Economics of PM
What are the consequences of a PM strategy? The customer is disturbed 3½ times a year. The significant difference is that 3 of the interruptions are scheduled. Operations can choose when to go down for the corrective work. Overall, the chargeable downtime is about the same as with the hot-swap example, and provides more than a 50% improvement over the breakdown mode.
One of the biggest changes is that the model calls for 72 hours of labor, or a 55% increase. The above-the-waterline costs are higher, and the total annual costs are slightly higher than hot swap but still well below Breakdown. Again, with one pump the impact is not noticeable. A hundred pumps would require 3200 extra hours, or about 2 people full-time. There is no capital cost.
Much more management (perhaps a CMMS PM module) is needed than with either of the two last examples to ensure that the PM is done weekly and the corrective maintenance is done in a timely way. The stocking system has to ensure that spares are on the shelf when needed. Safety is improved because of reduced non-scheduled events.
PCR
Another PM alternative is Planned Component Replacement, which has two versions: Planned rebuild (as in the previous example), and planned discard (used for low-cost components). PCR is closely related to the quick-change alternative except that the pump is changed out on a planned basis before failure.
PCR was one of the primary strategies of the aircraft field as well as in Air Forces around the world. Advantages include the ability to schedule technology upgrades to the equipment. Good scheduling practices are encouraged by allowing accurate workloads to be determined for an entire year, and longer for major overhauls. PCR is expensive, and is usually only justified where the consequences of the breakdown are expensive, dangerous, or both. Newer approaches toward higher levels of intrinsic reliability and advanced Predictive Maintenance inspections have forced PCR into a back-seat role in its traditional industries.
In our ongoing example, a PCR interval of 2 months would be required. The pump would be changed every two months, whether it needs it or not. The PCR operation (as with the hot-swapping operation) would take 2 hours of mechanics’ time. Bringing the pump back to operational specifications would take 5 hours on the bench each time, plus $500 worth of materials. One other advantage is that PCR can result in extremely high levels of reliability. The new failure rate would be once in 10 years (with costs similar to those of the breakdown example).
What are the consequences of this choice? Once again, there are several kinds of consequences. Production is disturbed 6.1 times a year for less than half a shift. The interruptions are almost all scheduled. Chargeable downtime drops by 19.3 hours per year, or better than a 20% improvement over hot swapping, which is a large reduction. There is also a 3-hour increase in maintenance labor with this mode. Annual costs are improved to $14,570 because of the reduction in both above-the-waterline costs and downtime. There is a $15,000 capital cost, but it is paid off in less than a year.
As mentioned previously, more management is needed to ensure that the PCR is done on schedule before failure, and that the pump is rebuilt in a timely way. Safety is improved because there are few unscheduled events.
Back-up
Many organizations choose to operate critical processes with one or more back-ups. Back-ups are all around us in critical systems. Few people would be inclined to fly globally if jets still had one engine and no way to fly when it broke. Most hospitals of any size have back-up power generation to replace electricity in a utility outage. The downside to building plants with back-up pumps and compressors come in operational and economic areas.
In the operational area it is thought that having back-ups makes the maintenance department sloppy and removes the urgency from the equation. If we have one compressor we are extremely focused in keeping it going. Having two or more compressors take away the excitement from a breakdown. One of the upcoming key performance indicators of manufacturers is Return on Assets. Return on assets goes down as the asset base goes up (for the same profit level). Of course the reason for the back-up is to enhance and stabilize the production and the profit levels too.
An alternative strategy is to mount a back-up pump in the system with an automatic alarm. We assume there is enough room to fit a back-up in place. The operators can then switch the pumping load to the back up when needed. The cost of the back up and associated piping and controls is $25,000, including labor, and will take 20 hours of work time (one time fee). A back up can be switched on without downtime. Failure rates may be assumed to be the same as in a breakdown, but without downtime. The cost of the back-up pump is charged only once, and it should be capitalized, depreciated, and held in an asset account.
What are the consequences of a back-up strategy? Customers are happy because they are never disturbed (which is why this set up is so popular). After installation, chargeable downtime is zero. Labor and parts (above the waterline), are the same as for the breakdown model, and annual costs are the lowest, though there is high capital cost. Not much management is needed beyond being sure the unit is repaired after failure and put back in service, to be ready for the next breakdown. Safety considerations are the same as for the breakdown model, (not great).
Here is what you should take away from modeling: Modeling is a Lean activity. It is one of the few ways you can sit in an office with a spreadsheet and have an impact on maintenance and operating costs for the next twenty years.
Every maintenance alternative that can be imagined costs money, and every alternative has consequences. Pick the alternative that gives the least costs and the consequences you want!
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CHAPTER 4 |
Lean Maintenance and World Class Maintenance
World Class Maintenance is an extremely useful fiction, invented to spur companies toward excellence in their respective fields. It is important to realize that there is no one World Class standard. What is World Class in a nuclear power plant would bankrupt a chicken-processing plant. World Class is always referential toward one or a series of related industries. For example, oil refineries and large chemical plants might be within one World Class division. Chicken processors and other meat processors might be in another. The rules and benchmarks could be compared within the division.
Having said that, if there was a world class standard it would relate to its attitude toward customers. Womack and Jones outline a World Class approach to supplying customers in Lean Solutions that is also Lean. Customers want:
•My problem completely solved
•Don’t waste my time
•Provide exactly what I want
•Deliver value where I want it
•Supply value when I want
•Reduce the number of decisions I have to make to solve my problem
There are World Class attitudes that are common across industries. In Managing Factory Maintenance Second Edition I reviewed some of these areas. I want to revisit those areas while adding in discussion about their relationship to Lean Maintenance. Also, since