A Successful Journey to Reliability Excellence - Part 1
By Keith Mobley, CMRP, of Life Cycle Engineering
As many of you know, I have written a monthly column for Plant Services for the past twenty years. During that time, we have explored every facet, nook and cranny of preventive and predictive maintenance, maintenance management and total plant continuous improvement. After twenty years it was time for a change. Terry O’Hanlon has given me the opportunity to share my forty years experience with you through a regular series of articles. Since one point of interest in my case passion – that we share is reliability, I thought it appropriate to use this initial three-part series of articles to provide a guide for a journey to an optimal state of performance, a state called Reliability Excellence.
Most of you who work with or know me think that my passion is engineering, and I do enjoy testing my ability as an engineer to solve problems, redesign malfunctioning process systems and the myriad of other “engineering” challenges. However, my real passion is Reliability Excellence, e.g. helping corporations’ individual plants and their entire workforce achieve their full potential. Reliability Excellence is not reaching some arbitrary benchmark or a threshold performance level. Rather it is a state of mind that permeates the entire organization, drives it to achieve its full potential and still strive to improve. It is the performance level that all corporations strive for, but few achieve and even fewer sustain. This series of articles will share a road map that could start you on the road to sustainable Reliability Excellence.
The best way to start a journey of this magnitude is to first understand our objective and that must include a clear understanding of what Reliability Excellence means. To simplify the process, let us start with the term reliability. Reliability can, and is, defined in multiple ways. The more popular definitions include:
- The probability that an item can perform its intended function for a specified interval under stated conditions
- An engineering discipline for applying scientific know-how to a component, assembly, plant, or process so it will perform its intended function, without failure, for the required time duration when installed and operated correctly in a specified environment
- The absence of failures
When one reads these definitions the normal tendency is to assume that reliability is limited to the physical assets that make up a plant or facility, and this is an important aspect of Reliability Excellence. However, there is another application of reliability that is as important, if not more so, than asset reliability and that is the business and work processes that support those assets. Applying reliability concepts to the way we do business, from strategic planning through day-to-day operations and maintenance of the plant and its assets is crucial and must receive as much consideration as the physical assets.
Achieving and sustaining optimum performance levels absolutely depend on capital assets that will consistently perform their design function for the planned campaign life of plant production systems; but what does that entail? There are many factors that directly or indirectly affect asset reliability, and when asked, most would place proper maintenance at or near the top of the list. While proper maintenance is an essential requirement, numerous studies indicate that maintenance deficiencies account for just 17% of all reliability-related plant problems. The fundamental requirements for reliable capital assets include:
- Proper Design: The assets must have reliability built in. One cannot add reliability after the fact. Statistics indicate that 95% of the Total Cost of Ownership is pre-determined before the asset or system is turned over to production.
- Proper Installation: Proper installation, including proper foundation, leveling and alignment, seems to be a lost art, but is an absolute necessity before reliability is possible.
- Effective Utilization: Most, if not all, physical assets are designed to perform a finite range of work. This range, called the operating envelope, includes limitations on the hours of continuous operation, number and frequency of starts-stops, range of incoming products and range of output products. Effective utilization insures that the right products and optimum batch or run sizes are allocated to the best-suited asset or production system. Effective utilization also minimize the number and frequency of changeovers and allocates sufficient time for effective preventive and periodic rebuild maintenance activities.
- Proper Operation: The old joke that one operator can destroy a machine faster than ten mechanics can repair it, has validity. Proper operation, especially setup, startup, ramp rates and shutdown, is essential for reliability.
- Controlled Modifications: A rigid engineering change management process once controlled a change in form, fit or function of plant systems. Uncontrolled modifications and changes account for almost 27% of reliability-related problems.
- Proper Materials: This requirement includes both production and maintenance materials. In both instances, asset reliability depends on an acceptable range of materials. When off-specification materials are provided, reliability suffers.
- Proper Maintenance: While its contribution is much smaller than most think, proper maintenance is essential.
Is it reasonable to assume that any of these fundamental requirements will be achieved without trained employees who universally and consistently follow reliable work processes? Think about it for one minute and then read the definition of reliability again. Reliability is defined as, “The probability that an item can perform its intended function for a specified interval under stated conditions.” Doesn’t this also apply to the way we design, purchase, operate and maintain the asset?
Business Process Reliability
Reliability Excellence must include the means to evaluate your current business processes and upgrade or replace them with reliable processes that will eliminate:
- Errors: Reliable business or work processes provide standardized work procedures that provide step-by-step guidance to the person or people executing the task or scope of work. While a procedure cannot totally eliminate human error, adherence to SWPs will greatly reduce the probability of errors.
- Waste: While waste is not a direct indicator of un-reliability, it can and often does result from reliability issues.
- Variation: Stability and repeatability of work processes is essential for effective, efficient planning, coordination, scheduling, execution and management of all work performed within the plant, as well as the corporation. Most quality and cost, as well as many reliability problems, can be directly tracked to excessive variation in one or more work processes.
- Misuse or Abuse: Standardized work processes ensure that each asset is consistently and constantly operated and maintained according to a predefined plan, called an Asset Management Plan (AMP) that is designed to optimize the asset’s useful life as well as its Total Cost of Ownership (TCO). Within the AMP are SWP for all facets of the asset’s use. These processes include:
- Business Planning: The strategic and tactical business planning process governs the methods and logic used to plan the future of the plant and corporation. This process must include specific methods and logic trees that determine best utilization of physical and human assets, as well as to assure maximum reliability and Total Cost of Ownership for the entire enterprise.
- Production Planning and Scheduling: This process governs how all revenue- generating work is allocated and scheduled through the plant. This is a critical plant function whose impact on physical asset reliability is too often overlooked.
- Production or Manufacturing: A series of SWPs are needed to cover all of the direct and indirect activities that are required to perform the production or manufacturing process. The more critical of these processes are for setup, adjustments, calibration and, of course, normal day-to-day operation.
- Maintenance: The AMP also includes processes that assure adequate time, and the best intervals are allocated for sustaining maintenance activities.
There is one other factor that must be incorporated into the definition of reliability – cost. The purely technical definitions and applications of reliability do not consider costs, even though it is part of the definition. When one says that the asset is capable of performing at stated condition, this condition must include the cost of operation, as well as the cost of goods produced. From a business standpoint, it does little good to have physical assets that produce the required number of quality parts when the cost is greater than the sales price or revenue that the parts will generate. Therefore in Reliability Excellence, Cost of Goods Sold (COGS) or Conversion Cost (CC) are integral parts of the reliability equation.
In conclusion, the definition of reliability is “the ability of physical assets and business/work processes to deliver its optimum level of performance, within the parameters defined in the company’s business plan.” Ideally, this means that physical assets are capable of operating at design or best demonstrated performance rates for 8,760 hours minus the appropriate downtime, typically 8% to 15%, for sustaining maintenance. Business and work processes do not require maintenance and therefore must be reliable continuously and forever.
The Journey Begins
Admittedly I am old school, and many might consider me antiquated, but the first step in any journey must start with a map and a clear understanding of the start and end point. It also helps to have some understanding of the journey’s length – you might want to pack a lunch for the journey to Reliability Excellence—it’s not going to be instant gratification, but then nothing worthwhile ever is.
The first step in the journey must be a thorough understanding of where you are: your plant’s strengths and weaknesses, and the changes that must be implemented to build on strengths and eliminate weaknesses. While this might sound simple, it is not. Few corporations or plants have historical data with sufficient accuracy or level of detail to effectively quantify its performance level. Even fewer can isolate and quantify specific strengths and limitations. Before you revolt, the key word was “quantify.” All can give you their opinion or subjective reasons for their failure to achieve desired performance levels. We will come back to this later, but first we should look at the scope of the assessment.
The initial assessment or evaluation must clearly identify and quantify the strengths and weaknesses of those portions of the corporation or plant that affect reliability and, through reliability, performance. With that said, how much of the corporation or plant should be evaluated? To answer that question, one must look at the historical data that quantifies the contribution of various plant functions to reliability. Based on these data, the evaluation or assessment should include:
- Management: The total contribution of the corporate/plan management to reliability is difficult to quantify, but at least 11% can be exclusively attributed to this function. The overall corporate or plant culture created by the management function is a primary contributor to the deficiencies listed in the following functional groups.
- Finance: Performance improvement starts with a clear understanding of where and on what you are spending the plant’s operating capital. The assessment must dive deeply into historical and current cost and cost-accounting records. This is not an easy analysis, but cannot be glossed over—due diligence is essential.
- Sales: The sales department is directly responsible for 15% of reliability problems and is truly the “tail that wags the dog.” When the sales function consistently loads the plant with standard products, with optimum lot size, delivery commitments and price, the plant can achieve and sustain reliability. If not, every plant function, beginning with production planning and scheduling, are forced to be reactive.
- Production: The composite contribution of the production function is 23% of reliability issues. This is a combination of deficiencies in the planning and scheduling function, production execution and work-in-process materials handling.
- Procurement: Procurement, or purchasing contributes 12% of the reliability issues that most plants face. These issues are predominately the result of parts and materials substitutions that directly reduce the useful life and reliability of critical plant assets.
- Engineering: The 22% of reliability issues that is allocated to engineering does not include initial or new capital equipment design. It is limited to undocumented modifications or changes to existing assets.
- Maintenance: As stated earlier, maintenance contributes 17% to reliability problems that result from a failure to provide a minimum level of sustaining maintenance.
- Human Resources: This function is responsible for the human resource that is essential to Reliability Excellence. In addition to hiring a qualified workforce, human resources is responsible for workforce training and, to a degree, morale.
- Labor Relations: Even in non-union plants, the assessment must develop a clear understanding of the work culture as defined by the labor agreement, established company policies and all other agreements that bind the workforce and corporate culture.
It is extremely difficult to develop an accurate, comprehensive understanding of your plant’s performance without outside help. Success depends on a completely unbiased assessment that is not skewed by preconceived opinions or the preconditioned view of the company and its world. This conditioning is a subconscious part of employment and, to a varying degree, affects the entire workforce, from the president to the newest hire in the plant. One phrase that is consistently employed at this point in the journey is “You just don’t understand we’re different; this is the best we can do.”
The data derived from the initial assessment must be converted into actionable tasks or actions that will build upon existing strengths and eliminate, or at least mitigate, deficiencies. As the name suggests, a gap analysis compares two or more set of data in an effort to identify similarities and differences. The normal practice is to use a “benchmark” standard as the point of comparison; but where do you find a viable standard? For those of you who have looked, there are hundreds, if not thousands, of benchmark data set and each is touted as the true baseline or benchmark that all others should measure against. The problem is that none of these benchmark databases agree. Selecting the best points for comparison is critical to a successful journey. If you choose the wrong benchmark, your resultant plans will most likely head down the wrong path and little benefit will be derived. My best advice is to seek professional help.
One of the strengths that my forty year quest for the perfect company has given me is the ability to see through the mass of conflicting data and opinions and accurately identify the inherent strengths and weaknesses of a corporation or company. I am not alone in possessing that strength, there is a small group of professionals who have dedicated their careers to this quest and they can help you make the right decisions.
An effective gap analysis should evaluate all aspects of corporate or plant performance and not be self-limiting by only looking at specific functions, e.g. maintenance or production. Unfortunately, selective analysis has been the greatest limitation of many attempts to improve performance. The corporation or plant is pre-inclined toward Lean Manufacturing, Total Productive Maintenance or some other popular, quick-fix program and skew their analysis to provide justification for pursuing this improvement methodology. Most, if not all, of these have merit and address limiting factors that affect most plants; but each of these methodologies is narrowly focused and fails to address all of the factors that limit your performance. Singularly, none of these methodologies will achieve a state of Reliability Excellence.
The journey to sustainable Reliability Excellence is directly proportional to the level of effort expended on the status assessment and gap analysis. The old saw “How do you eat an elephant” is true; the critical factor is determining the proper sequence of bites. Changing the status quo in your plant will not be easy and false steps in the beginning stages will guarantee failure. Spend the time and effort to do it right. Do not be afraid to ask for help; few companies have the in-house ability to complete this critical part of the journey, and this is too important to make mistakes just for the sake of ego. “You just don’t understand, we’re different.”
In our next article, we will guide you through the process of developing a viable roadmap, e.g. master plan, which will direct your journey to Reliability Excellence.
© Life Cycle Engineering, Inc.
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