Reliability Excellence Paper - Milan Sochor


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Reliability Excellence Through Culture Change and Continuous Improvement (Milan Sochor\'s conference paper for Smart Ideas 2009)

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Reliability Excellence Paper - Milan Sochor

  1. 1. 224 smart ideas conference 2009 RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT Milan Sochor Reliability Specialist, AltaSteel, Scaw Metals Group Abstract: AltaSteel is establishing a culture of reliability excellence through teamwork and continuous improvement. In order to improve reliability of physical assets to support the business mission of improved asset optimisation, a proactive rather than a reactive approach to equipment maintenance is needed. This requires a significant shift in thinking, of business processes, and in company culture. In 2007, AltaSteel began implementing a culture change project, called “Proactive Maintenance Initiative” (PMI), which goes beyond maintenance to optimize equipment availability, resource efficiency, and system effectiveness. This opportunity represents a potential net cash flow improvement resulting in an estimated Net Present Value of $US 15 M over 12 years. The current AltaSteel culture is one of reactive response to equipment failures, with limited use of forward-looking techniques to proactively manage potential failures. The desired culture comprises of planning, coordination, and continuous improvement. The challenge is to establish those practices within an existing company culture and structure, ultimately changing the way people work and interact. For the change to be sustained by employees long-term, an approach of acceptance-through-involvement is taken. It is a collaborative effort at all levels of the organization. The initiative’s leadership team is a unique partnership between management and union executive members to provide overall direction, resources, motivation, and visibility to the initiative. Cross-functional Focus Groups, consisting of operators, maintenance staff, and materials personnel are empowered to review and optimize key functions within the organization - Reliability, Work Management, and Materials Management. In 2008, a Pilot phase was implemented in AltaSteel’s Bar Mill to allow the organization to adapt with new roles and methods. AltaSteel continues on its journey of continuous improvement towards reliability excellence with a forthcoming implementation in the rest of the plant. This paper will describe the approach taken, challenges encountered, and improvements that have been realized. Keywords: Reliability, Maintenance, Culture Change, Asset Optimisation 1. BACKGROUND AltaSteel is a scrap-based steel manufacturer based in Edmonton, Alberta, Canada. The facility recycles scrap metal by melting it in an electric-arc furnace, casting billets, and hot-rolling. Various bar products are supplied to downstream manufacturers in the mining, oil and gas, automotive, construction, agriculture, and original equipment manufacturers. The plant employs over 370 people, has a production capability of over 315,000 metric tons of billets annually and revenues of over $200 Million per year. In 2006, AltaSteel became a member of the Scaw Metals Group which is a member of the Ferrous Metals and Industries Division of Anglo American plc. 2. SEEKING IMPROVEMENT AltaSteel has been a successful company since 1955 and management strives to make strategic decisions that will contribute to continued, long-term, success. Great effort is made to assure AltaSteel’s product quality, as indicated by its ISO 9001:2000 certified quality system. Internally, unit-cost-of-production is affected by conversion costs and equipment effectiveness – which can be improved from within through improved reliability. Moore (2004) defines reliability as the level to which operational stability is achieved because equipment does not fail – the equipment is available at rated capacity whenever it is needed, and it yields the same results on repeated operation. RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  2. 2. smart ideas conference 2009 225 The strategic need to maximize conversion capability through improved equipment reliability was the driver in 2003 for AltaSteel to dedicate two individuals to the roles of Maintenance Analysts. Their mandate was to support AltaSteel’s maintenance departments and to find a replacement for an existing computerized maintenance management system that was no longer supported by the provider. The scope would expand considerably as they researched improvement opportunities. Visits to other local manufacturing facilities and review of leading maintenance practices in various industries highlighted great differences between AltaSteel’s reactive approach and the proactive approach of leading companies. Better maintenance tactics and new software would not be enough to gain significant improvement. Managing maintenance goes beyond repair and prevention to encompass the entire asset life cycle from selection to disposal (Campbell and Jardine, 2001). While pockets of success existed within AltaSteel’s maintenance function, the infrastructure was not in place for a complete system to be effective. The departments that contribute to asset management and reliability are diverse and they cross departmental boundaries within the organization. As an added concern, much of the specific equipment knowledge and history required for making informed decisions rested with individual crafts personnel or operators and was not in the “corporate memory”. Since many of AltaSteel’s most experienced staff would retire within the next five to 10 years it was important to capture their knowledge. 3. CURRENT STATE & OPPORTUNITY FOR IMPROVEMENT This opportunity for improvement would require the effort of the entire organization and a strong business case. To ensure the business case was credible, it was based on an external Practice Assessment performed by experts in the field of maintenance and reliability. Canadian consulting firm IVARA Corporation was contracted to assess maintenance and reliability practices at AltaSteel in comparison to recognized industry benchmarks. The objective was to recognize gaps, highlight areas that presented the best return-on-investment and quantify the potential return. 3.1 ASSESSMENT FINDINGS The assessment was organized into the following elements of a Reliability-Driven Maintenance Process: • Business Focus • Work Identification • Data Analysis • Work Planning • Scheduling • Execution • Follow-up Criteria necessary to support those elements were also assessed: • Practices • Roles & Responsibilities • Resources • Training • Information • Performance Assurance The assessment concluded that AltaSteel was functioning within a very early phase in the evolution of world-class asset management. PAPERS It based this conclusion on a maintenance technique progression that John Moubray describes (1997), which compares maintenance techniques adopted by industry over several decades:
  3. 3. 226 smart ideas conference 2009 Figure 1. Evolution of World Class Asset Management IVARA found that AltaSteel’s current practices comprised largely of first generation reaction to breakdowns, with some aspects of second generation maintenance practices. 3.2 CULTURE When comparing the degree of urgency with which companies adopt new technologies and practices related to maintenance and reliability, IVARA found that AltaSteel was in the lower tier. This tier is exemplified by skepticism of new technologies, reluctance to adopt them, and a lack of awareness of the comprehensive set of best practices to support the management of physical assets and maintenance. In comparison, companies in the upper tier are considered leaders and visionaries. They constantly seek new opportunities to achieve competitive advantage, and manage compliance to practices. The assessment emphasized the gaps between current state and the desired state. It also emphasized the differences between AltaSteel’s company culture and the culture needed to improve and sustain effective asset management practices. 3.3 THE PRIzE With analysis details and supporting data, IVARA proposed recurring annual benefits due to maintenance cost improvements and operational improvements. Maintenance cost improvements would be a result of more effective and efficient use of maintenance resources and materials. Operational improvements would include maintenance-related downtime reduction and reduction in production losses achieved through improved asset performance. A conservative, but realistic, financial benefit of $3.0 million annually was achievable three years after the project to improve practices was initiated, excluding costs of a new asset management software system to support new processes. 3.4 RECOMMENDATIONS IVARA concluded that there was significant opportunity for AltaSteel to advance to third generation practices and focus maintenance activity on more proactive maintenance and improved reliability. It provided recommendations for specific elements that contribute to RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  4. 4. smart ideas conference 2009 227 achieving a leadership position in asset management. IVARA explained that while the improvement plan requires sound technical solutions, sustainable results would only be achieved by managing the change from a repair-focused culture to a reliability-focused culture. Successfully engaging the workforce would make this possible. Once the transition is made, ongoing effort would be required to insure execution of best practices is ongoing and benefits are realized continuously. 4. RALLYING SUPPORT & READINESS FOR CHANGE 4.1 SELLING THE IDEA AltaSteel’s Maintenance Analysts used their research and the external Practices Assessment to create awareness at the management level that a major culture change project represented significant return-on-investment. With clearer understanding of the scope of change required, the effort received sponsorship of top management and dedicated staff were assigned, including a project manager. The project was branded “Proactive Maintenance Initiative” (PMI), and a project purpose was created: PMI Project Purpose: Establish a Maintenance & Repair Management System that is capable of continuous improvement and is fully sustained by AltaSteel personnel, for improved safety performance, increased uptime of plant equipment, and reduced maintenance, repair and inventory costs. This purpose and the following key points were used to create awareness in the workforce: • Securing AltaSteel’s future prosperity by implementing best practices • Retaining knowledge of the experienced work force • Not just a maintenance initiative, but an entire business and culture change • The change is urgent as global competition and workforce attrition increases 4.2 ANTICIPATED CHALLENGES It became evident during the project planning and awareness phase, that implementation would be critical and challenging due to several factors: Dedicated resources were required to concentrate on the extra workload of executing project steps and preparing for change in processes. Involvement of all employees was a necessity if a new approach was to be sustained by those employees long-term. Union leadership and membership participation would be critical. Resistance to change was already coming to the surface from many levels of the organization. This was expected, as a broad range of business methods and processes would be affected. As a result of process changes, roles and responsibilities would be changing as well. One reason is knowledge of AltaSteel’s past success. Tushman and O’Rielly (1996) explain this as Cultural Inertia, which comes from age and success. As organizations get older, part of their learning is embedded in the shared expectations about how things are to be done. AltaSteel would need assistance in the specialized field of Change Management. Expert knowledge and credibility is not achieved by simply receiving training or understanding what successful companies do. The PAPERS assistance of subject-matter experts in the field of maintenance and reliability practices would speed-up implementation and ease uncertainty associated with doing things differently.
  5. 5. 228 smart ideas conference 2009 4.3 ENGAGING THE UNION The members of the United Steel Workers Union Local 5220 have contributed to AltaSteel’s past success, and are critical to future success. Strong leadership would be needed to help the workforce navigate the turbulence that comes with a change of this scope. Union executives would have to be convinced that the PMI project was a worthwhile endeavor to support, and that it would not have damaging effects on the workforce. In late 2006, after much effort over several months, a milestone was reached in the relationship between AltaSteel’s management and union executives in the form of a Letter of Agreement. It specifies the partnership and boundaries by which PMI would be jointly implemented. Union executives described to their members their effort to insure that no changes coming from the project would take place outside of the bounds of the collective agreement and that the integrity of the bargaining unit would be preserved. Members of the executive would be actively involved in developing the guidelines, scope, and goals of PMI. They urged that it was in the interest of all union members that AltaSteel survive and prosper - securing wages, pensions and benefits into the future. Member participation in the initiative would contribute to prosperity, a better workplace, retention of skills and a reduction in wasteful practices such as over- dependence on outside contractors. (USW Local 5220, 2007) 4.4 IMPLEMENTATION CONSULTING SERVICES Consulting proposals were evaluated based on experience, credibility, and implementation methodology. Life Cycle Engineering (LCE) was selected in late 2006 as the consultant to assist AltaSteel in the implementation phase of the PMI project. 5. IMPLEMENTATION APPROACH Life Cycle Engineering provided technical and change management expertise to the project. 5.1 EMPLOYEE ACCEPTANCE The approach is based on the principle that sustained change is possible if the people affected by it are involved in creating it and develop a sense of ownership. People are much more accepting of change if they have input into it, rather than if change is thrust upon them. If the ownership of the change can be spread to a broad number of people, many of those people will not only accept the change, but will strive to promote and champion the new practices. This acceptance-through-involvement approach was applied starting at the top. 5.2 LEADERSHIP A PMI Steering Committee was formed to provide leadership throughout PMI implementation. It is sponsored by AltaSteel’s president and headed by the Vice President of Operations. This committee is a union/management partnership including members of the USW Local 5220 Executive and managers from diverse departments, including Safety & Human Resources, Materials Management, Operations, and Maintenance. The Steering Committee is responsible for the success of the project and to provide the conditions enabling the workforce to make a successful transition. This includes providing overall direction, resources, motivation, and visibility to the initiative. LCE provided guidance and coaching to the Steering Committee on the high-level concepts of reliability excellence, their roles as committee members and on Change Management principles. This enabled the Steering Committee to stay on course toward best practices. The effort and decisions were the committee’s responsibility, not the consultant’s. They met on a weekly basis in the early part of 2007 to develop a group Charter, declaring their path forward, and developing a high-level implementation plan. RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  6. 6. smart ideas conference 2009 229 Steering Committee Purpose: To jointly establish the culture and business practices that achieve and sustain reliability excellence. Scope: • To enable the use of employees skills more effectively and efficiently. • Work together in a collaborative and cooperative manner at all levels of the organization. • To ensure reliability excellence can be sustained by the AltaSteel workforce. • To increase reliability and predictability of the assets through a culture of continuous improvement. • Establish systems to monitor both PMI and business goals. 5.3 FOCUS GROUPS The Steering Committee created the structure in Figure 2 to support the detailed work that lay ahead. Based on findings in the practices assessment and awareness of the process gaps AltaSteel needed to fill, LCE advised the Steering Committee to create three Focus Groups. They would focus on three areas which directly contribute to reliability excellence: • Work Management • Materials Management • Reliability Figure 2. PMI Implementation Organizational Structure 5.4 FOCUS GROUP MEMBERS Members were selected by the Steering Committee and asked to participate voluntarily. It was important that they had a desire to get involved. PAPERS Groups include union and non-union employees with diverse roles such as operators, maintenance crafts, materials staff, supervisors and engineers. A cross-functional group is able to bring different perspectives on each focus area, resulting in processes that are more effective. Evans and Lindsay (2008) describe that teams often provide the infrastructure for high-performance work systems.
  7. 7. 230 smart ideas conference 2009 Teamwork breaks down barriers among individuals, departments and staff functions. While employees at AltaSteel have worked in crews and in team settings within their departments, PMI Focus Groups are a forum for cross-departmental cooperation towards shared goals. The setting is also conducive to creating the sense of ownership and awareness of best practices that is critical to sustainability. This cooperative approach resembles a continuous improvement philosophy described by Evans and Lindsay (2008) known as Kaizen, which focuses on improvement in all areas of a business with participation by everyone. They describe the following characteristics of the philosophy: • Discarding fixed ideas • Thinking of how to do something, not why it cannot be done • Not seeking perfection, not making excuses, but questioning current practices • Seeking the “wisdom of ten people rather than the knowledge of one” AltaSteel Focus Groups were encouraged to approach their assignment in a similar spirit. Not to get hung-up on trying to achieve perfection, but to strive for an “80% percent solution” – this would yield significant improvements. 5.5 COACH An LCE subject-matter expert was provided to each Group to coach them in functioning effectively together and meeting their best practice goals. 5.6 SPONSOR A Steering Committee member serves as the Sponsor for each of the Focus Groups ensuring they have adequate resources and to deal with any roadblocks that may arise. The sponsor is the communication link between the Group and the Steering Committee. 5.7 LEADER One of the Group members is designated as leader to be a spokesperson, to keep group activities on track and to participate as a member. Once established, the Focus Groups began an intensive period of team building, training, and process building. 5.8 TEAM BUILDING Evans and Lindsay (2008) call this the Forming, Storming, and Norming phases of a team’s life-cycle. Forming activities include getting to know each other, sharing each other’s hopes and fears related to PMI, and exploring the issues of their assignment. Storming occurs when group members disagree on their roles and challenge the way the group will function. Norming takes place when the issues of the previous phase have been resolved and roles and ground rules are agreed upon. The outcomes of team building were a greater sense of unity, a code of conduct for cooperation and decision making, and the Group’s own Charter describing the following elements of its mission: • Purpose • Scope (the range or boundaries of the Group’s focus) • Objectives (results to be achieved) • Deliverables (tangible outcomes) • Key Activities • Benefits (outcomes of achieving the purpose) RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  8. 8. smart ideas conference 2009 231 • Linkages (partners/stakeholders) • Timeline Work Management Focus Group Purpose: Develop and establish best practice work management processes to safely, effectively and efficiently operate, maintain and repair our assets at a sustainable world-class performance level. Materials Management Focus Group Purpose: To establish and implement an effective, sustainable system to manage; maintenance, repair and operational materials. Reliability Focus Group Purpose: To establish processes for continuously improving and sustaining asset reliability based on industry best practices. The Charters were presented to the Steering Committee and agreed upon as a living roadmap for a direction forward. Signatures by the Steering Committee Chair/VP of Operations, Focus Group Sponsors and Focus Group Leaders demonstrated commitment. 5.9 PROCESS DEVELOPMENT Performing is the next phase of a team’s life cycle. For the Focus Groups, this meant process development as illustrated in Figure 3. Figure 3. Typical Process Development Steps The Groups developed their processes over the span of 10 weeks during which they met as often as eight hours per week. Each process was described within the following documents that defined it as a formal Standard Operating Practice (Figure 4): • Process Map – a flow chart illustrating sequence of steps • Step Definitions – detailed explanation of each step • RACI Chart – chart showing who is Responsible for executing each step, who is Accountable to insure it is done, who will Consult or provide support , and who should be Informed or communicated with. PAPERS
  9. 9. 232 smart ideas conference 2009 Figure 4. Typical Process Documents Table 1 lists the Focus Group processes that were developed based on recognized best practices: Table 1: Focus Group Processes 5.10 KEY PERFORMANCE INDICATORS Leading and lagging Key Performance Indicators (KPI) were developed by the Focus Groups and by the Steering Committee in order to measure effectiveness of specific processes as well as the initiative’s overall impact on AltaSteel. Many indicators are published and discussed with the workforce in order to communicate progress and highlight areas that need added focus. AltaSteel uses Overall Equipment Effectiveness (OEE) to measure three factors that affect its conversion capability: • Availability – process uptime measured against available time • Efficiency – production rate versus ideal rate • Quality – prime quality produced the first time RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  10. 10. smart ideas conference 2009 233 Availability x Efficiency x Quality = OEE (1) These factors can be positively influenced by improved equipment reliability. OEE is the primary indicator upon which return-on- investment of PMI will be measured long-term. 5.11 NEW ROLES The Steering Committee accepted these processes and began to recruit for new positions as identified by the Focus Groups. These new positions included stores personnel, Planner/schedulers, Reliability Specialist, and Maintenance Manager. Positions were filled either by internal promotions or outside recruiting and the company’s organizational structure was revised to suite. 5.12 COMMUNICATION AND PREPARATION TO IMPLEMENT NEW PROCESSES Communication and training for the entire workforce, not just those directly involved in Focus Groups, was a change management priority. Because AltaSteel staff were at different levels of awareness of the coming changes, effort was made to communicate often and in various ways: • Monthly Business Meeting presentations and PMI News bulletins - Messages and presentations were delivered by AltaSteel’s president, the union president, and by Focus Groups. • LCE Reliability Excellence Training - Approximately 300 employees (80% of the workforce) received training on reliability best practices. • Direct contacts - Following AltaSteel’s practice of Visible Felt Leadership (VFL) for safety awareness, Steering Committee members engaged the workforce for the purpose of PMI awareness. • Involving the workforce - Employees directly involved in taking control of spare parts, gathering equipment data, and identifying potential failure modes of the most critical assets. • Work Flow Training - Specific training was provided to staff that would be most immediately affected. 6. “GO-LIVE” IN PILOT AREA Another milestone was reached in January, 2008, with the official “go-live” of new processes in a Pilot Area. The purpose of this phase was to test the new processes in a real business setting and to allow the organization to adapt with new roles and responsibilities. The scope included implementation of the new work flow processes in AltaSteel’s Bar Mill, including planning and scheduling, new controls for spare parts, and identifying maintenance tasks on critical equipment in a Finishing Mill section. PAPERS
  11. 11. 234 smart ideas conference 2009 The Finishing Mill was selected by the Steering Committee based on the following criteria: • Significant productivity and financial benefits are possible • It is a small, controllable area with a diverse variety of equipment • The equipment is critical and relatively new Communication and training continued into the Pilot phase using the previously mentioned methods, as well as: • Peer-to-peer Coaching - Coaching cards were used to interview staff in various roles to assess if processes were understood and to identify areas for improvement. • Dedicated Coaching - An operator or maintenance staff member was made available to provide coaching on shift in the early weeks of going live. • Celebration - Incremental successes and milestones were celebrated with the whole workforce in ways such as lunch gatherings - helping to keep the workforce motivated. The Pilot phase has been vital to AltaSteel’s collective learning and the experience gained contributes to setting strategy for subsequent implementation steps in 2009 and beyond. 7. ASSET MANAGEMENT SOFTWARE 7.1 SELECTION It was known that full benefits of maintenance planning and scheduling would not be realized without good asset management software. But the risk of proceeding in the Pilot Area without a software system was outweighed by the risk of losing momentum. It would take time to properly select and implement the software. Processes were implemented in the Pilot Area and the software project proceeded simultaneously. During the transition, work flow and equipment data was administered by an interim system of paper, excel spreadsheets, and a computer program internally-developed by the Planning Department. A Software Selection Group was established with Group members participating on a part-time basis while fulfilling regular duties. They included staff from operations, maintenance, reliability, materials, and information technology departments. The selection process included the following: • Developing functional requirements based on AltaSteel’s new processes • Determining a list of credible vendors that would meet those requirements • Selecting the software based on user-friendliness, ability to integrate with AltaSteel’s and corporate systems, success at other plants and overall value for investment • Justifying the investment The selection of Avantis.PRO from Invensys, in mid 2008, was not only based on functionality, but also on the vendor’s commitment to a thorough implementation methodology. 7.2 IMPLEMENTATION Implementation of the software was assigned to a project leader and a cross-functional team of dedicated “subject-matter-experts” from within AltaSteel. The team’s main function is to implement the software with the needed functionality and acceptance by the workforce. RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  12. 12. smart ideas conference 2009 235 Key activities include learning the new system, integrating it with existing systems, populating it with data on AltaSteel’s equipment and maintenance activities, and training peers. Implementation is being completed over a one year timeline with the system poised to “go-live” plant-wide in September, 2009. 8. CHALLENGES & LESSONS LEARNED Participants in the PMI project have highlighted the following from their experience so far: 8.1 LEADERSHIP • Vision for the initiative must be clear, consistent and well communicated in order to inspire the right action. • Top management and union leadership must be unwavering. The leadership team must understand the vision and how the various aspects of the new system fit together. • Carefully managing expectations is vital to keeping the workforce believing in the approach. Resoundingly, participants urge that caution should be taken to understand the full implications of change and to communicate realistic expectations to the workforce. 8.2 PEOPLE • Reliability and Asset Management involves everyone, but this fact is not immediately embraced by all. The mind-set that it is primarily a concern of the maintenance department must be dispelled. • Resistance to change is inevitable and it can be experienced at all levels of the organization. Resistance is most prominent in staff that is not directly involved and not well informed. Keys to overcoming resistance are early involvement by all parties, open and honest dialogue, and good planning (Evans and Lindsay, 2008). Communication must not only be efficient, but also effective, in conveying successes and failures. • Collaboration among individuals from different functional backgrounds is challenging but necessary. Managers need to carefully evaluate how teams are introduced in the organization and address team building as a critical work process. Solid support at a number of managerial levels is necessary to keep teams going (Evans and Lindsay, 2008). • Collaboration among departments is challenging, but necessary. Nearly every major activity within an organization involves a process that crosses traditional organizational boundaries. Many of the greatest opportunities for improving organizational performance lie in the organizational interfaces – those spaces between the boxes on an organizational chart. A process focus supports continuous improvement efforts by highlighting these opportunities (Evans and Lindsay, 2008). • Sustaining empowerment and a sense of ownership within the work force is challenging over a long roll-out period. Keeping the workforce engaged in finding solutions and using their new-found knowledge to assist decision making on process issues is important. PAPERS 8.3 SOFTWARE A well integrated software system is critical to efficient execution of processes. Successful software implementations attribute their success to well defined business processes and properly addressing the people-side of integration. A critical look should be taken at legacy systems - it may make more sense to replace them rather than integrate.
  13. 13. 236 smart ideas conference 2009 8.4 TIMELINE Disruption to timelines occurred during the planning and implementation phases of the initiative. These included significant events that consumed management and union leadership, including labor contract negotiations and the sale and inclusion of AltaSteel into new ownership. An atmosphere of change overload can be experienced at times due to the many interrelated projects that are simultaneously undertaken in order to meet strategic goals. The sacrifice needs to be recognized and effort made to provide dedicated resources where necessary. Timelines must be realistic, with good momentum, but at a rate that will not overwhelm the workforce. Avoid seeking perfection along the way, but insure the fundamentals are properly in place. Change Management and Project Management expertise is necessary. Figure 5. Timeline to Date 9. BENEFITS REALIzED The following benefits have been achieved in these early stages of the journey to reliability excellence: 9.1 SOFT BENEFITS • Universal awareness of the opportunity and urgency • Improved relations between management and the union • Increasing acceptance of the change • (76% of unionized workforce recently voted to continue supporting the initiative) • Collaboration and cooperation at all levels • Workforce trained on maintenance and reliability best practices • Increased involvement of the workforce in asset management decisions • Workforce is actively being involved in knowledge transfer 9.2 HARD BENEFITS • Defined processes, responsibilities, and a changed organizational structure to support proactive practices • System for capturing and managing work (safety & quality systems are enhanced as a result) • Best practices are actively being applied to support operations • Asset management software is ready to commission • Stores facilities have been improved and expanded • Over $US 2.5 million in spare parts have been transferred to controlled stores RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  14. 14. smart ideas conference 2009 237 • Reduction in contractor use • Overall Equipment Effectiveness is consistent and slightly improving (Figure 5). Figure 6. Overall Equipment Effectiveness 10. COMMITMENT & PRIORITIES GOING-FORWARD As part of the Scaw Metals drive for asset optimisation, AltaSteel has committed to the long-term OEE targets shown in Figure 6, with PMI as the vehicle to get there. Figure 7 illustrates the net cash flow improvements related to the PMI project over 12 years, generating an estimated Net Present Value of $US 15 M. The benefits derived are due to incremental capacity and, in turn, incremental margin gained through improvements in OEE net costs related to the project. PAPERS
  15. 15. 238 smart ideas conference 2009 Figure 7. PMI Projected Return on Investment To achieve these targets AltaSteel must focus on the following priorities: • Fully implement asset management software • Implement processes plant-wide • On-going reliability education and collaboration among stakeholders • Re-assess progress toward 3rd generation practices • Track and communicate benefits • Move PMI from a project mode, to a regular way of doing business 11. CONCLUSION Currently AltaSteel is at an exciting point on its journey toward reliability excellence and the benefits of much hard work are beginning to come to fruition. What started with an awareness of a better way to do things has evolved into a collective mission with a great deal of momentum. By way of collaboration and a cultural transformation, the company is moving from a very reactive approach to asset management, to a proactive approach. Change of this magnitude requires commitment to a vision and significant capacity for adversity. In order for AltaSteel to realize long-term prosperity, it must continue to embrace change and continuous improvement. In describing leadership and endurance of change, Dr. Calder cites Conner (1993): change is not made permanent in an organization until the values, behaviors, and processes associated with change are internalized by a critical mass of the organization’s workforce. RELIABILITY EXCELLENCE THROUGH CULTURE CHANGE AND CONTINUOUS IMPROVEMENT •Milan Sochor
  16. 16. smart ideas conference 2009 239 12. REFERENCES 1. Campbell, J. D. and A. K. S. Jardine (2001). Maintenance Excellence: Optimizing Equipment Life-Cycle Decisions, p.33. Marcel Dekker, New York, NY. 2. Conner, D. R. (1993). Managing at the Speed of Change, Random House, New York, NY. Calder, Wm. B. (n.d.) BTE 463 – Innovation and Change Management, Module 4: Leadership and Change, Northern Alberta Institute of Technology. 3. Evans, J. R. and W. M. Lindsay (2008). Managing for Quality and Performance Excellence, p. 285, p.364-365, p.281, p.280, p. 21. Thomson South-Western, Canada. 4. Moore, R. (2004). Making Common Sense Common Practice, p.115. Elsevier, Burlington, MA. 5. Moubray, J. (1997). RCM II: Reliability-centered Maintenance, p.2-6. Industrial Press, New York, NY. 6. Tushman, M. L. and C. A. O’Reilly III (1996). Ambidextrous Organizations: Managing Evolutionary and PAPERS Revolutionary Change, California Management Review, VOL.38, NO.4, p.18. 7. United Steelworkers Local 5220 Executive (2007). Membership Bulletin, April Edition. 8. 9. IVARA Corporation. 10. Life Cycle Engineering.