re-engineering maintenance for the organization of the future

7/29/2019 Re-Engineering Maintenance for the Organization of the Future

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Emerson Process Management - CSI

DoctorKnow Application PaperTitle: Re-engineering Maintenance for the Organization of the Future

Source/

Author:

Richard A. Gabel

Product: GeneralTechnology: Vibration

Classification:The current wave of Business Re-engineering presents a great opportunity for corporations seeking

to increase earnings by changing the way plant assets are maintained. Plant organizational

structures are evolving from a group of functional units to a single process-complete department.

Functional fiefdoms are being replaced with process-complete departments consisting of teams that

share common performance goals and reward systems. Traditional functional units such as

maintenance departments are being disbanded, and members are reappearing as key players onprocess-complete teams. In manufacturing plants, job descriptions are becoming broader and job

titles fewer. Information systems are also shedding functional autonomies, and transforming into

highly integrated process-complete plant information and enterprise-wide systems. Changes in

maintenance technology, as driven by this new process-complete paradigm, are profoundly

impacting corporate competitiveness. Dramatic increases in productivity, attributed to process-

complete organizational structures empowered with new reliability centered maintenance

technology, will alter the battlefield of corporate warfare and tip the scales of competition. The

criteria by which maintenance effectiveness is measured will be redefined. What follows is a vision

for 21st century maintenance and a road-map to re-engineer our way there.

In the not too distant future, maintenance performance metrics will no longer be evaluated against

traditional benchmarks such as equipment availability and plant availability. The effectiveness of

maintenance will be measured against its contribution to customer satisfaction, product quality,

and corporate profitability. Peter Drucker puts it this way, "there are no results within the

organization, all results are on the outside" 1 hence, maintenance performance will be measured

based on its impact on the constituents comprising the organizations external environment. These

external constituents may consist of customers, government agencies, shareholders, and

competition.

To measure maintenance performance at the customer level, criteria will shift to product value in

terms of product quality, product cost (as impacted by maintenance dollars per unit volume of

product), and product reliability. Enterprise-wide computing systems will track equipment life

cycle cost and calculate (in real-time) the maintenance dollars spent per unit of product produced.

Within the organization, exposure of maintenance deficiencies will increase as giant networks of

enterprise-wide information monitored by high levels of management root out the cause and effect

of weak maintenance practices. Government agencies, such as the EPA, will access corporate

information systems over the World Wide Web, monitoring toxic chemical leaks per unit volumeof product produced, rewarding tax breaks to the strong (well maintained plants) and severely

penalizing the weak (plants with ineffective maintenance practices).

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Stock analysts will monitor individual plants within corporations, plant earnings per headcount and

maintenance dollars per unit of product volume will be scrutinized, and divestiture of plants

operating below global norms will be encouraged. Wall Street will force survival of the efficient,

western civilization will accelerate the implementation of maintenance technology, and every

advantage will be sought to remain competitive with the labor cost advantages of emerging Third

World countries. As the CEO of a Fortune 100 corporation has remarked, American corporations

will have to "automate, immigrate or evaporate." Automation will be applied to many of the

processes that make up the maintenance function, especially equipment condition monitoring.

The acceleration of maintenance technology and the way it is implemented will evolve to fit the

process-complete organization. Traditional organizational structures comprised of functional units

will give way to process-complete departments consisting of cross trained team members. Process-

complete department team members will be made up of manufacturing engineers, purchasing

experts, process operators, and maintenance experts. Each team member will be cross trained to

perform a multitude of team functions, so as to optimize team performance.

Maintenance technologies will progress to simplify implementation into the process-completeorganization. Machine condition parameters such as overall vibration, vibration spectral bands,

temperature, flux, input energy and lubricant characteristics will be monitored using the same

statistical process control techniques already used to monitor manufacturing processes. Machine

condition alarms will be set as a function of standard deviations from normal machine condition

levels. Normal or mean machine condition levels will be calculated from data of like groups of

machines.

Equipment condition data collection will shift to a new paradigm. Collection of data will

decentralize, manual collection will be distributed to all process-centered team members andautomated collection will be performed by remote self powered monitoring modules. With

intelligent remote monitoring modules in place, equipment condition data will be stored only when

a significant change in machine condition has occurred. Increases in the number of points or

channels of information monitored for equipment condition will require workstations outfitted with

exception reporting algorithms to scan data and alert operators to machines with significant

condition degradation. On command, operators will retrieve automated machine condition

diagnostic reports, generated from expert rule bases residing on the machinery condition

monitoring workstation. Operators will consult with the team maintenance expert to determine a

course of action to correct unsatisfactory conditions. Corrective maintenance actions will bereleased into maintenance management modules residing on the plant information network. Work

orders will be organized and planned by CMMS (Computerized Maintenance Management

Systems) to optimize the timing and allocation of resources, so as to maximize plant output and

minimize maintenance expenditures.

While the vision above describes a single scenario, it is important to note that there is no one

"cookie cutter" re-engineering solution that will fit all businesses. To implement business re-

engineering one needs to understand some of its basic principles, as the concept is often confused

with a host of other business practices such as corporate downsizing.

The basic premise of "business re-engineering" starts with taking a certain process that an

organization engages in and calling into question how it is done and why it is done. It is very



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different from the continuous improvement model that defines a current process along with

performance criteria, then makes subsequent improvements to enhance performance. Figure 1

illustrates the Continuous Improvement Model.

Figure 1 Continuous Improvement Model

The continuous improvement model has been proven to bring about gradual improvements. In the

current global economy, however, corporations need to be achieving breakthrough solutions that

bring significant competitive advantage. Achieving breakthrough solutions is the objective of

business re-engineering. The continuous improvement process may be applied to a re-engineered

business solution once it is put in place, however, it should not be a part of the re-engineering

process.

Figure 2 Business Re-engineering Model

Business re-engineering starts the process redesign with a clean slate. It assumes the current

process is broken and needs to be reinvented. To truly reinvent the business process, assumptions

that previous systems were built on are discarded. A discontinuous "out of the box" mode of

thinking needs to be engaged. According to re-engineering pioneer Dr. Hammer, "disassociating

the business re-engineering process from the current process design is paramount". 2

The steps to a typical business re-engineering process are as follows:

1)Define the process that needs to be reinvented.The process that needs re-engineering

may consist of multiple activities that occur in some sort of sequence to produce a desired

product or output for a customer. In many cases the customer of the maintenance process is

not the customer of the company. It is critical in this step not to define the process in terms

of the structure of the organization, "define a re-engineering effort in terms of an

organizational unit, and the effort is doomed" 3Many maintenance programs are carried out

by a dedicated maintenance department - for some industry types this may prove optimum -

for other industry types it would make more sense to have the maintenance activities carried

out by existing personnel in various departments. For example, the activity of datacollection may be better served by existing machine &process operators (as advocated in

Total Productive Maintenance) as opposed to a centralized maintenance team, depending

upon industry type.



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2)Establish a re-engineering team.This is the group that will define the new process and

implement it into existence. This team should include members from most departments. For

reinventing the maintenance process, the team make up should include members from the

operations, maintenance, engineering, manufacturing, procurement and finance

departments. The team needs to have some "insider" members that currently implement the

existing maintenance process. The team should not exceed 10 members, for most industry

types 5 to 7 is a good size.

3)Appoint a Process Owner. The process owner typically should be a senior level manager

with line responsibility. For maintenance, good process owner candidates may be a Plant

Manager, VP of Operations, VP of Manufacturing, or Manager of Maintenance. This needs

to be an individual with credibility and clout within the organization. The process owner is

usually someone who manages at least one of the activities of the existing process.

4)Assess all existing technologies that can be used to implement the maintenance process.This search and assessment could include radically different methods of collecting and

processing data. Expert Automated Diagnostic Software utilizing statistical based alarming

envelopes for high accuracy, new high speed data collectors that also function as laser

alignment tools, and independent self powered monitoring modules such as CSI's new

Status system are just a few ways to reduce the labor needed to implement the equipment

condition monitoring aspect of maintenance. New motor monitoring technologies that can

be implemented through new generation data collectors such as the CSI model 2120 can

close the gap on motor induced equipment failures. Also, methods of integrating equipment

condition monitoring workstations to CMMS &enterprise-wide information systems, suchas ODBC connections (a feature of CSI's MasterTrend software) need to be examined.

5)Brainstorm new designs for the process.To effectively carry out the brainstorming

process all team members need to understand the following:

a) There are no rules that must be adhered to for making the new process design.

b) Forget how it was done in the past.

c) Encourage out of the box thinking.

d) All suggestions need to be documented and evaluated - what may sound like a

silly idea may lead to another thought that produces a breakthrough solution.e)Pretend there are no departmental boundaries.

6)Perform financial benefit analysis for each of the final solutions & select the new

process. Here is a good reason to get a member from your finance department on your team.

Be sure to leave no stone unturned in this step. Savings attributed to increased plant asset

availability, increased product quality, increased plant asset life spans, increased plant

safety, decreased spare parts inventory and decreased insurance premiums for plant loss

prevention are some of the results of properly implemented maintenance. Construction

projects to increase manufacturing capacity may be avoided or deferred in some cases.

7) Trial test the new process.



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8)Plan the transition and implement the solution.

9)Define performance measurement parameters and measure the results.Dave Petersen's

paper entitled "The Business of Plant Maintenance" (reprints are available through CSI)

offers an excellent set of maintenance performance metrics. A few of these are shown

below. 4

Percent Utilized Capacity = (Required Capacity Time/ Total Available Capacity

Time) x 100

Actual Plant Asset Availability = (Actual Uptime/ Required Capacity Time) x 100

Maintenance Contribution to Cost Per Unit of Production measures the cost of

maintenance per each product unit produced = Total Maintenance Cost per Month/

Finished Yield Per Month (unit count)

Maintenance Margin measures the margin cost contribution of maintenance relative

to sales = Total Maintenance Cost per month($)/ Company Sales ($)

Maintenance Off Yield Quality measures the percentage of defective product

produced due to inadequate maintenance = (Out of Spec Units resulting from

maintenance/ Total Out of Spec Units Produced) x 100

Managing the cultural aspects of the re-engineered organization will present the greatest challenge.

Process-complete organizations will tend to gravitate back to their previous functions unless a

collaborative team culture is built. Job descriptions will need to be broadened and reward systems

redesigned to encourage team work and a sense of collective responsibility. Many managers who

have already implemented process-complete teams have assumed that simply restructuring the

organizational chart from functional units to process oriented teams will innately create a sense of

shared responsibility among team members.

To cultivate a collaborative culture design jobs so that responsibilities overlap.Minimize thenumber of job titles designed into the process-complete team, and create broad job descriptions

that overlap each other. Work environment researcher Ann Majchrzak has noted "Designing jobs

so that employees can at least partially perform most of the functions assigned to a department

helps create a shared sense of responsibility because people understand one another's work and

thus share a common language and similar constraints and objectives." Create a common reward

system.Tying bonuses to the profitability of team efforts avoids individuals from taking actions to

maximize individual results at the expense of the team's overall output. Dangers of doing otherwise

might be machinery in OK condition being run beyond design limits and machinery in not OK

condition being operated to destruction, so as to maximize product output at the expense of overallprofits and plant safety.Redesign work procedures.Formal and informal work procedures need to

encourage employees to communicate ideas for continuous improvements with colleagues from

other departments. 5



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Re-engineering maintenance to empower your corporation to compete in the 21st century is

imperative. Many of the technologies and organizational structures discussed here are currently in

place. Maintenance will evolve to fit process-complete organizations that are the result of business

re-engineering. Support & sponsorship from all levels of the organization are necessary to make re-

engineered maintenance work. Don't settle for minor improvements, reinvent plant maintenance for

breakthrough results. Be careful to select a re-engineering team that has the breadth and depth of

knowledge needed for process redesign. Make sure the re-engineered maintenance solution isaligned with the vision, values, and objectives of the corporate strategic plan. Without proper

alignment with the corporate strategic plan, the re-engineered maintenance solution will lose the

resources and support necessary for sustained success. Most importantly, managers leading the re-

engineering effort need to be sensitive to the fears of team members by encouraging honest, open,

and frequent communication. 6

1 Drucker, Peter F., The Effective Executive, Harper & Row, 1966

2,3 Hammer, Michael and Champy, James, Reengineering The Corporation, Harper Business, 1993

4 Peterson, David, The Business of Plant Maintenance, Computational Systems Inc, 1995

5 Majchrzak, Ann and Qianwei, Wang, Breaking The Functional Mindset, Harvard Business

Review, September 1996

6 Deming, W. Edwards and Walton, Mary, The Deming Management Method, The Putnum

Publishing Group, 1986

All contents copyright 1998 - 2006, Computational Systems, Inc.

All Rights Reserved.

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re-engineering maintenance for the organization of the future

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