Work Load Indicators This group includes current backlog, total backlog ratio of preventive mainten-ance to total maintenmainten-ance, ratio of daily maintenmainten-ance to total mainten
Trang 1PERFORMANCE MEASUREMENT AND MANAGEMENT
The measurement and subsequent management of organizational performance is necessary to determine whether goals and objectives are being met Numerous books have been written detailing performance management, benchmarking, competitive analysis, or a multitude of other names The purpose of this section
is to provide an introductory overview of performance measurement and man-agement The first section will focus on measurement, and the next section will focus on management practices
PURPOSE
The purpose of measuring performance is to help predict future action and performance based on historical data Measuring performance helps identify areas that need management attention On the other hand, measuring perform-ance also highlights successful areas and accomplishments Both are necessary to get a picture of how the organization is performing Knowing the direction or trend in which the organization is headed is the first step in setting or correcting performance
Developing raw data into useful information requires a skill set Measurements must be reviewed on a regular basis to provide insight into the organization Use
of measurements can vary from one organization to another The following pages provide an overview of using performance measurement
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Trang 2To properly position the use of performance measurement, some general philo-sophical guidelines need to be developed The following is intended to correctly position how performance measurement and management should be viewed
You can’t measure everything
Performance management is like a gauge to equipment; it tells operat-ing condition
Manage what you measure
Turn data into information, then into action
Indicators must tie into a ‘‘strategic business plan’’ and have purpose The best organizations have most, if not all, of the following essential practices in place: (1) performance measurement/management system developed; (2) Key Performance Indicators (KPIs) driven by business initiatives and linked to strategic direction; (3) focus on internal trending measured and continuous improvement managed
Downplay only external comparison External benchmarking data collected, analyzed, and ‘‘shared.’’ ‘‘Core’’ critical success factors iden-tified and measured/managed ‘‘At a glance’’ performance designed systems and procedures
For both equipment and manufacturing processes
Posted and visible ‘‘on the fly.’’ Accessible, user-friendly format, re-sponsive to requests
Regular performance information review and updates, at least quar-terly
Multiple recognition and reward systems designed and functioning Simple to ‘‘digest’’ performance information
Must be in chart or graph form
With explanation and reveals trending measurement What is ‘‘meas-ured’’ gets ‘‘managed.’’
MANAGEMENTREPORTS
Every maintenance organization should have a reporting system, regardless of size or whether or not a computerized program supports the organization Feedback from these systems provides assistance to the organization in deter-mining whether its goals or objectives are being met, if it is satisfying customer needs, and if it is operating efficiently and economically Last but not least, feedback helps to identify design and quality improvements The following are examples of reports
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Trang 3Broad Indicators
This group includes the ratio of maintenance costs to sales ratio of maintenance costs to value of assets maintenance expenditures by cost centers
Work Load Indicators
This group includes current backlog, total backlog ratio of preventive mainten-ance to total maintenmainten-ance, ratio of daily maintenmainten-ance to total maintenmainten-ance, ratio
of work performed under blanket work orders (or charge numbers) to total maintenance, ratio of capital work to total maintenance, ratio of shutdown work to total maintenance, ratio of area maintenance to total maintenance, and ratio of craft equipment backlog
Planning Indicators
This group includes jobs completed versus jobs planned, jobs completed versus jobs scheduled, estimated versus actual (effort-hours and cost) ratio of planned
to unplanned jobs, ratio of emergency jobs to total jobs, and ratio of downtime
to available ‘‘run-time.’’
Productivity Indicators
This group includes percentage of wasted time, maintenance labor costs versus maintenance material cost, and maintenance cost per unit of production
Cost Indicators
This group includes work class or type percentages, actual maintenance cost as compared with budgeted costs, and percentage of maintenance administration cost to total maintenance cost
These reports will be developed from information provided by all maintenance personnel This is why it is so important to develop an efficient feedback system The work order system is probably the most important feedback system in maintenance
Equipment Efficiency
For a process industry, we recommend the following elements to be included in the analysis of equipment efficiency:
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Trang 41 The percent of availability or uptime
% AVAILABILITY OR TIME UP
TIME UP 100 A
TIME UPþ TIME DOWN
TIME UPþ TIME DOWN ¼ 365 DAYS A YEAR
2 % PRIME QUALITY VOLUME
PRIME QUALITY VOLUME 100 Q
PRIME QUALITY VOLUMEþ REJECTS
3 % OPERATING RATE OR SPEED
TARGET CAPACITY 100 S
ACTUAL CAPACITYþ SPEED LOSSES
OVERALL EQUIPMENT EFFICIENCY (OEE) IS
OEE¼ %A %Q %S Most plants or facilities use only A and Q, but it is important to also include speed losses in the analysis of overall equipment efficiency
VALUE OFLOSSES/IMPROVEMENTS
Depending on the product you are manufacturing, the value of a 1% increase in OEE in a 400,000-ton-per-year plant corresponds to an increase in revenue of
$1.6 million to $5.5 million per year This corresponds to an increase in operating profits or contributions to cover fixed costs of $800,000 to $2.8 million per 1% increase in OEE, or an average per-minute capacity of 400,000 tons per year of
$11.2 million to $39.2 million per Chapter 14
The investment to achieve these savings is relatively small We believe that most improvements can be accomplished by doing better with what you already have, and the key phrases are planning of operations and maintenance and implementa-tion of continuous improvement processes
Improvement efforts in maintenance performance alone can often affect more than half of the improvement potential, and increased integration between operations and maintenance improvement efforts will give you the full effect of your improvement efforts
Maintenance efforts to increase OEE will almost always result in savings in maintenance costs in the range of 5–40% Our experience data show that
invest-Performance Measurement and Management 377
Trang 5ments required to improve maintenance performance are in the range of 0.5–5%
of the maintenance budget during the duration of an improvement project
As a whole, maintenance improvement projects have a potential to pay back 5–15 times investments annually
PRODUCTIVITYINDICATORS
During the past 10 years we have analyzed performance and developed product-ivity improvement plans for approximately 140 different paper machines and a large number of pulp mills including wood yards, bleacheries, recovery boilers, and power boilers, mainly in the United States, Canada, and Scandinavia These analyses have been an in-depth focus on maintenance procedures and their impact on equipment efficiency and the productivity of mills
In addition to these analyses of pulp and paper mills, improvement plans have been developed and implemented in more than 200 companies before 1985 To sum-marize, the following findings were based on a vast database and much experience
Do not expect to learn anything new from this; with some additions, the bottom line is that planned maintenance is a key success factor and that planned maintenance cannot be achieved unless you have condition monitoring practices implemented to feed your planning procedures, which we refer to as condition-based maintenance (CBM)
The PQV/M Factor indicates how much Prime Quality Volume is being pro-duced per $1,000 invested in maintenance This is a Results Oriented Mainten-ance productivity indicator The PQV/M Factor is the inverted value of maintenance cost per ton
Equipment Efficiency is based only on % Uptime % Rejects and does not include speed losses
Poor performers only plan and schedule 10% of their work An increase in planned and scheduled work improves equipment efficiency from a poor per-formance of 76% to 96%, an improvement of 20% Concurrent with this, the PQV/M Factor increases from 18 to 44 Prime Quality Volume produced per
$1,000 invested in maintenance In summary, planned maintenance increases productivity and decreases costs for maintenance
Concurrent with the increase in planned maintenance and OEE, the maintenance cost is gradually decreasing by 33%
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Trang 6Other findings are that planned maintenance increases the technical life of the equipment At 10% planned maintenance, the average life of electric motors is in the range of 3 to 7 years; pumps are 1 to 5 years, and bearings are 5 to 9 years Excellent performers have two to three times longer technical life of their equipment
Common for excellent performers is that they all were supported by well-organ-ized professional maintenance resources
Most of the investment is intended to help people to do better with what they already have
MAINTENANCEOBJECTIVE
The prime goal of a maintenance operation is to provide equipment efficiency The secondary goal is to deliver equipment efficiency as cost-effectively as possible Unfortunately, it is common to see that most mills have turned this goal upside down and thus focus too much attention on cutting the maintenance cost We all know that we can easily do this for a short period of time, but we have to pay back later
The measurement goal for a maintenance organization should be:
PQV=M FACTOR long term maintenance effectiveness measure
Prime Quality Volume X $1000¼ PQV=M
Maintenance Cost
Maintenance Efficiency
Percent Unplanned Percent Waiting Time U/W Factor
Maintenance Jobs Related to Unplanned Jobs
The U/W Factor is suggested to be used as the day-to-day measurement of maintenance effectiveness The factor should be recorded every day and followed
up and compared with targets each week An unplanned maintenance job is defined as a job that has to be started the same day it is initiated An unplanned job always includes waiting time
A brief explanation of the U/W factor follows
Planned Work—Work orders written ahead of time for which someone has:
1 Estimated the necessary steps, skills, and manpower required to do the job
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Trang 72 For each step, identified all stock materials (by stock number) and non-stock materials required, and ordered the non-stock items
3 Tracked material availability and analyzed personnel needs (by skill levels) and availability, as well as opportunity and availability of production equipment and special tools
4 Scheduled the job (at least one day ahead of time) based upon #3 and coordinated with production plans
5 Executed the job, without interruption, when scheduled
Unplanned Work—Work required to be done the same day as ordered and which might interrupt the daily schedule of work as outlined in ‘‘unplanned work.’’
Waiting (or Wasted) Time—Nonproductive time associated with unplanned work including:
1 Finding the personnel to do the work
2 The time it takes for the personnel to stop the job they are on and go
to the unplanned job
3 Diagnosing the failure
4 Gathering the correct materials and tools to perform the job
5 Waiting on materials that are not on site
6 Coordinating people to work overtime (if necessary)
MAINTENANCEINPUTDATAREQUIRED TOMEASUREMAINTENANCE
IMPROVEMENTEFFECTIVENESS
1 Percent Emergency Effort-hours (Period)
Effort-hours spent on emergency work orders (period) 100 Total direct maintenance hours (period)
2 Percent Emergency and AD Unscheduled Effort hours (period) Effort hours spent on unscheduled work orders (period) 100 ¼ % Total direct maintenance effort hours (period)
3 Breakdown Equipment Time (period)
Percent downtime caused by breakdown (period) 100 ¼ N Total downtime (period)
4 Percent Breakdown Repair Hours (period)
Total effort hours on breakdown repairs (period) 100 ¼ % Total maintenance effort-hours (direct) (period)
380 Maintenance Fundamentals
Trang 85 Dollar Value of Breakdown Repairs (period)
Cost breakdown repairs 100 ¼ !/0
Total direct cost of maintenance
6 Percent Equipment Availability (period)
Equipment run time 100 ¼ !/0
Equipment run time and downtime
7 Percent Breakdowns Caused by Low Quality
Breakdowns caused by low quality maintenance 100 ¼ !/0 Total number of breakdowns
8 Dollar Value of Low Quality Maintenance Breakdowns
Direct main cost and lost production cost 100 %
Total number of breakdowns
9 Maintenance Dollar Percentage Mill Book Investment
Total maintenance cost 100 ¼ %
Plant investment book
10 Percent Labor Costs to Material Costs
Total maintenance labor cost 100 ¼
Total maintenance material cost
11 Percent Clerical Manpower Costs of Total Maintenance Cost Total clerical cost 100 ¼ %
Total maintenance cost
12 Percent Supervision Cost of Total Maintenance Costs
Total cost of supervision 100 ¼
Total maintenance cost
13 Maintenance Cost Percentage of Total Manufacturing Cost Cost of maintenance 100
Manufacturing cost
14 Maintenance Cost Percentage of Sales
Total maintenance cost 100
Dollar value of sales
15 Cost of Maintenance Hour
Total cost of maintenance 100 ¼ %
Total effort hours worked
Performance Measurement and Management 381
Trang 916 Breakdown Cost Component (period)
Total breakdown cost 100 ¼ %
Total production cost
17 Percent Efficiency
Total effort hours estimated for jobs 100 ¼ %
Total effort hours spent on same job
18 Percent Overtime
Total overtime hours worked 100 0/0
Total hours worked
19 Percent Work Orders Planned and Scheduled Daily
Work order planned and scheduled 100 ¼ %
Total work orders executed
20 Percent Scheduled Hours vs Hours Worked as Scheduled Hours worked as scheduled 100 %
Total hours scheduled
21 Percent Scheduled Hours vs Total Hours Worked
Hours scheduled 100 %
Total hours worked
22 Percent Work Order Executed As Scheduled
Work orders executed as scheduled 100 ¼ %
Total work orders scheduled
23 Compliance with Estimated Cost
Jobs executed at or within 15% of estimated cost 100 ¼ % Total estimated jobs executed
24 Ratio Maintenance Planners
Total hourly personnel 100 ¼ %
Total maintenance planners
25 Percent Estimated Coverage
Number of planned work orders 100 %
Number of work orders completed
26 Percent Activity Level of Maintenance Craftsmen
Direct time working on work orders 100 %
Work orders released for work
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Trang 1027 Work Order Turnover Percentage
Number of work orders completed during period 100 %
Number of work orders awaiting release
28 Current Crew Backlog (Weeks)
Effort-hours ready to release¼ weeks
One crew week (effort hours)
29 Total Backlog by Crew (Weeks)
Total effort-hours ready to work¼ weeks
One crew week expressed in effort hours
30 P.M Coverage Percentage
A Effort hours spent on P.M work orders (period)
B Total effort hours worked (period)
C P.M inspections incomplete (period)
D P.M inspections scheduled (period)
E Repair jobs resulting from inspection (period)
F P.M inspections completed
WHERETOSTART
No two organizations have the exact same performance indicators This is because situations are different Most organizations attempt to or think that they need to track 50 or more indicators This is a waste of time and effort The focus should be on quality, not quantity
To assist organizations in this transformation process, EDCON Inc has pre-pared a recommended list of performance management indicators These indica-tors should form ‘‘the core’’ of the performance measurement and management system
This core group is supported by other indicators that are tracked in support of the core group The supporting group might be tracked for several months, then replaced by another indicator However, the core group of indicators always (or almost always) remains the same The following is a recommended list of core group indicators
Competitive indicators focus more on industry and ‘‘macro’’ internal measure-ment Productive measures focus on maintenance and quality production Oper-ational indicators focus more on equipment The combination of all three indicators will provide an excellent ‘‘snapshot’’ of organizational performance
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