Measuring Performance ... Improved specificity of outcomes will inform the selection of performance indicators.

1. Measuring and ImprovingMeasuring and Improving
Maintenance PerformanceMaintenance Performance
Salih O. DuffuaaSalih O. Duffuaa
Systems Engineering DepartmentSystems Engineering Department
King Fahd University of Petroleum and MineralsKing Fahd University of Petroleum and Minerals

2. Presentation PlanPresentation Plan
 IntroductionIntroduction
 Evolution of Maintenance ManagementEvolution of Maintenance Management
 Why MeasureWhy Measure
 Performance MeasurementPerformance Measurement
– Structured AuditingStructured Auditing
– Key performance indicatorKey performance indicator
– BenchmarkingBenchmarking
 Improvement processImprovement process
 Case StudiesCase Studies

3. Role of MaintenanceRole of Maintenance
 Maintenance is defined as theMaintenance is defined as the
combination of activities by whichcombination of activities by which
equipment, assets or a system isequipment, assets or a system is
kept or restored to a state in whichkept or restored to a state in which
it can perform its designatedit can perform its designated
function. It is an important factor infunction. It is an important factor in
product or service quality and canproduct or service quality and can
be used as a strategy forbe used as a strategy for
successful competitionsuccessful competition

4. IntroductionIntroduction
PLANNING ORGANIZING
Maintenance
Process
Maintenance strategy
Maintenance Load Forecasting
Maintenance Capacity
Maintenance Organization
Maintenance Scheduling
Process design
Standards
Performance Measurement
Project Management
MONITOR
FEEDBACK
CONTROL
Work control
Material control
Inventory control
Cost control
Managing for quality
INPUT OUTPUT
Operational
Machines
Equipment
&
Facilities
Labor
Equipment
Management
Spares
Variations in
Maintenance
Demand
* Scheduling

5. Maintenance Versus OrganizationMaintenance Versus Organization
ObjectivesObjectives
 The objectives and goals of anThe objectives and goals of an
organization depends on the organizationorganization depends on the organization
state, strategy and type of business. Somestate, strategy and type of business. Some
objectives areobjectives are
– Meet or exceed customer satisfactionMeet or exceed customer satisfaction
– Maximizing profit, Meet set targetsMaximizing profit, Meet set targets
– Meet set safety standard,Meet set safety standard,
– Zero product defectZero product defect
 Does Maintenance affect these goalsDoes Maintenance affect these goals??

6. Evolution of MaintenanceEvolution of Maintenance
ManagementManagement
 Prior to 50Prior to 50thth
: Necessary evil: Necessary evil
 50-70 : Preventive maintenance50-70 : Preventive maintenance
 7070thth
: Life cycle costing, RCM and: Life cycle costing, RCM and
Productive maintenance.Productive maintenance.
 80 : TPM an RCM80 : TPM an RCM
 9oth-date: Strategic view of maintenance9oth-date: Strategic view of maintenance

7. Why MeasureWhy Measure
 What can be measured will beWhat can be measured will be
understood better.understood better.
 What can be measured can be assessed.What can be measured can be assessed.
 What can be measured can be managed.What can be measured can be managed.
 What can be measured can beWhat can be measured can be
improved.improved.

8. Measuring MaintenanceMeasuring Maintenance
PerformancePerformance
 What to measure?What to measure?
 How to measure?How to measure?
 What to do with measurement output?What to do with measurement output?

9. Continuous ImprovementContinuous Improvement
Develop
Measurement System
(1(
Evaluate Maintenance
System (2(
Identify most deficient areas (3(
Identify root causes of deficiencies
(4(
Develop and implement corrective
and preventive actions (5(

10. Measurement SystemMeasurement System
 Structured AuditStructured Audit
 Performance IndicatorsPerformance Indicators
 Benchmarking ( can be utilized by both)Benchmarking ( can be utilized by both)

11. Structured Audit ApproachStructured Audit Approach
 What is an auditWhat is an audit
 Standard for the audit ( factors forStandard for the audit ( factors for
audit)audit)
 Organization of the auditOrganization of the audit
 Expected out put of the auditExpected out put of the audit

12. Structured AuditStructured Audit
 The American Heritage Dictionary defines audit as: “an examination ofThe American Heritage Dictionary defines audit as: “an examination of
records or accounts to check their accuracy”.records or accounts to check their accuracy”.
 Thomas and Henke (1989), “Auditing is a process in which one personThomas and Henke (1989), “Auditing is a process in which one person
verifies the assertions of an other”.verifies the assertions of an other”.
 Carmichael et al (1996), defines audit as : “Auditing is an independentCarmichael et al (1996), defines audit as : “Auditing is an independent
investigation of some particular activity”.investigation of some particular activity”.
 (http://www.columbia) defines an audit as a formal or official examination(http://www.columbia) defines an audit as a formal or official examination
and verification of the activities of an organizational unit, system, function,and verification of the activities of an organizational unit, system, function,
or other aspect of the organization's operations. It may include a review ofor other aspect of the organization's operations. It may include a review of
(1) economy and efficiency of operations; (2) effectiveness in achieving(1) economy and efficiency of operations; (2) effectiveness in achieving
program results; and (3) compliance with laws, regulations, and otherprogram results; and (3) compliance with laws, regulations, and other
rules. The audit results in a written reportrules. The audit results in a written report

13. Standard for the AuditStandard for the Audit
 Factors/activities to be examined.Factors/activities to be examined.
 Standard for each factor.Standard for each factor.
 Aggregation of sub-factors and factors.Aggregation of sub-factors and factors.

14. Audit FactorsAudit Factors
 1.1. Strategic ManagementStrategic Management
 Maintenance mission and objectivesMaintenance mission and objectives
 Alliance of process with mission andAlliance of process with mission and
objectives.objectives.
 ValuesValues
 Performance measurementPerformance measurement
 Effective strategiesEffective strategies
 Strategy assessmentStrategy assessment

15. Audit FactorsAudit Factors
 2. Organization and staffing2. Organization and staffing
 Organization structureOrganization structure
 Job descriptionJob description
 responsibilities and supervisionresponsibilities and supervision
 Polices and proceduresPolices and procedures
 Shops organizationShops organization
 3. Human resources3. Human resources
 Shop manningShop manning
 Employee motivationEmployee motivation

16. Audit FactorsAudit Factors
 4. Training4. Training
 Management trainingManagement training
 Planner trainingPlanner training
 Craft trainingCraft training
 5. Management control and budget5. Management control and budget
 6.1 Budget planning6.1 Budget planning
 Reporting and feedbackReporting and feedback
 Effective controlEffective control

17. Audit FactorsAudit Factors
 6. Work order planning and scheduling6. Work order planning and scheduling
 Priority systemPriority system
 Work order system and proceduresWork order system and procedures
 Emergency & shutdown schedulingEmergency & shutdown scheduling
 Planning proceduresPlanning procedures
 7. Facilities and resources7. Facilities and resources
 8. Stores and material8. Stores and material
 9. Preventive maintenance and equipment9. Preventive maintenance and equipment
historyhistory
 1o. Engineering Condition monitoring1o. Engineering Condition monitoring

18. Audit FactorsAudit Factors
 11. Information technology11. Information technology
 12. Performance analysis and appraisal12. Performance analysis and appraisal
 13. Safety in maintenance13. Safety in maintenance
 14. Maintenance and the Environment14. Maintenance and the Environment
 The audit program we are using has 90The audit program we are using has 90
questions distributed over the above 14questions distributed over the above 14
main factors.main factors.

19. Audit Plan and ExecutionAudit Plan and Execution
 Examine the audit program to reflect plantExamine the audit program to reflect plant
special characteristics.special characteristics.
 Form audit team from consultant in plantForm audit team from consultant in plant
personnel.personnel.
 Regular meeting.Regular meeting.
 Corrective and preventive actions.Corrective and preventive actions.

20. A case of a Process Plant in SaudiA case of a Process Plant in Saudi
Arabia : Audit Raw ScoreArabia : Audit Raw Score

Factor
number
Score
(Si)
Idealscore
(Li)
Factor
number
Score
(Si)
IdealScore
(Li)
1
2
3
4
5
6
7
7.00
6.20
6.75
7.33
7.25
8.00
7.14
10
10
10
10
10
10
10
8
9
10
11
12
13
14
9.67
6.70
7.82
7.80
6.00
3.00
8.00
10
10
10
10
10
10
10

21. Factors Weight Using AHPFactors Weight Using AHP
Factor
number
Normalized
weight
Factor
number
Normalized
weight
1
2
3
4
5
6
7
0.52
0.117
0.078
0.026
0.117
0.104
0.063
8
9
10
11
12
13
14
0.065
0.039
0.065
0.052
0.091
0.052
0.078

22. Audit AnalysisAudit Analysis
10
SiSi
=C.A.I.IndexAuditComposite
14
1
14
1
14
1
∑
∑
∑ =
=
=
== i
i
i
i
i
i w
Iw
w
d wiI w S w I Si i i i i i i= − = −( )

23. ABC on the TableABC on the Table
Factor
number
Percentage
weighted
deviation
Cumulative
percentage
weighted
deviation
Factor
number
Percentage
weighted
deviation
Cumulative
percentage
weighted
deviation
2
13
12
5
3
6
7
0.152
0.125
0.125
0.110
0.087
0.071
0.062
0.152
0.277
0.402
0.512
0.599
0.670
0.732
1
14
10
11
4
8
0.053
0.053
0.048
0.039
0.024
0.008
0.785
0.838
0.886
0.925
0.949
1.00

24. Improvement ActionsImprovement Actions
 Factor 2: Organization and StaffingFactor 2: Organization and Staffing
– Document procedures for PMDocument procedures for PM
– Supervisor technician ratioSupervisor technician ratio
– Establish a suitable planner-worker ratio.Establish a suitable planner-worker ratio.
– Decentralize some of the maintenance activities.Decentralize some of the maintenance activities.
 Factor 13: Safety in maintenanceFactor 13: Safety in maintenance
– Include safety within maintenance processInclude safety within maintenance process
– Enforce safety rulesEnforce safety rules
– Training program for maintenance personnel.Training program for maintenance personnel.

25. Performance MeasuresPerformance Measures
 An alternative or integrated approach withAn alternative or integrated approach with
structured auditing ?structured auditing ?
 It links processes to objectives.It links processes to objectives.

26. Performance MeasuresPerformance Measures
 There are literally hundreds of potential indicatorsThere are literally hundreds of potential indicators
 ““Appropriate” indicators depend on many factors,Appropriate” indicators depend on many factors,
such assuch as
– Level in the organization to use the informationLevel in the organization to use the information
– Existing data collection systems, and how easily modifiedExisting data collection systems, and how easily modified
– Staff availability to develop/maintain systemsStaff availability to develop/maintain systems
– Demands of managers &teams for the information, and theirDemands of managers &teams for the information, and their
level of sophistication (foreman vs. MBA)level of sophistication (foreman vs. MBA)
 Frequency of reporting also is situation dependentFrequency of reporting also is situation dependent
 Stratification options by plant, department, machine,Stratification options by plant, department, machine,
product line, etc., are importantproduct line, etc., are important

27. Managerial ClassificationManagerial Classification
 Macro IndicatorMacro Indicator
– Macro-indicatorsMacro-indicators (for upper management,(for upper management,
primarily)primarily)
 Micro IndicatorMicro Indicator
– Micro-indicatorsMicro-indicators (for lower levels of(for lower levels of
management)management)

28. Macro IndicatorMacro Indicator
 maintenance expense dollars as a percentmaintenance expense dollars as a percent
of replacement asset value.of replacement asset value.
 maintenance expense dollars per unitmaintenance expense dollars per unit
producedproduced
 maintenance expense dollars as a percentmaintenance expense dollars as a percent
of plant controllable expensesof plant controllable expenses
 regulatory compliance indicatorsregulatory compliance indicators
 Productive capacityProductive capacity

29. Micro-IndicatorMicro-Indicator
 maintenance budget compliance (budgetmaintenance budget compliance (budget
vs. expense)vs. expense)
 monthly expense dollars (by equipmentmonthly expense dollars (by equipment
type)type)
 percent overtime (3-9% sometimes citedpercent overtime (3-9% sometimes cited
as ideal)as ideal)
 percent emergency workpercent emergency work

30. System ClassificationSystem Classification
 Input Measures Primarily Cost MeasuresInput Measures Primarily Cost Measures
 Output measuresOutput measures
 Within The System MeasuresWithin The System Measures

31. Input MeasuresInput Measures
 Input Measures are Mostly Related ToInput Measures are Mostly Related To
CostCost
 Labor : Cost of trades, semi-skilled etcLabor : Cost of trades, semi-skilled etc
 Materials and sparesMaterials and spares
 ContractsContracts
 Shop ServiceShop Service
 Equipment RentalsEquipment Rentals
 Maintenance OverheadMaintenance Overhead
 Company OverheadCompany Overhead

32. Output MeasuresOutput Measures
 Availability : Measure of UptimeAvailability : Measure of Uptime
 Reliability : Mean-time-between-failureReliability : Mean-time-between-failure
 MTBF = S-d/f , f is number of failuresMTBF = S-d/f , f is number of failures
 Mean Time To Repair: Measure ofMean Time To Repair: Measure of
Duration of RepairDuration of Repair
 MTTR = d/fMTTR = d/f
 Utilization = Scheduled Time/C TUtilization = Scheduled Time/C T
 CT = Calendar TimeCT = Calendar Time

33. Output MeasuresOutput Measures
 Process Rate (PR) : Measure of theProcess Rate (PR) : Measure of the
Equipment Cycle Time in The ProcessEquipment Cycle Time in The Process
 PR = Ideal Cycle Time/Actual Cycle timePR = Ideal Cycle Time/Actual Cycle time
 Quality Rate (QR) : Measure of equipmentQuality Rate (QR) : Measure of equipment
PrecisionPrecision
 Total Produced - Rejected/Downgrades/ TotalTotal Produced - Rejected/Downgrades/ Total
 Overall equipment EffectivenessOverall equipment Effectiveness
 OEE = A* PR *QROEE = A* PR *QR
 Productive capacityProductive capacity
 OEE * UtlizationOEE * Utlization

34. Measures Within The SystemMeasures Within The System
 Work Distribution : Time Spent in each workWork Distribution : Time Spent in each work
categorycategory
 Delays : Time spent waiting for instructionsDelays : Time spent waiting for instructions
 parts, travel,breaks, Start and Quitsparts, travel,breaks, Start and Quits
 Compliance : Measures to Track ComplianceCompliance : Measures to Track Compliance
with various plans, such as PM, Shutdownwith various plans, such as PM, Shutdown
schedules etc.schedules etc.

35. Measures Within The SystemMeasures Within The System
 Backlog : Amount of Work Planned butBacklog : Amount of Work Planned but
not Completed by Plant, Area, Craft, etcnot Completed by Plant, Area, Craft, etc
 Failure Analysis: Tracks improvementFailure Analysis: Tracks improvement
analysis, such Number of New PManalysis, such Number of New PM
Routines, Number of Root CauseRoutines, Number of Root Cause
Analysis of Breakdowns Undertaken.Analysis of Breakdowns Undertaken.

36. Indicators Selection CriteriaIndicators Selection Criteria
 Reflect business objectives.Reflect business objectives.
 Impact customer satisfaction.Impact customer satisfaction.
 Quality of product or serviceQuality of product or service
 Describe the performance of key process.Describe the performance of key process.
 Performance of critical equipment.Performance of critical equipment.
 Safety and environment.Safety and environment.

37. Balance Scorecard ApproachBalance Scorecard Approach
 FinancialFinancial
 CustomerCustomer
 InternalInternal
 Learning and growthLearning and growth

38. Improvement ApproachImprovement Approach
 Identify areas were goals are not metIdentify areas were goals are not met
 Use Pareto chart to prioritize areasUse Pareto chart to prioritize areas
 Root cause analysisRoot cause analysis
 Corrective and preventive actionsCorrective and preventive actions
 Implement actionsImplement actions
 Measure and checkMeasure and check

39. BenchmarkingBenchmarking
 Formal DefinitionFormal Definition
BenchmarkingBenchmarking is the continuous, systematicis the continuous, systematic
processprocess of measuring our products, services, andof measuring our products, services, and
practices against the toughest competitors or thosepractices against the toughest competitors or those
companies recognized as industry leaders.companies recognized as industry leaders.
Working DefinitionWorking Definition
BenchmarkingBenchmarking is a basis of establishing rationalis a basis of establishing rational
performance goals through the search for bestperformance goals through the search for best
industry practices that will lead to superiorindustry practices that will lead to superior
performance.performance.
A Related DefinitionA Related Definition
Benchmark:Benchmark: An industry standardAn industry standard
 Descriptive Benchmarks or PracticesDescriptive Benchmarks or Practices
 Quantitative Benchmarks or PerformanceQuantitative Benchmarks or Performance
MeasurementsMeasurements

40. Benchmarking As An ImprovementBenchmarking As An Improvement
ToolTool
 How Benchmarking Makes PossibleHow Benchmarking Makes Possible
ImprovementsImprovements
 The gap between internal and externalThe gap between internal and external
practices creates the need forpractices creates the need for
improvementimprovement
 Understanding industry best practicesUnderstanding industry best practices
identifies what you must improve.identifies what you must improve.
 Externally benchmarked practicesExternally benchmarked practices
developed from others give a picture ofdeveloped from others give a picture of
the endpoint after improvement.the endpoint after improvement.

41. Types of BenchmarkingTypes of Benchmarking
 InternalInternal
– Similar processes (data is available).Similar processes (data is available).
 ExternalExternal
– Type of industry (competitors)Type of industry (competitors)
– Best in industry (non-competitors)Best in industry (non-competitors)

42. Benchmarking ProcessBenchmarking Process

BENCHMARKING PROCESS
BENCHMARK METRICS BENCHMARK PRACTICES
BENCHMARK GAP
• HOW MUCH
• WHERE
• WHEN
HOW TO CLOSE THE GAP
• IMPROVED KNOWLEDGE
• IMPROVE PRACTICES
• IMPROVED PROCESSES
MANAGEMENT
COMMITMENT
ORGANIZATION
COMMUNICATION
EMPLOYEE
PARTICIPATION
SUPERIOR
PERFORMANCE

43. Benchmarking as a Process ofBenchmarking as a Process of
ImprovementImprovement
 Know your own operation, both its strengths andKnow your own operation, both its strengths and
weaknesses.weaknesses.
 Know those industries that excel at theKnow those industries that excel at the
maintenance processes used in your operation,maintenance processes used in your operation,
including competitors, sector leaders, and thoseincluding competitors, sector leaders, and those
in other industriesin other industries
 Set challenging targets for your maintenanceSet challenging targets for your maintenance
performance measures; incorporate the bestperformance measures; incorporate the best
practicespractices
 Measure results and strive continually forMeasure results and strive continually for
superior performancesuperior performance

44. Key Factors for SuccessKey Factors for Success
 Management commitment forManagement commitment for
improvement.improvement.
 Create a culture of MaintenanceCreate a culture of Maintenance
Kaizen.Kaizen.
 People motivation, growth andPeople motivation, growth and
continuous learning.continuous learning.
 Quality circle for process improvementQuality circle for process improvement
 Reward based performance.Reward based performance.
 Technology as a means for enabling.Technology as a means for enabling.

45. ConclusionConclusion
 Maintenance Should managed as aMaintenance Should managed as a
business unit.business unit.
 Maintenance performance must beMaintenance performance must be
aligned with company strategicaligned with company strategic directions.directions.
 Three approached for improvement areThree approached for improvement are
presented- Structured audits,presented- Structured audits,
Performance Indicators andPerformance Indicators and Benchmarking.Benchmarking.

46. ConclusionConclusion
 Culture of continuous improvementCulture of continuous improvement
(C.I) must be created to sustain C. I.(C.I) must be created to sustain C. I.
 Leadership and managementLeadership and management
commitment are key to creating thecommitment are key to creating the
culture of C.I.culture of C.I.

47. Thank you for your patienceThank you for your patience
Any Questions or commentsAny Questions or comments ..