CHAPTER_1_MAINTENANCE_ORGANIZATION_NEW (1).ppt

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JJ616 Maintenance ManagementChapter 1

Maintenance Organization

Miskiah Binti WakijanDepartment of Mechanical Engineering

Politeknik Sultan haji Ahmad ShahKuantan, Pahang

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Course Learning Outcomes Students should be able to point out

the concepts of maintenance organization and strategies that increases productivity by increase availability and capacity at reduced cost.

Topic outline :–Determine role of maintenance

management.–Understand types of maintenance cost.

Introduction Maintenance OrganizationIt concerns in achieving an optimum balance between plant availability and maintenance resource utilization. A maintenance organization can be considered as being made up three necessary and interdependent components.

– Resources: men, spares and tools. – Administration: a hierarchy of authority and

responsibility for deciding what, when and how work should be carried out.

– Work Planning and Control System: a mechanism for planning and scheduling the work and feeding back the information that is needed for correctly directing the maintenance effort towards defined objective.

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DefinitionMaintenance The term ‘maintenance’ means to keep the equipment in

operational condition or repair it to its operational mode. Work undertaken in order to keep or restore every

facility, i.e every part of a site, building and contents to an acceptable standard. (British Standard BS3811)

All actions which have an objective to retain an item in, or restore it to, a state in which it can perform the required function. The actions include the combination of all technical and corresponding administrative, managerial, and supervision actions. (K.Venkataraman, Maintenance engineering and Management)

Definition (cont.)Maintenance ManagementMaintenance Management is an orderly and systematic approach to planning, organizing, monitoring and evaluating maintenance activities and their costs.

– A good maintenance management system coupled with knowledgeable and capable maintenance staff can prevent health and safety problems and environmental damage; yield longer asset life with fewer breakdowns; and result in lower operating costs and a higher quality of life.

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IMPACT OF POOR MAINTENANCEMaintenance operations include all efforts to keep production facilities and equipment in an acceptable operating condition. Failure or ml-functioning of machines and equipment in manufacturing and service industries have a direct impact on the following:1. Production capacity: Machines idled by breakdowns cannot produce, thus the capacity of the system is reduced.2. Customer satisfaction:When production equipment break own, products often can not be produced according to the master production schedules, due to work stoppages. This will lead to delayed deliveries of products to the customers.

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IMPACT OF POOR MAINTENANCE (cont.)

3. Product and service quality: Poorly maintained equipment produce low quality products.

Equipment that have not been properly maintained have frequent break downs and cannot provide adequate service to customers. For example, air craft fleets of the airline, railway and road transport services not maintained well can result in poor service to customers.

4. Employee or customer safety: Worn-out equipment is likely to fail at any moment and

these failures can cause injuries to the workers, working on those equipment. Products such as two wheelers and automobiles, if not serviced periodically, can break down suddenly and cause injuries to the stress.

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IMPACT OF POOR MAINTENANCE (cont.) 5. Production costs: Labor costs per unit rise because of idle labor

due to machine breakdowns. When machine malfunctions result in scrap, unit labor and material costs increase. Besides, cost of maintenance which includes such costs as costs of providing repair facilities, repair crews, preventive maintenance inspections, spare parts and stand by machines will increase as machines break down frequently.

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Objective of Maintenance Management I. Minimizing the loss of productive time because of

equipment failure (minimizing idle time of equipment due to break down).II. Minimizing the repair time and repair cost.

III. Minimizing the loss due to production stoppages. IV. Efficient use of maintenance personnel and

equipment. V. Prolonging the life of capital assets by minimizing

the rate of wear and tear. VI. To keep all productive assets in good working

conditions.

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Objective of Maintenance Management VII. To maximize efficiency and economy in

production through optimum use of facilities. VIII. To minimize accidents through regular

inspection and repair of safety devices. IX. To minimize the total maintenance cost

which includes the cost of repair, cost of preventive maintenance and inventory carrying costs, due to spare parts inventory.

X. To improve the quality of products and to improve productivity.

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Benefit of Maintenance Management Manages Control Reduces Overtime Improves Quality Ensures Better Support & Service Allows Easy Error Spotting Reduces Resource Waste Improves Safety

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Benefit (cont.) Manages Control

– One of the most significant advantages of maintenance management is the management of control. Maintenance can be planned and serves a pre-active instead of a reactive (be put to action after an event has come to pass). Management control ensures timely schedules, well-defined job descriptions and the availability of standby equipment in times of disaster.

Reduces Overtime– Maintenance management reduces and even eliminates

overtime by reducing the chance of surprises. It ensures all loose ends are tied and enough contingency planning is done to manage operations in case of undesirable circumstances and situations. Management defines tasks and allocates resources effectively, ensuring that all objectives are met in a timely and orderly fashion.

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Benefit (cont.) Improves Quality

– Effective maintenance management improves output and ensures quality. It gives a small amount of leeway to tolerances but within well established control limits. Employee productivity improves, improving the overall productivity of individual and collective processes. Investing in maintenance management pays off for a company by increasing its revenues.

Ensures Better Support & Service– A well established and documented maintenance management

system provides ample support to production managers, equipment operators, and other personnel and users. An effective maintenance management program needs to be made public (and/or published) for the benefit of everyone involved. End users can benefit from a better level of support provided by maintenance management. It allows for reliable, on time, and quality service.

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Benefit (cont.) Allows Easy Error Spotting

– Since maintenance management details the goals and objectives of departments and employees, it make it easier for managers to spot errors and deviations from established and desired outcomes.

Reduces Resource Waste– Maintenance management ensures that labor, materials and

equipment are well utilized, which reduces waste of allocated resources. Utility costs are lowered and the production of hazardous waste material is decreased with managed effort.

Improves Safety– Maintenance management promotes safety and health. It ensures

everyone involved knows safety procedures in case of a minor or major disaster. A well-implemented management program examines the risk of potential hazards and finds ways of addressing them before they pose a risk. Regular house-keeping programs promote fire prevention and safety measures.

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Types of Maintenance Organization The selection of a particular type of

system will largely depend upon the main structure of an industry. Maintenance organization can be of the following types:

i. Decentralized ii. Centralized iii. Partially decentralized

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Decentralized In large size plants located at different places, inter unit

communication is difficult. In such cases the decentralized type of organization is best suited, which means that the maintenance organization works under the direct control of a chief engineer in-charge of production. Under this type of organization, better coordination between production and maintenance groups is possible because of a common head of organization. The advantages of such type of organization are:

Speedy decisions due to better line of communication under single control.

Maintenance and production people understand each other’s problems better because of their common goals.

Interchangeability of workforce, even at the managerial level, is also possible.

Better training at the workers’ level can be arranged.

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Centralized In a small factory where communication between the

departments is freer, the centralized type of maintenance organization is preferred, which is placed under a chief maintenance engineer/manager. The total responsibility of the maintenance function for the entire factory lies with the chief maintenance engineer. Under this type of organization, the responsibilities and accountability of work must be properly specified for production as well as maintenance personnel to successfully meet the project goals. If this is not taken care of, one department may blame other for any shortfall.

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Partially decentralized The partially centralized organization, which is the

modified form of a centralized type of organization, is most suitable for projects that have units far away locations. Under this type of maintenance organization, the maintenance personnel, attached to the production unit, carry out work at unit level and look after day to day maintenance. All centralized work pertaining to maintenance planning and documentation is done at the level of central maintenance workshop.The above three types of maintenance organizations, however, are not strictly exclusive and some adjustments can be made to suit the working environment and the need.

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Responsibilities in Maintenance Management OrganizationThe main functions of a maintenance department are as follows:(i) Planning maintenance work on a long-term basis.(ii) Issuing maintenance work orders.(iii) Storing maintenance materials, e.g., tools, spare parts, lubricants, etc.(iv) Deciding inspection methods and routine.(v) Developing and issuing standard instructions.(vi) Measuring efficiency of maintenance.(vii) Controlling maintenance personnel.(viii) Maintaining maintenance records.The main responsibilities of maintenance staff are given below :(a) timely inspection and servicing of equipment;(b) instructing proper use of equipment by workers;(c) raising timely indent for replacement and! or spare parts;(d) emergency repairing whenever necessary.

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Roles in Maintenance Management Organization

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Employee Involvement

Partnering with maintenance personnel

Skill trainingReward systemEmployee empowerment

Maintenance and Reliability Procedures

Clean and lubricateMonitor and adjustMake minor repairKeep computerized records

Results

Reduced inventoryImproved qualityImproved capacityReputation for qualityContinuous improvementReduced variability

Sources of Maintenance Cost Maintenance cost is in many instances influenced by the effectiveness

and efficiency in which maintenance is performed. Maintenance cost and related indicators are therefore important measures of maintenance performance. Maintenance effectiveness is demonstrated by proactively identifying the right work and doing it at the right time. This in turn eliminates chances of secondary damage, safety and environmental consequences and thus minimizes the maintenance cost. Maintenance efficiency in planning and scheduling resources and manpower can potentially minimize the maintenance cost. Some of the important cost performance indicators are summarized as shown in Fig. 4. The cost and equipment performance indicators are instrumental in doing performance analysis of the maintenance function and identifying the performance gaps that would trigger management actions. They provide a good basis of conducting a root cause analysis for establishing the reasons for performance gaps, which leads to learning and improvement of the main

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Types of Maintenance CostMaintenance cost :Preventive maintenance costsBreakdown maintenance costsCost to replace or repairLosses of outputDelayed shipmentScrap and reworkThe traditional view attempted to balance preventive and breakdown maintenance costs Typically this approach failed to consider the true total cost of breakdowns

Inventory Employee morale Schedule unreliability

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Maintenance Cost (cont.)

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Total costs

Breakdown maintenance costs

Cos

ts

Maintenance commitment

Traditional View

Preventive maintenance costs

Optimal point (lowestcost maintenance policy)

Maintenance Cost (cont.)

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Cos

ts

Maintenance commitment

Full Cost View

Optimal point (lowestcost maintenance policy)

Total costs

Full cost of breakdowns

Preventive maintenance costs

Cost Analysis Costs are the values of all the resources (e.g., labor,

buildings, equipment, and supplies), tangible or intangible, used to produce a good or a service.

Cost analysis is an economic evaluation technique that involves the systematic collection, categorization, and analysis of program or intervention costs, and cost of illness.

Cost analysis is currently a somewhat controversial set of methods in program evaluation.

Cost analysis can be used as a stand-alone evaluation method when – only one program is being assessed,– information about program effectiveness is not available, or– the interventions being assessed and compared are

equally effective.

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Cost Analysis MethodsCost analysis can also be used together with effectiveness assessment techniques within the framework of three types of economic evaluation: cost-effectiveness analysis, cost-benefit analysis, orcost-utility analysis / cost allocation.

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Cost Analysis Methods (cont.) Cost-effectiveness analysis assumes that a certain

benefit or outcome is desired, and that there are several alternative ways to achieve it. Cost-effectiveness analysis is comparative,

Cost-benefit analysis usually considers only one program at a time. Cost-benefit analysis always compares the monetary costs and benefits of a program. Another tool for comparison in cost-benefit analysis is the net rate of return, which is basically total costs minus the total value of benefits

Cost allocation basically means setting up budgeting and accounting systems in a way that allows program managers to determine a unit cost or cost per unit of service.

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Cost and Budget Control System A budgetary control system is a method of monitoring and

controlling income, and expenditure and for managing the demands for cash, minimizing borrowings . It can be applied in a business context or by an individual in relation to his or her personal finances.

In a business environment it is most valuable as a tool to control the flow of cash because a good system would monitor cash inflow and flag-up any projected shortfalls so that corrective action could be taken, for example if some customers were habitually not paying promptly or there was a sudden and unusual need for spending. Additionally, such a system would also ensure that cash was always available for essential business purposes like buying raw materials.

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Developing Cost and Budgets Control System Common Steps (Kettner, et al., 1990):1. Develop a line-item budget that shows all expenditures. This is the minimal level of budgeting and accounting that is required by many funders. Some funders require a specific format, so that the categories used are standard across the programs that they fund.2. Determine the agency's program structure. A distinct program is a set of activities or services designed to accomplish a specific set of agency goals and objectives. Many agencies have several different programs.

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Developing (cont.) 3. Identify all direct costs and indirect costs. Direct costs are

those that benefit only one program (for example, salaries of staff who work only for one program, or supplies and equipment used only for that program). Indirect costs or "overhead" costs are those that benefit or are shared by more than one program (for example, several programs in an agency might share the same building, and be served by the same bookkeeping and secretarial staff, utilities, or janitorial services).

4. Assign direct costs to the appropriate program or project. This is usually fairly straightforward. If one county agent has full-time responsibility for operating project, for example, then 100% of salary and benefits would be assigned as an expense to that project in the budget. If a staff member spends 50% of time on the project and 50% on another assignment, then half of that person's salary and benefits would be assigned to the project as a direct cost.

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Developing (cont.) 5. Allocate indirect costs to programs. Deciding

how to divide up the indirect (shared) cost pool among several programs in the agency can be much more complicated and technical. The actual practice of allocating or dividing up the indirect costs is usually best left to an accountant. Cost allocation of indirect costs can be a time-consuming step, it is considered well worth doing because of the increased information it provides about the real costs of providing services.

6. Determine total program costs. The total cost of a particular program is the sum of the direct costs, and the portion of indirect costs that is allocated to that program.

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Analysis Effective or Non –Effective Maintenance

Maintenance effectiveness is demonstrated by proactively identifying the right work and doing it at the right time. This in turn eliminates chances of secondary damage, safety and environmental consequences and thus minimizes the maintenance cost.

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Analysis Maintenance Risk and Opportunity Analysis of a Maintenance

Task

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Analysis Maintenance (cont.) Economic Analysis of a Maintenance Task

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Maintenance Performance Analysis

Performance analysis scope :• Organization effectiveness• Organization efficiency• Organization aspects• Management aspects• Industry benchmarking

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Maintenance Assessment

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Assessment Scope

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Maintenance Audit The maintenance audit is a review of the maintenance

function from within the overall organization taking into account all the various functions within the organization.

The purpose of a Maintenance Audit is to derive a maintenance strategy, which aims to deliver improvements to the general maintenance function, provide clearer communications and to develop a set of Best Practices for the maintenance function.

Maintenance Audits can prove vital to your organization. It is very important to measure the performance of the maintenance function whether you have an existing Maintenance strategy or not.

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Maintenance Audit (cont.) Maintenance Audits can prove vital to your organization. It

is very important to measure the performance of the maintenance function whether you have an existing Maintenance strategy or not.

A dysfunctional maintenance function can adversely affect the following:– Performance targets not being met due to breakdowns– Low morale of engineering personnel– Ratio of breakdown to planned maintenance very high– Over- purchasing and double-purchasing of

maintenance spares– Purchasing of incorrect maintenance spares– Unnecessary Planned Maintenance– Machinery over-maintained

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Maintenance Audit (cont.)Maintenance audits can serve two purposes:To measure performance of your maintenance function and ascertain the need for a coherent maintenance strategy.To measure performance of your maintenance function post strategy implementation.

So what does a maintenance audit involve?Interviews with key personnel.Analysis of interview results.Presentation of findings and recommendations to key management.Such an audit enables the preparation of policy and strategy to ensure that effective effort is directed as part of a successful maintenance plan.

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Maintenance Plan Audit The audit plan is essentially a work plan that documents what,

when, and how the audit will be done. It should incorporate any changes based on pre audit contacts before being finalized.

The client and the auditee should receive the final audit plan prior to the audit to ensure that all interested groups understand and agree to what the auditors plan to do before the audit begins.

The audit file for this project should be created before the audit. Prior to the audit, this file should contain the audit plan, a questionnaire for the interviews, a checklist for recording key items, the letter to the auditee, the audit agenda, the pre audit information supplied by the auditee, the auditors’ travel arrangements, and any other information specific to the audit.

After the audit, notes, complete checklists, the closeout memo, and all reports should be added to this file.

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Maintenance Plan Audit (cont.) Other preparation : May include preparing any special forms. Such samples must be

shipped in accordance with applicable regulations. Also, the equipment to be used may require calibration.

A checklist should be prepared by the lead auditor based on review of the QA Project Plan and other project documentation. This checklist should be reviewed by the audit team and by other appropriate individuals, such as the QA Manager, before the audit begins.

All members of the audit team should have a clear understanding of their individual responsibilities before the audit.

They should be aware that health and safety may be key factors in some audits and that appropriate preparations to safeguard the auditors’ health and safety should be made before visiting the site.

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Maintenance Technical Audit A technical audit or assessment is a systematic and

objective examination of a program or project to determine whether environmental data collection activities and related results comply with the project’s QA Project Plan and other planning documents, are implemented effectively, and are suitable to achieve its data quality goals.

Technical audits and assessments may also be used as an investigative tool where problems may be suspected.

A technical audit or assessment several types of technical audits and related assessments can be used to evaluate the effectiveness of project implementation, as follows:

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Maintenance Technical Audit (cont.) Readiness reviews are conducted before specific

technical activities (e.g., sample collection, field work, and laboratory analysis) are initiated to assess whether procedures, personnel, equipment, and facilities are ready for environmental data to be collected according to the QA Project Plan.

Technical systems audits (TSAs) qualitatively document the degree to which the procedures and processes specified in the approved QA Project Plan are being implemented.

Surveillance is used to continuously or periodically assess the real-time implementation of an activity or activities to determine conformance to established

procedures and protocols.

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Maintenance Technical Audit (cont.) Performance evaluations (PEs) quantitatively test the

ability of a measurement system to obtain acceptable results.

Audits of data quality (ADQs) are conducted on verified data to document the capability

of a project’s data management system (hardcopy and/or electronic) to collect, analyze, interpret, and report data as specified in the QA Project Plan. Data quality assessments (DQAs) are scientific and

statistical evaluations of validated data to determine if the data are of the right type, quality, and quantity to support their intended use.

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Key Performance Indicators (KPI) What is a KPI?What is a KPI? KPIs track performance against established key success factors.• KPIs are directly linked to the overall goals of the • company. Business Objectives are defined at corporate, regional and site level. These goals determine critical activities (Key Success Factors that must be done well for a particular operation to succeed.• KPIs are utilized to track or measure actual performance against

key success factors. – Key Success Factors (KSFs) only change if there is a

fundamental shift in business objectives.– Key Performance Indicators (KPIs) change as objectives are

met, or management focus shifts.

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KPI (cont.) ObjectivesObjectives• Improve personnel’s understanding of KPIs and

what they indicate.

• Improve personnel’s awareness of maintenance performance.

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KPI (cont.) Every person on-site has an influence on certain

KPIs and business objectives.

LTIFR (Lost Time Injury Frequency Rate) - a measure of overall safety performance, and indicates the frequency of Lost Time Injuries (LTIs).

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Senior Foremen• LTIFR• Incidents• Property damage ($)• Cost / unit• Cost / hour• Cost of quality• Maintenance effectiveness• Maintenance efficiency• Mean time between failure• Mean time to repair

Crew• LTIFR• Incidents• Property damage ($)• Mean time to repair

THANK YOU

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