Key Performance Indicators for Facility Managers in a Lean Environment

Life Cycle Engineering

Lean Maintenance = Radical Change

New processes must begin with radical change Continuous improvement is exactly the right idea if you are already the world leader in everything you do. It is a terrible idea if you are lagging. It is probably a disastrous idea if you are far behind the world standard. I believe that we have made a major mistake of our advocacy of continuous improvement.we need rapid, quantum leap improvement. -Paul ONeil, Former Chairman of Alcoa

Life Cycle Engineering

Core Lean Business Aspects

Increase ROA / RONA

Revenue Growth

Increase Asset Utilization

Reduce Total Delivered Cost

Market differentiation Price Quality Response Cash Flow

Availability Operation & Maintenance Occupancy rate Costs Quality Capital effectiveness Materials & Spare Parts Management
Lean Maintenance

Life Cycle Engineering

Objectives of Lean Maintenance

Design Buy Store Install/ Comm Occupy
Root Causes

Maintain
Root Causes

Root Root Causes Causes

Root Root Causes Causes

Losses Unnecessary Work Uptime & Necessary Work

Life Cycle Engineering

Defects Minimum Unit Cost of Maintenance

4

Objective of Lean Maintenance

OPTIMUM ASSET UTILIZATION

Optimum AssetTotal Cost of Utilization Reliability

Optimum Asset Utilization

Total Costs

Cost to Improve Reliability Cost of Unreliable Assets

Life Cycle Engineering

Reliability

High Predictive: Collect data, Assess Conditions Primitive: Fix it when Broke Low
Life Cycle Engineering

Proactive: Solve Root Cause

Competitive Advantage

Low

Preventive: Perform TimeBased Tasks. Value Creation High

6

Causes of Maintenance & Repair

Management 10-17% Construction 7-13% Non Preventable 31%

Occupancy 15-46%

Maintenance Errors 12-23%

Design & Engineering 25-32%

Life Cycle Engineering

Preventable Work

Almost

70% of all maintenance work does not need to happen and can be eliminated in a perfect world and in consideration of the entire life cycle Estimates associated with this are broken down as follows:

Design/Engineering Construction Damage (Occupancy) Maintenance Error Management Strategy

Life Cycle Engineering

25-32% 7-13% 15-46% 12-23% 10-17%

8

Core KPIs
CORPORATE ROA, RONA,Others INDUSTRY PERFORMANCE Cost as a Percentage of RAV, Total Cost/Unit, Others OPERATING EFFECTIVENESS OA, Asset Utilization, Others

RELIABILITY MANAGEMENT MTBF, MTBR, MTTR, Others WORK PROCESS EFFICIENCY Planned to Total Work, Overtime as a Percentage of Total Hours, etc. PROGRAM EFFECTIVENESS Faults Detected Prior to Failure, Avoided Cost, Others

Life Cycle Engineering

Performance Dashboard
Orders Backlog

RONA
Safety Index

Share Price

Environmental Index

ROA/RONA

Business Unit

AU

Cost

KPIs

Availability Occupancy

Damage

Cost/RAV

Cost/Unit

Effectiveness by Asset or Group of Assets Equipment

MTBF

Efficiency

Pareto to identify distribution MTBF affects availability and cost

Life Cycle Engineering

Work Effectiveness

10

Maintenance Core KPIs

Reliability Excellence
Mission, Vision, Goals
4. Maintenance Repair Factor 5. Maintenance Cost/square foot

Organizational Effectiveness

1. Asset Performance/ Availability

17. TRIR

Strategy

2. MTBR

6. Overtime 7. Budget Variance

9. Training hours

12. Levels of Supervision 13. Span of Control

Processes & Activities

3. Number of Overdue PM/PDM Work Orders

8. % of each type of work

10. % Labor Cost charged to work orders 11. % Maintenance Materials charged to work orders

14. % Emergency work orders 15. % Planned work orders 16. Backlog

People Technology Business Structure Leadership Life Cycle Engineering 11

Allocation of Maintenance by Type

Eliminated Maintenance
A survey(1) disclosed the following objectives: Reduce total maintenance by 50% Shift the proportion of maintenance: Current Objective Reactive 50% 15% Preventive 35% 30% Condition Based 15% 55%
(1) Thomas Marketing Information Center, Dec. 1997

Percentage

Reactive Maintenance

Preventive Maintenance

Condition-Based Maintenance
Life Cycle Engineering

Current

Objective

Regulatory & Quality

Asset Performance

Cost Control

Resources

12

IMPROVEMENT PROCESS
Asset Effectiveness Assessment Business Critical Operating Objectives Business Plan

Improvement Process
Best Practice Objectives Current Conditions Gap, Opportunities for Improvement

BenchmarkingPrioritize by Impact
on Objectives Form Strategies, Develop Metrics Continuous Improvement

People Processes Systems Technology

Life Cycle Engineering

Formulate Tactical Action Plans Gain Approval, Obtain Resources Measure Results, Metrics
13

Implement

WORK ORDER BREAKDOWN STRUCTURE

WORK ORDER BREAKDOWN STRUCTURE

Included in M&R Factor

X
WorkOrder Total Costs

Excluded from M&R Factor

Type of Activities
Unplanned Planned Planned Planned

Type of Tactics
Breakdown Repair Preventive Maintenance Corrective/ Preventive Repair Predictive Maintenance Training Prev.Pred. Maint & Repair Proactive Maintenance Proactive & Special Maintenance Mgmt Support Capital Projects Expense Projects Demolition

Type of Work
Emergency Maintenance Repair Condition Monitoring & Inspection Training Turnaround/ Shutdown Improvemnts Modifications Tech.Innovat. Regulatory Compliance Mgmt. Support New Investment Improve Existing Assets Demolition

10

11

12

Life Cycle Engineering

14

$$$$ MTCE & Repair Cost

Cost Buckets per Work 12 Order Breakdown Structure

5
Repair Factor

10

11

Identifies Supports or Helps to re-direct Supports Supports

Life Cycle Engineering

CMMS Report CMMS information = Basis for Change Shortens Budgeting Cycle identifies Base Load MTCE KPI s at your Fingertip
15

MTCE Strategy

Budgeting Process Benchmarking Process

QUESTIONS??

Life Cycle Engineering