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.