implementing and managing a maintenance plan the maintenance plan ken henman

Implementing and Managing a Maintenance Plan

The Maintenance PlanKen Henman

May 23, 2008 DTE Rail Services, Inc. Maintenance Management Seminar

2

The Maintenance Plan

What is a Maintenance Plan Why have Maintenance Plan How to develop a Maintenance Plan Implementing and managing a Maintenance

Plan


3

What is a Maintenance Plan

Part of the total effective management of railcar assets

A structure under which railcar maintenance and repair can be proactively managed

Allows for aggressive control of maintenance costs and procedures


4

Why Have a Maintenance Plan

Meet regulatory requirements Improve and sustain reliability Risk management and loss control Avoid opportunity loss Sustain asset function Sustain asset value Maintenance of assets viewed as contributor

to business success


5

How to Develop a Maintenance Plan

Understand objectives Understand responsibilities Evaluate Organize Develop Implement Measure effectiveness Re-evaluate Adjust


6

Implementing and Managing a Maintenance Plan

Establish a scope of work- SOW Selection of repair facilities Logistics and scheduling Commence maintenance activities Evaluate- leading and lagging KPI’s Adjust


7

Establish a Scope Of Work

Objectives - State your intent Goals Types of maintenance Overall expectations

List of specific cars involved Individual, group or series

Repair scope Focus of repairs according to objectives Applicable attachments (i.e. prints, schematics etc.) Overall car condition and other repairs


8

Establish a Scope Of Work

Responsibilities Maintenance responsible party

Who approves and pays the bills Expectations of shop

Quality Reporting Estimating Turnaround

Contact information Maintenance responsible party and shop


9

Distribution of the Scope of Work

Treat as a controlled document Titled and dated per latest revision Confirmation of receipt and understanding by shop


10

Selection of Repair Facility

Capacity Size suitable for level of performance and turn

around expected Capabilities

Meets quality and quantity expectations Location

Within boundaries of serving railroad without off line transportation charges

Relationship Familiarity of service expectations Agreements covering rates and material


11

Logistics and Scheduling Maintenance Activities

Car service demands Loading schedule Availability of railcars

Relationship of car location to shop(s) Criticality of condition Shop availability Materials


12

Maintenance Activities

Equipment inspection results Inspection summary or estimate as needed Distributed to maintenance responsible party for

approval According to SOW criteria Adherence to stated objectives Report of overall car condition

Estimate Per SOW Within expectations


13

Maintenance Activities

Approval of inspection summaries- estimates In process inspections Status reports Completed car inspections Track all warranties and claims Equipment return to service


14

The Scope of Work as a Living Document

Inspection and repair results meet expectations Flexible according to need Revised as needed Revisions distributed in controlled manner


15

Maintenance Plan Evaluation-KPI’s

Leading KPI - Indicators that measure performance before problems arise EHMS exposure Last major repair event

Lagging KPI - Historical information measuring performance results According to budget Reliability – effectiveness measure

Maintenance costs to deliveries Reactive to proactive maintenance

Unplanned to planned maintenance


16

Evaluate-Leading KPI’s

Periodic maintenance Time or mileage based maintenance

Component life cycle based maintenance According to known component life expectations

Equipment condition base According to baseline and periodic inspections


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Evaluate-Leading KPI’s

Estimated cost of repairs according to the SOW Relationship to budget and expectations – meets

objectives EHMS exposure

Review current car information for open “Alerts” Quality assurance

Avoidance of rework


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Evaluate-Lagging KPI’s

Quality control Avoid after repair rework

Tracking actual maintenance cost Estimate to final invoice audit Final invoice to SOW To budget

Gather information Equipment inspection and performance information

Results measured against plan


19

Evaluate-Lagging KPI’s

Repair facility performance Quality Quantity Out of service –Turnaround time

Time the car is bad order or awaiting disposition Time the car takes moving to shop Time the car is in the shop for repair

Arrival to inspection and estimate Approval to completion

Time the car takes to move back into service Results measured against plan All this “out of service” time decreases utilization


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Key Performance Indicators

Association of leading and lagging KPI identifies trends Time between component failures or repairs Per car per month Life cycle cost to asset value EHMS exposure Actual cost to budget Car status monitoring Shopping performance Continuous improvement


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Plan Effectiveness - KPI Reporting

Gather data and measure results Provide results in detailed, summarized format Periodic reviews

Internal Contractors Repair facility

Results used to adjust plan and SOW Insure quality of work and cost control Re-focus on specific problem cars or components


22

Fleet Per Car Per Month Cost

$48.86

$49.58

$51.87

$36.67

$22.32

$19.59

$13.09

$1.65

$30.45

$132.57

$107.26

$131.50

$74.48

$29.80

$33.78

$9.20

$64.82

$181.43

$156.85

$183.37

$111.15

$52.11

$54.71

$46.87

$10.85

$95.28

100-199

200-299

300-399

400-499

500-599

600-699

700-799

800-899

Fleet Average

PCPM

Contractor

AAR

CA

R S

ER

IES


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Major Components, Contractor OnlyABCX 1000-1999

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000

1/1/2006 through 12/31/2006

1/1/2007 through 12/31/2007

$1,786 $3,645

$78,531

$53,969

$25,003

Cost per Car per Month

2006 2007

AAR $ 26.86 $ 36.67

Contractor $ 41.30 $ 74.48

Combined $ 68.16 $111.15


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Major Components, Contractor OnlyABCX 2000-2999

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

1/1/2006 through 12/31/2006

1/1/2007 through 12/31/2007

$285 $536

$11,093

$1,803

$761

Cost per Car per Month

2006 2007

AAR $ 7.17 $ 22.32

Contractor $ 53.50 $ 29.80

Combined $ 60.67 $ 52.12

$3,933


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Budget ReviewMaintenance Budget Monthly Expense Contractors Balance AAR Balance BudgetBudget $1,767,560.00 $473,460.00 $2,241,020.00Jan -$141,133.96 -$20,517.03 -7%

$1,626,426.04 $452,942.97Feb -$99,345.71 -$30,616.25 -13%

$1,527,080.33 $422,326.72Mar -$147,108.41 -$43,905.66 -22%

$1,379,971.92 $378,421.06Apr -$188,872.22 -$46,305.84 -32%

$1,191,099.70 $332,115.22May -$147,521.87 -$55,929.21 -41%

$1,043,577.83 $276,186.01Jun -$190,842.85 -$42,464.67 -52%

$852,734.98 $233,721.34Jul -$68,530.24 -$37,005.65 -56%

$784,204.74 $196,715.69Aug -$89,871.43 -$115,565.07 -65%

$694,333.31 $81,150.62Sep -$84,516.38 -$65,976.71 -72%

$609,816.93 $15,173.91Oct -$174,268.67 -$79,002.40 -83%

$435,548.26 -$63,828.49Nov -$321,902.18 -$35,108.44 -99%

$113,646.08 -$98,936.93Dec -$80,562.74 -$42,737.75 -105%

$33,083.34 -$141,674.68Remaining Budget $33,083.34 ($141,674.68) ($108,591.34)Percent Remaining 2% -30% -5%Totals ($1,734,476.66) ($615,134.68) ($2,349,611.34)Percentage 74% 26%


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Budget Review – YTD

Maintenance Budget YTDMonthly Contractors Contractor's AAR AAR TotalExpense Balance Balance BudgetBudget $2,285,000.00 $540,000.00 $2,825,000.00

Jan -$95,249.39 -$93,699.99 -7%$2,189,750.61 $446,300.01

Feb -$271,367.80 -$74,086.94 -19%$1,918,382.81 $372,213.07

Mar -$254,461.68 -$61,246.96 -30%$1,663,921.13 $310,966.11

Apr -$139,946.99 -$62,995.70 -37%$1,523,974.14 $247,970.41

May -$115,015.06 -$54,482.39 -43%$1,408,959.08 $193,488.02

Remaining Budget $1,408,959.08 $193,488.02 $1,602,447.10Percent Remaining 62% 36% 57%Totals ($876,040.92) ($346,511.98) ($1,222,552.90)Percentage 72% 28%


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Yearly AAR Billing PercentageReactive to Proactive

23%

25%

30% 29%

25%

17% 18%

26%28%

0%

5%

10%

15%

20%

25%

30%

35%

1999 2000 2001 2002 2003 2004 2005 2006 2007YTD

Year

Per

cen

tag

e


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Wheel & Bearing Defects

0

100200

300

400

500600

700

800

900

WORN OUT

ENVIRONMENT

BEARINGS

ALL WHEELS REPLACED

552

541

82

870

149

781

All Wheels Replaced by AAR & Contract Shop

143

312

180

183

792

792

157

155

271

119

*Total includes wheels changed for other

reasons18

3

315

485

184


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Average Wheel Set Mileage, by Group

356,250

458,236

286,696

325,687

375,890

556,250

432,568

353,987

393,196

100-199

200-299

300-399

400-499

500-599

600-699

700-799

800-899

Fleet Average

AVGMILEAGE

CA

R S

ER

IES


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EHMS Exposure


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Major Shopping Event, Last Air Brake Test

2003 2004 2005

17

238

162

0

50

100

150

200

250

QT

Y

YEAR

LAST ABT DATE OLDER THAN 1/1/2006

Total 17 238 162

2003 2004 2005


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Shop Process Cycle Times

10

2

15

6

33

15

5

20

12

52

6 610 10

32

0

10

20

30

40

50

60

BAD ORDER TO SHOP

ARRIVAL TO ESTIMATEAPPROVAL TO COMPLETION

COMPLETED TO SERVICETOTAL OUT OF SERVICE


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Evaluate-

Continuing evaluation of SOW according to maintenance goals Did the plan accomplish the objectives? Adjusted - revise Determining revisions to Scope of Work Select revisions to meet objectives

Process of continuing improvement


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Maintenance Types

Maintenance Type Description Plan Budget Results

Corrective-Reactive

Fix it when it breaks-Breakdown Unscheduled

Unexpected, uncontrollable costs

Costs of Doing Nothing

Periodic Time or mileage based ScheduledPlanned, controllable costs

Tends to over maintain-shorten component life

Preventative Defensive maintenance AnticipatedPlanned, controllable costs

Dependent on condition evaluation

Predictive Condition based PredictedPlanned, controllable costs

Dependent on information evaluation

Proactive Combination of allAccording to criticality

Flexible plan, controllable costs

Best mix – Best results!


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Journey From Repair-Focused to Reliability-Focused Culture

Contributor To

Business Success

Don't Just Fix It-

Improve it!

Fix It Before It

BreaksAlignment

(Shared Vision)

Fix It AfterIt Breaks

PerformanceImprovement

Integration:Business Processes

Predict

PlanAsset Function

Proven PlanPerformance

Schedule

CoordinateAsset Value Business Reliability

Cost Center Cost Focus ReliabilityCustomer/Supplier

Relationship

Rewards:Staged Decay

Short Term SavingsUncontrolled Cost Limit Surprises

CompetitiveAdvantage

Business Success

Motivator: Meet Budget Breakdowns Avoid Loss Utilization Growth

Behavior: Decaying Responding Initiate Discipline Disciplined Alliance

Don't Fix It

Reactive

Planned

Proactive

Strategic


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Maintenance Plan Cycle

Maintenance-

Continuous Improvement Cycle

PLAN

SCHEDULEANALYZE

EXECUTE


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Summary

Maintenance and value to assets Risks of not maintaining Maintenance philosophies Technology Maintenance plan Measuring effectiveness

implementing and managing a maintenance plan the maintenance plan ken henman

Documents

maintenance management

maintenance plan slide

railcar maintenance

maintenance activities

dte rail services

shop slide

material slide

procedures slide