Maintenance KPI Short Assignment

8/10/2019 Maintenance KPI Short Assignment

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Maintenance Engineering & Asset Management

Module M03

MAINTENANCE STRATEGY

SHORT/IN UNIT ASSESSMENT

Name: Hernán Quiroz

Company: Ternium Siderar



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I. Key Performance Indicators

I. Key PerformanceIndicators..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1

A. THE MAYOR CHALLENGES FOR MAINTENANCE IN STEEL I NDUSTRY .......................................................... 1

B. KPI´S USED IN TERNIUM SIDERAR STEEL FACTORY ................................................................................... 21. Effectiveness Measures .................................................................................................................. 2

2. Efficiency Measures ....................................................................................................................... 2

3. Safety Measures ............................................................................................................................. 2 4. Consideration................................................................................................................................. 2

C. CONCLUSIONS...........................................................................................................................................3D. APPENDIX 1: TERNIUM SIDERAR MAINTENANCE KPI´S............................................................................ 4

1. Direct Maintenance Cost ............................................................................................................... 4

2. Diary Plant Downtime ................................................................................................................... 4 3. Pareto Downtime (6 month) ........................................................................................................... 5

4. Efficacy-Nª Job Completed/Month ................................................................................................. 5

5. Workshop Backlog ......................................................................................................................... 6 6. Turnover of spare parts .................................................................................................................. 6

7. Frequency Index (FI), Gravity Index (GI)...................................................................................... 7

8. FI Benchmark................................................................................................................................. 7 E. APPENDIX 2 ..............................................................................................................................................8

1. Figure 4.4 – Efficiency & Effectiveness ......................................................................................... 8

2. Figure 1.5: Total Cost of Maintenance .......................................................................................... 8 F. R EFERENCES .............................................................................................................................................9

A. The Mayor Challenges for Maintenance in Steel Industry

Nowadays, the COST is the key driver for Maintenance in the Steel

Industry.

To begin with the recent history of the Steel Industry, before the 90th

decade, the Steel was considered as a nation strategic asset for military

matters. After 1990, the privatisation process took place along the world.

For the actual century more than 90% of Steel factories are controlled byprivate companies. This phenomenon produced an atomized steel market.

According to the Word Steel Association, the mayor producer has less than

10% of the market sharei. Because of the atomized market, the steel

Industry is a very competitive business in which there aren’t big players

that can control the price. In this context the most efficient companies will

buy the less efficient. It is a natural market process.

What is more, “The global steel industry has not escaped the current

economic downturn and this will be reflected in the figures you see for the

last quarter of 2008ii. The industry has responded rapidly with production

cuts, to ensure supply matches demand. 2009 will be a difficult year in

terms of profitability. There will be restructuring in the industry and this

will be hard on those involved iii.”



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Production Evolution for 2008 – Word Crude Steel Statistics (106 Tons)

Source: Word Steel Association

As maintenance is one department into the company, not a company of

maintenanceiv, the mayor challenge for maintenance in the steel industry

is to maintain functions of equipments for a required time with maximum

safety and minimal environmental impact for the life cycle cost at the less

cost as possible.

B. KPI´s used in Ternium Siderar Steel FactoryIn order to check that the challenges are being met by the maintenance

strategy, Ternium Siderar has the following KPI´s (See appendix 1):

1. Effectiveness Measures

- Direct Maintenance Cost - Cost vs Budget (long term control)

- Diary Plant Downtime (short term control)

- Six Month Pareto Downtime (long term control)

2. Efficiency Measures

- Nº Job Completed / Month or day (long / short term control)

- Workshop Backlog (short term control)

- Turnover of spare parts (long term control)

3. Safety Measures

- Frequency Index (FI), Gravity Index (GI) (long term control)

- Frequency Index Benchmark (long term control)

4. Consideration

In Ternium Siderar we have a diary planning meeting between

maintenance and production in which we analyse the diary plant

downtime. Apart from this, in the workshop, the maintenance



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department reviews the Nº Job completed/day and the backlog. The

rest of KPI´s are being monthly analysed between maintenance and

production department.

Each KPI´s has standard, targets and it is automatically obtain from

the systems. (SAP, QNX).

Everybody into Ternium Siderar could access to maintenance KPI´s

(Free Public Access).

In this assignment, It has been presented the most representative

Ternium Siderar Maintenance KPI´s. These are only the 25% of the

total SITE.

C. ConclusionsIn my opinion Ternium Siderar has developed a very good KPI´s in the

Maintenance Site in order to keep indicators on target.

If I compare the Ternium Siderar KPI´s with the Efficiency &

Effectiveness diagram (see Appendix 2.1), we have developed very

well KPI´s to measure Effectiveness and we have opportunity to

improve in Efficiency.

According with the Industrial Steel context, I consider that the next

step for Ternium Siderar is to begin to measure the Hidden Cost in

direct form, for example the Cost/Downtime. We have automatically

registered every downtime. In addition to this, we have the

opportunity cost per unit process and the cost for the scrap that every

downtime produced. We have everything in our systems, but we only

display the visible part of the iceberg (see Appendix 2.2). Ternium

Siderar must show the part of the iceberg behind of the water line in

order to maintain the leadership in the steel industry.



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D. Appendix 1: Ternium Siderar Maintenance KPI´s

1. Direct Maintenance Cost

2. Diary Plant Downtime

LabourMaterials

Contracts

Services

Others

Month Year

Dif. Dif.

MAINTENANCE DIRECT COST

BUDGET BUDGETReal Real

LabourMaterials

Contracts

Services

Others

Month Year

Dif. Dif.

MAINTENANCE DIRECT COST

BUDGET BUDGETReal Real

Cool Mill

D O W N T I M E ( H o u r s – F r e q u e n c y )

T o t a l M o n t h

Frequency Last Month DowntimeTotal Last Month

Frequency Month SAPTotal Month IGO

Frequency Month IGOFrequencyDowntime Last Month

Maintenance Downtime

Cool Mill

D O W N T I M E ( H o u r s – F r e q u e n c y )

T o t a l M o n t h

Frequency Last Month DowntimeTotal Last Month

Frequency Month SAPTotal Month IGO

Frequency Month IGOFrequencyDowntime Last Month

Maintenance Downtime



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3. Pareto Downtime (6 month)

4. Efficacy-Nª Job Completed/Month

PARETO DOWNTIME (6 Months)

H o u r s

SAP Equipment Number

PARETO DOWNTIME (6 Months)

H o u r s

SAP Equipment Number



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5. Workshop Backlog

6. Turnover of spare parts

Workshop Backlog

W o r k O r d e r s

Months

Workshop Backlog

W o r k O r d e r s

Months



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7. Frequency Index (FI), Gravity Index (GI)

8. FI Benchmark



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E. Appendix 2

1. Figure 4.4 – Efficiency & Effectivenessv

2. Figure 1.5: Total Cost of Maintenancevi



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F. References

i Top Steel Producers 2008, Word Steel Association, link:

http://www.worldsteel.org/?action=storypages&id=330

ii Crude Steel Statistics 2008, Word Steel Association link:

http://www.worldsteel.org/?action=stats&type=steel&period=latest&month=13&year=2

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iii Ian Cristmas (2009), Director General’s column, Word Steel Newsletters 32, Word

Steel Association. Link: http://www.worldsteel.org/?action=storypages&id=332

iv Tom Lenahan (2009), Complexity of relationships between maintenance, operations,

and business function in a company, page 6, Residential Classes-MSc Maintenance

Engineering & Asset Management-Manchester University

v Paul Wheelhouse (2009), Section 4.1, Figure 4.4, M01 Maintenance Strategy, MSc

Maintenance Engineering & Asset Management-Manchester University

vi Paul Wheelhouse (2009), Section 1.1, Figure 1.5, M01 Maintenance Strategy, MSc

Maintenance Engineering & Asset Management-Manchester University

Maintenance KPI Short Assignment

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