, or operating, and capital budgets. Variance is usually shown in terms of percentages or dollars over or below the current budget on a monthly basis and yearto-date. In Chapter 2 we looked at ways to analyze budget variances and at how ongoing awareness of variances aids in effective management. Budget variance is likely to be smaller as the size of the budget increases and varies with individual items included in the budget. All line item variances should be reviewed, but experience tells which ones are high-leverage indicators of problems and management challenge. Some managers keep watch on the budget variances alone, but this may be an incomplete review. Other measurement indexes allow the manager to know how much was actually spent on the items that caused the variances and whether the expenses were justified.
MAINTENANCE COST PER UNIT Maintenance cost per unit is another method of measuring the cost, or effectiveness, of maintenance. The unit in maintenance cost per unit can be defined in any way local management considers important. Generally, the unit is a unit of production or service. Examples include number of manufactured products produced, pieces of equipment maintained, pounds, barrels, tons, geographic areas, departments or plants, energy systems, or any other unit used by the cost accounting organization to measure products or service.
125
Watching the maintenance cost per unit figure provides valuable trend information for the manager. Specific indicators, or measurements, can be affected by changes in volumes or processes in manufacturing, introduction of new products, changes in the weather or seasons, introduction of new or different equipment, and by more or less effective maintenance activities. These factors that influence the maintenance contribution to the cost of production or to the cost of operations in nonmanufacturing organizations, must be taken into account when determining the portion of the total product cost that can be attributed to maintenance. Some costs included in maintenance, such as building maintenance, heat, light, grounds, and depreciation, are constants and are therefore not proportional to the level of production. Consequently, maintenance cost per unit of production increases when production decreases, and decrease when production levels peak. The maintenance cost per unit only indicates that a closer look should be taken if the figure makes a change in either direction. Action should be taken quickly to reduce costs of all kinds whenever there is a drop in production or operations. A similar index is maintenance cost per sales dollar. The same problems exist as with maintenance cost per unit. There is also a concern with the time lag between the time sales are credited and the time production levels change to reflect the sales volume.
AUINTENANCE COST AS A PERCENTAGE OF CAPITAL INVESTMENT The function of maintenance is to maintain equipment, systems, buildings and grounds, and other assets at an optimum level of performance and with an optimum outlay. Because equipment, systems, buildings, and grounds are included in the capital investment of the business, the cost of maintaining them can be compared with the capital invested as another way of measuring maintenance effectiveness. Accountants look at capital investment in several ways. One is the book value, the original purchase cost less the accumulated allowance for depreciation. When book value is used, the maintenance cost of individual assets always show an increase each year because the book value decreases while maintenance and inflation generally increase as the asset gets older. The original purchase price of the asset (not depreciated) can also be used, but this generally has little relevance in measuring current maintenance performance. A better value to use as a base for calculating an index is the cost of replacing an asset. This appears to be the best method for measuring maintenance cost as a percentage of capital investment, although it makes no allowance for the fact that the physical plant is always aging and more maintenance is required. An allowance figure is often used to recognize this cost. The insurance department in most companies keeps asset replacement value information. If not, estimates should be made by persons having knowledge of current costs of equipment and facilities.
126
The three measures mentioned-budget variance, maintenance cost per unit, and maintenance cost as a percent of capital investment-can be used individually or together to monitor trends in the cost of providing maintenance.
ADDITIONAL MEASURES Additional measures follow specific areas of maintenance activity and are used to: highlight trends, problems, and areas of improvement; gauge the success of changes in methods or equipment; and create special reports for activities of special interest designated by management. In the following sections some of these measurements are discussed. These are valuable tools if properly developed and diligently pursued and should be used where appropriate to monitor progress and performance. Percentage of Uptime This measure is the percentage of time a piece of equipment is operable. The percentage might also be shown for a system, line, department, facility, product area, or any meaningful designation. An average for all equipment or groups of equipment is more valuable as an indicator of trends over time. Some organizations measure downtime, but measuring uptime is a more positive approach. The index can be constructed using the 24 hours of the day or, more reasonably, a number such as the hours the department is scheduled to operate for the month. Managers should take care working out the basis for this measure. A high uptime rate must be balanced against the cost of obtaining it; the last few percentage points will probably be costly. Each case has to be judged separately, taking into consideration the number of machines available, redundancy, importance of the equipment (that is, the risk factor if it fails or does not run up to par), costs of overtime, and many other factors. Maintenance managers concerned with achieving high uptime must make informed decisions about preventive maintenance, overhauls, replacement, and interruption of operations or production. Exhibit 8-1 shows the relationship of maintenance efforts to uptime results. Creative planning and scheduling of maintenance can increase the uptime without being excessively costly. Percentage of uptime, budget variance, maintenance cost per unit of production, and maintenance cost per dollar of investment offer four measurements of the effectiveness of the maintenance organization. Other measures important to individual organizations could and should be developed and used. The next series of measures indicates how well management uses the work force. Improvement in these ratios indicates the effects of proper planning and scheduling, employee training, motivation, and management's direction.
127
This classic graph has appeared in maintenance procedure manuals in many companies. It illustrates the point at which the attempts of maintenance to provide the availability of equipment (or uptime) becomes more costly than the return realized from continuous production. The last few percentage points are the most expensive. The desired effort is where the two lines intersect. To the left of this point are the combined costs indicating not enough maintenance (meaning the return from production is decreasing because of the unavailability of equipment); to the right are the combined costs indicating too much maintenance. Maintenance can only guarantee the availability of equipment to a certain point. At that point, the cost of maintenance to avoid the unavailability of equipment becomes greater than the losses because of reduced production. In other words, maintenance costs are rising faster than the return from guaranteed uptime. Using a buffer of plus and minus 10 percent helps in controlling the desired level of maintenance. To maintain the lowest practical cost of maintenance, costs must stay within this 10 percent range. The cost of the availability of equipment in this graph is not the measure of a single uptime statistic alone. It represents the total maintenance effort.
Workload Backlog Workload backlog compares the amount of work on hand, assigned or ready to be assigned, with the amount of labor hours available. It should include work required by blanket work orders and planned preventive and predictive maintenance for the period. It is generally thought that a lack of backlog indicates overstaffing. In some operations this is not the case. On the other hand, a 10-day backlog may signal the need for more staff or overtime or perhaps a need to review the work to see what can be postponed or eliminated.
128
Days of backlog are usually expressed as crew days, although some organizations prefer total labor hours. For example: Mechanic section employees Normal work week Total available hrs./wk.(15 x 40) Absenteeism Dept. meetings, administration, etc. Available hours/wk. 600 - (2.1 +.5)% Regular PM allocated (16 hrs./day) Blanket work orders allocated (8 hrs./day) Reserve for emergency order response* Average actual hours available/wk. Hrs./day avail. for backlog (454.4 + 5) Estimated hours of work orders to issue Workload backlog (981 -.91.98) May be provided for in planned work estimate as allowance %. Overtime Ratio The amount of overtime, expressed as a percent of regular hours, is called the overtime ratio. It affects budget performance employee morale and plans for staffing. Overtime is an important factor in preventive maintenance, backlog, uptime ratios, and other forces within maintenance. The objective of management is to keep the ratio within planned limits. If no overtime is ever needed, it may be a signal that staffing may be too high. Excessive overtime usually means poor management. The ratio should be monitored to indicate trends, to highlight major problems, and to evaluate supervisory effectiveness. Excessive overtime also creates classic personnel problems when it becomes a way of life with employees. If it is suddenly reduced or eliminated, employees may suffer great reductions in take-home pay. Overtime often masks management deficiencies in workload planning and scheduling, training, labor planning, and discipline. Moreover, constant use of overtime works to decrease productivity as work tends to expand to fill available time to do it. It is the maintenance manager's responsibility to keep the overtime as close as possible to the optimum planned levels. Emergency Work Ratio The emergency work ratio is the number of hours spent on emergency work (Chapter 3) as a percentage of the total hours worked by the maintenance department. Some managers break it out according to regular and overtime hours. It is common to find maintenance groups so busy putting out fires they cannot find time to plan and schedule properly, do preventive maintenance, and control overtime costs. As a result, emergency work increases. To control this situation, it is necessary to redefine emergency work, establish a more reasonable set of priorities, eliminate trying to satisfy all customers immediately, and enlist top management of the organization in the quest for scarce maintenance resources. Users of maintenance usually cooperate if they are convinced their work will be done according to a fair set of schedules and priorities. Constant review of the emergency work ratio pro= 15 employees = 40 hrs. = 600 hrs. = 2.1 = .5% = 584.4 hrs. = 90 hrs./wk. = 40 hrs./day = 0 hrs./day = 454.4 hrs./wk. = 91.98 hrs./day = 981 hrs. = 10.66 crew days
129
vides timely ammunition in gaining control of this work and in getting support from the users of maintenance services. Labor Versus Materials Ratio The average labor cost compared with average materials cost is called the labor-materials ratio. It can be calculated for trades, shops, department, or by units of production or operations. For example, the ratio might be 1.2: 1.0, or 1.2 dollars of labor for 1.0 dollars of materials used. The labor versus materials ratio is useful only when measuring a large amount of work over a period of time because many labor jobs require little material. This ratio is a general indicator of the effectiveness of labor in using or installing materials. But it is also useful for evaluating training, supervision, and planning. The ratio can be affected by such variables as overtime, the balance between new work and repairs, and new construction. Some trades are more affected than others: auto mechanics typically use a lot of parts, for example, whereas electricians might not.
WORK MEASUREMENT One measurement desired by management and perhaps the most difficult to obtain is the measurement of actual work rather than counting work. A number of methods compare actual time spent on maintenance jobs with an established norm. Counting the actual time it takes to complete a job is relatively easy if structured and supervised correctly. Comparing the actual time with the estimated time on a work order is also a routine accounting task. But ways of determining how long it should take to do the work are numerous and varied. The question remains: Are the maintenance personnel accomplishing their jobs in a reasonable amount of time and at the right pace? This is an important issue because it has been shown that major contributions can be made to improvements in productivity and profitability through properly planned and scheduled work, coupled with efficient execution of that work. The time estimated for a work order is based on a specific work method and is used primarily for scheduling the job at a particular time. The estimated time should be a reasonable indicator of how long a competent worker needs to complete the work. However, determining if jobs are being accomplished at the right pace can be a daunting task. Work of almost any type is influenced by training, motivation, methods, planning and scheduling, supervision, and time. However, the manager who pursues this subject will be rewarded because even a simple system that collects and assigns the average time to accomplish similar jobs or tasks usually shows an increase of 10 percent or more in effectiveness over a short period. There seems to be a natural increase in productivity just because someone is keeping a record. A number of systems that help in determining norms for performing maintenance work. Among these are systems that provide historical standard data, engineered time standards, and even elemental time study data for specific tasks. Increasingly, machine operator tasks in manufacturing situations occur within the time cycles of automated machinery, so worker pace is not a prob-
130
lem unless the worker exceeds the time the machine is taking. This may apply in some maintenance activities, as well. However, most maintenance work tends to be largely unstructured and nonrepetitive, so the task of establishing budgets for how long jobs or activities should take can be difficult and illusive. In meeting this challenge, maintenance planners often use time estimates based on recent local experience for similar jobs or based on best estimates of people familiar with the tasks. Some resort to published standards or information from manufacturers' manuals. Still others use sophisticated computerized techniques of estimating, coupled with databases filled with locally derived time estimates or purchased time estimates. Allowances for travel, personal time, fatigue, delay, and so on are unique to each local site. Planned work must have a time budget because this is key to being able to schedule it. Completed work should be audited to compare actual versus budgeted times so that time estimate databases can be updated and improved. A job post audit is less costly than developing new time standards for each job that comes along. Estimated Time Versus Actual Time Actual time versus estimated time ratios can be generated and published for management. These can be created on the basis of total hours worked, by craft, customer, class of work, project, or any other category that makes sense to maintenance management. As an example, Exhibit 8-2 shows a list of estimated and actual times for each completed work order. Many computerized systems generate useful reports and graphs that depict comparisons of estimated versus actual hours and dollars. Exhibit 8-3 shows graphs that represent efforts of a maintenance project of new installations. Graph A shows that work is being completed fairly close to the estimated times. The graph also shows that the amount of labor devoted to projects is growing. Graphs B and C show that some of the close-in details of work management need closer attention.
WORK SAMPLING Although work sampling is not a precise measurement of effectiveness, it does indicate how time is being used and, therefore, assists in pointing out problem areas. This technique is a statistical system that uses ratio delay and is based on the principle that what happens in a large sector of activity tends to happen in a smaller one. Managers may draw inferences about the overall situation by sampling the small sector. Most public opinion polls are based on this method. In maintenance, work sampling is most often used to determine the percentage of time spent on a number of items associated with performance of observed jobs or activities. These items may include travel time, waiting for parts, actually doing a job, idle time, and interruptions. The results are often unexpected and startling. A typical work sampling report might indicate ten
131
132
133
mechanics in a certain part of the facility spend 20 percent of their time traveling, whereas their assigned work orders might have allowed much less. In effect, the equivalent of two out of ten people assigned are doing nothing but traveling from one place to another. The reasons for the high travel require examination by supervisors. Work sampling studies and reports offer opportunity for understanding activities in operations such as maintenance, where people move around a lot and perform varied tasks.
SUMMARY In this chapter, we looked at ways to measure the effectiveness of the maintenance function. We have also reviewed some indicators of specific activities in various functional areas. The relationship among these data and their effect on each other is important. An astute manager considers them as a group and continuously balances maintenance resources while getting the job done the best way possible. To answer the question stated at the beginning of this chapter- How am I doing?-the maintenance manager must set goals and measure the results by using the mix of indicators agreed upon within the department and with those in top management. A preferred way to record, measure, and present results is to _employ computerized systems to generate reports and graphs similar to those discussed in this chapter.
134
1. Budget variance is a measure of how maintenance form to the costs. (a) safety standards ... unit (b) expenditures ... estimated (c) audits... production (d) projects ... contractor 2. The maintenance share of the product's cost is the: (a) backlog. (b) work measurement. (c) maintenance cost per unit. (d) labor versus materials ratio. 3. The percentage of time that equipment is operable is called: (a) uptime. (b) available time. (c) effective time. (d) scheduled time. 4. Uptime becomes more expensive because of (a) the aging of the equipment. (b) decreases in inflation. (c) greater manufacturing lot sizes. (d) the labor ratio. 5. It is best to assign a or a(n) desired maintenance costs. (a) range ... buffer (b) priority system ... emergency schedule (c) workload ... overtime ratio (d) dollar limit ... automatic stop order 6. Work order backlogs generally are stated in: (a) work years. (b) work days. (c) crew days. (d) number of jobs.
con-
1. (b)
2. (c)
3. (a)
4. (a)
for controlling
5. (c)
6. (c)
135
7. A high overtime ratio indicates that: (a) more labor staff may be needed. (b) a temporary workload exists. (c) there may be poor planning and scheduling of work. (d) all of the above. 8. One of the best measurements of a manager's effectiveness can be found in the of the operation. (a) safety record (b) frugal cost (c) low backlog (d) staff morale 9. Work sampling is a statistical method of determining the that maintenance workers use on tasks associated with completing a job or activity. (a) cost of materials (b) percentage of total labor time (c) amount of skill time (d) type of training 10. Comparison of actual work hours with estimated work hours on planned jobs is a way to: (a) improve estimates on future job planning. (b) assign responsibility for excessive time expended. (c) confirm that the work was done. (d) look for steps that were missed.
7. (d)
8. (a)
9. (b)
10. (a)
Computerized Maintenance Management Systems (CAIMS)

Learning Objectives By the end of this chapter, you should be able to: Define the five basic operations that CMMS should perform. List the nine system features exhibited by most CMMS. Identify three important actions to take to ensure successful implementation of CMMS. List the seven categories of reports generated by CMMS. Name seven measurable benefits or savings that can be realized through use of CMMS. Identify at least 12 other benefits or savings enhanced by the use of CIVIMS.
INTRODUCTION Throughout the first eight chapters of this course book, we made numerous references to computerized systems for such things as preventive maintenance, work orders, scheduling, inventory management, maintenance management, facility control, and reports. We pointed out that it is not necessary to use a computerized system for successful management of any part of a maintenance function. However, we would not do justice to the subject of maintenance management if a full discussion of modern computerized maintenance management systems (CMMS) were not included in this course. The need for a CMMS is not specific to any one situation, industry, or mission. However, use of computer technology in the administration of a complex business enterprise such as a maintenance department is almost a given these days. Most organizations, no matter what size, have
137
138
little difficulty justifying such systems. It is hard to imagine situations where CMMS would not be beneficial, considering the easy availability, low cost, and convenience of computerized systems targeted for various applications in the maintenance field. Early computerized maintenance management systems typically automated the manual, paper-type systems in use at the time. Many buyers were grateful to have a faster and perhaps more detailed solution to the growing difficulty of tracking and scheduling maintenance work and projects, posting equipment history records, and keeping the financial books. Early CMMS also offered improved scheduling abilities and on-line data access. But they did not improve the capabilities of maintenance technicians or their managers to fix or to manage. Early systems were designed primarily to feed information forward with no feedback functions or only limited ones. Continuous design advances in CMMS allow users to harvest benefits far beyond those that initial systems provided. Improved computer function and improved CMMS programs now provide improved and timely feedback functions. The real value of modern systems comes from the way advanced software programs improve the organization and interpretation of data. This capability allows maintenance to respond with more insight and efficiency to situations. CMMS are now used to ensure the high quality of equipment condition and performance, not just as a way to control the work of maintenance personnel. Enhanced quality results are primary reasons for having CMMS, and should be stated among the goals when a maintenance department implements computerized systems. When those quality objectives are recognized as goals, they can be measured and used as indicators of system effectiveness.
WHAT SHOULD CMMS DO? In simplest terms, CMMS should cover the following basic operations: Identifying the maintenance tasks to be done, listing each job and the steps to complete it. Describing the contents of each job or step. Planning jobs: specifying the craft, number of hours, time required, parts needed, and other pertinent information; providing specific objective information (tighten to 15 lb./ft.) rather than subjective (tighten). Scheduling jobs: ensuring all supporting assets are available and a fixed . time or date is set. Supporting the actual performance: monitoring execution of the work, generating reports, and reacting and expediting to assure completion. Many of these operations can be handled on-screen by CMMS. Various modules and databases can speedily fetch and process information in response to commands keyed in by the system user. The output is compre-
139
hensive work orders and supporting information. When progress has been made or the job completed, further information can be entered into the system, allowing status reporting and updating of databases. CMMS, in effect, handle a lot of planned tasks that formerly would have been accomplished, if time permitted, by knowledgeable persons involved with maintenance activities. Certain support operations may be carried out by CMMS as enhancements to the basic operations. CMMS can: Keep a history of what was done in the past. Manage parts and materials in the inventory. Provide access to of repair procedures, bills of materials, drawings, and sketches. Monitor and report on equipment condition. The foregoing descriptions do not consider the technological breadth and scope of a particular system. Whether a system is large, sophisticated, multifunctional, on-line, real-time, interactive with the operator, or integrated with business and financial packages is not the issue here. Most, if not all, CMMS are based on carrying out the basic operations and some systems have useful enhancements.
HOW DO CMMS WORK? Computerized maintenance management systems are computer software programs designed to assist in the planning, management, and administrative control required for effective maintenance. The output of these programs may involve writing, planning, and recording work accomplished; collecting a history of work accomplished; recording shipping and receiving transactions; and generating reports. CIVIMS consist of system programs and information in databases. The software programs retrieve, manipulate, display, and update data in the databases; perform calculations of various types; and generate reports. Most CLAIMS are designed to portray information in ways that support what the system users wish to communicate. No system design applies to every maintenance department. In fact, each user's system is a collection of smaller systems that address needs within a particular facility. The total system is influenced by the nature of the business or activity, the size and composition of the maintenance organization, unique equipment requirements, environmental issues, sophistication of the computer capabilities at the site, regulatory and legal requirements, industry practices, staff computer literacy, and many other factors. Hundreds of computerized systems are available commercially. The systems offered range from narrow, specialized applications to broad, multifunction integrated systems. The CMMS Directory and Comparison Guide, published by the Thomas Marketing Information Center (1993, New York), lists 175 companies that sell systems. There are probably an equal number of firms in the field, as well. Even so,
140
many maintenance organizations develop their systems on a customized basis, through choice or necessity. Basic System Features Certain features seem to be common to most computerized maintenance management systems. These include: Work order management. Project management. Preventive and predictive maintenance. Equipment listing. Equipment history. Parts and stores inventory. Management reports generation. Work planning, estimating, and scheduling. Financial and budget controls.
Almost all commercially available systems contain these features and a selection of others that enhance the desirability of their product. System Modules In rare cases, systems are developed around one, large program. It is more likely that systems in general use comprise several program modules. It is the number and organization of the modules that determine the system's attributes, capability, power, flexibility, and utility. By combining functions and operations associated with a particular area of maintenance operations into a single program module, the user is able to access related operations more easily. These modules permit greater speed, convenience, and userfriendly system operation. Some of the more prominent modules available in current systems include: Preventive maintenance Predictive maintenance Project management Inventory control Fleet management Personnel management Equipment list and management Expert systems Energy management Service contract management Buildings and grounds Fuel and other consumable resources allocation Tool management Financial interface Planning and scheduling Corrective and improvement work orders Materials management Facilities management Financial management Work estimating Equipment monitoring and control Training administration Cost and budgeting Bar-code reading and printing Task standards library Maintenance procedure library Vendor and contractor data file Integrated graphics systems
141
Lube routing Event tracking CAD/CMM interface Defect analysis Archiving Hazardous materials file Purchasing management
Invoice matching Report generator Catalog file Condition-based monitoring CPM/PERT diagramming Forecasting Subcontract management
Not every module is contained in every system. It is the choice of modules, their content, and the organization, or architecture, of the system that makes each unique and attractive to a user. The same is true for customized systems that are developed in-house. Buyers can look for a provider that offers modules covering all the perceived current and future needs for their maintenance management function. Or they might purchase several systems that offer the best fit for their needs and operate them on a stand-alone basis or integrate them into a super system they operate on their own. For best results, it is important that a great deal of planning and evaluation be done before making decisions about the computerizing of a maintenance function. Assistance from outside consultants or from in-house information systems experts is recommended in this vital up-front phase of CMMS development. After a system is chosen, some modification of the software to fit local conditions may be necessary. This is not uncommon. The user's organization and ways of doing business may need to be modified to achieve effective management and operation of the maintenance department in a computerized environment. Functions Included in Modules The following list, by no means complete, indicates functions typically found in widely used modules: Work order status reporting Equipment drawings and Work order backlog reporting graphic displays Work order schedule development Maintenance procedures on screen Library update Work order priority setting Stores inventory management PM schedule setting on screen Availability checking on parts PM detailed task description for work orders PM multiple scheduling bases Allocation of stores for Equipment downtime tracking open work orders Equipment listing, or inventory Automatic generation of Equipment maintenance stores pick list Labor history Just-in-time inventory Equipment maintenance planning cost history Automatic stores inventory update Equipment materials Automatic purchase order creation usage history Work standards file
142
Equipment repair cause history Equipment repair procedure history Equipment specifications Equipment bill of materials
Work standards update On-screen job planning Skills resources planning Reports on individual employees by skills, training, availability
Not all these functions are found in every module of every system sold. But a representative mix of these functions will be found in almost every system, depending on how it is organized. An informed maintenance manager should study the needs of the local maintenance function and make sure the system contains functions that will support those needs. System Operating Details Computerized systems offer a variety of powerful operating details that make them convenient, attractive, interactive, and secure. These vary according to the producer of the system and the unique circumstances in which the user will want to operate it. A list of some of these qualities include: File retrieval from history Browse function in databases Customizing report generator Security (password protection) Data entry validation Multitasking Link to mainframe computer Programmable user keys Archiving, cloning, transfer equipment Pop-up windows in all databases Built-in file packing and re-indexing On-line query of databases Built-in help screens keyed to the current activity Built-in data backup and recovery procedures Graphics in reports Foreign languages available for outputs to screen Local area network capability Auto CAD (computer aided design) Multiple databases with file and module sharing Bar-code interface
Not every system has all these operating details, but most of them contain a large number and new technical developments are happening all the time to make the list grow.
CMMS IMPLEMENTATION Second only to CMMS needs evaluation, implementation of the chosen package is critical for CMMS success. No matter how good and user-friendly a system, if the implementation is not carried out in a proper manner, it will be impossible for the system to live up to its expectations. The implementation of CMMS can be broken into three parts: user training, evaluation of the facility, and entry of data into the system. All three parts are equally important to the success of the CMMS.
143
The user often does not have the resources or expertise to perform these three parts. If that is the case, the user should select a CMMS vendor that can supply the needed implementation services as part of the total solution. Obviously, the user will still have to be involved in the implementation, but this load will be considerably reduced by vendor support. User Training User training should be focused on the work situation of the people who will be using CMMS and not just a learning exercise on how to push the right key on the computer. The training should be more of a workshop in which the trainer and users work with life examples from the maintenance management system environment. The trainer must teach personnel about how the system is designed and operated, and procedures must be developed about data collection. Also, decisions need to be made regarding who will act on the system's outputs and the actions they will take. The system is only a means of improving the quality and speed of communications within the maintenance function. Evaluation of the Facility During the evaluation of the facility, an implementation team prepares a plan for guiding all activities that support the installation of the computerized maintenance management system. A major portion of the plan must deal with how to obtain inventories, databases, and pertinent files pertaining to other topics. Some of these topics include capital assets, manufacturing and facilities equipment, miscellaneous equipment, preventive maintenance schedules, predictive maintenance schedules, spare parts and materials, financial and budget information, personnel files, and reports. The information may be developed through data already on file, or it may be necessary to obtain it by physically counting assets and equipment or other items at the site. Usually, a combination of these two approaches is necessary to evaluate the facility completely and obtain all information needed to ensure the system is set up properly. The team will prepare all information in a format suitable for further action by the data entry function. Data Entry Data entry is the most time consuming but also the simplest part of the implementation. A team of data entry personnel needs to enter the data, or information, into the computerized system databases in the format and quantity the system requires. The data entry persons do not have to have extensive knowledge of the system. However, this stage needs to be supervised by people who thoroughly understand the system. SYSTEM OPERATION With the advent of powerful personal computer (PC) technology, most available CMMS are supported by microcomputers. This is true even for large
144
organizations with much equipment and workload. At some point in the growth process, the systems may require larger capability, such as minicomputers or even mainframe computers. Even so, there are often PCs in the work areas which serve as terminals for communication with the host computer. Some organizations use a service bureau where all data reside on a contractor's system at a remote location. For a monthly fee, the user gains access to the system via local terminals. The advantage of this arrangement is that system technology advances are implemented by the service bureau contractor; the maintenance manager can concentrate on maintenance matters alone. Whether services are in-house or contracted, users of any system do not need to know the size of the computer system used to support their efforts. What matters is their access to information they need to get the maintenance job done in the most effective way. CMMS are usually operated by maintenance department personnel who enter instructions at the computer keyboard. Typically, these entries are made in response to questions, or prompts appearing on the monitor screen. A whole screen full of prompts is called a menu. The simplest and easiest CMMS use menus. Many systems are designed to serve several users at once, providing all with simultaneous access to the data files they need. The majority of current systems operate in an on-line, real-time mode; some are even interactive. However, some very able systems are set up in an older technology called batch operating mode that features fewer functions, slower turnaround, and limited computational ability. It is more important that the technology work well for the users than that they have the latest software. Managers should be alert for improvements in CMMS capabilities just because constantly changing management responsibilities require timely and appropriate information for making effective decisions. REPORTS A dizzying array of reports are possible with CMMS. These vary from fixed, standard reports that are common to most all systems to highly customized reports useful only to users having unique information requirements. Sellers of commercial CMMS have made great strides in offering report generators that suit virtually every need for user information desires. Generally, reports are offered in categories such as: Work orders: remedial, corrective, project, preventive, predictive, alarmbased. routine, administrative Workload reports: current, backlog, project, priority, shop Labor utilization: trades, shift, customer, priority, dates Equipment: uptime, history, trends, class, problems, cost Budget variance: shop, equipment usage, labor, program, energy Inventory: purchases, turnover, stockout, obsolescence, status Custom: schedule analysis, repair history, work completed, quality assurance, overtime, part and equipment cross reference, labor and materials distribution, and more
145
A report need not be printed to be useful or effective. Often, for effective communication, it is sufficient that the report be viewed on the screen. Exhibit 9-1 shows the kinds of reports available in one commercial system. These reports may be viewed on the screen or printed out. The list is not complete because the custom report capability can generate many additional reports. A user rarely exhausts the ability of CMMS to generate reports. It is i mportant to think through carefully what report information is really needed to manage the maintenance function best and then set up suitable reports. As needs for reports change over a period of time, CMMS can generally supply them if the database information is in the system and kept up to date. Report Samples As shown by Exhibit 9- l, the vast number of reports available through CIVIMS makes it possible to obtain just about any type of information useful in managing maintenance. The few samples that follow in this chapter are views of what can be seen on the CAWS screen and then printed out. These exhibits illustrate the variety of reports possible. Exhibit 9-2 demonstrates work and purchase order functions; Exhibits 9-3 and 9-4 deal with database inquiry and analysis; Exhibit 9-5 shows inventory management functions; Exhibit 9-6 indicates some of the preventive maintenance reports.
BENEFITS OF USING CMMS The purpose of operating CMMS is usually to improve performance of equipment or plant capability, as well as save maintenance time and costs. It may be difficult to specify why excellent maintenance is a necessity for producing a product or service of higher quality at lower cost than the competition. But it is widely accepted that lack of excellent maintenance can inhibit this goal. In fact, popular concepts such as total quality management (TQM) and total productive maintenance (TPM) emphasize that maintenance must be performed optimally to ensure competitiveness. There are benefits from minimum maintenance with or without a management system. The advantage of computerizing the management of maintenance is that it allows monitoring of more activities, information, and knowledge, without spending more money in the process. Some specific measurable benefits of using CMMS include: More effective use of maintenance workers' time. Less production loss. Improved equipment life and resale value. Improved product quality. More effective use of parts and materials. Lower parts and inventory requirements. Improved equipment reliability and dependability.
146
147
148
149
150
151
152
These benefits come with the identification, description, planning, and scheduling of maintenance work required to keep a plant, or any operation, for that matter, going smoothly. CMMS enhances maintenance and leads to savings. Versions of these benefits are reflected in Exhibits 9-7 through 9-9. These exhibits show results of surveys by a national organization on the subject of actual and perceived benefits of using computerized maintenance management systems. Identifying Benefits and Savings Maintenance management should set up a procedure for local monitoring of benefits or savings that accrue by using CAWS. If such a system is already in use, it should be reviewed periodically. Sometimes, obvious benefits or savings are overlooked because they were taken for granted. Among the categories to consider are: Increased equipment uptime. Increased maintenance labor efficiency. Overall maintenance cost reduction. Improved supervisor effectiveness. Improved parts and materials availability. Lower production costs or fewer interruptions. Lower cost of maintaining the equipment. Lower parts and materials inventory levels. Lower purchase costs for maintenance parts and materials. Reduced manual data input, with better quality data availability. Improved life-cycle and equipment life expectancy. Reduced outside maintenance contractor costs. Some of these benefits are measurable in percentage changes or changes in levels of effort; others can be quantified in dollars or hours of work. Some thought is needed to determine how a benefit or saving can be measured and reported best. There are other, less tangible, benefits or savings: improved safety, compliance with regulatory requirements, reduced energy consumption, tool savings, reduced overtime, and more. Items that should be tracked are those that make the best sense in the local situation. But the real aim of using CMMS is to afford managers an effective mechanism for getting the maintenance job done better and with highest quality. The resulting benefits or savings are the main force behind the decision to implement CMMS and ought to be looked at closely when considering whether the system is effective.
153
154
155
156
SUMMARY The time and effort needed to select and implement CMMS are well spent because of the benefits and savings they offer in managing the maintenance function. Intense evaluation of the requirements of the user should be undertaken before any system is chosen. There is a support cost associated with using CMMS. Constant attention must be given to keeping the system up to date and supplied with input data. Growth of the maintenance department's responsibilities may require expansion and upgrading, even replacement, of the system. These represent added cost. But the added dimension CMMS offer in managing the maintenance function is well worth the investment.
157
1. CMMS basic operations should be to: (a) identify, describe, plan, schedule, support. (b) take the place of a manual system. (c) manage the work hour charges. (d) provide security for the manager. 2. Computerized maintenance management systems are software programs designed to assist in the required for effective maintenance. (a) training and discipline (b) planning, management, and administrative control (c) safety and labor harmony (d) production of official reports 3. All CLAIMS: (a) perform the same tasks for users. (b) comprise a single program module. (c) depend on databases and user instructions. (d) can run on any type of digital computer. 4. In developing CMMS, it is important to: (a) find a well-recommended provider. (b) hire employees who can operate a computer. (c) select desired computer hardware, then software. (d) conduct a needs survey for the particular location. S. The two most important actions to ensure successful CMMS are: (a) a needs survey and good user training. (b) adequate funding and management backing. (c) staff enthusiasm and plenty of time. (d) a completed equipment inventory and PM procedures.
1. (a)
2. (b)
3. (c)
4. (d)
5. (a)
158
6. Characteristics of CMMS are determined by how their software and are organized. (a) is chosen ... databases (b) modules ... functions (c) performs ... work stations (d) is installed ... work procedures 7. CMMS are most easily operated through: (a) screen menus. (b) ad hoc instructions. (c) maintenance supervisors. (d) customized digital scenarios. 8. CMMS reports are generally: (a) difficult to obtain from the system. (b) plentiful and quickly obtained from the system. (c) inaccurate in terms of work actually completed. (d) of more value to managers than to maintenance workers. 9. A key benefit of using CMMS is: (a) increased equipment uptime. (b) elimination of PM. (c) foreknowledge of major equipment breakdowns. (d) elimination of field supervision of workers. 10. After CMMS is installed and running, it: (a) requires no changes for three years. (b) replaces first-line supervisors. (c) must be evaluated periodically to see if changes are needed. (d) needs to be expanded on a continuous basis.
6. (b)
7. (a)
8. (b)
9. (a)
10. (c)
Bibliography
Blake, Alexander, ed. Handbook of Mechanics, Materials, and Structures (1985) Blanchard, B.S. Logistics Engineering and Management, 4th ed. (1992) Bovay, H.E., Jr. Handbook of Mechanical and Electrical Systems for Buildings (1989) Brooks, R.B., L. W. Wilson. Inventory Record Accuracy (1992) Burke, Harry E. Handbook of Bar-Coding Systems (1987) Cleland, D.I., W. R. King. Project Management Handbook (1990) Criswell, John W. Planned Maintenance for Productivity and Energy Conservation (1988) Dear, Anthony. Inventory Management Demystified (1990) Dyer, C. "Implementing TPM In America," Proceedings, Second Annual TPM Conference and Exhibition (October 1991) Hartmann, Edward H. Successfully Installing TPM in a Non Japanese Plant (1992) Hodson, William K., ed. Maynards Industrial Engineering Handbook (1993)
159
160
Juran, J. M., F M. Gryna. Quality Planning And Analysis, 3rd ed. (1992) Liska, R. W., J. M. Liska. Handbook of Building and Plant Maintenance Forms and Checklists (1990) Maggard, Bill N. TPM That Works (1992) Mobley, Keith. An Introduction to Predictive Maintenance (1990) . "The Next Generation," Engineers Digest (March 1993) . "Total Plant Performance Measurement," Engineers Digest (April 1993) Moubray, John. Reliability-Centered Maintenance (1993) Nakajima, Seiichi. Introduction to TPM (1984) Nelson, Raymond A. Computerizing Warehouse Operations (1986) Patton, Joseph D., Jr. Preventive Maintenance (1983) Salee, A. M. CMMS User Handbook (1992) Salvendy, Gavriel, ed. Handbook of Industrial Engineering, 2nd. ed. (1993) Schorr, John E. Purchasing in the 21st Century (1992) Sink, D. Scott. Productivity Management (1985) Sink, D. Scott, Thomas T. Tuttle. Planning and Measurement in Your Organization of the Future (1993) Stevenson, William J. Production/Operations Management, 4th ed. (1993) Thamhain, Hans J. Engineering Program Management (1984)
161
. Engineering Management (1992) Tompkins, J., J. White. Facilities Planning (1984) Westerkamp, Thomas A. Maintenance Manager's Standard Manual (1993) Wireman, T. World Class Maintenance Management (1990)
Post Test
Course Code 95039 How to Manage Maintenance
1. The structure of an organization is affected by: (a) the functions it performs. (b) the resources available to it. (c) the size of the operation. (d) all of the above. 2. The categories listed in the maintenance budgets are called: (a) estimates. (b) statistics. (c) line items. (d) projects.
163
164
3. In addition to maintenance, the sponsible for the maintenance budget. (a) accounting (b) sales (c) production (d) operations
department is sometimes re-
4. Specialist, component, and OEM are all types of (a) vendor (b) craft (c) in-house (d) community college
training.
5. Of the three types of training mentioned in question 4, is the one dealing with special parts and materials, such as pumps, lubricants, and hydraulics. (a) specialist (b) component (c) OEM (d) none of the above 6. In a typical work order system, the planner or scheduler: (a) prepares the work schedule. (b) performs the work. (c) authorizes the expenditure of funds. (d) sets the priority of work. 7. A preventive maintenance schedule should contain work for a period of (a) one week. (b) six months. (c) one year. (d) five years. 8. Maintenance managers are usually involved in: (a) composing rules on standard operational procedures. (b) designing manufacturing process lines. (c) negotiations with trade unions. (d) acting as official host for visitors to the plant. 9. As time passes, the priority of a low-priority job should: (a) be reviewed. (b) remain the same. (c) decrease. (d) fluctuate.
165
10.
jobs can be scheduled using PERT or CPM. (a) Large (b) Small (c) Preventive maintenance (d) all of the above
11. The percentage of time a piece of equipment is operable is called: (a) running time. (b) uptime. (c) service level. (d) productive time. 12. A manager who manages well will usually manage well too. (a) the human resource ... all resources (b) the physical resource ... all resources (c) the financial resource ... the physical resource (d) the dollar budget ... energy consumption 13. Perhaps the most important issue in controlling maintenance inventory is: (a) the number of jobs to be supplied with materials. (b) record keeping. (c) computerization. (d) the size of the inventory itself. 14. Capital work done by maintenance can cause: (a) overstaffing and deferred maintenance. (b) cost savings and faster delivery. (c) interruption of labor tranquillity. (d) hard feelings with outside contractors. 15. Preventive maintenance consists of (a) regular inspection, test, and lubrication of equipment. (b) response to equipment when manufacturing reports trouble. (c) redesign of equipment to avoid trouble possibilities. (d) calling manufacturers when equipment performs badly. 16. A lot of overtime: (a) can become a habit with employees. (b) can reflect personnel problems. (c) is a symptom of understaffing. (d) all of the above.
166
17. The department will help develop economical order quantities for maintenance inventory. (a) production (b) administration (c) purchasing (d) sales 18. Training to keep up with the continuous technological advances is called training. (a) hands-on (b) OEM (c) component (d) upgrade 19. After a trainee is assigned to an experienced worker, training: (a) is finished. (b) should be monitored by management. (c) has just begun. (d) must start over. 20. Using area assignments: (a) discourages loyalty among workers. (b) may possibly set conditions for overstaffing. (c) is excellent for small to medium-size plants. (d) increases time for travel to get parts. 21. In a manual system, the planner retains the order. (a) open (b) closed (c) originator's (d) work 22. Book value is the original cost of the facility: (a) plus allowance for depreciation. (b) less allowance for depreciation. (c) plus allowance for inflation. (d) less allowance for inflation. 23. The ratio of one supervisor to hourly employees: (a) is the same for labor-intensive and capital-intensive industries. (b) should always be about 10 to 1. (c) depends on the type of industry or operation. (d) is not important. copy of the work
167
24. Numbers must be assigned to: (a) bulk maintenance inventory items only. (b) high-cost maintenance inventory items only. (c) safety stock quantities only. (d) all maintenance inventory items. 25. Nuts, bolts, and similar items are often (a) free-use (b) tightly controlled (c) user-provided (d) discretionary items.
26. The percentage of scheduled PM work that is completed during a given week is shown in the: (a) compliance report. (b) work generated report. (c) work order. (d) expense budget. 27. Ensuring that the work is executed is the responsibility of (a) planners. (b) line management. (c) schedulers. (d) engineering. 28. Ideally, a new planner should have (a) supervisory (b) managerial (c) craft (d) engineering experience.
29. The maintenance department should strive to control account variances: (a) as close to zero as possible. (b) between 10 percent and 2 S percent positive. (c) around 10 percent negative. (d) in accordance with production volume changes. 30. Considerations in measuring the risk of omitting PM on a piece of equipment are and (a) labor available ... time needed to do the job. (b) severity of problems that could arise ... probability of equipment failure. (c) cost of parts ... inventory on hand. (d) size of workforce ... number of skilled trades.
168
31. The must approve job requests for planning and scheduling activity. (a) maintenance manager (b) planner (c) requester (d) accounting department 32. In the 1,2,3,4 system, number 2 indicates a(n) type of job that must be completed after the work order is received. (a) emergency ... immediately (b) urgent ... five days (c) routine ... seven to ten days (d) deferred ... three to five weeks 33. Variances in maintenance budgets can be caused by: (a) price changes. (b) unexpected breakdowns. (c) improperly prepared budgets. (d) all of the above. 34. The day-to-day costs of doing business are reflected in the: (a) expense budget. (b) capital budget. (c) weekly payroll. (d) profit and loss statement. 35. The first step in setting up a PM program is: (a) writing up work orders. (b) hiring PM staff. (c) identifying all equipment. (d) obtaining funding commitments. 36. The list of all parts, which allows maintenance to choose the materials to complete assigned jobs is called the: (a) work order. (b) alphanumeric description. (c) stores catalog. (d) maintenance inventory. 37. Maintaining inventory usually costs the inventory value. (a) 6... 10 (b) 10...20 (c) 20...40 (d) 40 ... 50 to percent of
169
38. Effectiveness of the maintenance function can be measured by: (a) budget variances. (b) skills analysis. (c) overtime costs. (d) training requirements. 39. Breaking a job into components and estimating the time required to complete each component is the estimate. (a) slotting (b) engineering (c) historical (d) CPM or PERT 40. It is important that you plan your training needs for (a) one (b) two (c) five (d) ten years.
41. Maintenance managers should give attention to their own training needs in the area of (a) technical and managerial skills. (b) financial management. (c) OSHA regulations. (d) environmental and pollution abatement. 42. Determining attrition information allows you to: (a) assess training needs. (b) reduce the work force, if necessary. (c) determine salaries and fringes. (d) (a) and (b). 43. A maintenance manager will benefit from experience gained by: (a) working in other departments in the facility. (b) designing HVAC systems. (c) working for a utilities company. (d) visits to the employer's customers. 44. In a formatted equipment numbering system, the first number indicates: (a) the geographic location of the equipment. (b) the generic, or primary, equipment group. (c) the ownership of the equipment. (d) the value class of the equipment.
170
45. If maintenance has no job backlog, this indicates: (a) high productivity among the mechanics. (b) understaffing. (c) overstaffing. (d) customer satisfaction. 46. Work sampling is a way to determine: (a) what kind of work is being done. (b) the efficiency of observed work. (c) which employees are taking too long to do a job. (d) work order compliance. 47. Computerized management control systems are: (a) a great aid but no substitute for enlightened managers. (b) necessary in managing any size maintenance department. (c) required for insurance purposes. (d) easily paid for by savings in the PM program they support. 48. The TPM program focuses attention on: (a) equipment performance and condition. (b) training needs of mechanics. (c) manufacturing schedules. (d) equipment breakdown response. 49. The annual maintenance budget should be prepared by: (a) the maintenance manager and staff. (b) the financial department. (c) users of maintenance services. (d) accounting, based on the previous year's results. S0. For effectiveness and cost control, the maintenance inventory should be located: (a) where the mechanics spend most of their time. (b) in any place(s) that make(s) good sense. (c) only in a covered, locked, heated facility. (d) as close as possible to the receiving dock.
The Practice Case
INSTRUCTIONS: The practice case enables you to sharpen the ideas and methods you have studied by applying them to a realistic business problem. The answers you provide to the questions are not submitted to Educational Services for grading. Rather, as its name implies, the practice case gives you the chance to practice for the examination case by having you put your newly acquired knowledge to work through analyzing and solving problems in a realistic setting. After reading the case, summarize and analyze the situation as it has been presented. Ask yourself, "What is really going on here?" Read and answer the review questions, and then prepare a written analysis and solution.
FJTURE AIANUFACTURING COMPANY The Future Manufacturing Company is a small producer of components for the growing electronics industry. If the company is to avoid being swallowed by its competitors, it must anticipate growth of its own. To retain the company's competitive edge and meet the challenge of anticipated growth, executives of Future Company have developed an action plan. The plan takes into account the major characteristics of the entire industry and how these characteristics affect the company's growth. Among these characteristics is the industry's relative newness, which creates the need for high capital investment in technological research and development. That, in turn, will lead to designing and building the unique equipment required for manufacturing the components. A by-product of the research efforts could be the development of a new product that would put the Future Company in the business of manufacturing original equipment instead of supplying parts to others. Consequently, research and development are essential to the long- and short-term plans of the company. Because of the rapid growth in this industry, many problems exist. Management efforts at the new plant, including an investment of $30 million for
171
172
equipment, have been overwhelmed by the rapid growth and the need to meet increasing demand almost daily. It's a high technology industry, it's new, and the necessary skills are not available. Future Company began in a garage two years ago. Its founders were two brilliant science majors just out of college. They had no manufacturing knowledge and no exposure to it. They concentrated on the technical development area, and the company just grew. Recognizing the problem, they recently hired an experienced operations manager, Ron Tuit.
RON TUIT COMES ABOARD Ron assessed the needs for production, scheduling, materials, planning, manpower, and equipment use. Although the problems were many, the solutions were pretty straightforward. The area that needed most attention was maintenance. Downtime had been a major problem. Ron was satisfied from his own investigation that the downtime was not caused by a lack of equipment, raw materials, or labor. His conclusion was that maintenance management was inadequate. Technical know-how, procedures, systems, and controls were lacking. He decided that the top priority was to hire an experienced maintenance manager. Ron justified hiring an experienced manager by the anticipated growth of the company and the immediate need to catch up with current growth. After an extensive search, Harry Aldo was hired to fill the new position of maintenance manager. During their first meeting, Tuit and Aldo jointly evaluated Tuit's findings. Ron proposed that Aldo think about the maintenance department's operation and come up with a plan for immediate controls as well as longterm needs. Review Questions 1. What systems should Aldo review to implement immediate control? 2. List other areas Aldo should review.
ALDO'S REVIEW Aldo decided to review existing control systems first. Aldo planned to review all functional activities, as well, including inventory, preventive maintenance, planning and scheduling, and training. However, he felt the best place to start was with the three basic systems for running a maintenance department. As Aldo put it, "You can't do anything without a work order, a priority system, and feedback or a reporting system." Work Order Review The first step was to review the forms and systems currently being used. He obtained a copy of the single-part work order, the list of priorities, and the
173
reports generated by the department. The work order contained the following information: Originator's name and department Request (place to write request) Priority Date Date desired for completion Date completed
This information seemed limited, and many of the work orders were lost after being written. This created concern and arguments and claims that work orders were not written or that the work was not done. Next, Aldo reviewed 50 completed work orders. He obtained the following information: Originator's name appeared on 40 orders. Requests read "fix machines;" "repair press," "spindle broken," and so on. Priority: Of the 50, 36 were, No. * 1, 6 were No. 2, 8 were No. 3. Date: All were dated. Date desired: Of the 50,40 requested same-day service and 10 required service the following day. Date completed varied from the day of request to as many as 30 days later. Review Questions 1. What weaknesses did Aldo find by reviewing the 50 work orders? 2. How many parts should there be to a work order? What would each part be used for? 3. What are the advantages of a good work order system? Priority Review After reviewing the work orders, Aldo obtained a copy of the priority procedures. The system was short and simple. It stated: Priority 1 2 3 4 Description Emergency-do right away Urgent-within 24 hours Routing-within 48 hours Planned-within 5 days
At this point, he remembered the breakdown of priorities on the 50 work orders he had reviewed and compared them with the expected priority completion times listed in the procedure manual. Review Questions 1. Are these priorities emergency oriented? Why 2. Would you alter these priorities?
174
Reporting System The third function Aldo reviewed was the communication, or reporting, system. He found that a monthly report containing the following information was issued: The number of work-order requests written The number o work orders completed The average cost per job The amount of maintenance work done in the production department
In addition to this report, which was Aldo's primary concern, there were a number of other reports that were prepared on a monthly basis - absentee, overtime, and vacation reports, as well as OSHA forms and so forth. Review Questions I. What would you expect a report generated from the work-order system to contain? 2. Would you use average time to complete a work order as an index? 3. What information about effectiveness would you expect from a work order system?
OBTAINING FEEDBACK Next, Aldo decided to interview some foremen in maintenance and manufacturing to obtain their opinions of the control system. The maintenance department employed 55 craftsmen, 3 foremen, and one general foreman. The manufacturing department included 2 production managers, 2 superintendents, 7 foremen, and 220 hourly employees. He gave himself a week's time to interview all managerial personnel and some of the hourly employees and obtain the information he needed. After completing the interviews, he summed up the comments as follows. Production Comments Priorities Production should assign priorities. It's our responsibility to keep the equipment running. Besides, we know what is critical; others don't. We ask for a No. 1 priority because we need to get the work done now. We can't trust maintenance to get repairs done on time anyway. Work Orders No more information is required. The orders tell maintenance what to do and when to do it. Work Orders There isn't any more information required. The orders tell maintenance what to do and when to do it.
175
Reporting Information It's fine because we know how much was spent, and how many jobs were done in our departments. We know the average cost to complete each work order. It also proves our point that priorities aren't met. General Comments The systems are fine for our needs, the people are okay, but something seems to be wrong with the way maintenance is managed. Maintenance Comments Priorities Everything has to be done right away. There isn't enough time. Rome wasn't built in a day! It's no wonder we don't get the jobs done on time. Who could? We should set the priorities. After all, we know the amount of work we have to do. Work Orders The work orders just add up to a blizzard of paperwork because we have so many small jobs. We spend most of our time trying to keep up with the paper work. Why don't we assign men to production departments to do what is requested? It would save the foreman a lot of headaches. Reporting Information We wouldn't know because we don't get the reports anyway. Sure, we would like to know what's going on. General Comments Every day new equipment is installed. How can we keep up with repairs? Anyway, parts are never available. Aldo knew he had all the information he needed and started to write his recommendations on controls that should be instituted immediately. Review Questions 1. Why aren't priorities met? 2. What problems could develop if mechanics were assigned to production departments? 3. Is there a solution to excess paperwork? 4. Should the maintenance foremen receive reports? 5. If you were Aldo, how would you answer these questions? Outline your answers.
REVIEW OF OTHER ACTIVITIES Some comments made during Aldo's interviews confirmed his feelings about other functional maintenance activities. Aldo knew that a high technology industry with a shortage of skills certainly needed skills training. Comments that reinforced this notion came from both production and maintenance. Because the equipment was uniquely designed and built for the Future Com-
176
pany, his solution was to develop training programs using this equipment. In fact, he proposed that some maintenance people participate in building the equipment as part of their training. To justify training costs, Aldo pointed out that this early interface with design and building would aid in developing the preventive maintenance program and identify routine repetitive tasks required on the equipment. This knowledge would help ensure uptime. "It isn't just the priority and work order systems that need revamping," Aldo reported. "It is impossible to schedule or plan work on the basis of must-be-done-right-away philosophy. Under these circumstances, even if there were a planner, it would be difficult to succeed." DESIGNING THE NEW MAINTENANCE DEPARTMENT At this point, Harry Aldo began designing a maintenance organization for presentation to Ron Tuit. Aldo realized his ideas would require money. At that time, the only money formally budgeted for maintenance was the labor pay roll ($1,252,680) and the foremen's salaries ($135,500). Each of these figures included 30 percent for fringes. He decided to assume a one-to-one ratio of material to labor. He also subtracted the fringes from the labor cost, added them to the salaries, then added in his salary, utilities, and other costs to determine overhead. After Also completed this, he knew the approximate maintenance budget base. After determining the percentage of replacement value this budget base represented, he was in a position to present a case for the money he thought necessary to effectively maintain the plant. To support his request, he also did a work sampling to determine the daily time distribution of the mechanical organization. Aldo was sure he would find more areas for improvement, but he also knew he must have these organizational changes first if he were to make further improvements. Review Questions 1. What functions are needed for Aldo's maintenance department? 2. Prepare an organization chart for this department. 3. By how much will the maintenance budget be increased? If you were Aldo, how would you justify this increase? Aldo felt that the following functions would be required to operate the new maintenance department: Employee relations Safety Repairs Stores control Controls Budgeting Engineering Preventive maintenance
177
Training Planning Scheduling Construction Record keeping Energy conservation Regulatory compliance
Because the Future Company is a small- to medium-size operation, Aldo sketched out an organization chart similar to the one illustrated in Exhibit 1-3. He also determined that the budget for the maintenance department would be $3 million because the equipment was new and cost $30 million. Aldo knew that in a high-technology industry, its replacement value should be estimated at 10 percent to 12 percent of its original cost. Because he would undoubtedly be asked to justify this figure, he figured the budget again using the following reasoning: Cost of labor with 30% in fringes deducted would be $972,400 for 55 employees. Assuming a one-to-one labor-material ratio, $972,400 must be budgeted for materials. Using the historic rule of thumb that labor should be about one-third of maintenance costs, $972,400 should also be budgeted for overhead. The total of these figures would be $2,917,200-approximately $100,000 short of 10 percent of the equipment replacement cost. This amount might be enough to support his own staff buildup.
The Practice Case Solution
In a complex case such as this, there is no single or textbook solution. As there are a number of variables, the traits of the individual student will be an important factor in approaching the solution. The objective is to call the student to make a broad, in-depth analysis of the problems and the industry that is presented in this practice situation. To implement immediate control, Aldo needs to find out what controls, if any, are currently in place. This means looking at the department organization, control measures, and reports that are being used, as well as work orders, priorities, and formal departmental procedures. Close behind these, Aldo would review the entire staff in terms of skills, training, and qualifications. He should also find out what is being done with staff training, planning and scheduling of work, safety records, work backlog, budget performance, and various pertinent maintenance ratios, especially the ratio of labor hours to materials used. His review of the work orders revealed serious deficiencies in details concerning the work requested, prioritization, planning and scheduling, and management control of the work process itself. It appears that the priority system had been subverted, and most of the work requested was given an emergency priority. This was compounded by date desired requests of one day (40 requests) and two days (10 requests). Clearly, there was no control on setting reasonable priorities or due dates. There was virtually no management control over the work response because the actual completion dates bore little resemblance to the priorities or requested due dates. The work order request form itself was inadequate because of lack of information, flow control, management review, planning and scheduling, and even number of copies. If Aldo sticks with a manual work order system for the time being, there should be a minimum of four copies of the work order form: one for the originator, one for the planner's office, one for the foreman, and one for the craftsperson. In a computerized system, fewer copies may be printed, but more people will have access to the information by viewing the work order on video screens.
179
180
Getting a grip on the work being done via an improved work order control, would give Aldo a means of requesting, assigning, and following up on work done; providing a method of communicating written, detailed instructions on work; providing a method of estimating and comparing actual costs of work; and providing data from which reports can be prepared. The requested priorities were emergency oriented, probably because the requesters had found that this was the only way to get some action on their problems. This suggests a big problem with ongoing preventive maintenance activities in the plant. Moreover, it suggests that overall management of maintenance work is deficient. A first attempt at easing the priority problem is to meet with the production management team and others who make significant requests for maintenance work to discuss the allocation of maintenance response capability. The aim is to achieve more realistic priority ratings on requests and more complete information about the work or problem involved. Aldo would have to make the commitment that maintenance supervision will review the requests more closely and seek to satisfy the higher priority requests first, with others at realistically scheduled dates later. Administratively, the maintenance manager should reassess the definition of priorities No. 3 and No. 4, and redesignate them for more credible response times, such as one week and 30 days, respectively. It appears to Aldo after his review that the work order activities were not reported very well. Managers should develop reports that point out achievements and highlight problem areas. In this case, they should attempt to develop and produce monthly reports that indicate the following: Safety record of the department Budget variance, all maintenance line item accounts Maintenance cost per unit of production Maintenance cost as a percentage of capital investment Percentage of equipment uptime Workload backlog, by client department Weekly overtime ratio Emergency work ratio Labor versus materials ratio Estimated time versus actual time Using the average time to complete a work order as an index in this case might be misleading for Aldo because there are a lot of current organizational, supervisory, and training problems in the maintenance area. Moreover, the plant is in an industry characterized by rapid change in technology and growth. He could also be given the wrong signals by an average time to complete a work order index because so few of the jobs actually done in the plant are covered by work orders. It would probably be a meaningless index. Typically, a comprehensive and well-supported work order system would offer Aldo a detailed picture of how effectively the maintenance department is doing its work. It tells what work was done, for whom is was done, who did it,
181
what work is yet to be done, and whether the work was done in accordance with labor and materials estimates. By analyzing this basic information, Aldo can get a true measure of departmental effectiveness. From Aldo's interviews, it is apparent that priorities are not being met for two main reasons: First, it looks as if there is no preventive maintenance program in place. Second, between production and maintenance, there is no over all management coordination of priorities, hence the numerous requests for No. 1 priorities and immediate due dates. Assigning maintenance workers to the production areas on a full-time basis would only worsen the problems because there would be an imbalance of skills and ultimately a shortage of personnel to respond to major equipment outages elsewhere. In addition, the assigned mechanics would lose the benefit of timely advice by supervisors in the maintenance department and their training would probably be neglected while under informal supervision by production managers. Implementing a computerized maintenance management system (CIVIMS) could considerably ease the paperwork problem. This would allow for electronic means of requesting work to be done, planning and scheduling of the work, priority ranking, work order creation (with a good bit more information in it), and progress tracking as the job is completed. Ironically, CMMS result in more paperwork, but it is accomplished mostly within the systems, relieving the maintenance workers of having to prepare and process it. Maintenance workers should receive all reports that pertain to the area of their responsibilities and, where applicable, they should see management reports, as well. After all, maintenance supervisors and workers are the people closest to the work, so the reports could only make them more aware of the results and effectiveness of their work. Aldo's assessment of maintenance probably would produce an organizational need as follows: work control-that is, job tracking and reporting, planning and scheduling, training, equipment design, mechanic support for the facility (mostly in production), tool control, inventory control, repair shop, preventive maintenance, outside technical services contractors, and construction. Aldo's proposed organizational scheme is presented in Exhibit PCS-1. Projected Maintenance Budget In the Practice Case, Aldo prepared an initial budget in the range of $2,917,200 to $3,000,000. By contrast, a more definitive, or built-up, budget might look like the following: Current labor ($1,252,680 less 30% benefits) Material (1:1 ratio assumption) Subtotal Proposed staff Manager (excl. 30% benefits) Foremen (4)($135,500 less 30% ben.) Sec'y (excl. 30% benefits) Engineer (excl. 30% benefits.) Planner/scheduler (excl. 30% benefits) Inv. control (excl. 30% benefits) $963,600 963.600 1,927,200 (A) $50,000 104,230 15,600 25,000 18,000 18,000
182
Services admin. (excl. 30% benefits) Subtotal Benefits on 55 workers Ca3 30% Benefits on salaried staff (B) @ 30% Other costs (estimated): Utilities Training CMMS operating costs Misc. Total est. budget. (A)+(B)+(C)+(D) Subtotal
18,000 $248,830 (B) $289,080 74,649 $363,729 (C)
$480,000 120,000 50,000 25,000 Subtotal $675,000 (D) $3,214,759
(At 5% of sales, this suggests a company annual sales level of $64,295,180. Is this a close figure or not? We don't know at this point because the practice case did not give the sales figure.) Aldo's current budget (labor for mechanics and foremen plus benefits) would apparently be increased by 13.5 percent ($1,388,180 to $1,576,159), materials, utilities and other charges excluded. This increase can be justified because it should provide better work management and supervision, more planning and estimating for the work, an improved priority system review, and the prospect of less downtime and interruption of production operations. Assuming a cost of sales of 50 percent, an improvement of only 1 percent in production efficiency would yield almost twice the amount of the added new staff costs in maintenance. One would expect actual productivity improvements of much more than that small percentage. Unless something is done about maintenance, the company's growth will surely be halted, if not put into decline. In the practice case example, to justify his proposed budget Aldo re-estimated his annual budget at $3 million, based on 10 percent of the original equipment cost of $30 million. Aldo appears to be in the right ballpark, but may be taking a big chance because of the way he arrived at the $3 million figure. Because we don't know the actual annual current or projected sales, the best information is the amount invested in the plant's equipment, which is $30 million. But replacement of that equipment might now run as high as $3 5 million, or $30 million plus an assumed inflation figure of 8 percent, compounded over two years). So Aldo's annual budget estimate, instead of $3 million, might well be $3.5 million if based on 10 percent of calculated replacement cost. Viewed another way, his $3 million estimate could be low by around $215,000, compared with the earlier calculation we show for a proposed budget of $3,214,759. However, he may not be as far off as it seems. We don't really know the amount he has included in his first budget pass for utilities. It appears Aldo needs to do more investigation and gathering of useful facts to arrive at sound justifications for his proposed staffing and budget recommendations. He could be fairly close to the right estimates at this point or dangerously low. However, the gross judgments and solutions he has arrived at so far show the mark of good judgement. He has put the maintenance function on the right course and appears to be firming up a good plan to keep it moving that way.
183
Selected Readings
Effective Maintenance Management

INTRODUCTION
RAMESH C. GULATI, PE.
American industry is facing the most critical time in its history since the Industrial Revolution. Never before has the challenge to its very existence been so clearly threatened. Not only must we compete with U.S. manufacturers, but we must also consider off-shore competition. Today, the automotive, electronic, textile, and toy industries and many more, including the aerospace industry, are being severely challenged by the foreign-based manufacturer. Producing a quality product or providing quality services at competitive prices has become a key issue for survival in today's environment. If a facility is not kept operable within reasonable cost limits in today's competitive environment, the whole organization will suffer, or perhaps even be forced to close its doors. To keep a facility operationally cost effective, the resources required (such as people, equipment, and material) must be utilized efficiently. All activities should be evaluated in light of the total operating system and be optimized to reduce the total cost. Availability of equipment/plant to manufacture a product or to produce services (such as testing in the ground testing facilities) is a key factor in controlling the cost of testing and maintaining the competitive edge. If the equipment is down because of failure or other operational problems, it delays the testing causing an increase in testing cost. It is not cost effective to operate equipment/plant at less than their rated capacity on a continuing basis.
Source: Reprinted with permission from Sverdrup Technology, Inc., Arnold Engineering Development Center, Air Force Systems Command.
195
196
A facility operating at low availability usually has higher maintenance and operational costs and requires additional equipment to compensate for lost capability. Therefore, the cost of the products produced or the services pro vided usually goes up. There are several other factors contributing to the upward trend in maintenance costs: Increasing labor cost. Complex and state-of-the-art equipment. Specialized training cost. Union/company policies-culture. Low labor utilization/high work delays. To reduce maintenance cost and improve productivity, changes in the traditional way of managing maintenance must be made. We can't afford to live with the old way of thinking: "If it ain't broke, don't fix it." It is time to think: "If it ain't broke, predict when it will break and fix it before it happens" so that it is available whenever you need it and ready to produce. Maintenance plays a key role in meeting the operational/organizational goals. However, there is evidence of lack of management support resulting in part from an existing perception that maintenance is a necessary evil and cannot be managed effectively. On the contrary, maintenance can be managed effectively. An effective maintenance program is a key element in keeping equipment or facility running smoothly and efficiently to keep product costs down. There are several techniques/tools available which can be used to improve maintenance effectiveness. Implementation of the appropriate techniques/tools is essential to establish an effective, maintenance management program. We at the Arnold Engineering Development Center (AFDC) were facing similar issues to those found in industry. The trends in equipment failures were up. Facility operations and maintenance costs were rising, causing testing costs to go up significantly. A need to establish an improved maintenance (work) management system was identified. This paper provides a framework for establishing an Effective Maintenance Management program to reduce the product/service cost. FACYLITY BACKGROUND Arnold Engineering Development Center (AFDC) is an Air Force-owned, contractor-operated research and development test facility. It has contributed to the development of virtually all of the nation's top priority aerospace, programs, including the Atlas, Minuteman, Peacekeeper, Space Shuttle, F-5/16, ATF, Tomahawk, and NASP (National Aero Space Plane). AFDC operates the most advanced and largest complex of flight simulation test facilities in the world-some forty aerodynamic and propulsion wind tunnels, rocket and turbine test cells, space environmental chambers, ballistic ranges, and other specialized units. Facilities can simulate flight conditions
197
from sea level to altitudes around 1,000 miles, and from subsonic velocities to those well over Mach 20. The mission of AEDC is to test aircraft, missiles, and space systems at the conditions they will experience during flight. The objective is to help developers qualify their systems for flight, improve system designs, establish performance levels before production, and help users in resolving operational problems. To support its mission, AEDC maintains a variety of equipment/systems in several major facilities. Large air compression systems are the basic type of equipment used in these facilities. In addition, a wide range of support equipment, including the fastest and most advanced computer systems, are installed in these facilities to support testing. The total installed capacity of the equipment/systems at AEDC is in excess of 1,300,000 HP The cost of electric power to operate these facilities is over $2,000,000 per month. The Engine Test Facility (ETF) is one of the key facilities at AEDC used for testing the propulsion systems for advanced aircraft, missiles and space vehicles. These propulsion systems include rocket motors, turbojet, and turbofan engines. The ETF is operated and maintained by Sverdup Technology Inc. under contract with the Air Force. Propulsion testing in the ETF provides the test variables such as pressure, humidity, temperature, and air flow, throughout the environmental conditions that an engine is expected to encounter in actual flight. There are three plants located in the ETF that can generate conditioned air in excess of 1,400 lbs/sec (1,300,000 cfm) in the range of 0 to 300 psi. This air is then channeled through various test cells to create the required environmental conditions. These plants have over 20 axial and centrifugal compressors in the range of 5,000- to 50,000-hp capacity, refrigeration systems, process air heaters, and miles of air-piping/ducting, along with other associated equipment. MAINTENANCE OBJECTIVES Maintenance is any activity designed to keep equipment or other assets in working condition. Poorly maintained equipment can be unsafe to operate and can create high costs in the form of delays, defective products, and idle ti me. Maintenance usually deals with servicing equipment, replacing wornout parts, and performing emergency repairs. The goal of an operations and maintenance organization should be to ensure that equipment/facility capacity is maintained and operated costeffectively. Maintenance activities should be evaluated in light of the total operating system and optimized to reduce the total cost. Therefore, overall maintenance objectives should be to: Improve equipment/facility availability. Optimize maintenance activities. These objectives should be met without sacrificing any product or service quality.
198
T ECHNIQUES/TOOLS TO ACHIEVE OBJECTIVES There are several techniques/tools that can be applied to the maintenance area to improve its effectiveness. These techniques/tools can be classified into three categories: Prevention. Resources/tasks optimization. Culture.
PREVENTION The prime reason for higher maintenance costs is equipment failures. Excessive equipment failure causes two problems: It increases the cost of maintenance; and it reduces the production capacity. The application of prevention techniques to reduce failures is an important strategy which should be adopted. The following are some of the prevention techniques: Preventive Maintenance (PM). Predictive Maintenance. Reliability Centered Maintenance (RCM). Preventive Maintenance Preventive Maintenance (PM) involves a pattern of routine inspections and servicing at regular intervals. These activities are intended to detect potential failure conditions and take steps to prevent their occurrence. Traditionally, PM programs are set up to carry out equipment maintenance, on a regular calendar schedule or by hours of operation, based on the manufacturer's recommendations. These recommendations are usually based on average operating environment. However, questions we must answer include: Is our operating environment different? What is the failure rate of the equipment? We must adjust/modify the PM program to met our equipment's operating environment and reflect our experience. Predictive Maintenance The primary objective of Predictive Maintenance is also to detect potential failures, but it goes beyond this to predict equipment condition by monitoring vital equipment performance parameters such as vibration levels, flow rates, pressure, etc. Inspection or repair is only conducted when measured values reach predetermined limits. This technique is currently being applied very effectively to rotating and reciprocating types of equipment. In addition, new measurement and assessment techniques utilizing artificial intelligence are being developed to enhance the system. Ideally, Predictive Maintenance should be utilized whenever feasible. However, it may not be cost effective in every case. The cost of preventive,
199
predictive, and failure maintenance must be evaluated for every application to optimize total cost. Exhibit SRI - I illustrates types of maintenance activities and their relationships. Our goal should be to reduce failures through preventive or predictive maintenance. Reliability Centered Maintenance Reliability Centered Maintenance (RCM) is an improvement to the Preventive Maintenance process. It takes a logical and more scientific approach in developing PM tasks. RCM processes require identifying dominant failure modes and establishing and prioritizing PM tasks based on function needs. Preserving the equipment/system function becomes the key thrust (Objective) of a RCM program.
200
RESOURCES/TASKS OPTIMIZATION Maintenance tasks, sometimes known as repair activities, can be grouped into two major categories: Planned and Unplanned. The "Unplanned" tasks, also known as "Failures" or "Breakdowns," are usually an emergency and are performed when equipment fails to operate, often at a premium cost. Planned tasks can be further divided into two classifications: Prevention (preventive maintenance tasks) and scheduled (corrective repairs) resulting from PM findings. There are a number of techniques/tools that can be applied to optimize the resources required for maintenance activities. Some of these techniques/ tools include: Equipment History Analysis (Pareto Analysis, Trend Analysis, Cause & Effect Analysis). Applications of Work Standards (including improved planning/scheduling techniques). Application of Optimization Models. Life Cycle Costing Analysis. Computerized Maintenance Management System (CMMS). Equipment History An equipment history data base is the foundation of any maintenance organization. This data base aids in the decision-making process to maintain the facility in a cost-effective manner. The equipment data base should contain the following information: Failure-breakdown events. Preventive Maintenance (PM) data. Planned/scheduled repairs. Operating/usage hours. Repair time and cost.
In addition, it could have: Equipment name plate and specifications. Spare part/component data. Drawings data. Information from the equipment data base can be used to perform failure analyses to identify problem areas. This allows cost-effective corrective actions to be taken to reduce failure rates and repair time, thereby increasing equipment/plant availability. The results of a failure analysis using data from an equipment data base and utilizing a simple Pareto approach (an analysis tool) are shown in Exhibit SR 1-2. The number of failures for a large compressor system, including those due to human error, are shown in the exhibit.
201
As the data indicate, 72 percent of the problems are contributed by two subsystems, "electric controls" and "lube oil." Problems in these two systems should be addressed first to reduce system failures. "Human error" is not a subsystem or a component of the compressor system; however, it is the second major contributor of the downtime. It warrants a training program to improve workmanship. Pareto analyses assist in prioritizing work so that failures are reduced cost effectively. In fact, it supports the overall optimization of maintenance resources. Statistical Process Control (SPC) principles can also be applied to maintenance to control cost or failures. SPC charts can provide an advance warning if a controlling parameter is heading out of control to allow timely corrective actions. Exhibits SRl-3 and 1-4 are examples of trend control charts showing the number of failures in a facility. Exhibit SR 1-3 shows the failure trend of hydraulic systems in A, B, and C plants. Exhibit SR 1-4 is an example of an SPC control chart for B plant failures. It appears that failures were rising initially; however, with some emphasis (corrective actions) they were brought under control.
202
Cause and Effect Analysis is another technique that can be used very effectively to identify problem areas. It is a structured technique for uncovering, layer-by-layer, the most probable causes associated with a failure (defect) category. Once the probable causes are known, an investigation can focus on determining the actual root causes. Exhibit SR1-S is a type of Cause and Effect diagram called a "Fishbone" diagram. It is a simple diagram illustrating the effects and causes of "downtime." It is a general template which can be adopted for any type of equipment failure analysis. The Cause and Effect diagram is a road map to chart routes for investigation when problems arise. It can be very useful in helping to reduce the number of possible causes and categories to be investigated. It optimizes the process for determining root cause and taking corrective action. Application of Work Standards and Planning The average utilization rate of the U.S. maintenance work force is approximately 40 percent. The low utilization rate is one of the major contributors of poor maintenance effectiveness and high maintenance cost. To improve utilization of a maintenance work force, an improvement in maintenance planning is required. Planning is best facilitated by reviewing the total work
203
204
flow process, from work requests to job completion, and then making changes for improvements. A typical work process chart is shown in Exhibit SR1-6. To plan maintenance work effectively, it is very important to know how long it should take to do a specified job. Estimating the time required to do a job is a key element in maintenance planning. Work/time standards have been used in production areas very effectively. It has been generally perceived that the work/time standards concept can't be used in the maintenance area since every job is unique. However, work/time standards for maintenance work have been developed and are being used successfully with positive results. In developing standards, the maintenance tasks are usually broken down into smaller elements which are common to many processes. An example of this would be replacing the gasket in a 6-in. flange, removing a 10-HP motor of a xx frame size, connecting/disconnecting lead wires of a 10-HP motor to a control box, etc. These small task elements, also known as benchmarks, can be developed and aggregated to make a standard time for a particular job. A work/time standard includes:
205
Work content (from benchmark and standard tables). Job preparation. Area travel. Allowances. It is not necessary to have standards for every job or task. "Slotting'`-similar job techniques can be effectively used to obtain a standard benchmark value for some new tasks. This approach reduces the overall standards development time. Results of work standards and planning techniques as applied to the rocket preparation/installation test area are shown in Exhibit SR1-7. Some benefits of a work/time standards technique are: Improved adherence to the schedule. Methods improvement potential. Work delays-identified problem areas. Improved work force utilization. Improved morale. Application of Optimization Models Maintenance tasks can be optimized by utilizing statistical, expected value and simulations technique to estimate and compare alternatives to help mini-
206
mize total maintenance costs. The next example illustrates how the preventive and the breakdown maintenance cost can be estimated and compared to minimize the total cost. PM and Breakdown Cost Model A well-organized equipment database can provide information to develop a cost model, using the concept of expected value. This model helps in the decision process used in establishing cost-effective maintenance policies. In the following example, this concept is used to determine the cost advantage of a PM policy over breakdown-type maintenance. A typical equipment history database contains the following repair cost information on a machine for the last 20-month period.
The plant engineer is in the process of developing a PM program for the machine. It is estimated that it would cost $225 to perform the PM that would reduce the breakdowns (service calls) to one per month. Is the PM proposal cost effective? The above data can be grouped by the number of breakdowns (service calls) and the number of months they occurred. The average cost of a breakdown is also calculated.
207
Breakdown frequencies can now be converted to a probability distribution to determine the expected cost per month of all breakdowns.
Other examples include how simulated breakdown and repair time values can be used to estimate breakdown cost, and how these values assist decision making in determining the appropriate crew size or selecting a preventive maintenance policy (i.e., how often service should be performed based on probability model). Life Cycle Costing (LCC) LCC is a method of calculating the total cost of ownership over the life span of the asset. It is another tool to help us in the decision-making process. Usually LCC will help in justifying replacement for high maintenance cost equipment. Four major factors which may influence the economic feasibility of applying LCC analysis are: Energy-LCC should be considered when the anticipated energy costs of the purchase are expected to be large throughout its life. Life Expectancy-For items with long lives, costs other than the initial purchase price take on added importance. For short-life items, the initial cost becomes an important factor. Efficiency-The efficiency of operation and maintenance can have significant impact on overall costs. LCC is beneficial when savings can be achieved through reduction of maintenance costs. Investment Cost-As a general rule, the larger the investment, the more important LCC analysis becomes. Computerized Maintenance Management System An effective maintenance management program requires accurate and timely information relating to the resources available, work required or to be per-
208
formed, and equipment history including failure data, materials, and inventory costs. A Computerized Maintenance Management System (CMMS) can provide the necessary information. A CAMS is an essential tool in today's environment. It helps the maintenance department operate in a much more structured environment. CMMS, or simply maintenance software, can allow maintenance departments to organize and plan all maintenance-related activities (e.g., preventive maintenance, equipment records, work orders, spare parts, etc.). It can help to establish a good equipment history database to perform a variety of analyses. Most of the software utilizes a relational database which provides flexibility, rapid access, and the efficiency to accommodate a larger amount of data as the information level need grows. The market is currently flooded with maintenance software with a wide range of capabilities. The cost of this software ranges from $500 to $200,000. Selecting the right software for an application becomes a complex task. The maintenance software can be grouped in three classifications: Mainframe Mini based PC based PC based software has the largest selection available. This software can be subgrouped again in three classifications: Low, medium, and high. Software at the low end of the spectrum usually has limited capabilities and may cost less than $6,000. Software on the high side of the spectrum usually costs between $15,000 to $25,000 and has a broad range of capabilities. In fact, in some cases, better features are available than in a mainframe system. Almost all of them can be used in a multiuser environment. Selecting CLAIMS or maintenance software to meet your needs usually is not an easy task. Current processes and future needs should be evaluated --to establish CLAIMS requirements it may require a thorough investigation or audit of the maintenance department operation. In general, the functions of a CIVIMS should include: Equipment Records: Name plate data-Identification numbering schemeDrawings and component listing Work Order Planning/Scheduling and Tracking: Work order generating and tracking by types-Work forecasting/scheduling-week/month/yearResource balancing-work/people-Backlog and work status Preventive Maintenance: PM based on fixed interval-PM based on usage rate and health monitoring data-PM task/procedures linking Equipment History and Analysis: History by failure, PM, and othersFailure analysis-Pareto Analysis, etc. -Reliability analysis-MTBF, MTTR, etc. Inventory/Materials Management: Parts list-"where else used" by mfg. no.-Tool crib management-Purchasing module
209
Project Management: Schedules/Pert/Gantt Chart-Resources management Reports and Graphs: Standards reports-Ad hocs/special report generatorGraphics The subsystems listed above can be used as criteria for evaluating maintenance software. To improve the selection process, these subsystems could be weighted according to importance factors based on requirements. In addition, three other factors should be considered before making the final selection. Adaptability/Flexibility : Changing/masking data fields - Adding/deleting data fields User Friendliness: Pop up windows/menu driven - System navigation Ease of learning/help utility - "Copy" feature - Screen layout Cost and Expandability: Cost versus features/capabilities - Training support and cost - Modularity for expansion and enhancement plan Industry Week magazine and A. T. Kearney conducted a survey of over 500 users of CMM Systems. The study report was published in the February 5, 1990 issue of Industry Week. Some of the improvements reported as a result of CMMS implementation include: Enhanced PM program. More complete equipment repair history. Improved planning and scheduling performance. Improved inventory control. Increased labor utilization. Improvement in communication/decision-making ability. The study also listed the top twenty vendors of CMMS based on user satisfaction ranking. The author also performed a somewhat similar evaluation of CMMS vendors and grouped them in three categories based on the capabilities spectrum. Details of this evaluation will not be discussed in this paper because of space limitations.
CULTURE The success of some techniques/tools used in optimizing the work is very dependent on a company's culture. A spirit of cooperation and a cordial relationship among the labor work force and the company management is a key ingredient for successful application of these techniques/tools. Some of the techniques/tools that can be categorized under this classification are Total Productive Maintenance (TPM). Integration of Operations and Maintenance.
210
In typical operations, when failure of equipment occurs, a maintenance crew is usually called in to fix the problem. The maintenance crew could be late in responding to the request as they may be tied up with other repairs. In the meantime, the operations crew is idle during this period and throughout the repair. It would be ideal if the operations crew (operators) could fix the equipment themselves, if the fix is small, instead of waiting for a maintenance crew. If the fix is major and requires large resources, they could become part of the repair crew. Operations and maintenance could become partners in maintaining the equipment, as well as in producing quality products. They exchange their work (partial or full) as the need arises to meet production of maintenance requirements. Operators are considered the real owners of the equipment and maintain them in good condition. This is what Total Productive Maintenance-TPM-is! It's a new culture-philosophy, although it's not exactly a new idea. This type of environment has existed in the past. Some salient features of a TPM approach are: Operator has ownership of his machine Operators perform: First-level maintenance-Minor adjustments and fixes On large repairs, operator becomes part of the maintenance team Maintenance personnel train operators Operators and maintenance are partners Integration of Operations and Maintenance groups can be a first step toward implementing TPM, particularly in a labor union environment. The implementation of TPM requires an entirely new culture-environment. Changing a culture cannot be accomplished overnight. It's a step-by-step process. Integration of operations and maintenance into one group can be a first step toward attaining the benefits of TPM. In this approach, operators, as well as maintenance personnel, are trained to perform the others' tasks in some specific areas. They can work as either operators or maintenance technicians as the workload warrants. This arrangement provides flexibility to meet customer needs. The side benefit of this approach is that it provides an appropriate medium for developing the new culture. They, the operators and maintenance technicians, will start thinking like a team or as partners. A teamwork environment must exist between company management and the labor work force (labor union) to implement these types of programs.
MEASURING AIAINTENANCE EFFECTTVENESS We all are in a mode of CHANGE for continuous improvement. When a change is made for improvement, we must be able to measure the impact of the change. The application of several techniques/tools to improve maintenance has been discussed. We must establish a measurement system to measure the effectiveness of these techniques/tools.
211
Effectiveness of maintenance programs should be measured at two levels: Equipment/System Level Maintenance Department Level The suggested key parameters that should be measured and tracked on a continuing basis are: Downtime Cost: Repair-Downtime penalty Reliability-Availability-Maintainability Parameters: Availability percen t Mean Time Between Failures (MTBF)-Mean Time to Repair (MTTR)Mean Time to Maintenance Actions (MTTMA) Typical downtime and percentage availability data are shown in Exhibit SRI-8. There is a downward trend in downtime and a corresponding increase in availability. The maintenance cost data for the plant shown in Exhibit SRI-9 indicate a downward trend in cost.
212
CONCLUSION Maintenance is an important function in any organization which can be planned and managed effectively. Maintenance must receive emphasis and support from the top management to meet objectives, which are to maintain and increase the equipment or plant capacity to cost effectively deliver a quality product. Using the appropriate type of techniques/tools to improve the maintenance function, maintenance can become a major contributor of enhanced ability and improved profitability in an organization. Some of these techniques/tools require a cultural change and should be implemented with a well-planned strategy.
BIBLIOGR"HYIREFERENCES Moss, Marvin A. Designing for Minimal Maintenance Expense. Marcel Dekker, Inc., New York, 1985. Monks, Joseph G. Operations Management. Theory and Problems. McGrawHill, Inc., New York, 1977.
213
Gulati, Ramesh C. "Preventive or Predictive ... Ways to Optimize Maintenance." 5th International Maintenance Conference, Atlanta, Sept. 26-28, 1988. Gulati, Ramesh C. "Reliability in Maintenance." 4th Annual Fall Quality Conference, Nashville, TN, Sept. 21-23, 1989. Welter, Therese R. "Move the Wrench Over ... and Pass Me the Computer." Industry Week, Feb. 5, 1990.
Capacity Assurance Through "T.P.M." and Equipment Reliability B. N. MAGGARD

INTRODUCTION
For many years, industries have focused on equipment reliability through service groups such as plant engineering and/or maintenance organizations. Appropriate technologies were developed and administered by these "champion groups." The actual owner of a given piece of equipment (the operator) had very little knowledge of his equipment and usually less of the technologies necessary to enhance its reliability. At Tennessee Eastman, in 1986, a process called Total Productive Maintenance (TPM)* was developed. Simply stated, TPM is a conscientious, systematic, data-based approach to skills transfer. Through TPM, the operators have become "owners" of their equipment and craft workers have become more process-oriented. We'll discuss the TPM culture in depth later in this article. Currently, TPM is progressing toward TPM 2. In TPM2, the entire manufacturing process has to be reviewed with a focus on the social and technical changes required for continual improvement. This analysis revealed a needed change in the way that production equipment was made and/or maintained in a reliable state. As a result, the concept of Total Equipment Reliability (TER) was developed. TER is a process which empowers "community teams" in a plant to apply reliability technologies that will reduce or eliminate major production losses including start-up, defects, throughput, idle and minor stoppage, production changes, and failures. TER, when implemented with commitment, is the philosophical and practical foundation of Capacity Assurance.
* A glossary of abbreviations is located at the end of this reading. Source: Reprinted with Permission. Copyright Eastman Kodak/Maggard.
215
216
Capacity Assurance is the ability to make sure that your equipment and processes are capable of producing the desired quality product for the best value possible. Historically, "maintenance" has been viewed in a negative light, a necessary evil to be lived with. Think of car repairs ... or a broken-down washing machine ... or perhaps, most frustrating, an expired warranty. In industry, "maintenance" has had a similarly negative image: downtime . . . broken equipment ... production stoppage. "Good maintenance" is often considered to be an oxymoron whose two words contradict one another. Capacity Assurance requires that maintenance in the '90s become a part of a company's management strategy and not just a job performed by the tradesman. Management must make a paradigm shift to view maintenance costs as a percentage of replacement costs (i.e., of assets), not as a percentage of sales. The primary reason for this shift is global competition. When sales are affected by currency fluctuations in foreign markets, the use of "per cent of sales" becomes an unsteady criterion for budgeting maintenance in contemporary industries. A more realistic, less volatile standard is benchmarking a company against the "Best of the Best" from various international sources. This benchmark will provide a more accurate foundation on which to base true costs of maintenance. Successful world-class companies of the '90s will be those which shift their corporate strategies by benchmarking on like businesses in their respective fields. (See Exhibit SR2-1.) Capacity Assurance also recognizes that corporate management methods of maintenance must change due to undeniable trends: the evolution of new technologies; and the emergence of new, people-based realities. As noted earlier, these two trends are addressed at Tennessee Eastman in the implementation of Total Productive Maintenance. The following discussion of TPM is excerpted from "Total Productive Maintenance; TPM That Works, " B. N. Maggard, Tennessee Eastman Company, 1989.
TOTAL PRODUCTIVE AZAINTENANCE TPM is a partnership between the maintenance and production organizations to improve product quality, reduce waste, reduce manufacturing cost, increase equipment availability, and improve our state of maintenance. TPM. emphasizes the involvement of all employees in maintaining facilities and equipment. TPM is composed of six concepts, which are built on operators and mechanics working together to (1) understand how their roles interact, (2) broaden their skills, and (3) support one another. These concepts are: Utilization of operators to perform specified routine maintenance tasks on their equipment. Utilization of operators to assist mechanics in the repair of equipment when it is down.
217
Utilization of mechanics to assist operators in the shutdown and start-up of equipment. Utilization of lower skilled personnel to perform routine jobs not requiring skilled craftsmen. Utilization of computerized technology to enable operators to calibrate selected instruments. Transfer of tasks between operating groups.
THE NEED FOR TPM As mentioned earlier, there is a need to improve product quality, reduce waste and reduce manufacturing cost. Traditional organizational lines prevent the operator or mechanic from taking the immediate action necessary to support these goals. The existing system is highly structured and limits the particular actions that may be taken. To correct an equipment failure the individual must interact with an administrative system which impairs operating efficiency and productivity. (See Exhibit SR2-2.) TPM, on the other hand, removes the inefficiency of the organizational barrier by allowing trained operators and/or mechanics to correct problems without the "administrative hassle." The zone approach to TPM illustrates why TPM is effective. (Exhibit SR2-3.) This approach gets both operators
218
219
who spots the problem can go ahead and take remedial action. This eliminates the nonproductive administration cycle and equipment is restored to operation with significantly less downtime.
WHO NEEDS TPM Companies with multi-crafts. Companies seeking enhanced earnings. Companies with multi-cultures.
IMPLEMENTING TPM The Existing Culture To be successful with TPM implementation requires a sensitivity to the underlying culture which controls the way things get done in the organization. In other words, who are the key people in the organization, what are their approaches to administration, do they support change, and any other strong influences which could impact the success of the implementation plan. Paying close attention to this detail and cultivating a "management champion" could very well provide the driving energy needed to get the TPM effort off to good start. Spend some time getting the right people on board, make sure they are committed, and utilize their input/influence to design and sell the TPM plan. Designing to Change the Culture TPM is a significant cultural change. Getting individuals to change from, "That's not my job," to "This is what I can do to help" will require a significant adjustment by everyone involved. Don't overlook the important fact that even though the change is desirable, people will have to alter their routines, and alteration has the potential for creating discomfort. Keeping the people involved who will be impacted by the change will help to minimize this discomfort. Be sure to identify the particular groups who will be influenced by the change and the particular way in which the change will evidence itself-How will top management be impacted? Middle managers? First-line supervisors? Operators and maintenance personnel? Staff groups? Understanding how they interface in the current culture, as well as in the new culture, will help to determine how to best involve them in the plan for bringing about the change. Building Commitment Information and involvement are the key elements here. Make sure that everyone who will be involved with the TPM effort gets first-hand information about the nature of the change, how the change will take place, and the extent of the change (if known). TEC's approach to keeping everyone informed has been to develop a slide presentation and video which TPM
220
Team Leaders use to educate individual operators and maintenance personnel who will be involved with the change. Involvement of everyone, especially in the early stages, is not always possible. The next best thing is to use team representatives from the groups which will be involved. These individuals become the ears, eyes, and voices for everyone else. They are encouraged to keep their groups apprised of progress and to provide feedback from the work group to the team which is planning TPM application in their area. USE OF PERFORMANCE MANAGEMENT Another important step in building commitment is to provide reinforcement to participants as they progress through important stages of the implementation plan. Some examples of important milestones: All personnel trained to perform TPM tasks. Achieving cost reduction goals. TPM expansion goals (new tasks undertaken). TPM task performance goals (total task count). Equipment uptime.
The main thrust of Performance Management is to reinforce the employees for their TPM behaviors, that is, giving them symbolic tangible and social rewards for doing TPM tasks. Providing reinforcement/recognition for achieving major milestones acknowledges appreciation for results and provides a necessary catalyst for moving to each successive level in the implementation plan. The Team Approach The importance of keeping people involved with the change has already been mentioned as a vital element of success. A good implementation plan draws heavily on the element of involvement. From top management in the operating and maintenance divisions, down to the production operators and mechanics, a conscientious effort should be made to involve all levels in the organization. This can be accomplished by building interlocking teams to support the implementation process. (See Exhibit SR2-4.) Each of these teams has a specific role in the plan. From deciding where to implement, to defining team membership, and so on to actual identification of TPM tasks, each team has a unique responsibility. Interlocking team membership provides the necessary communication link between these teams and helps to build ownership and pride in results. This approach is further enhanced by a central TPM staff group whose purpose is to provide facilitation support to all teams involved with the TPM effort. Opportunity Audit Before embarking on a TPM effort, an opportunity audit should be conducted to provide additional insight into areas having the greatest potential.
221
Such an audit needs to take into consideration the interests of both the maintenance organization and the operations group-and these interests aren't necessarily the same. From the standpoint of improving productivity and cost reduction, the maintenance group is usually quick to identify highfrequency, low-skill tasks which consume a lot of resources. Operations, on the other hand, is concerned about equipment downtime, product quality, waste levels, and schedules. The opportunity audit should consider the needs of both groups and produces best results when both parties participate. The audit is intended to help identify the areas of opportunity, not to identify specific tasks-the TPM implementation team should have the freedom to identify specific tasks without management interference. The focus should not be restricted to task value alone but should also consider the interests of people. The theme is to start small, ensure success, and build on strengths. Implementation Steps Implementation of TPM is accomplished in a more expeditious manner if a well-defined implementation sequence is used (See Exhibit SR2-5.)
222
Anticipating Concerns/Resistance The introduction of TPM represents a change which impacts on the day-today work routine of both operating and maintenance personnel, a change which alters job content and may be perceived as a threat to earnings, job security, and safety. These issues should not be avoided but should be accepted as a normal response from concerned individuals. A conscientious effort should be made to anticipate concerns which will arise. With these in mind, responses should be developed which address the concerns as directly as possible. Management should establish a definite position on particular items which are likely to be major concerns. A definite statement outlining that position should be issued at the beginning of the TPM effort. The key is to make sure that potential resistance is removed or minimized by providing "up front" information which will help individuals reach rational conclusions about the expected impact of TPM.
223
PROBLEMS AND/OR ADVERSE CONSEQUENCES TO ADDRESS/OVERCOME IN TPM PROCESS Will operators have an incentive to buy into TPM-promotion option? Will TPM be a structured or voluntary program for employees? Will operators/mechanics have the time to take on additional tasks? Who will audit to see if work is done right? Training will need to be on an individual basis, because all operators are not at the same level of aptitude for mechanics/electricity. 6. Will operators/laborers doing TPM have first chance to enroll in an apprentice program? 7. Determining percent of mechanics to remove from area of operations once TPM's implemented. 8. Will operators/mechanics assume ownership? 9. Will maintenance and operations supervision buy into program? 10. Will operations supervision expect an incentive for taking over some maintenance work? 11. Safety for employees and equipment. 12. Labor laws. 13. Culture response. 14. Will mechanics/operators only get bad jobs? (Clean up after others) 15. What tools to give to operators. 16. Will operators/mechanics work in boundary of zone responsibilities? 17. Will operators major on mechanic work and let operations slip? 18. Deadline for program must be realistic-moving to fast or too slow. 19. Team concept to be used? How many teams? Who should be on teams? 20. Develop PM-goals, feedback, and reinforcement. 21. History of what has been done to equipment? How to collect what operations does? 22. Management styles-selecting the right people for the pilot areas. 23. Work within comfort zone of all employees. 24. Selection of the mechanic trainers. 25. Setting of priority for TPM. 26. Access to shops, electric rooms, and tools. 27. Will operators have to buy their own tools? 28. What will be accounting practice for charging operator's time on maintenance? 29. Authorization to buy parts? 30. Perception-"doing their work"-has to be overcome. 31. Budget control with operators doing maintenance. 32. Will maintenance mechanics/supervisors feel threatened at lost jobs? 33. Will TPM demands on employees' time conflict with Quality Management? 34. "OSHA" concerns over electrical rooms. 35. Will operating departments set up their own maintenance force? 1. 2. 3. 4. S.
224
TPM KEY RESULTS/BENEFITS TEC has experienced significant benefits as a result of TPM. Some of these have been measurable; others have been difficult to quantify. Some which have been identified are shown below: Improved product quality. Reduced cost. Improved equipment uptime. Improved teamwork between operators and mechanics. Job enrichment. Improved skills and flexibility of all employees. Reduction in emergency work. "Are You Ready to Do TPM" Take a few minutes to assess your company's rating in each of the eight profile areas shown in Exhibit SR2-6-you may be more ready for TPM than you thought! Regardless of where your company's TPM profile falls it is clear that Total Productive Maintenance can assist management in addressing those two undeniable trends of the '90s-new technologies and the emerging people-based realities. For these reasons, TPM is the keystone for successful implementation of a company's Capacity Assurance-the assurance "that the equipment and process are capable of producing the desired quality product for the best value possible."
IMPLEMENTING CAPACITY ASSURANCE IN TODAY'S WORLD Traditionally, management focus has been on "preventive maintenance." If something did break down, technological champions (such as service groups) would ride down on their white horses, solve whatever the problem was, and then ride out of town. Maintenance personnel were left feeling, "Why couldn't I have done that?" Predictably, the result was fragmentation, no consolidation, no "owner" input. And everyone waited until the next breakdown, when the white horse champions would ride into town again.
MANAGEIVIENT MUST RETIIINK WHAT "AUEVTENANCE" IS Corporate thinking must undergo a turnaround, a paradigm shift that works toward a goal of balanced input from equipment "owners" (the operators), plant maintenance personnel, and, yes, the white horse champions.
225
The result will be a maintenance process that is both technology-based and owner/stakeholder-based. It defines how the technology is used, as well as who uses it. Before, the focus was on "doing things right"; now, the focus shifts to identifying "the right changes" as part of the total picture. This identification process is called Condition Based Maintenance, or CBM. Condition Based Maintenance involves: Preventive or Predictive Maintenance "PM." Diagnostic Based "DBM."
226
Owners' Input (feel, smell, sound, or sight). Equipment age or life. Equipment signatures. Equipment history.
The CBM strategy derives its strengths from a TPM concept-Total Equipment Reliability (TER). TER is founded on four principles: Empowerment-when an employee has the knowledge, skills, tools, desire, and accountability to manage his own job. Community teams-consisting of all stakeholders that are focusing and/or serving to get quality products "out of the door." Reduction of major losses to critical equipment-equipment failure, production changes, effectiveness of equipment, idle time or minor stoppages, defects and/or rejects, start ups and loading/unloading losses. Reliability technologies-consisting of all the currently available technologies whose use can be justified by the organization. Let's address these last two principles in detail.
REDUCTION OF MAJOR LOSSES TO CRITICAL EQUIPMIENT Equipment Failure One of the most costly downtime situations a production unit can experience. It has been estimated that breakdown failures cost 10 times more than planned maintenance, and take four time longer. This type of failure is where most engineering and maintenance groups focus their efforts. Production Changes A loss of many days can be incurred when equipment has to be cleaned before another product can be made in it: when equipment is down, not a pound of product is being made. Effectiveness of Equipment While the first two losses are sporadic in nature, this loss (often called "throughput") is a chronic problem of major proportions. Most industries will live with this type of loss, yet calculations show that a piece of equipment operating at 80 percent efficiency is so ineffective that it might as well be taking 1.4 days of unearned leave every week! For example, because it's 30 years old, a water pump rated for 25,000 gallons a minute is pumping only 19,000 gallons, a 20 percent loss of efficiency. Yet, the pump could be repaired to operate at optimum capacity.
227
Idle Time or Minor Stoppages These losses are unexpected yet they occur frequently, making it difficult to maintain process stability. For example, taking a process sample to the lab for analysis may cause a minor stoppage in production; however, if operators were empowered to analyze samples at the point of production, the process could continue uninterrupted. Defects and/or Reject Losses Most production units already focus on this type of loss through their Quality Management process of Statistical Process Control. To maintain quality requires that instrumentation be kept accurate for highest reliability. Start Ups and Loading/Unloading Losses Not all losses occur because of equipment problems or failures. Other losses can occur when equipment is being warmed up or shut down. Another loss often occurs when the product is run as waste until it is qualified to specifications.
RELIABILITY TECHNOLOGIES In order to assure the capacity of a unit, the equipment must be made and maintained reliably. Numerous reliability technologies are available to do this, some of which are: Computer integrated maintenance Maintenance management systems Alloy analyzers Computerized instrument calibration Failure analysis Noise abatement Eddy current testing Radiographic testing Ultrasonic testing Vibration monitoring/analysis Leak detection Laser alignment Coordinate measuring Electrical disturbance analyzer Infrared thermography Vendor testing Dye penetrant testing Balancing Lubrication analysis ISO scan
228
Some of these technologies have highly specific uses and should be employed as a custom fit. However, many of the technologies can be employed in: Preventive Maintenance Programs Predictive Maintenance Programs Equipment signatures/histories Reliability Centered Maintenance Total Productive Maintenance
Bear in mind that reliability technologies should only be one of the means to accomplish Capacity Assurance. The other major driving force toward equipment reliability is employee (stakeholder) involvement. Think of the reliability of a piece of equipment in the same way you think of your body-there's a definite "bathtub curve" in the respective liabilities (see Exhibit SR2-7). When a baby is born it's associated with high front-end costs and low capabilities. As its body matures, the accompanying cost of healthcare decreases with the increase in capability. In the later years of life, the body requires considerable Restoration Maintenance (for instance, recovery from gallbladder surgery). By the end of its useful life, the body requires enormous expenses to keep it operating with very little capability. It's the same with a piece of equipment. When it's new, there's a high front-end cost and a low initial capability. As its capabilities increase, maintenance costs are minimal. However, as it ages, the equipment needs consider-
229
able Restoration Maintenance to keep it operating effectively. Finally, the costs of keeping it functioning are enormous compared to its capabilities. Whether its your body, or your company's maintenance process, bow do you feel? Is your equipment operating reliably? By implementing Total Equipment Reliability, of Capacity Assurance, your physical assets will remain in good condition. Your management strategy based on good condition (CBM) will direct you to a state of Total Productive Maintenance. And this state of wellbeing, this TPM, will enable you to implement the paradigm shift required of corporate management in the 1990s-Capacity Assurance. That's the blueprint, the plan ... but what will it take for you to make the commitment to Capacity Assurance as a "way of life"? What will it take to give you the competitive edge?
KEY SUCCESS FACTORS A management team willing to commit resources. Centralized, dedicated TPM managers and coordinators. Dedicated team leaders and trainers. A well-defined implementation process. A team approach involving all employees. A flexible program. Tasks identified at lowest levels, not management-dictated. Emphasis placed on safety. Training done and developed by area mechanics and operators. A performance measurement plan to recognize and reinforce behavior and results.
Capacity Assurance works. As an example, at Tennessee Eastman Company we discovered the cost of one of our chemicals was 40 percent above standard, primarily because of long cycle times. Our average cycle time was 34 hours and many batches had to be redistilled. A "TER" team was formed to look at the problem. The team consisted of building operators, a shift supervisor, TPM operators, mechanics from pertinent areas, and management representatives. The reliability of the chemical still was reviewed from the various perspectives of operators and maintenance, resulting in minor recommendations for improvements to the still. Consequently, some procedural and analytical changes were made. The result? The average cycle time was reduced to 20.4 hours with an upper control limit of 2 S hours, a savings of 14 hours per batch! Additionally, no batches had to be reworked due to high acidity or low assay. (See Exhibit SR2-8). This marked the first time that operators and maintenance worked together in a TER team to problem-solve a process. This approach has been shown to be a very effective way to tackle problems where the equipment is a major source of the problem.
230
SUMMARY Capacity Assurance, or TER, appears to be a successful management tool for industry. By providing management a framework for redefining maintenance's place in the corporate strategy, Capacity Assurance will enable a company to assume a leadership role for its employees, its shareholders, and its customers.
GLOSSARY OF ABBREVIATIONS CBM-Condition Based Management. A maintenance process based both in technologies and in operators/maintenance. ECC-Eastman Chemical Company. Parent company of TEC. PM-Performance Management. The use of industrial psychology to manage the desired behavior of employees. Its three major component are Antecedents, Behaviors, and Consequences. TEC-Tennessee Eastman Company. Based in Kingsport, Tennessee. Where TPM has been implemented for several years, with significant results.
231
TER-Total Equipment Reliability. A maintenance program founded on employee empowerment, community teams, reduction of major equipment losses, and reliability technologies. TPM-Total Productive Maintenance. A systematic approach to skills transfer in which operators become "owners" of their equipment while craft-workers become more process-oriented.
Index
Alpha numeric systems, 50 American Society of Plant Engineers, 14 Area organizations, 18-19 Area responsibility, 18 Availability of substitutes, 68 Bar charts, 101 Bar coding, 62, 102-103 inventory and, 62 Breakdown maintenance, 79 Budget, 23-24 accountability and, 30-31 capital, 30 chart of accounts and, 24 deferred maintenance and, 30 expense, 24-30 preparation, 32-33 Budget variances, 124 Capital budget, 30 Capital investment maintenance cost and, 125-126 Capital projects, budget and, 33 Certified plant engineers (C.P.E.), 14 Chart of accounts, 24 Classic area assignment, 18-19 CMMS, 137-138 basic features of, 140 basic operations of, 138-139 benefits, savings of, 152 data entry, 143 evaluation of facility and, 143 functions in modules of, 141-142 how, works, 139-140 implementation, 142-143
reports and, 144 system modules, 140-141 system operating details, 142 system operation and, 143-144 user training, 143 Communication sources, work orders and, 43 Compliance reports, 87 Component vendors, training and, 115 Computerized control systems, versus manual, 52 Computerized maintenance management systems
(CMMS). See CMMS
equipment identification and, 82 frequency of, 83-84 inspection procedures and, 82-83 Estimating labor hours, 95-96 Execution of work, 101-103 line management and, 101 on-line computer systems and, 102-103 Expense budget, 24-30 Financial resources, 11 Foremen, 14-15 Free use items, 66-67 Functional training, 114-115 Gantt charts, 101 Graphical data, 87 Hands-on training, 115 Human resources, 11 Identifying equipment, 82 Information resources, 11 Inspection frequency, 83-84 Inspection procedures, 82-83 Instructors, training and, 115-116 Inventory, 57 accuracy, 67-68 bar coding and, 62 free use items, 66-67 lubrication materials and, 68 maintaining stock and, 61-62 maintenance, 58-59 measuring stores effectiveness and, 68-69
233
Control systems, 37 Corrective maintenance, 79-80 Cost information, 40-43 job cards and, 40 Costs, 11-12 capital investment and, 125-126 control of, 12 maintenance, 80 Critical path method (CPM), 101 Data entry, CMMS and, 143 Deferred maintenance, 30 Drucker, Peter, 10 Economic order quantity formula, (EOQ), 59-60 Emergency maintenance, 79 Emergency service orders, 46 Emergency work ratio, 128-129 EOQ formula, 59-60 Equipment identification, 82 Equipment inspections, 81-84
234
need versus cost and, 60 numbering schemes and, 61-62 ordering and costs and, 59-61 role of purchasing and, 60-61 storage locations and, 67-68 stores catalog and, 62 technical database and, 62 Inventory level control, 62-66 economic order quantity (EOQ) and, 62-63 safety stock quantity and, 62-63 , lob cards, 40 Job-related training, 114 Jobs, identifying for planning, 94-95 Labor tickets, 40 Labor versus materials ratio, 129 Large jobs, planning sheets and, 97 Line assignment, 18 Lubrication materials, 68 Lubrication programs, 78 Maintenance budget. See Budget Maintenance. See also Maintenance support programs (MSP) costs, 11-12 managerial objectives and, 8-10 organizations and, 1-2 proactive/reactive, 73-74 technology and, 109-110 Maintenance control systems, 37. See also Work orders computer versus manual, 52 manual, 3 8 priority systems and, 48-51 record keeping systems and, 51-52 Maintenance cost per unit, 124-125 production levels and, 12 5 Maintenance costs, 11-12 capital investment and, 125-126 Maintenance department functions, 13-14 primary skills and, 17-18 staffing and, 15-16 Maintenance department objectives, 12 Maintenance inventory. See Inventory Maintenance job orders, 48. See also Priority systems Maintenance managers, 2, 14 profits and, 2
Maintenance organization area assignment and, 18-19 large organizations and, 8 medium organizations and, 3-8 small organizations and, 3 Maintenance personnel, overstaffing and, 30 Maintenance stores, 58 Maintenance supervisors, 14-15 Maintenance support programs (MSP), 75-80 costs of, 80 equipment inspection and, 81-84 measuring risks of, 80-81 planned maintenance, 77-79 reliability improvement, 75-77 reports and, 86-87 unplanned maintenance, 79-80 Managerial objectives, maintenance and, 8-10 Managers inspections and, 86 maintenance, 14 Manual control systems, 38 computerized, versus, 52 Measurements, 123-124 budget variance and, 124 emergency work ratio, 128-129 estimated versus actual time, 130 labor versus materials ratio, 129 maintenance cost per unit and, 124 overtime ratio, 128 percentage of uptime, 126 safety, 124 work, 129-130 workload backlog, 127-128 work sampling, 130-133 Measuring effectiveness work review and, 103-104 Measuring stores effectiveness, 68-69 MSP See Maintenance support programs (MSP) Numbering schemes, inventory and, 61-62 Objectives eight key areas for, 10 maintenance and, 8-10 maintenance department, 12 One,2,3,4 Systems, 49-50 Open work orders, 46 Opportunistic maintenance, 78-79
Ordering, inventory costs and, 59-61 Ordering materials, 97 Organization, maintenance and, 1-2 Organization charts, 3-8 large organizations and, 8 medium organizations and, 3-8 small organizations and, 3 Organization rules and regulations, 19-20 Original equipment manufacturers (OEM), training and, 115 Overstaffing, 30 Overtime ratio, 128 Percentage of uptime, 126 Periodic maintenance, 78 Personnel ratios, 16-17 PERT charts, 101 Physical resources, 11 Planned maintenance, 77-79 lubrication programs, 78 opportunistic maintenance, 78-79 periodic maintenance, 78 preventive maintenance (PM), 77-78 project, or upgrading, tasks, 78 Planning assigning priorities and, 95 authorizing work orders and, 95 identification of jobs and, 94-95 key elements of, 93-95 selecting planner and, 104-105 Planning process estimating labor hours and, 95-96 ordering materials and, 97 parts, materials needed, 96-97 planning sheets and, 97 providing information and, 96 scheduling large jobs and, 101 scheduling small jobs and, 100 scheduling work and, 97-99 Planning sheets, 97 Predictive maintenance (PDM), 75-76 Pre-kiting of parts, 67 Preventive maintenance (PM), 74, 77-78 routing, 84-86 work order scheduling, 84 Price changes, budget and, 32-33 Priorities, assigning, 95 Priority systems, 48-50 one,2,3,4 System, 49-50 Proactive maintenance, 73-74
235
Procedure flow, work orders and, 46-48 Production levels maintenance cost per unit and, 125 Professional engineers (PE.), 14 Profits, maintenance managers and, 2 Project tasks, 78 Ratios emergency work, 128-129 estimated versus actual time, 130 labor versus material, 129 overtime, 128 personnel, 16-17 work sampling, 130-133 Reactive maintenance, 73-74 Record keeping, 61-62 inventory and, 61 systems, 51-52 upkeep and, 104 Records. See Reports Reliability-centered maintenance (RCM), 76 Reliability improvement, 75-77 predictive maintenance (PDM), 75-76 reliability-centered maintenance (RCM), 76 total productive maintenance (TPM), 76-77 total quality management (TQM), 77 Reorder point, 63 Replacement costs, 125-126 value, 15-16 Reporting systems, 51-52 record keeping systems, 51-52 Reports, 86-87. See also Records CMMS, 144 compliance, 87 graphical data, 87 ten most critical, 87 uptime, 86 work generated, 87 Requisitions, number of items per, 69 Resources to manage, 10-11 Risk measurement
maintenance support programs and, 80-81 Routing, preventive maintenance and, 84-86 Rules, regulations, 19-20 Safety measurements, 124 Safety stock quantity, 62-63 Scheduling assigning priorities and, 95 authorizing work orders and, 95 identifying jobs to be planned and, 94-95 key elements of, 93-95 preventive maintenance and, 84 selecting schedulers and, 105 Scheduling work, 97-99 large jobs and, 101 small jobs and, 100 Selection of planners, 104-105 Selection of schedulers, 105 Service level, 68 Service order, 43-46 emergency, 46 small jobs and, 45-46 Service time, 68 Skills analysis, training needs and, 113-114 Stock levels, 62-63 Stockouts, 68--69 Storage locations, 67-68 inventory accuracy and, 67-68 lubrication materials and, 68 pre-kiting of parts and, 67 Stores catalog, 62 Stores effectiveness, measuring, 68-69 System operation, CMMS and, 143-144 Technical database, 62 Technology. See also CAWS maintenance and, 109-110 Ten most critical reports, 87 Total productive maintenance (TPM), 74, 76-77 Total quality management (TQM), 74,77 Training CMMS users and, 143 existing programs and, 117-118 functional, 114-115
hands-on, 115 instructors and, 115-116 job-related, 114 materials, 116-117 upgrade, 116 Training needs analysis, 110 documenting, 110-113 forms and, 111 predicting, 111-113 skills analysis and, 113-114 Transaction volume, 69 Trend information, 124-125 Trends, budget and, 32 Turnover rates, 69 Unplanned maintenance, 79-80 breakdown maintenance, 79 corrective maintenance, 79-80 emergency maintenance, 79 Upgrade training, 116 Upgrading tasks, 78 Uptime reports, 86 User training, CMMS and, 143 Variables, budget and, 32 Variances, 32 Work, execution of, 101-103 Work generated reports, 87 Workload backlog, 127-128 Work measurement, 129-130 Work order flow diagram, 43 Work order numbers, 42-43 Work orders, 37-48 advantages of, 48 authorizing, 95 closed copy and, 38 communication and, 43 copies of, 38 cost information and, 40-43 open, 46 open copy and, 38 originator and, 38 procedure flow of, 46-48 service order and, 43 -46 work copy and, 38 Work review, 103-104 measuring effectiveness and, 103-104 records upkeep and, 104

How To Manage Maintenance B0006F5GYY

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

How To Manage Maintenance B0006F5GYY

Uploaded by

Copyright:

Available Formats

About This Course

How to Manage Maintenance

How to Take This Course

How to Manage Maintenance

How to Manage Maintenance

Edward Hartmann Donald J. Knapp Joseph J. Johnstone Kenneth G. Ward

About This Course How to Take This Course

Managerial Objectives Resources to Manage

How to Manage Maintenance

2 The Maintenance Budget

The Capital Budget

3 Systems for Control

The Service Order

Open Work Orders Work Order Procedure Flow

Summary Review Questions

4 Inventory: Parts and Materials

The Role of Purchasing

Maintaining the Stock Stores Catalog

How to Manage Maintenance

Control of Inventory Level Free Use Items Storage Location

Measuring Stores Effectiveness Summary Review Questions

5 Maintenance Support Programs

PM Work Order Scheduling and Routing

The Manager's Role MSP Reports

Summary Review Questions

6 Planning and Scheduling

The Planning Process

How to Manage Maintenance

Execution of Work Review of Work

Selecting the Planner and Scheduler

Summary Review Questions

How to Manage Maintenance

Estimated Time Versus Actual Time

Work Sampling Summary Review Questions

9 Computerized Maintenance Management Systems (CIVIMS)

System Operation Reports

Benefits of Using CMMS

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance

The Maintenance Budget

How to Manage Maintenance

How to Manage Maintenance

How to Manage Maintenance