Asset Maintenance - A Paradigm Shift

In my previous blogs, we discussed about definition of asset maintenance management, importance of asset maintenance in the operations intensive manufacturing industry, relation and crucial impact of asset maintenance in operations of any organization. Then, we had also planned to discuss about the operation’s perspective on asset maintenance in this blog.

Traditionally, asset maintenance management was dealt with the short term issues like resources, cost, man power etc. In recent past, maintenance management has changed its concerns towards the consideration of long-term goals like competitiveness, sustainability and strategy. Therefore, asset maintenance management approach needs to be viewed in a strategic perspective. Asset maintenance is not just ensuring healthiness of equipment in a facility but it also plays a crucial role in achieving organisation’s goals and objectives with optimum maintenance cost with the maximum production output in any organisation. Once maintenance is viewed as a strategic perspective in the organisation, there is a requirement to formulate asset maintenance strategy for performing maintenance function in the organization in order to achieve set maintenance objectives defined.    

Asset maintenance strategy can be defined as a systematic approach to upkeep the facilities and equipment and it may vary from facility to facility. It involves identification, researching and execution of many repairs, replace and inspect decisions and is concerned with formulating the best life plan for each unit of the production plant, in coordination with operations function and other functions concerned. It describes what events (e.g. failure, passing of time, condition) trigger what type of maintenance action (inspection, repair, or replacement).

Asset maintenance strategy process includes various activities such as formulation of plant wise maintenance strategies for the organisation, selection of particular maintenance strategy of the specific equipment or process and effective implementation of maintenance strategies selected. All these activities are required to be viewed strategically and to be monitored ad implemented holistically.

It is also pertinent that asset maintenance function has gained crucial role over the last few decades in the operations intensive industries. Consequently, over the years, many different strategies have also been developed to support asset maintenance management implementation in the industry. With increasing automation and mechanization in production processes are becoming highly sensitive to machine/equipment and people. Consequently, the role of equipment maintenance in controlling quality, quantity and reducing costs is more evident and important than ever.

One of the challenges of asset maintenance function is to continuously improve the performance of maintenance. Despite the obvious importance of maintenance strategies, a survey among maintenance managers shows that 48% managers agreed for having written maintenance strategy and 28% had no maintenance strategy at all and also remarks that the quality standard ISO to be a maintenance strategy (Alsyouf, 2009).

There seems to be a less interest among the maintenance practitioners for a structured asset maintenance strategy formulation and implementation. The reasons may be:

•    Asset maintenance approaches/methods/concepts are resource demanding so that SME organisations do not show much interest in using such maintenance approaches
•        Organisations are reluctant to experiment with the new asset maintenance methods developed such as Total Productive Maintenance (TPM), Reliability Centred Maintenance (RCM) etc.

In the operations intensive industries and manufacturing plants, despite the best efforts of asset maintenance managers, equipment still fails, and plants are vulnerable to failures. Therefore, before adopting any maintenance strategy, maintenance managers must change the way they think about failures and understand its diversity. The implications in production and maintenance suggest the need to change the focus of asset maintenance polices & maintenance methodology adopted.

In the upcoming blogs, we shall explore the various asset maintenance methods/approaches and they are also named as maintenance strategies such as Preventive Maintenance (PM), Predictive Maintenance (PdM), Total Productive Maintenance (TPM), and Reliability Centred Maintenance (RCM) one by one.

I put forward my request to you all once again to read the blog series and share your comments in the blog page and it helps me to keep track of your comments and add value to the blog series. If some of you have any questions, please mention your question also in the comments box in the blog and I will answer the questions based on my experience. So, Let us make more interactive this blog series…

-        Contact at rsvelmurugan@gmail.com

Operations Vs Maintenance

In my last blogs we could deliberate the issues related to asset maintenance in the Industry with the support of data. As told at the end of the blog dated 25^th August, 2016, in this blog, I am shifting the focus to Operations. Therefore, I would like to present here the role of operations in the manufacturing industry and relations with maintenance function.

Operations in the industry constitute all set of the activities that an organisation achieves in order to deliver value to its customers. It is the set of processes that transforms either materials or information into a product or service. There have been some exciting changes happening in the industry in recent years. Operations are no longer merely something that has to complete in order to proceed with business as common. Today, organisations can generate huge competitive advantage with their superior and novel operations. In the context of globalization of business, the changing nature of operations in any organisation is due to the major developments such as information technology and technological advances in the production/ maintenance technology.

Operations in the industry are characterized by diversity of issues of distinct nature such as technical and operational, short and long term planning, systems management, and involvement of various stakeholders. Organisations are also facing a lot of challenges such as optimization of operations function due to the continual evolving world of technologies, global competitiveness, environmental and safety requirements.

Now is the time for operations of the organisation in the industry to step up to the stage and become a key player in achieving company profitability and growth goals.  Sound operations management excels at meeting daily business requirements and builds competitive advantage. This is a much bigger vision than just being a cost-effective business enabler. It requires forward, innovative thinking and agile response to rapidly changing markets, technologies and global cost structures.

The concern towards total quality and profitability of an organisation are crucial factors in the business. Availability of production equipment and ensuring production efficiency is essential to sustaining production capacity in continuous production plant in any industry like operations intensive industry also. These fundamentals factors affect profitability of an organisation in the operations intensive industries. Studies have shown that the negligence in asset maintenance and its role in production processes results in consequential issues such as financial, technical, as well as safety in both internal and external environment of the organization.

Further, organisations in operations intensive industries such as utilities, food and beverage processing, metals and mining, chemicals, oil and gas, and automotive recognize that asset maintenance is crucial to the successful operations of their organisations. Even though organisations provide the importance to effective and efficient maintenance practices in order to achieve the financial objectives, only 7% of organisations are completely satisfied with their maintenance performance. (Source: Report on Collaborative Asset Maintenance Strategies by Aberdeen Group, 2006)    

It is evident that industrial maintenance function has gained high recognition over the last few decades in various industries. Consequently, over the years, many different strategies have been developed to support maintenance management implementation in the industry. In today’s highly competitive business environment, management of physical assets (their selection, maintenance, inspection and renewal) plays a key role in determining operational performance and profitability of any business unit, manufacturing plant or industry that operate assets as a part of their core business. Asset Management, being the art and science of making right decisions and optimizing these processes, attempts to minimize the total life cost of assets and directly or indirectly influences manufacturing/ production/operation/service cost, processes and quality, and throughput or delivery time.

Especially impact of maintenance in achieving business objectives has been proven as important in recent time. However, more research study regarding the importance of maintenance in manufacturing environment is the requirement in the industry.

With the above inputs on operations and relations with maintenance function, I am of the opinion that the asset maintenance is given least preference in the industry. Organization’s board (top management) spends their time and decides the business strategy of the company. But, maintenance strategy is being decided by the functional heads. Top management is least worried about the operational strategy since it is treated as only targets.

In my next blog, let us further see on how maintenance has been viewed by Operation’s people. Are maintenance is in healthy condition in operations intensive industry?

Asset Maintenance Data - An Indian perspective

In my previous two blogs, I provoked the asset managers to respond about their life in asset maintenance in Indian scenario in the first blog and then discussed few definitions related to asset maintenance such as asset maintenance strategy and maintenance approaches and methods in the subsequent blog. As I promised you in the lost blog, I would like to present below data related to asset maintenance with Indian perspective.  It could be possible to retrieve these data from the literature survey in the area of asset maintenance strategy and maintenance management which I did during by research work.  

The cost associated with the asset maintenance has increased constantly over the decades. In the present scenario, depending on the type of industry, about 15-70% of production costs are attributed towards maintenance (Ilangkumaran & Kumaran, 2012) Unfortunately, due to the uncertainties and inefficiencies involved in maintenance planning, about one third of maintenance costs are wasted (Mobley, 2002). The selection of an apt asset maintenance strategy is important as well as complex in maintenance management and the output of maintenance is hard to measure and quantify (Mechefske & Wang, 2001).

Selecting the best sustainable maintenance strategy depends on several factors such as the goals of maintenance, the nature of the facility or the equipment to be maintained, work flow patterns (process focus, product focus), and the work environment.

It is also evident that industrial maintenance function has gained high recognition over the last few decades and same is case with natural gas industry. Consequently, over the years, many different strategies have developed to support maintenance management implementation in natural gas industry. With increasing automation and mechanization in operations intensive industry, production processes are becoming highly sensitive to machines and people. Consequently, the role of equipment maintenance in controlling quality, quantity and reducing costs is more evident and important than ever.

In addition, the production process is continuous and any abrupt stop of whole production process may cause excessive delay and huge reduction in output. Although organization follows various maintenance strategies, the cost and impact of sudden failure of equipment was found to be huge in the present organization.

Indian economy has witnessed sub-5 % growth of Gross Domestic Product (GDP) during last two years. It is poised to overcome the growth rate above 5% in the year 2014-15. One among the reasons for this slow growth rate is the performance of the industry sector. After 2008-09, the industrial sector which includes manufacturing, mining, construction, and electricity demonstrated recovery and steady growth for consecutive three years. Thereafter, industrial growth has lost its momentum due to various supply side and demand side constraints. The latest gross domestic product (GDP) estimates show that industry growth rate was 1% in 2012-13 and further reduced to 0.4% in the year 2013-14. The projected 12^th plan targets for manufacturing sector is 10% and 5.7% for mining sector in the remaining three years. To achieve these targets strong initiatives & growth strategies in industrial sector are crucial (Source: www.indianbudget.nic.in ).

Sector wise analysis of industrial performance is presented in Figure 1. It shows that the key reasons for poor performance in industrial performance are due to contraction in mining activities and deceleration in manufacturing output.  In manufacturing sector, reasons for growth slowdown are reduced fixed investment, several domestic and external factors like higher interest rate, bottlenecks in infrastructure, inflationary pressure due to rising input costs, and drop in domestic and external demand. In mining sector, reasons for growth slowdown are majorly due to lower or moderate production of goal, lignite, crude petroleum, iron ore, and natural gas (Source: www.indianbudget.nic.in )

   Sector-wise Growth of Industry GDP (%)

 (Source: www.indianbudget.nic.in).

Among the industries in Index of Industrial Production (IIP), India basket, core operation intensive industries have been identified for industrial growth rate study.  These industries are coal, fertilizer, electricity, crude oil, natural gas, refinery, steel, and cement. The average growth rate of these industries was 5% & 6.5% in the year 2011-12 & 2012-13 respectively. The index has grown to only 2.7% during 2013-14. This is mainly due to negative growth rate in natural gas (-13%) and crude oil (-2%). Further, due to lower growth rate in coal (0.7%), fertilizers (1.5%), and refinery products (1.7%). However, Government of India promotes to achieve industrial growth to almost 14% GDP over the medium term and further by 25% GDP by 2022 from the current 15-16% GDP thorough various initiatives such as National Manufacturing Policy (Source: www.indianbudget.nic.in ).

To achieve the targeted GDP growth set by GOI and also to sustain in global arena, it is crucial for Indian industries to sharpen the productivity, profitability and competitiveness. In order to maximise productivity and profitability in the industry, the world class best practices are to be adopted by organisations in the areas of operations & maintenance (Campbell & Jardine, 2001).

The above data demonstrates the importance attached to maintenance function in the operations intensive industry with an Indian perspective. In my next blog, I would like to shift my focus into importance of operations in the Industry.

I would sincerely request the readers of this blog to respond and share your experiences in the area of asset maintenance management. Thanks for your kind support.

Is asset maintenance a strategy or approach or method?

In my last blog posted on 15^th August, 2016, I could highlight the situation of an asset manager working in Indian industry through a small incident. By this incident, one should not come into the conclusion that the Indian asset managers are doing only fire-fighting and they are not following any regular preventive or predictive maintenance. Despite the best efforts of maintenance managers, equipment still fails, and plants are vulnerable to failures. The question before us is why?  & how?

Traditionally, asset maintenance was dealt with the short term issues like resources, cost, man power etc.  Recent past, maintenance management has changed its concerns towards the consideration of long-term goals like competitive, sustainability and strategy.

Asset maintenance is not about eliminating failures but understanding that it is more important to preserve the functions and understand each of the consequences of failure in order to address these failures, we must thoroughly understand its diversity. The importance and complexity involved in planning maintenance are now well known to companies, owing to which many resources have been diverted towards the area of maintenance management strategies.

Therefore, asset maintenance managers must change the way they think about failures and understand its diversity. The implications in production & maintenance suggest the need to change the focus on existing maintenance polices & maintenance methodology adopted. Asset maintenance should be viewed in terms of strategic perspective rather than operations perspective. What is asset maintenance strategy? Let us explore the few definitions given by the experts & researchers from asset maintenance area.

Asset maintenance strategy is a systematic approach to upkeep the facilities and equipment and it may vary from facility to facility. It involves identification, researching and execution of many repairs, replace and inspect decisions (Kelly) and is concerned with formulating the best life plan for each unit of the plant, in coordination with production and other functions concerned. It describes what events (e.g. failure, passing of time, condition) trigger what type of maintenance action (inspection, repair, or replacement).

When I was doing research on the subject of Asset Maintenance, I spoke with my industry colleagues.  What asset maintenance strategy is being followed in your organization? The most of answers from asset maintenance managers and engineers are Preventive Maintenance (PM) and Predictive Maintenance (PdM). Few of the colleagues know about the following Reliability Centered Maintenance (RCM), Total Productive Maintenance (TPM), Business Centered Maintenance (BCM), Capital Asset Management (CAM), and Integrated Logistic Support (ILS), but these maintenance approaches are not being followed mostly in Indian companies.

The above mentioned maintenance approaches (I named them as maintenance approaches), are being mentioned as maintenance strategies. Therefore, the question in my mind was that the preventive maintenance is a maintenance method/approach or it is a maintenance strategy? Then, to try to answers, I put my efforts to study the research papers, articles, magazines, etc. Readers of this blog may post their comments. In upcoming posts, I will slowly take you to step by step exploration on the subject.

Gentlemen & Ladies you may pose a question, is it necessary to answer this question what is the benefit, etc.  

In the current global scenario of extreme competition, factors such as productivity, availability, reliability, quality and cost of operations play a vital role in the success of a company. A critical component relating to all these factors is asset maintenance.

Nowadays, with profit decreasing, the need for a good asset maintenance planning & control system is obvious. However, often maintenance is a secondary process in companies that have production as their core business. The result is that maintenance does not receive enough management attention. This was confirmed by the researcher Ashayeri et al. in his Pilot survey which was conducted at six chemical firms (where maintenance was done in an adhoc manner).

In next post, I would post data on asset maintenance to make interesting our argument.

Operations In-charge's Call - Plant Trip

This series of blog titled Indian Story of an Asset Maintenance Manager is dedicated to all my colleagues, engineers, supervisors, technicians working in asset maintenance function of various industries such as operations intensive plant, manufacturing plant, services, etc. I would like to share my industry experience of 24 years and research experience on the subject. The illustrations will not be so technical but will be more on experiential sharing. I request readers to respond to my views and suggestions so that we together can improve the asset maintenance system of Indian Industry to excellence level.

Asset maintenance has been defined  as  the  combination  of  technical  and  associated  administrative  actions  in tended  to  retain  an  item  or  system  in,  or  restore  it  to, a  state  in  which  it  can  perform  its  required  function (ISO 14224:  2004). Further, Dhillion (2002) defined maintenance as all actions appropriate for retaining an item/ part/equipment in or restoring it to, a given condition.

A proper asset maintenance needs technical skills, techniques, methods to properly utilize the assets like factories, power plants, vehicles, equipment and machines. The key objective of asset maintenance is to ensure system function (availability, efficiency and product quality), system life (asset management), and system safety with low energy consumption. Poorly maintained machines or equipment may lead to random breakdowns causing unavailability for production or service.

The preceding paragraphs are defining asset maintenance and its objective. These details are given for reader’s knowledge. As an asset maintenance manager, we need to ensure the healthiness of equipment and to maximize the availability to operations/production.

I am sharing an experience when I was working as a maintenance in-charge for a Gas Processing Plant in Gujarat, India. The day was 25^th June, 2006 (Sunday), my son’s birthday. We decided to go for a dinner at Domino's after a party with all children in our apartments.  After a lunch myself, wife, and my son were taking a nap. I got up after a long ringing of my Sony mobile.

The news was from my operations in-charge. He told that “he was sending the vehicle for picking me to plant”. Reason for that pleasurable trip (?) was gas processing plant got tripped due to gas turbine problem. 

Upon receipt of the above call, I woke up my wife to tell my wife that I was going to plant to attend the turbine problem. My wife’s face got shrunk but she had given me a support “Okay dear, you go attend the plant problem. I will taken care of dinner” (all maintenance engineers/ managers got such a lucky wife? Readers of the blog may share their experience to recognize the sacrifices of our family). That day, I reached back to home around 2 am mid-night.

Let us see as a maintenance manager, how to avoid the above situation for the asset maintenance team. Is every manager working in this lines or they just fire-fight the situation? See you in my next post…Keep sharing your personal experiences… let us bring solutions at later stage.