Connecting Reliability & Business + ISO 55000 Framework
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This presentation outlines the current state of equipment performance and reliability in the pharmaceutical and biotech industries, and the opportunity to leverage new international standards such as ISO 55000 to create asset management programs that are directly connected to corporate business strategies. Also provided is an example of how to create a business case for improving asset reliability through increasing equipment availability. Outlines of both strategic and tactical approaches for asset management and equipment reliability improvements are also included.
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Connecting Reliability & Business + ISO 55000 Framework
- 1. 1© Life Cycle Engineering 2015 1 Connecting Reliability & Business + ISO 55000 © Life Cycle Engineering
- 2. 2© Life Cycle Engineering 2015 Connecting Reliability & Business + ISO 55000 Framework Outline: • State of the Industry – Pharma & Biotech Manufacturing Disruptions • Asset Management vs. Reliability vs. Maintenance • Understand the Corporate Business Strategy • The Value Stream and Monetizing Downtime • Strategic Implementation Value • Tactical Implementation Value - Availability • The A3 Tool
- 3. 3© Life Cycle Engineering 2015 Impact of Manufacturing Disruptions Graphic Source: Strategic Plan for Preventing and Mitigating Drug Shortages, Food and Drug Administration, October 2013 66% of disruptions resulted from: • Facility remediation efforts (35%) • Manufacturing issues (31%) Drug Shortages by Primary Reason for Disruption in Supply (2012) Note: Regulatory agencies are asking companies about asset management programs during audits
- 4. 4© Life Cycle Engineering 2015 4 • ISO 55000 (2014): Asset Management Standards • BSI PAS 55 (2004, 2008): Optimized Management of Physical Assets Standards • ASTM E2500: Pharma-specific Guidance (Create or Acquire Phase of Asset Life Cycle) Recent focus on Asset Management
- 5. 5© Life Cycle Engineering 2015 5 Graphic Source: Life Cycle Engineering, Copyright 2015 Leadership, Policy & Strategy Asset Management Strategy Physical Asset Portfolio Business Case Procure & Construct Commission Operate & Maintain Asset Management System Asset Management Capability (Processes, Procedures & Knowledge) Asset Management Objectives Value Delivery ISO 55000 Compliance Reliability Excellence Process Safety Management Mechanical Integrity ISO 31000 Risk Management Asset Management Plans Asset Criticality ASSET LIFECYCLE Asset Management System Implementation Framework Areas where companies commonly focus
- 6. 6© Life Cycle Engineering 2015 6 Asset Management Implementation Broken-Down Further… 1. Understand the corporate (and/or site) business strategy & objectives 2. Create asset management strategy & objectives that align with the business strategy & objectives 3. Implement asset management capabilities, across the asset lifecycle, to deliver value Asset Management Capability (Processes, Procedures & Knowledge) Value Delivery ISO 55000 Compliance Reliability Excellence Process Safety Management Mechanical Integrity ISO 31000 Risk Management Asset Management Plans Asset Criticality
- 7. 7© Life Cycle Engineering 2015 7 FAQ: What’s the difference between Reliability, Maintenance and Asset Management? • Reliability Processes: o Asset criticality, root cause analysis, etc. • Maintenance Processes: o Planning & scheduling, work execution, etc. These are Asset Management Capabilities • Other asset management capabilities include: capital delivery, MRO materials management, etc. Asset Management Capability (Processes, Procedures & Knowledge) Value Delivery ISO 55000 Compliance Reliability Excellence Process Safety Management Mechanical Integrity ISO 31000 Risk Management Asset Management Plans Asset Criticality
- 8. 8© Life Cycle Engineering 2015 8 Understanding the Value Stream How does your business create value? • Producing medicines, vaccines, devices, etc. • Selling products – increasing prices &/or volume over time • Reducing cost of goods sold (COGS) over time Waste = Cost TIM WOOD T: Transportation I: Inventory M: Motion W: Waiting O: Over-processing O: Over-production D: Defects
- 9. 9© Life Cycle Engineering 2015 9 Understanding the Value Stream • What are your high-profit products? • Do you have capacity-constrained products (everything made is immediately sold)? • Where in your production is COGS absorbed? • What is the cost of downtime? • Get to know your corporate & site finance teams! They can answer most of the questions above. • Great partnership opportunity with your Operational Excellence groups!
- 10. 10© Life Cycle Engineering 2015 10 Highest-Level Value Delivery Concepts Fixed Capital • Optimize lifecycle costs • Defer asset replacement through increased asset life Working Capital • Leaner manufacturing • Reduce work in process • Reduce spare parts inventory Revenue or Output • Increase asset availability • Increase throughput • Improve quality Operating Costs • Reduce unscheduled downtime • Reduce maintenance cost • Reduce operations Cost Note: Site-to-site and/or company-to-company benchmarking key to quantifying opportunities for strategic implementations
- 11. 11© Life Cycle Engineering 2015 11 Tactical Value - Availability & Opportunity Case for Improvement Availability as defined by SMRP Best Practices & Metrics Guide (download at SMRP.org – free for members):
- 12. 12© Life Cycle Engineering 2015 12 Availability & Opportunity Case for Improvement Reliability Engineers should focus on improving unscheduled downtime Unscheduled Downtime due to Equipment Issues: 90 hrs/month (1 hr/shift, 3 shifts/day)
- 13. 13© Life Cycle Engineering 2015 13 Availability & Opportunity Case for Improvement Goal: Reduce unscheduled equipment downtime from 90 hrs/month to 45 hrs/month (Improve availability from 44% to 50%) • 45 hrs/month of additional production time now available • Average production rate for data collection period: 382 vials/hr • Average Profit/vial: $10 • Monthly profit gain: $171,900 Annual profit gain: $2.1MM
- 14. 14© Life Cycle Engineering 2015 14 Availability & Opportunity Case for Improvement What can we do to reduce unscheduled equipment downtime? • Pareto analysis of equipment issues/failures • FMEA for bad actors on the line (typically filler, inspection machine) • PM optimization/improvements across line unit ops • Implement PdM for common failure modes & causes • If large line or operation, start with asset criticality analysis Graphics Source: Life Cycle Engineering, Copyright 2015
- 15. 15© Life Cycle Engineering 2015 15 Presenting & Tracking Improvements Utilize the A3 Business Case Template Graphics Source: Life Cycle Engineering, Copyright 2015 The A3 template is named after the ISO 216 ‘A3’ paper size, and incorporates all information on a single 11”x17” sheet of paper. The format was developed in the 1960s as part of Toyota’s Quality Circle problem-solving program. Example Goal: Reduce unscheduled equipment downtime from 90 hrs/month to 45 hrs/month (Improve availability from 44% to 50%) Present to Engineering Leadership Team monthly to update on: Implementation Plan, Schedule, Metrics including unscheduled downtime, availability, ROI
- 16. 16© Life Cycle Engineering 2015 16 Summary of Reliability Improvement Approaches & Impact on the Business Graphics Source: Life Cycle Engineering, Copyright 2015 Strategic Approach: • Establish an Asset Management Program with a policy, strategy and objectives aligned with corporate and/or site business objectives • Multi-year effort: 1 year to see results in a pilot area of company, 3-5 year full transformation – 1st year benefits often ‘pay for’ the entire program • Implementation of all asset management capabilities (50+) • Largest value opportunity: Hundreds of millions of dollars for most pharma & biotech companies Tactical Approach: • Targeted improvements of one area or production line • Smaller scope, faster return on investment: Average 3-6 month implementation • Can still provide significant business benefit • Implementation of several (3-5) asset management capabilities • Does require other functioning asset management capabilities such as maintenance work execution, spare parts management, etc.
- 17. 17© Life Cycle Engineering 2015 17 Questions & Discussion Connecting Reliability & Business + ISO 55000 Framework David J. Mierau, PE, CMRP Director, Reliability Solutions Life Cycle Engineering (954) 547-5854 dmierau@lce.com www.LCE.com
Editor's Notes
- Today, LCE is a privately held company with headquarters in Charleston, South Carolina. Our more than 600 employees, working out of 10 offices around the United States, provide engineering solutions for private industry, public entities, government organizations and the military, in North America and around the world. LCE is a strengths-based organization focused on turning individual talents into strengths and then turning individual strengths into organizational performance that supports our clients’ success. Our corporate culture encourages personal and professional growth because LCE’s success depends on the talent, professionalism and commitment of our employees. Ranked in the top 10 Best Places to Work in South Carolina for six consecutive years, in 2012 we were honored to be selected as the Best Place to Work in South Carolina among large employers in the state. Since 1976, Life Cycle Engineering has grown to include three groups: LCE’s Applied Technology Group provides expertise in software testing, Service Oriented Architecture, cyber security, agile development, virtualization, and systems administration and monitoring. The Engineering Services Group provides engineering and professional services to U.S. and foreign Navies, commercial marine operators and industrial companies. These services include electrical and environmental engineering, mechanical and marine engineering, materials and metallurgical engineering, energy management, integrated logistics support, and program and financial management. Our Reliability Consulting Group provides consulting, services and education that help organizations reduce risk, improve operating performance and engage their employees. Let’s take a closer look at what makes LCE’s Reliability Consulting Group a leading provider of reliability solutions worldwide.
- Referenced standards provide the elements of a holistic asset management program and should be referenced when creating a corporate or site asset management policy and program.