Presentation on theme: "Reliability and Maintenance (RAM)"— Presentation transcript:
1 Reliability and Maintenance (RAM) The Path to World-Class Performance27th Brazilian Congress on MaintenanceRio de Janeiro, BrazilSeptember 12, 2012Al PolingRAM Study Project ManagerHSB Solomon Associates LLCDallas, TX
2 Survival in Nature“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”- Charles Darwin
3 Survival in a Global Market “It is not the strongest, nor the most intelligent that survives. It is the one that is the most adaptable to change.”“Reliability and maintenance are tools in the manufacturing survival tool kit!”- Al Poling3
4 Reliability and Maintenance Benchmarking Benchmarking is the use of actual operating data to compare performance of multiple entities (e.g., companies, sites, production units, etc.).A benchmark is a performance threshold used for comparative purposes (e.g., first quartile, median, etc.).Benchmarks can be average values (e.g., overall average, better half or poorer half average, etc.) of a peer group’s performance indices.Benchmarks can also be any breakpoint used to distinguish performance between better and poorer performers.
5 Reliability and Maintenance Benchmarking Monetized margin loss (maintenance downtime times standard margin) due to a facility’s mechanical unavailability and failure to perform as designed compared to peers in the same industryMaintenanceThe normalized cost of conserving a facility’s physical assets so they operate at design performance levels compared to peers in the same industry
6 International Study of Plant Reliability and Maintenance Effectiveness (RAM Study) Implemented in 1996 to compare company, site, and unitMaintenance CostsMechanical AvailabilityProcess IndustryChemicals and PetrochemicalsRefiningRedesigned in 2010/2011Focused on Factors that Impact RAM PerformanceUtilizing Contemporary Measures of PerformanceBenchmarks Against Better Half Average Performance
7 RAM Study – Core Indices Maintenance Cost Index (MCI) Maintenance Cost TypeExpenseCapital (replacements due to end of life)Maintenance Cost CategoriesLaborMaterialOverhead/SupportMaintenance Work TypesCorrectivePreventivePredictive/Condition MonitoringMaintenance Work CategoriesRoutine MaintenanceTurnarounds Including Short Overhauls
8 RAM Study – Core Indices Mechanical Availability Index (MAI) Captures all reliability and maintenance related downtimeBreakdownTurnarounds and Short OverhaulsSlowdowns and Rate ReductionsMonetizes all reliability and maintenance downtimeAssigns a standard margin for each production unitPlant replacement value (PRV) × 40% × annual RAM downtimeCaptures downtime by equipment categoryRotatingFixedInstrument/ElectricalBenchmarks Mean Time Between Failure (MTBF)Pumps, compressors, motors, heat exchangers, etc.
9 RAM Study – Core Indices Reliability & Maintenance Effectiveness Index (RAMEI) Reports Net Performance GapsReliabilityMaintenanceHighlights Areas of ExcellenceWhere performance is equal to or better than first quartile performanceNeed to understand what enables excellent performance and replicate throughout the siteSums Total Improvement OpportunitiesMaintenance Cost Improvement OpportunitiesMechanical Availability Improvement OpportunitiesProvides a Basis for a Performance Improvement Plan
10 Reliability and Maintenance Culture Behaviors are driven by the local cultureThere are two distinct cultures in the reliability and maintenance communityTraditional Culture – based on the belief that failures are inevitable, so they focus on being good at reactingContemporary Culture – based on the belief that failure-free operation is the objective, so they focus on failure elimination10
11 Traditional Culture High Maintenance Costs (Cost/PRV >1.4%) Low Equipment Reliability (<96.7% mech. avail.)Reactive Culture (reinforce reactive behaviors)Majority Corrective Maintenance (80/20)Annual Turnarounds (T/As) with Little Scope ManagementChange (Risk) AverseFocus on Optimizing Reactive BehaviorsReinforce the Current Culture and Related BehaviorsInefficient and Ineffective Organizations11
12 Consequences of Traditional Reliability and Maintenance Increased risk of a catastrophic incidentHigher recordable injury rateIncreased downtime, therefore less productionMore off-spec product, thus lower marginsLarger replacement capital requirements (4–10%)Reduced revenue, therefore lower profitResource intensiveLower return on assetsCannot compete in a global marketplace12
13 Contemporary Culture Low Maintenance Costs (Cost/PRV <1.4%) High Equipment Reliability (>96.7% mech. avail.)Proactive Culture (reinforce proactive behaviors)Majority Condition-Based Maintenance (80/20)Efficient and Effective OrganizationsFailure AverseLow T/A Frequency (5–7 years) w/Scope ManagementAccept Failure-Free Operation as NormalFocus on Optimizing Overall Performance13
14 Benefits of Contemporary Reliability and Maintenance Lower risk – both safety and environmentalUninterrupted operationHigher product qualityIncreased throughputHigher return on assetsSmaller replacement capital requirements (0–2%)Increased revenue and profitsOptimum resource requirementsCompetitive globally14
15 Traditional vs Contemporary Reliability and Maintenance Which one are you?How do you know?You know by measuring and comparing performance!15
16 The Relationship Between Reliability & Maintenance Reliability and Maintenance Are Inextricably LinkedReliabilityCannot cost cut your way to improved reliabilityMaintenanceMaintenance costs are driven by reliability…or the lack thereofBest performers achieve high reliability at low cost!Poor performers have high cost with low reliability!Each 1% increase in mechanical availability can translate into a 10% reduction in maintenance cost!
17 Traditional Approach Pressure Applied Here Maintenance Costs Reliability(Margin)
18 Initial Traditional Result Pressure Applied HereLowerReliability(Margin)LowerMaintenanceCosts
19 Long-Term Traditional Result HigherMaintenanceCostsLowerReliability(Margin)
20 Contemporary Approach MaintenanceCostsReliability(Margin)Apply Pressure Here
21 Progressive Result Higher Reliability (Margin) Apply Pressure Here LowerMaintenanceCostsApply Pressure Here
23 Profit Optimization Total Cost Costs Maintenance Cost Lost Revenue 100%Mechanical Availability
24 Maintenance Cost, % (US $/PRV) Path to First Quartile<9595969798>9811.4>10Maintenance Cost, % (US $/PRV)Mechanical Availability, %High Mechanical Availability and Low CostIndustry LeadersSustainableEffectivenessLow Mechanical Availability and High CostNot SustainableFacilityEfficiency and Cost
25 World-Class Manufacturers Recognize the value of reliable operationsFocus on failure elimination (uninterrupted operation)Build reliability into their corporate strategyEngineering DesignProcurementOperationCompete effectively in a global marketplace
26 SummaryIf maintenance costs are not below 1.4% of plant replacement value, you are not a world-class performer.If mechanical availability is not above 96.7%, you are not a world-class performer.Best performers continue to get better while poor performers continue to fall further behind.Regrettably, for some, it is already too late!The path to world-class performance begins with the first step… what are you waiting for?
27 Questions? Thank You! Al Poling RAM Study Project Manager HSB Solomon Associates LLCDallas, TX