chemical and pharmaceutical project study
DESCRIPTION
Increasing costs and new competitors from growth markets are challenging the industry. The consequences are the obligation to increase efficiency and a growing relocation and concentration process. But what is the benchmark for top performance in manufacturing chemical and pharmaceutical products? The ConMoto project study confirms: a Value oriented Maintenance and Asset Management is the key to sustainably increase production efficiency of the chemical and pharmaceutical industry.TRANSCRIPT
CHEMICAL AND PHARMACEUTICAL
PROJECT STUDY
VALUE ORIENTED MAINTENANCE AND ASSET MANAGEMENT
Highlights
• Importanceofmaintenance
• ValueorientedMaintenanceasthebasisanddriverforsustainablesuccess
• Evaluationofmaintenanceandassetmanagement performancebymanagers andoperationalstaffin67 chemicalandpharmaceutical companiesonsite
• Benchmarkwithidealsituationandindustry-specificvalue creationareas • Keysuccessfactorsand resultsinthechemicalandpharmaceuticalindustry
Excursus: Overall Equipment Effectiveness (O.E.E.)
Content
2
Page3 Preface
Page4-15 Chemicalandpharmaceuticalprojectstudy
Page4 ExecutiveSummary
Page5 Maintenanceasafactorworthbillions–There‘sstilllotstobedone
Page6 ValueorientedMaintenance–Basisanddriverforsustainablesuccess
Page7 Studydesign–TheConMotoMaintenanceScoreTest©
Page8 LevelmodelofMaintenanceandAssetManagementExcellence
Page9 Resultsofevaluation–Industrycomparison
Page10 Industry-specificvaluecreationareas
Page12 Keyfactorsinsuccessfulimplementation
Page13 Excursus:OverallEquipmentEffectiveness(O.E.E.)
Page14 Results–What‘sthebottomline?
Page16 Yourcontactperson
MarkusMärzDirectorBusinessDevelopmentConMotoConsultingGroupGmbHmaerz@conmoto.de
NilsBlechschmidtManagingDirectorConMotoConsultingGroupGmbHManagingDirector [email protected]
Dr.LeonhardWeckSeniorPartnerandManagingDirectorConMotoAkademieundTrainingweck@conmoto.de
©2014ConMotoConsultingGroupGmbH.Allrightsreserved.Forrepeatordersandreprintingauthorisationpleasecontact:
ConMotoConsultingGroupGmbHBoschetsriederStr.6981379MunichGermany
Tel.:+49(0)8978066-138Fax:+49(0)8978066-101Email:[email protected]
Authors
The huge significance of both the chemical andthepharmaceutical industries for theeconomy isbeyondquestion.In2012alone,thetwoindustriesturnedovermorethanfourbillioneurosworldwide.Aretheydifferentorsimilar?Howeverdifferenttheproductsof thechemical andpharmaceutical in-dustriesmaybe, they still havenumerouspointsincommon.Bothhaveahigh levelofequipmentintensity1 and automation, sophisticated processtechnology,complexvaluecreationprocessesandextensiveregulatoryrequirements.
The chemical industry primarily produces in-termediate goods and is therefore heavily dependenton itsuser industries.Accordingly, its developmenttendstobeaheadoftheoveralleco-nomy.Thus, for example, thesectorwasable torecoverrelativelyquicklyfromtheserioussetbackscausedby thefinancial crisisof2009and reporttwo recordyears in2011and2012.At thesametime, growth is distributed very unevenly. In par-ticular, someAsiancountries–withChinaaheadoftherest–wereabletogrowdisproportionately.TheforecastsoftheVCI2areevenpredictingthatby 2030, almost half of the chemical productionin theworldwillbe located inChina,whileespe-ciallyinEurope,thesliceofthecakewillbecomeeversmaller(seeFigure1).Evenso,Chinaiscur-rentlyfalteringsomewhatasanengineofgrowth.Althoughadeclineisanticipatedworldwideinthepolymerandspecialistchemicalssegments,pro-ductionremainsatahighlevel.Onthecostside,thechemicalcompaniesareconfrontedwithcons-tantpressureasaresultofincreasingrawmaterialandenergyprices.
Thepharmaceutical industry isvery importantbe-cause of demographic change and medical ad-vancesalone.Itisoneofthemostdynamicindus-try sectors in theworld. In2011,more than three quartersof its total turnoverwasstillgenerated inNorth America, Europe and Japan. But here too,countriessuchasChinaandBrazilarecatchingup.Overall,thesectorischaracterisedbylesssensiti-vitytoeconomicfluctuations.Atthesametime,therateofexpansionhasslowednoticeably in recentyears.This is linked,amongother things,with therequirementsandregulationsofhealthpolicy,whichhaveastrong impactonthebasicconditionsandearningspotentialofthepharmaceuticalindustry.
There are certainly some factors that have a ne-gative effect on business development and thuson long-term competitiveness in both industries.The chemical and pharmaceutical companiesshould now focus on pushing their efficiency tosustainably withstand the increasing cost andrelocation pressures and to defend their marketshares.TheConMotoprojectstudymakesitclearthat chemical andpharmaceutical companies dohave a future in Europe, too. The key to this is Value oriented Maintenance and Asset Manage-ment–asoneofthemostimportantcostblocksinproductionthatissusceptibletoinfluence.
Yourssincerely,
NilsBlechschmidt
Preface
3
Source: VCI-Prognos-Studie (Oct. 2012)
Rest of Europe
Germany
USA
Rest of World
China
Japan
2011[%]
2030[%]
15,012,1
24,4
16,5
3,45,6 29,0
47,1
11,07,4
13,415,0
Figure 1: Distribution of worldwide chemical production in 2011 and 2030 in percent
1) Intensity of equipment (investment rate) = Fixed assets ÷ Total assets2) Verband der Chemischen Industrie e. V.
Cost ef�ciency
Shutdown optimisation
Stock of spare partsInvestments
Overall Equipment Effectiveness (O.E.E.)
Reliability
PROFIT ORIENTED VALUE CREATION
VALUE ORIENTEDMAINTENANCE/
ASSET MANAGEMENTEFFICIENT CAPITAL
EXPENDITURE
Executive Summary
4
ChemicalandPharmaceuticalprojectStudy
There is hardly any other industry in which pro-ductionsystemsandequipmenthavesuchahugeimportance as in the chemical andpharmaceuti-cal industry. And yet, inmany companies, thosesystems are too often shut down. The cause isfrequentlyinadequateMaintenanceandAssetMa-nagement–companieswastebillionsinthisway.
One thing is clear: the importance of mainte-nance increases as the equipment intensity andinterconnection or the automation of productionincreases. In the investment-intensivecompaniesof the chemical and pharmaceutical industry, upto60percentofthetotalproductioncostscanbeinfluenceddirectlyandindirectlybytheefficiencyofmaintenanceandassetmanagement.This isasignificant lever for the successof thecompany.Butwhatisthebenchmarkfortopperformanceinmaintenanceandwherearethecompaniestoday?
The ConMoto Consulting Group has examined indetail the Maintenance and Asset Performanceof a total of 158 companies and production siteson fourcontinentsover therecentyears.Thiswasnot completed on the basis of questionnaires butof severalweeksofprojectworkwitheachofourclientsonsite.Intheindustrysectorchemicalsandpharmaceuticals,theefficiencyof67differentsitesinGermany,Austria,Switzerland,France,theUSA,BrazilandIndiawasanalysedandoptimised.Theseincludebothconcernsandcorporationslistedonthestockmarketaswell asmediumsizedcompaniesfromthesegmentsbasicinorganicchemicals,petro-chemicals, polymers, silicones, fine and specialistchemicals,detergentsandbody-careproducts,ba-sicpharmaceuticalmaterialsandspecialities.
The companies are currently a long way fromfirst-class maintenance and asset management. The average evaluation of the chemical/pharma-
ceuticalsector is just47%incomparison tobestpractice. Even the best company in the class stillhasconsiderableroomforimprovementat70per-centmaintenancematurity.
Thequestionnowarisesastowhatistobedonetosetnewstandardsforprofitorientedvaluecreationwithefficientcapitalexpenditure.Forward-thinkingdecisionmakersrecognisethenecessity,aboveall,ofpushing forwardwith increasing technical avai-labilityandreliabilitywhilereducinglife-cyclecostsof production systems and equipment. Both theindustry-specific valuecreationareasand thekeyfactors in successful implementation are summa-risedinthisstudy.
Thesuccessesachievedinthechemicalandphar-maceutical industries speak for themselves. Thecompanieswereabletomoveupagood1.5levelsonaverageontheirwaytoMaintenanceandAssetManagementExcellence.The implementationpro-jectscompletedalsoshowthat inall relevantKeyPerformance Indicators, objectively measurableimprovementswereachieved.Forexample, itwaspossible to improve theOverall Equipment Effec-tivenessbybetween2and15percentagepoints.As a consequence, one of the central profitabilityindicators, themaintenancecost rate,wascutbybetween7and27percent.Inotherwords,itwaspossibletoachieveasignificantlyhigheravailabilityand therefore additional value creationwith lowerresourcecosts.
These advances in operational performance alsohad a sustainably positive impact on financial results: companies that combine a high level ofeffectiveness and efficiency are among themosteconomicallysuccessfulintheirindustry.Theche-mical/pharmaceutical project study by ConMotopointsoutthewayforward.
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HeadofConMotoCompetenceCentre ValueorientedMaintenanceandAssetInnovation
NilsBlechschmidtManagingDirectorConMotoConsultingGroupGmbHManagingDirectorConMotoStrategieundRealisierung
Tel.:+49(0)8978066-114Fax:+49(0)8978066-101Email:[email protected]
ConMotoConsultingGroup
We have been supporting companies for more than 24 years to secureandimprovetheircompetitivenessandsustainability.Around80consultants,distributedacrossourofficesinMunich,Stuttgart,Vienna,St.Gallen,BratislavaandShanghai,workcompetentlyandwithcommitmenttorealisethebestpossiblebenefitsforourclients. Wecreateadvantage!This is the guiding approach of our implementation-oriented consultancy.
Nils Blechschmidt is managing director at ConMoto ConsultingGroupGmbHaswell asmanagingdirector atConMotoStrategieundRealisierung.Heisresponsibleforthefieldof“ValueorientedMaintenanceandAsset Innovation”.Asanexpert inthisareaandwith extensive knowledgeof various sectors, such as aerospace,engineering and plant construction, automotive and componentsupplier,plasticsprocessing,pulpandpaperandtransporttechnol-ogyaswellasprocess(chemicals,steel,pharmaceuticalsandfood),hegivesnumerouslectures.Since1997hehasbeenspeakerinre-nowned expert forums, like PlantMaintenance, EuroMaintenance,WorldMaintenanceForumandconferencesofVDIwithparticularemphasisonMaintenanceExcellenceandLeanProduction.BeforehistimeatConMoto,NilsBlechschmidtwasemployedastheTech-nicalHeadofanaircraftmaintenancebusinessforsevenyears.HecompletedhiseducationasagraduateengineerinAerospaceTech-nologyattheUniversityoftheBundeswehrinMunich.HepassedapostgraduatestudiesleadingtoaMasterofBusinessAdministra-tionatHenleyManagementCollege(UK).