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Applying Lean and RCM Principles to Implement a CostEffective Preventive Maintenance Program

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Title: Applying Lean and RCM Principles to Implement a CostEffective Preventive Maintenance Program


1
Applying Lean and RCM Principles to Implement a
Cost-Effective Preventive Maintenance Program

IFMA Industries Forum April 2008 Denver,
Colorado
Presented by Paul Ring, Vice President CH2M
HILL paul.ring_at_ch2m.com
2
Discussion Topics
An electronic copy of this presentation will
gladly be provided upon request.
  • Introductions
  • A Performance Perspective on Maintenance
  • Defining an Effective Maintenance Strategy
  • Reliability Centered Maintenance
  • Reliability Centered Maintenance (RCM lite)
  • Close

3
Our Founders
Established in 1946 by three engineers and a
professor, CH2M HILL operated from its very
beginning on four simple values take care of
clients, deliver great work, do right by
employees, and stay true to our integrity and
honesty.
Clair Hill
Holly Cornell
James Howland
Burke Hayes
Fred Merryfield
CH2M HILL Confidential and Proprietary -
Disclosure Prohibited
4
CH2M HILL Denver based
24,000 people - 250 offices in 40 countries
Revenues exceeding 5 billion
Fortune Magazine Top 100 companies to work for
54 for 2008
5
Industrial Rankings
  • 1 in
  • Industrial/ Manufacturing
  • Semiconductors
  • Program Management
  • Construction Management
  • Environmental Firms
  • Marine and Port Facilities
  • Site Assessment and Compliance
  • Wastewater
  • Water

Per 2007 Engineering News Record rankings
(McGraw-Hill)
CH2M HILL Confidential and Proprietary -
Disclosure Prohibited
6
Objectives
  • Mine
  • Promote the open discussion of ideas and concepts
    that challenge the norm or status quo
  • Yours
  • Leave this presentation with 2 great take-aways
    (ideas)

7
A Performance Perspective on Maintenance
8
Maintenance Equality
INITIAL CAPABILITY (What it can do)
9
Maintenance Cost Escalation
in Billions
2005
1979
Today 1/3 of all maintenance costs are spent
unnecessarily
Maintenance costs have risen 10-15 per year
Companies are wasting more today than they were
spending 25 years ago
10
Preventive Maintenance Programs
PARTIALLY SATISFIED
NOT SATISFIED
SATISFIED
20 of companies believe their PM programs are
effective
11
Root Cause Analysis
Only about 1/3 of all companies performed some
type of root cause failure analysis on equipment
breakdowns.
12
Maintenance Planners Perspective
Use of maintenance planners is one of the largest
potential areas for cost savings. Planned vs.
unplanned work may have a cost ratio as high as
15
13
W.O. Systems
  • W.O. Systems - Majority of all maintenance
    organizations are not satisfied with their
    current system or do not have one
  • Wrench time efficiency 2 to 4 hours per day are
    spent turning a wrench

Only 1/3 of all companies compared the actual
results to the work order plan
14
Maintenance Cost Compared to Downtime Costs
Downtime costs average 41 compared to
maintenance costs for a repair. Surveys range
from 21 to as much as 141 with downtime costs
always the higher number
15
Defining a Cost Effective Maintenance Strategy
16
The Life of the Facilities Manager
Operational Im under pressure to keep my costs
down, building and production assets
99.999 available and continue to improve
Customer Satisfaction
Strategic The plant portfolio is my companys
second largest cost how do I more closely tie
my objectives to corporate strategy?
OPERATIONAL
STRATEGIC
P O R T F O L I O
B U I L D I N G
S I N G L E
Cost What do I need to do to preserve the
building assets, support manufacturing and reduce
cost?
Plant Optimization Every occupant is my customer
their needs and satisfaction must drive my
objectives.
FACILITIES OPTIMIZATION
COST
17
The Motivating Factor
  • The primary reason for this discussion is MONEY
    ()

18
Maintenance Management Pyramid
Preventive Maintenance
19
Rethinking Maintenance Strategy
  • 1940

20
Some Common Maintenance Problems
  • Insufficient proactive maintenance
  • Frequent problem repetition
  • Erroneous maintenance work
  • Sound maintenance practices not institutionalized
  • Unnecessary conservative PM
  • Sketchy rationale for PM actions
  • Maintenance problems lack traceability or
    visibility
  • Blind acceptance of OEM inputs
  • PM variability between like or similar units
  • Ineffective PdM maintenance technology
  • Failure to employ the 80/20 rule
  • The construction paradigm

21
Blind Acceptance of OEM PM Input
  • OEMs almost always deliver some form of OM
    manual
  • Three problems
  • OEM has not thought through equipments role in a
    comprehensive and cost effective manner
  • PM is designed to protect manufacturer in
    warranty work
  • OEM equipment is used in many ways by different
    companies (e.g., cyclic versus steady state)
  • Equipment may be used for high reliability
    applications and low reliability requirements
    without consideration to maintenance times
  • The basis for many PM programs is blind, unknown
    or legacy acceptance of OEM recommendations

22
Proliferation of Solutions
  • The Acronym Parade
  • OEE, EVA, RAV, TPM, RCFA, TPR,TQM, etc
  • TQM problem with Florida Power Light (Deming
    Award)
  • Simple means NO
  • Complex organizational experiments
  • Overnight attempts at cultural changes
  • Unrealistic expectations of dramatic highly
    visible payoffs for a small or short term
    investment

The key to an effective maintenance program is
couched in a simple solution
23
An Effective Maintenance Program
1. Focus resources for best ROI
2. Measure results
4. Employ an effective management system
3. Avoid intrusive maintenance
5. View maintenance as a profit center
24
Some Common Obstacles Myths
  • Benchmarking Best Practices Help or
    Hindrance?
  • Benchmarking others
  • Direct apples-to-apples comparison?
  • Difficult to benchmark against a competitor
  • Nearly impossible to benchmark against an
    industrial plant for costs that count
  • One spends more time on process than results over
    time
  • Benchmark YOURSELF
  • This is an apples-to-apples comparison
  • Apply your time and energy gathering BEST
    PRACTICES
  • Best practices positively impact your bottom line
    over time
  • Best practices include effective measuring and
    reporting tools and methodology

Selectivity based on convenience
25
The 80/20 Rule Focusing Resources
  • 20 of equipment accounts for 80 of CM DT
  • 80 of CM DT costs comes from 20 of equipment
  • Based on industry Pareto analyses
  • Maintenance focus must be on 20 of equipment
  • Basis for Reliability Centered Maintenance

26
Reliability Centered Maintenance
27
Reliability Centered Maintenance
Maintenance Ensuring that physical assets
continue to do what their users want them to do
Reliability-Centered Maintenance A process used
to determine what must be done to ensure that any
physical asset continues to do what its users
want it to do in its present operating context
28
RCM History
29
(1) Reliability patterns for non-structural
equipment
The Maintenance Bathtub Curve (1)
30
Preventive Maintenance Definition and Structure
Time between planned or maintenance outage and
forced outage vs. duration of forced outage
31
RCM Four Features
  • Preserve function
  • Identify failure modes
  • Prioritize function need (via failure modes)
  • Select applicable and effective PM tasks for the
    high failure modes

You do not want to apply RCM to every system in a
plant using the 80/20 rule apply classical RCM
to 20 of the plant systems
32
RCM Implementation Cost ()
  • For a simple plant with about 30 systems (e.g.,
    fossil power plant)
  • 200,000 to 300,000 over 1-2 years
  • For a complex plant with 100 systems (e.g.,
    nuclear power plant)
  • 1,200,000 over 3-5 years

An alternative approach is even more cost
effective RCM lite
33
RCM lite
34
RCM lite
  • A cost effective Tier Three means to reduce cost
  • Classical Method ()
  • Abbreviated Classical Method ()
  • RCM lite
  • Preserve function
  • Identify failure modes
  • Prioritize function need (via failure modes)
  • Select applicable and effective PM tasks for the
    high failure modes

35
RCM lite
Maintenance Classes
36
RCM lite
5 Maintenance Classes
  • Class A Mission Critical
  • Failure has a significant effect financially or
    on the safety of the environment of the core
    business activities
  • Focus on maximizing the reliability of the
    equipment and systems, and hence the up time of
    the facility.
  • Conduct RCM analysis, including a Failure Modes
    and Effects Analysis (FMEA) and a comprehensive
    risk assessment, to determine most effective
    method of maintenance at the system and asset
    level.
  • Deploy appropriate PM and /or PdM strategies
    that mitigate unacceptable risk and maximize
    availability.
  • Class B Optimize Life Cycle Costs
  • Failure has generally a minor impact on the core
    business activities.
  • Focus on minimizing the life cycle costs of the
    equipment and systems over time.
  • Conduct RCM analysis, including a Failure Modes
    and Effects Analysis (FMEA) and a comprehensive
    risk assessment, to determine most cost effective
    method of maintenance at the system and asset
    level.
  • Deploy appropriate PM and /or PdM strategies
    that mitigate unacceptable risk and minimize
    cost. RCM analysis outcome may include decision
    to run asset to failure.

37
RCM lite
5 Maintenance Classes
  • Class C Minimize Short Term Costs
  • Failure does not impact the reliability of the
    core business and owner is willing to minimize
    costs at the expense of increasing the life cycle
    costs.
  • Focus on minimizing short term costs.
  • Conduct risk assessment to determine impacts of
    system and asset failure on personnel, community,
    and EHS compliance only.
  • Deploy unacceptable risk mitigation measures.
    Where appropriate perform scheduled visual
    inspections and TLC (Tighten, Lube, and Clean) PM
    to minimize unacceptable risk. RCM analysis
    outcome may include decision to run asset to
    failure.
  • Class D Industry Standard Maintenance
  • This class is the national industry standard for
    typical office space environments using the RS
    Means database.
  • Assign appropriate RS Means recommended
    preventive maintenance schedules. Where RS Means
    is not available, use OEM recommended or
    appropriate customized preventive maintenance
    schedules.
  • Conduct risk assessments or deploy advanced
    maintenance techniques.
  • Class E Out-of-Service
  • Associated with out-of-service equipment. The
    equipment remains with the ability to operate and
    minimum maintenance is performed.

38
Maintenance Management Pyramid
Preventive Maintenance
39
Thank you for your time!
40
CH2M HILL Overview
  • 4.2 Billion Revenue in 2006
  • 17,400 Employees
  • 225 Offices Worldwide
  • 100 Employee-Owned
  • E,P,C, OM firm

Corporate headquarters in Denver, CO, USA
Fortune Magazine Top 100 companies to work for
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