Physical Asset Management as a Profit Driver-A Back to Basics Approach
Dean GriffinDivisional Manager – Utilities & Facilities
17th October 2007 – Durban ICC
AMEU 60th Convention – Phezu Komkhono
Overview
IntroductionThe Challenges at HandLack of MaintenanceEffective Utilisation of ResourcesAsset Management as a profit driver?The Way forward
Introduction
Asset Provision – making sure that the most appropriate asset is acquired for a specific application and also making sure that the asset is effectively disposed of (in a responsible manner) at the end of its useful life.
Asset Operation – making sure that assets are operated in the most appropriate way that allows the asset to perform to its maximum capacity.
Asset Care – making sure that assets are looked after in the most appropriate way that will ensure continued performance at its originally intended design capacity.
The Challenge at hand
Labour, Materials, Operation, & ContractsVisible - Direct
Hidden - Indirect Poor asset reliability andperformance
Waste through inefficientprocesses
Poor teamwork
Incidents, Reputation Damage, Recovery Costs
Lack of CommunicationBetween Groups
Current Challenges
Backlog Maintenance estimated at R 5 BillionLabour Shortage / high turnoverMost organisations have organisational gaps at all levelsPoor Asset ReliabilityLow Public Perception of serviceLack of Asset informationInaccurate Asset informationUnder estimation of Asset ValueQuality of Work3-4 years of capacity problems aheadComplexity of solutions employed
Lack of Maintenance
There are 2 types of MaintenanceWhat we say we are going to doWhat we actually do
Tactic creation performed by consultants or by in house staff
RCM, OMM, BCM etcTechnical ability is high Developed tactics are comprehensive
Proactive tasks are scheduled weeklySchedule attainment is often low due to reactive interruptionsComprehensive IT management systems are in place
Maximo, On Key, SAP, Ellipse, GIS, MIS, Reporting tools, Scheduling tools
Refurbishment programs existTasks in place Failure Modes
No Effect
Good TasksManaged Failures
New Tasks
Current Breakdown and Ad hoc
items
Maintain the Maintenance Program
Maintenance Program Maintains the Assets
Preventative tasks are established with the best intentions
However!!
Organisational Culture invariably rewards reactive actions when problems arise
‘You worked through the night to get the supply back’ well done!‘My team know how to pull out all the stops when the chips are down!’
When did you last hear this sentence?Well done for that inspection, we haven’t had a failure in the last 6 months!
Lack of Maintenance cont
BP/KPI Maturity Matrix
PERF.LEVEL 1
PERF.LEVEL 2
PERF.LEVEL 3
PERF.LEVEL 4
PERF.LEVEL 5
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
ENABLING Best Practice
RE
SU
LT
ING
KP
I
Back ofthe packBack ofthe pack
Can’t go thedistanceCan’t go thedistance
PromisingPromising
World ClasscontendersWorld Classcontenders
Most organisations have gaps in their resource structuresThere is a country wide shortage of skilled labour across all industriesRefurbishment funding has been made available in a number of casesThere are no quick fixes to plug the organisational gapsAs Engineers we compensate
Over engineer and / or automateImplement complex technical solutionsOutsource
Lack of detailed planning, Scheduling and Execution managementPeople are asked to perform tasks that they should not (Planning, expediting etc)The level of actual job supervision is often low
Mainly due to constraints on supervisors to perform administrative duties, chasing tools, materials, labourNot enough time in the day to inspect work which results in artisan acceptable quality
Lack of Resources
Lack of Resources
Available Workforce
Simple WP&C in Context
Planned WP&C
ExecutionResources
Data Collection
Unplanned
Asset Register
History
Condition-based Feedback
Scheduled Work Orders
Resources available
Work to be done
Wrench time is the measure of productivity within the workforce
Average wrench time for industry is between 25 -35%For a 10 hour day the person is productive for 3½ hours.
Non-productive activities account for 6½ hours.
• Necessary break times
• Job delays• Waiting for spares• Waiting for instruction• Travel• Waiting for Tools
World class wrench time is between 55 - 60%
Implement a fundamental planning & scheduling system – 45%
Keep records and learn from previous mistakes – 50%
Detailed Asset register & CMMS – 55%
Lack of resources or low utilisation?
MisconceptionsBeing busy is not necessarily being productive or effective
Labour is invariably busy
Lets put in terms of people and cost
If we can take the productivity of a person from 35% to 55% by adding a planner then a planner increases productivity by 1.57
Breakeven point = take 1 of every 3 workers and make them a planner
Without Planner = 3 x 35% = 105% productivity
With Planner = 2 x 55% & 1 x 0% = 110% productivity
Experiences states that a planner can plan for between 20 & 30 people
Therefore for a 30 man workforce 1 planner adds 17 extra workers making an effective total of 47 workers without adding heads.
What does it mean?
If you take 90 workers the you get an effective headcount of 141. That’s 51 extra people!!
If the organisation is predominantly reactive in nature then the workforce can be split into a proactive team and a reactive team.
The majority of the people reside on the fire fighting side initially
The ratio of the split can be adjusted as the organisation moves from reactive to proactive.
In a more proactive organisation the extra pople can be used to perform tactical tasks ensuring fires don’t occur.
In world class organisations where reactive and proactive work is well in hand then the extra resources are used for training and development of processes or projects to further improve the performance of the assets.
What does it mean?
Indirect benefitsIf we have an effective support or care function then we should be performing the right task at the right time to the right quality at the right frequency.
Reliability will be high as will availability
Customer perception will change
Impact on industry and business will be reduced
Direct benefitsMaintenance backlog is reduced
Capital investment can be deferred
Saving in cost to perform maintenance due to planning & scheduling
More engaged work force
Lower turnover
AM as a profit driver
In the late 90’s at Jacksonville Electric Authority in the USA the following was found
For their 1000Mw steam system
1% increase in availability equated to $300 000/yr power transaction capability
Each 100 Btu/KWH improvement in efficiency equated to $400 000/yr
1% increase in availability for 1000Mw system means 10Mw of future power plant that does not have to be built. At $1200/KW construction prices that equates to $12 Million
Reference - The Leverage effect of Work order Planning – R.D. (Doc) Palmer, Jacksonville Electric Authority
Example - Jacksonville Electric Authority
The way forward - Asset Care Centre
Methodology
TechnologyPeople
Performance Improvement
Asset Base
Methodology
TechnologyPeople
Performance Improvement
Execution (In-House)Execution (External)
Planning & Scheduling
Execution Control (Supervisor)
FeedbackF
eedb
ack
Asset Base
ACC
The way forward - Asset Care Centre
Reactive Urgent work
…..and finally
Thanks & Questions?
Can you do it again?