10 JUNE 2017 • FOGHORN FOGHORNFOCUS: OPERATIONS O ne of the biggest misunderstandings among senior managers in most companies that operate machinery (i.e., vessels, manufacturing, construc- tion equipment) is the purpose of maintenance. The vast majority of companies see maintenance as a cost center at worst or, at best, a necessary evil that is to be scheduled around operations. What senior managers need to under- stand is that the purpose of maintenance is to preserve the machinery functions that they rely on to create revenue. In fact, reliable machinery is less expensive to maintain and will also enable a company to generate greater revenue with the same number of assets. Two desirable results for having an excellent machinery maintenance program! Additionally, if a company’s machinery is more reliable, everyone will be a lot less stressed because they will spend significantly less time trying to respond to the latest casualty. The vast majority of maintenance activities including repairs will be able to be scheduled during times that impact produc- tion or operations in a significant way. The effect on maintenance costs with increasing reliability through the use of progressively more effective maintenance programs is provided in Figure 1 (top right). Acompany with a world-class maintenance organization can expect on average to spend one to two percent of the re- placement cost of their plant on maintenance annually. So, if a company estimates $10 million to replace a vessel, the company will be spending $100,000 to $200,000, on average, in maintenance annually if they have a world-class mainte- nance organization. It is important to keep in mind that the company would be maintaining the vessel with little dete- rioration of the machinery, hull or electrical systems. In other words, it is not deferring critical maintenance what will lead to significant increased maintenance costs in future years. Companies that do not have world class maintenance organizations, will often be spending two to three times the amount of money on maintenance and also experience sig- nificant disruptions to their operations. The disruptions (lost revenue and profits) to operations (if significant) can be more expensive than the cost of the maintenance program. What is the path forward? Evaluate your maintenance program. Figure 2 (right) shows ten areas that need evalu- ation. Here is how two example areas, Process Discipline and Maintenance Program Approach, could be evaluated (see Table 1 and Table 2, page 12). Process discipline is probably the most important area fixed first, if a company has a deficiency. Why? There is no point in embarking on a journey to improve maintenance if the company is not capable of following through on what they have started. If a company has difficult time document- ing and complying with its daily processes, it will be very Figure 1: Relative Cost of Maintenance (Nolan and Heap for United Airlines and the US Navy) Increasing Revenue Through Reliability By Martin Oard, BMT Designers MAINTENANCE PROGRAM AREAS Process Discipline Configuration Management Work Scheduling Procurement & Inventory Policy - Responsible,Accountable, Consulted, Informed (RACI) Blue Collar Tools, Skill & Knowledge White Collar Skills,Tools & Knowledge Maintenance Program Approach Data Collection,Analysis & Critical Performance Measures Failure Reporting & Corrective Action System Figure 2: What is the path forward? Evaluate your maintenance program. Here are ten areas that need evaluation: difficult for a company to implement new ones and follow them. So, it would be better to focus company resources on improving its daily leadership and management before taking on anything new. What is condition-based maintenance and how does it work? Conditioned-based maintenance involves monitor- ing the conditions of equipment and then taking specific maintenance actions when the conditions exceed set pa- rameters. The curve below demonstrates the objective of condition monitoring. As can be seen on the graphic, equipment runs smoothly and then at some point starts to