Role of Strategic Maintenance Management in Plant Profitability by Professor Salih O. Duffuaa Systems Engineering Department King Fahd University of Petroleum and Minerals

Salih Duffuaa Dr. Duffuaa is a Professor of Industrial and Systems Engineering at the Department of Systems Engineering at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia. He received his PhD in Operations Research from the University of Texas at Austin, USA. His research interests are in the areas of Operations research, Optimization, quality control, process improvement and maintenance engineering and management. Dr. Duffuaa is a Professor of Industrial and Systems Engineering at the Department of Systems Engineering at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia. He received his PhD in Operations Research from the University of Texas at Austin, USA. His research interests are in the areas of Operations research, Optimization, quality control, process improvement and maintenance engineering and management. He teaches course in the areas of Statistics, Quality control, Production and inventory control, Maintenance and reliability engineering and Operations Management. He consulted to industry on maintenance, quality control and facility planning. He authored a book on maintenance planning and control published by John Wiley and Sons and edited a book on maintenance optimization and control. He is the Editor of the Journal of Quality in Maintenance Engineering, published by Emerald in the United Kingdom. He teaches course in the areas of Statistics, Quality control, Production and inventory control, Maintenance and reliability engineering and Operations Management. He consulted to industry on maintenance, quality control and facility planning. He authored a book on maintenance planning and control published by John Wiley and Sons and edited a book on maintenance optimization and control. He is the Editor of the Journal of Quality in Maintenance Engineering, published by Emerald in the United Kingdom.

Objective of the Presentation Maintenance RoleMaintenance Role Strategic Maintenance Management. Strategic Maintenance Management. Strategic maintenance decision. Strategic maintenance decision. Capacity planning decisions and issues. Capacity planning decisions and issues. Measuring the performance of your strategic maintenance management on plant profitability Measuring the performance of your strategic maintenance management on plant profitability Conclusions and further research. Conclusions and further research.

Maintenance Data 100 billion spent annually on maintenance in the USA. 100 billion spent annually on maintenance in the USA. Downtime costs as much as $ 50,000 per hour. Downtime costs as much as $ 50,000 per hour % of downtime is caused by poor design or maintenance % of downtime is caused by poor design or maintenance. 18% of maintenance work unnecessary. 18% of maintenance work unnecessary.

IntroductionIntroduction Maintenance Systems are critical to organizations in order to meet their goals and objectives. Maintenance can be used to provide competitive advantages. Maintenance management has evolved over time. Now days concepts such as strategic maintenance management are emerging.

Evolution of Maintenance Management Prior to 50 th : Necessary evilPrior to 50 th : Necessary evil : Preventive maintenance : Preventive maintenance 70 th : Life cycle costing, RCM and Productive maintenance. 70 th : Life cycle costing, RCM and Productive maintenance. 80 : TPM an RCM 80 : TPM an RCM 9oth-date: Strategic view of maintenance 9oth-date: Strategic view of maintenance

IntroductionIntroduction

Role of Maintenance Organization objectives Organization objectives Profitability.Profitability. Return on investment (ROI). Return on investment (ROI). Customer service. Customer service. Safety and environment Safety and environment Cost. Cost. Community development. Community development.

Role of Maintenance Maintenance has a high impact on business profitability, through its impact onMaintenance has a high impact on business profitability, through its impact on Equipment capacity Equipment capacity Availability (A) Availability (A) Rate (R) Rate (R) Product quality (QR) Product quality (QR) Safety Safety Health and the environment Health and the environment Cost of production. Cost of production.

Quantification of the Impact Maintenance provide productive capacity (PC).Maintenance provide productive capacity (PC). Productive capacity is a function of utilization and over all equipment effectiveness (OEE). Productive capacity is a function of utilization and over all equipment effectiveness (OEE). OEE = A * R * QR OEE = A * R * QR PC = U * OEE where : U is utilization PC = U * OEE where : U is utilization

Strategic Maintenance Objectives Maximize Availability Maximize Availability Ensure equipment are operating at full capacity (rate) Ensure equipment are operating at full capacity (rate) Integrate and continuously improve all elements to ensure the best quality rate. Integrate and continuously improve all elements to ensure the best quality rate. Improve equipment utilization. Improve equipment utilization.

Strategic Maintenance Strategic maintenance has three dimensions Managerial dimension Managerial dimension Technical DimensionTechnical Dimension Operational Operational Commercial or economic Commercial or economic

Operational Strategy Implementation Implementation Production scheduling Production scheduling Spare parts inventory Spare parts inventory Keeping with technology Keeping with technology Developing competencies Developing competencies

Commercial Economics Implementation Sales and marketing.Sales and marketing. Production costs.Production costs. Maintenance costs Maintenance costs

Managerial Dimension Implementation Aligning maintenance objectives with organizational objectives. Aligning maintenance objectives with organizational objectives. Performance evaluation Performance evaluation Human resources capacity Human resources capacity

Technical Dimension Functional requirements Functional requirements Design upgrade Design upgrade Maintaibility requirement Maintaibility requirement

Maintainability requirement Knowledge about system and plant conditionKnowledge about system and plant condition Technical know how Technical know how Data baseData base Inspection Inspection Monitoring. Monitoring. Selection optimal mix of maintenance polices Selection optimal mix of maintenance polices Predictive Predictive Preventive Preventive Reactive Reactive

Predictive Approach (PA) Characteristics Maintenance performed at needed time. Maintenance performed at needed time. Asses probability of failure Asses probability of failure Technology based. Technology based. Advantage Advantage Lower costs Lower costs Extend equipment life cycle Extend equipment life cycle Assist in identifying root cause Assist in identifying root cause Disadvantage Disadvantage Requires investment Requires investment Requires additional skills Requires additional skills

Preventive Approach (PA) Characteristics Time based. Time based. Forecast and prepares for planned down time. Forecast and prepares for planned down time. Advantage Advantage Improves resource planning Improves resource planning Reduces down time Reduces down time Control budget Control budget Disadvantage Disadvantage Activities performed regardless of need. Activities performed regardless of need. Possibility of statistical and human errors. Possibility of statistical and human errors.

Reactive Approach (PA) Characteristics Characteristics Run to failure. Run to failure. NO routine tasks performed. NO routine tasks performed. Advantage Advantage Do not spend money unless you have to. Do not spend money unless you have to. Disadvantage Disadvantage Most expensive approach. Most expensive approach. Less availability Less availability Longer down time. Longer down time. Higher capital costs. Higher capital costs.

Planning Strategic Approach Planning predictive strategy Planning predictive strategy Creative a proactive culture, long term commitment and accountability. Creative a proactive culture, long term commitment and accountability. Ensure availability of skills and knowledge Ensure availability of skills and knowledge Continuously review new technologies. Continuously review new technologies. Planning preventive strategy Planning preventive strategy Ensure availability of skills and knowledge Ensure availability of skills and knowledge Availability of reliability data Availability of reliability data

Planning Strategic Approach Planning reactive strategy Planning reactive strategy Establish service providers. Establish service providers. Procedure to limit down time. Procedure to limit down time. Effective inventory management. Effective inventory management.

Capacity planning decisions The deployment of the strategy requires providing the right capacity that include qualified personnel, tools and equipment.The deployment of the strategy requires providing the right capacity that include qualified personnel, tools and equipment. The competencies needed. The competencies needed. The organization and support. The organization and support.

Continuous Assessment Goals and targets. Goals and targets. Performance measurements Performance measurements OEE OEE Productive capacity Productive capacity ROI ROI Cost Cost Technology adaptation Technology adaptation Learning and development Learning and development Action plans Action plans

MissionMission The mission of the CEIM is to serve and support organizations to develop and improve their maintenance systems to the best quality standards: and enhance the educational process for students and faculty by providing opportunities for quality research and projects. The mission of the CEIM is to serve and support organizations to develop and improve their maintenance systems to the best quality standards: and enhance the educational process for students and faculty by providing opportunities for quality research and projects.

The vision for CEIM is to be the leading center in maintenance management and engineering in the region and a first class source of knowledge and information in the area of maintenance globally.The vision for CEIM is to be the leading center in maintenance management and engineering in the region and a first class source of knowledge and information in the area of maintenance globally. VisionVision

The CEIM mission shall be accomplished by pursuing the following objectives: High-quality industrial projects and training : Conduct projects and relevant training programs in the area of maintenance for industry that meet or exceed their expectations.High-quality industrial projects and training : Conduct projects and relevant training programs in the area of maintenance for industry that meet or exceed their expectations. Excellence in basic and applied research: Excellence in basic and applied research: Conduct original and high-quality basic and applied research at the frontier of the area of maintenance. Conduct original and high-quality basic and applied research at the frontier of the area of maintenance. ObjectivesObjectives

Enhance the educational process for students: Assist students in conducting their master's theses, senior projects and co-op training programs through effective links with industry.Enhance the educational process for students: Assist students in conducting their master's theses, senior projects and co-op training programs through effective links with industry. Objectives Objectives

OpportunitiesOpportunities Create partnerships and cooperate with industry through industrial membership program of the Center. Create partnerships and cooperate with industry through industrial membership program of the Center. Serve industry in an efficient manner.Serve industry in an efficient manner. Offer well-guided training programs.Offer well-guided training programs. Link industry in the Kingdom with international centers in the area of maintenance.Link industry in the Kingdom with international centers in the area of maintenance.

OpportunitiesOpportunities Advance research and applications in the area of maintenance.Advance research and applications in the area of maintenance. Focus on inter-disciplinary research.Focus on inter-disciplinary research. Enhance students’ learning experienceEnhance students’ learning experience

Center Programs and Activities High-quality industrial projects. High-quality industrial projects. Training programs.Training programs. Industrial consultations.Industrial consultations. Certification programs.Certification programs. Workshops and seminarsWorkshops and seminars

Center Programs and Activities Link with international experts and centers.Link with international experts and centers. Faculty mentoring and team-working Faculty mentoring and team-working Create opportunity for student projects. Create opportunity for student projects. Multi-disciplinary research. Multi-disciplinary research. Industry open house. Industry open house.

ResourcesResources Experienced faculty and staff. Experienced faculty and staff. Graduate Students. Graduate Students. Laboratories and software. Laboratories and software. Agreement with international centers in the area. Agreement with international centers in the area.

International Collaboration The center will establish agreements with international centers. Already contacts started with: The center will establish agreements with international centers. Already contacts started with: University of Toronto University of Toronto MIRCE MIRCE University of Salford. University of Salford. Queensland University in Australia Queensland University in Australia

Thank you for listening Thank you for listening Questions or comments are welcomed.