SKF Reliability Systems - Library

An API In Benchmarking Assets
This example shows how craft productivity is not expected to reach the target of 50% tool time until daily
schedule compliance of 80% or better is being achieved and planned work is making up over 90% of work
delivered. Work order labour reporting discipline of 100% is a fundamental requirement expected very early
in the improvement project in order to manage any improvement program. The time sequencing or schedule
for each metrics improvement is shown for this example together with information on how often the data for
each metric is collected, where the data comes from and the calculation method used to calculate each metric.
A similar approach is used for the entire suite of metrics being used for managing the Asset Performance
Improvement program.
A clear understanding of the leading/lagging relationships and logical linkages between each metric is key
to the development of a credible improvement plan with targets. Without this frustration at the slow rate of
improvement of a lag metric such as cost may undermine the success of a change initiative when the leading
indicators may well be demonstrating encouraging progress in changing a work processes performance.
CASE STUDY
The API approach presented was applied recently to a large industrial facility. The facility has participated for
many years in a well-known international benchmarking study where facilities all over the world provide data
to the benchmarking organisation and receive a report containing results metrics that benchmark the facilities
performance in a number of key areas including cost, process efficiency and equipment reliability. The facility
benchmarked in the fourth quartile of its relevant peer facilities and undertook to introduce a process of change
to improve its competitive position significantly. The results metric targeted as the top priority for improvement
was maintenance cost per unit output.
The use of the API suite of metrics facilitated the diagnostic insight to identify a range of issues with work processes
that were far from best practise in many areas. The results metrics from the international benchmarking study
did not provide the diagnostic information for use in a change program. They merely highlighted the results gap
between the facility and their cohort. The API results presented in Figure 1 show that overall the facility was a
third quartile performer in asset productivity with a score of 38%.
The results highlight three key areas of work process performance that require significant improvement
• Work process control (planning & scheduling of maintenance) – fourth quartile performer
• MRO materials management – fourth quartile performer
• Contractor management – fourth quartile performer
These results provided the management of the facility with the tactical information on where to first target the
change initiative. The quantification enabled management to understand the magnitude of the deviation from
best practice maintenance and the size of the opportunity to improve.
A benefits case for improvement developed based on the opportunities available to close the gaps to best
practice is presented below.
The savings available
confirmed that the facility
had the potential for
improving its maintenance
performance from fourth
quartile to top quartile of its
peer group.
In this case study it was
recommended that for
pursuing step-change
improvements in plant
maintenance practices the
most effective approach is
to establish focus teams
that will initially be focused
the following areas
52 Vol 23 No 3 AMMJ
As-Is To-Be Baseline Target Saving
Labour Productivity Improvement
Owner Maintenance 20% 40% $ 6,952,667 $ 3,476,334 $ 3,476,334
Contractor Maintenance 20% 40% $ 16,000,000 $ 8,000,000 $ 8,000,000
Contractor Overtime
Reliability Improvement
15% 5% $ 1,400,000 $ 460,000.00 $ 940,000
$ 12,416,334
Material $ reduction 100% 95% $ 6,459,083 $ 6,136,129 $ 322,954
Labour $ reduction
MRO Processes
100% 80% $ 1,500,000 $ 1,200,000 $ 300,000
$ 622,954
Material waste reduction 100% 95% $ 6,459,083 $ 6,136,129 $ 322,954
Material Purchased cost reduction 100% 95% $ 8,000,000 $ 7,600,000 $ 400,000
Planned contractors reduction (reduced margin) 14% 10% $ 2,160,000 $ 1,600,000 $ 560,000
MRO inventory reduction
Contract Management Improvement
100% 88% $ 12,500,000 $ 11,000,000 $ 1,500,000
$ 2,782,954
Contractor Materials & Other Services 100% 95% $ 16,197,111 $ 15,387,255 $ 809,856
Subcontracts Direct to Owner $ 25,000
Civil Contract Cost & Scope reduction 100% 92% $ 2,400,000 $ 2,200,000 $ 200,000
Crane Hire Rationalisation $ 10,000
Scaffold Hire Ratiopnalisation 100% 89% $ 1,300,000 $ 1,150,000 $ 150,000
$ 1,194,856
TOTAL SAVINGS $
17,017,098
• Work process control (labour productivity) • Equipment reliability (failure elimination)
• Contractor management • MRO • Shutdown management
Each focus team must validate the benefits case and the implementation costs. They must develop a team
Charter for management approval stating how the focus team will go about achieving the changes required.
Finally, the team will deliver the activities outlined in the Charter with a full time commitment commonly required.
The goal being a sustainable change in the work processes used that will become embedded and sustainable
into the future.