maintenance strategy

Maintenance Strategy

James V Reyes-Picknell, [email protected]

James V Reyes-Picknell, President, Conscious Group Inc. “Maintenance Strategy”©2006 Conscious Group Inc.

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Agenda

What is strategy?

What differentiates strategy from tactics?

What makes strategy so complicated and challenging?

It doesn’t need to be complex – “simple” goes further

Choosing a strategy – the development process

Implementing a strategy successfully


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Audience survey (part 1)

How many have a series of equipment specific strategies?(e.g.: we use preventive maintenance on a specific list of equipment, predictive maintenance on another list and have intentionally chosen to run some equipment to failure)

Using a show of hands, how many of your maintenance departments have a documented and widely understood high level strategy?

SamplesCan anyone describe their maintenance strategy in a few words?What are the major components of that strategy?

How many of you are striving for excellence?

How many have a formal maintenance improvement program in place today?


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Audience survey (part 2)

How many would describe their operating environment as reactive?

How many describe their operating environment as proactive?

The rest of you either don’t know or don’t operate physical assets yourselves.


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What is strategy?

Dictionary:

strat·e·gy (str t -j ) n. pl. strat·e·gies1. a. The science and art of using all the forces of a nation to execute approved plans as effectively as possible during peace or war.b. The science and art of military command as applied to the overall planning and conduct of large-scale combat operations.2. A plan of action resulting from strategy or intended to accomplish a specific goal. Synonym: plan.3. The art or skill of using stratagems in endeavors such as politics and business.

strat·a·gem (str t -j m) n.1. A military maneuver designed to deceive or surprise an enemy.2. A clever, often underhanded scheme for achieving an objective. Synonym: wile.

Reyes-PicknellStrategy is a plan of action intended to achieve a specific goal


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How the word “strategy” gets used

In most business literature a strategy is a high level plan to achieve a specific business goale.g.: A company that produces a commodity product like iron ore, oil, fuel, lumber, paper, etc. chooses a strategy of operational excellence to achieve market dominance where low cost is the primary factor in decisions to buy its product

In this case, the cost of raw materials are difficult to control so the choice is made to control production and transportation costs, getting product to market at low cost by being efficient and effective in all the activities it performs.If maintenance is a large part of operations costs then efficient and effective maintenance activities support this business strategy

In some maintenance management literature, strategy is a lower level plan to achieve equipment reliability at low cost

e.g.: Prevention of failures through regular overhauls of plant equipment will keep that equipment reliable and increase its mean time between failures

This sort of “strategy” is also a form of plan, but it is targeted at a very granular management level (i.e.: equipment by equipment)

Both uses are correct but I choose to use the first. I refer to the latter as a “tactic” or “tactical choice” that helps me execute on a chosen higher level strategy

e.g.: Preventive maintenance is an effective tactic that helps deliver lower cost maintenance and contributes to overall operational excellence


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What differentiates strategy from tactics?

Let’s first understand what we mean by “tactics”

Dictionary:

tac·tics (t k t ks) n.1. a. (used with a sing. verb) The military science that deals with securing objectives set bystrategy, especially the technique of deploying and directing troops, ships, and aircraft in effective maneuvers against an enemy: Tactics is a required course at all military academies.b. (used with a pl. verb) Maneuvers used against an enemy: Guerrilla tactics were employed during most of the war.2. (used with a sing. or pl. verb) A procedure or set of maneuvers engaged in to achieve an end, an aim, or a goal.

tac·tic (t k t k) n.An expedient for achieving a goal; a maneuver.


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Why do we need a strategy?

In industry there are 2 major ways to make profit:1. Produce more and sell it at higher margins or2. Produce a constant volume at the lowest possible cost so we maximize margin

Business strategy will be driven by one of these two fundamental approaches

Revenue & Costs vs. Volume of Sales

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Appreciate the full life cycle of an asset

Asset Strategy

Plan

EvaluateDesign

Build / Procure

Dispose

Operate, Maintain &

Modify

Asset Strategy

Plan

EvaluateDesign

Build / Procure

Dispose

Operate, Maintain &

Modify


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And understand where you can influence profitability

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Appreciate other areas where maintenance can influence the business

Many of our manufacturing processes are highly automatedRegulatory compliance

Safety and environmental compliance in particular are directly effected by the effectiveness of maintenance work and its execution

Quality programsProduction of high quality products requires the assets to be working reliably and within tolerances

InsuranceInsurance premiums for worker safety programs are directly impacted by the safety performance of your workforce

Lending institutionsBorrowing is easier and generally under better lending terms if you can demonstrate a highly reliable production track record

WarrantiesWarranty costs are a form of insurance where you bet against your ability to keep your equipment runningIf you can keep it running reliably you don’t need the warranty or its costs


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What makes strategy so complicated and challenging?

People and our fear!

Strategy is a plan of action intended to achieve a specific goalThe plan is what complicates most business strategies

A lot of detail becomes paralyzingToo little detail becomes confusing

The challenge comes in executing that plan correctlyPeople don’t want to make a mistake

• If there is too much detail they may follow it blindly and ignore what’s going on around them- They are afraid to stray from the plan

• If there is too little detail they become unsure of what to do next- They are afraid to do something that wasn’t intended

Fear of being wrong holds us back• We are afraid of being punished for being wrong• Fear has been used to guide us (all of our lives) and it’s a tough habit to break


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A complex strategy (refer to sample)

Sample (on CD)1. Corporate PAM Mission Statement2. Corporate PAM Vision Statement3. Desired PAM State4. Principles and Values5. Opportunity Mapping6. Action Plans7. Process Flows, Responsibility

Matrices and KPI’sAppendices8. Cross Industry Leading Practices9. Leading Practices10. ‘As-Is’ (issues)

This strategy “document”:Contained 112 pages of informationHad a concise mission and visionDesired state was too detailed

7 pages of bullet points – too much to remember

Principles and values – 13 points, again, a bit too much to rememberOpportunity map and action plans were good tactical documents but again, too much information (35 pages)Process details – 50 pages – way too much detailAppendices – 13 pages – good input data, but not they are not relevant to a forward looking direction / strategy


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What was wrong with it?

It was too bulky for mass distribution, so very few read it

There was too much information for anyone to fully assimilate let alone remember

Mission statement contained too much “how to”

Vision statement described a “wish”, not a “state” – there was no overall time frame

The desired future state was too detailed to remember, even for each element that was described

Plan details were good but they are very tactical


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Let’s look at the mission statement

“To select, procure, operate, maintain, and dispose of the physical assets in order to meet all stakeholder needs, while maximizing profitability we will work safely and in an environmentally responsible manner. We will continuously improve our skills and processes to optimize the return on the physical assets, using world class methods and technologies.”

No definition of “stakeholder”.

This word confuses people.

The underlined portion says what they are there to do.

That is a mission.

All of the blue text is “how to”.

Does not belong here.


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Let’s look at the vision statement

“MiningCo will be recognized as a world class leader in physical asset management. Continuous improvement and operating performance will be based on global benchmarks, and supported by effective coordination between the mine sites and departments at all levels.”

Implies that you will continue to strive for this, not achieve it

Use words like “we are” or “is”

Underlined text is a tactical choice of “how to”, not a vision


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Let’s look at the desired state

All of the statements are helpful here but there are just too many to be remembered

They are written like an engineering standardLots of detail – some of the statements are a big vague, but intent is fairly clearAvoids “how to” for the most partUseful at the departmental / functional group levelVery tactical because of the detail

The desired state is really described in the visionWhat’s listed in the strategy document is a great deal of descriptive detail


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Let’s look at principles and values

A good summary of widely recognized principles

This can be read in any number of text books

This is not specific to the company in its business environment


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Let’s look at the opportunity map and action plans

A great deal of detailWhat is to be doneWho is responsibleTime frame

Very good tactical plan

Not a strategy in itself – this supports the strategy


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Let’s look at the process flows and appendices

Lots of tactical detail in the process flows and their tables

This isn’t strategy nor is it a form of tactical plan for implementation

This is the solution to some of their problems, not the method for achieving a solution

Appendices provide a great deal of background information

Useful reference material but not strategy nor tactical action plans


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If all of this is “wrong,” then why use this example?

The example does contain good points that are neededIt has a mission statement embedded in itIt has a future state (vision)It shows that guiding principles and values must be followedIt shows that a plan is needed (even if the one shown here is too detailed)It shows a lot of what it takes to create an effective strategy (in the form of embedded reference materials)

How could it be improved?Link the mission to the business environment – tell us why we have chosen this mission

(e.g.: Our business requires excellence in operations. Our mission is to deliver cost effective asset uptime to optimize production rates.)

Keep vision short and make it visualMake is something that people can relate to(e.g.: We are leaders in our industry. We rely on our highly motivated and creative workforce to keep us in the forefront of technology and its execution. We share our success with our employees.)

Make principles and values relevant to your business environment, not general “feel good” statements – set the tone for future action

(e.g.: Maintenance represents 40% of our operating costs, it can only be reduced through the joint efforts of maintenance, production and engineering)

Keep the plan at a high level(e.g.: All of our actions depend on our people acting to the benefit of the company in implementing this strategy. We will develop the knowledge and capabilities of our people and we will put programs in place that motivate and nurture.)

Keep the reference materials out of the strategyThey are useful and needed, but they overwhelm the reader

Put it all on one page!Keep it simple.


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It doesn’t need to be complex – simples goes further

A strategy works best if everyone knows it and works to execute it

“Everyone” includes everyone in the company – not just the executives, managers and supervisors

Remember that the work gets done at the shop floorAdministrators, trades persons, clerks, planners, engineers, technicians, etc. all have important roles to playEach person must choose to execute the strategy or some parts of it will fail

• e.g.: If a planner doesn’t choose to plan in accordance with proven planning practices then his / her plans won’t effectively use the trades persons’ time resulting in costly work execution. That failure to be cost effective leaves room for improvement

• e.g.: Supervisors and managers must choose to truly value and trust their employees to execute their parts of the plan as intended. Lack of trust and micro-management will de-motivate employees and encourage them to be less creative and less willing to participate. In turn, that will tie up the supervisors’and managers’ time doing detailed work that could have been done by their subordinates had they been motivated to do so. This squanders the creative talents of the managers and supervisors and leaves room for improvement

• e.g.: Executives must choose to support the plan with the necessary funding and leadership or planned activities will flounder and the plan falls behind schedule. This causes a loss of confidence and credibility and everyone gives up on the initiative. The result is that nothing changes.


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Keeping it simple makes it easy to follow

If people can visualize it and remember it they will be motivated by it

e.g.: John F Kennedy in 1963: “We will put a man on the moon and return him safely to earth by the end of the decade”.

This was very visual – the mission was absolutely clear (the mission and vision were virtually identical in this case)It was a challenge to accomplish

It had never been done beforeIt had a “tight” time line

It had a simple principle – “return him safely”It left the details to the experts

JFK was assassinated shortly after making this commitmentThey got it done!

The experts carried on without his leadership and accomplished the goal on 21 July 1969• They even repeated the event on 19 Nov 1969 when Apollo 12 also put men on the moon and returned

them safely


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Simple strategies

Sun Tzu, “The Art of War” (500 BC) had a very visual analogy:

“An army may be likened to water: water leaves dry the high places and seeks the hollows; an army turns from strength and attacks emptiness. The flow of water is regulated by the shape of the ground; victory is gained by acting in accordance with the state of the enemy.”

Another simple principle helps guide tactical decisions:“the supreme art of war is to subdue the enemy without fighting”

The rest of Sun Tsu’s work is largely a collection of tactical rules that are fairly simple to follow:e.g.: On “waging war”

Victory is the main object in war. If this is long delayed, weapons are blunted and morale depressed. When troops attack cities, their strength will be exhausted.When the army engages in protracted campaigns the resources of the state will not sufficeThus while we have heard of blundering swiftness in war, we have not yet seen a clever operation that was prolongedFor there has never been a protracted war from which a country has benefitedThose unable to understand the dangers inherent in employing troops are equally unable to understand the advantageous ways of doing soThose adept in waging war do not require a second levy of conscripts nor more than one provisioningEtc.


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Sun Tsu (a few more simple concepts)

You should not encamp in low-lying ground

There are some roads not to follow; some troops not to strike; some cities not to assault; and some ground which should not be contested

By taking into account the favourable factors, he makes his plan feasible; by taking into account the unfavourable, he may resolve the difficulties

There are 5 qualities which are dangerous in the character of a general:If reckless, he can be killedIf cowardly, capturedIf quick-tempered you can make a fool of himIf he has too delicate a sense of honor you can calumniate himIf he is of compassionate nature you can harass him

Now these 5 traits are serious faults in a general and in military operations are calamitous


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Strategy implementation can be expressed as “simple rules”

Sun Tsu’s work was a collection of rules based on observations of what worked well in waging war as a successful general

His list was a long one so only a general would remember it all

In business today, that would be a serious flaw because it relies entirely on the wit and wisdom of the general. It assumes that those who follow can’t think for themselves

Today we have well educated workers who think for themselves outside of work

They are guided in their day-to-day lives by following simple sets of rulesThese rules come from laws, from religion, from basic economics and from our basic survival instincts

e.g.: We don’t kill other people, we don’t steal, we respect legitimate authority, we drive on the right hand side of the road, we lock our doors when we leave our homes, we educate our children, we sleep when we are tired, we eat healthy food, etc.


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Simple rules “at work” to guide our day-to-day actions

If simple rules work in our day-to-day lives, why not use them at work?

Here’s a simple set of principles (rules) that were used at a junior high school where 800 adolescent students helped keep their school environment neat, orderly and working smoothly:

1. Take care of yourself2. Take care of each other3. Take care of this place

Everyone in the school knew the rules and used them to deal with all situations

These rules defined what was significant to the school communityThey contained agreements about what they would pay attention to and what disturbed theme.g.: after a fire had occurred and the school was evacuated they returned with wet shoes and

muddy floors. Because they agreed to take care of this place, they removed shoes at the lobby to avoid making it worse until it could be cleaned up.

Could these rules work in your business too?


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Simple rules in maintenance

What would your maintenance department be like if it followed these simple rules?

Take care of yourselfTake care of each otherTake care of this place

Record answers and discuss

Note that rules alone don’t make up a strategyHowever, they do help us to implement it


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Remain flexible

Simple rules can be interpreted differently in new situations

Strategy must also respond to new situationsBusinesses change, grow, shrink, get acquired, acquire others, add new product lines, etc.Rigid strategies that don’t consider these possibilities become outdated before they are entirely executed

The result can be an implementation that no longer meets the needs of the businessUnderstand what can change in your business environment so you can build flexibility into your strategy and planning activities


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Choosing a strategy – the development process

Framework


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Develop vision


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Vision requires awareness

Become aware of your business environmentNature of the market for your company’s products

Price sensitive, demands high quality, requires rapid response / resolutionIs your product commodity, customized, mass produced, highly engineered, etc.

Nature of the competitive landscapeWhat sets your company apart from others?Can maintenance play a part in setting or establishing that distinction?

Can asset reliability, safety or environmental performance improve: insurance premiums, make it easier to borrow, reduce warranty costs, ensure regulatory compliance, ensure reliable and high quality production?

Appreciate your company’s culture and constraintsIs management open to new ideas or looking only for “tried and true” solutions?Is the operational environment “command and control” or is free choice encouraged?Is management cost focused? Excellence focused? Looking for optimal solutions?Are you constrained by layers of decision making authority and complex processes? Informal?Does your executive appreciate the value of maintenance / asset management to the business?Will they listen to you? Do you need to build credibility?As the maintenance leader do you have executive level support? Or are you on your own?

Become aware of your business strategyCan you sell everything you can make?

Internal constraints are entirely manageableAre your sales market limited in some way?

External constraints can’t be managed, but you can manage how you respond to them

Understand the various things you can do in maintenance to support the business strategyAppreciate successful practicesAppreciate how to apply them successfully


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A strategy for excellence in maintenance management

The “Uptime Pyramid of Excellence” is an overall maintenance management strategy that supports cost effective achievement of high levels of asset reliability.

It contains 10 tactical elements that are executed for achieve its goals.


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Making the general strategy useful

The “Uptime” strategy is general in natureThink of it as a roadmapYou need to determine where you are and where you want to go before you can determine the route you will takeAnd there are many possible routes

It applies to plants, factories, mills, fleets, infrastructure, utilities, facilities of all sorts

It’s execution will be different in each of these situations

It’s execution will also be different in each company

Why the differences?Each business environment is different

Different companies, even if they are in the same industry, have different physical assetsOperational methods are differentOperating environments are different

So “one size fits all” doesn’t workThe “Uptime” strategy must be tailored to work in your business environment


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The strategy process


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The review

Strategy People Work Management

Materials Mangement

Basic Care Performance Management

Support Systems Asset Reliability Teamwork Processes

Excellence Complete strategy developed with full participation including plans

Fully developed multi-skilling, autonomous teams in place

Long term planning cycles and extensive use of standard job plans.

Stockouts rare. Service level 98% plus. Inventory turns > 2 times.

Full regulatory compliance. PM program features extensive CBM. Operators do some minor PM. Equipment condition good.

Fully balanced score cards for teams. Improvement results evident in performance trends.

Full user acceptance and widespread use of management systems. CBM, reliability analysis and decision support systems in use.

PM program fully developed using RCM. RCFA used but not needed very often. Mtc inputs to design of new assets.

Autonomous teams of maintainers and operators used extensively. Support by management and specialists. Consistent maintenance standards in use.

Processes are efficient and effective. No work arounds in use. Regular reviews carried out to keep processes fresh. Support systems automate parts of the processes.

Competence Complete strategy developed by key personnel with plans

Multi-skilling and managed teams of maintainers and operators

Scheduling and planning well established for most work. Compliance high.

Inventory turns > 1. Service level 95% plus. Stockouts less than 5%.

Full regulatory compliance. PM program features some CBM. Operators help with PM. Equipment condition good.

Reliability measures in use and improvement programs monitored, trends being developed.

Extensive management systems used mostly by management. Some CBM, reliability analysis and decision support systems use.

RCM in use to define PM programs. RCFA in use.

Area or unit based teams of maintainers and operators with management. Maintenance standards applied in each area.

Processes are efficient and effective. Some work arounds may be in use. Reviews carried out infrequently.

Understanding Management defined strategy & plans

Some multi-skilling. Mostly distributed maintenance teams with conventional supervision

Scheduling established, compliance good. Planning for major work and shutdowns as work arises.

Inventory turns > 0.7. Service level 90% plus. Inventory analysis being performed.

Partial regulatory compliance. PM program based on fixed interval tasks with little CBM. Equipment condition fair.

Basic maintenance performance measures in use.

Management systems in use. Some reporting is used. Some CBM support systems in use.

Reliability improvement program in place. RCFA and possibly PM Optimization in use.

Maintenance working in area teams under maintenance supervision. Operations separate.

Maintenance processes reviewed. Interfacing processes untouched. Work arounds in use.

Awareness Documented goals but no plans

Partly de-centralized organization based on trades

Scheduling with about 50% compliance. Plans for shutdowns only

Inventory improvement plans in place. Measurement of stores performance started.

Poor regulatory compliance. PM program under development using traditional methods. Equipment condition fair.

Financial measures used to analyze spend patterns. Some downtime records.

Management systems use is spotty and providing little valuable output. Ad hoc systems still in use. CBM support being considered.

Downtime analysis is performed and some improvements are implemented.

Mix of centralized (shop) labor and individuals assigned to production areas. Conventional supervision.

Processes documented but not reviewed. Work arounds in use. Inefficiency evident particularly at functional hand offs.

Innocence No documented strategy. Maintenance is largely reactive

Centralized organization based on trades demarcation

No planning, little scheduling and poor compliance to schedule

Frequent stockouts. Service level poor. Jobs frequently waiting for parts.

Poor regulatory compliance. Minimal or non-existent PM program. Equipment condition poor.

Only financial measures being watched but no analysis of costs performed.

Little to no use of management systems. May be using variety of ad hoc systems.

Plenty of downtime but no analysis of causes or attempts to improve.

No teamwork. Conventional supervision.

Processes not documented and inefficient. Plenty of work arounds. Plenty of complaining.


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Example

Let’s say we observe:No documented strategy but everyone knows that we must keep costs downThe organization is centrally managed and organized by trades – little in-house training is done and skills are not kept up to date with new techniques and technologyWork is being scheduled but not plannedSchedule compliance is less than 50%Parts are often not available when neededWork required by safety and environmental regulations is done faithfully but there are still some minor accidents and incidentsFinancial and basic maintenance measures are in place and watched by management onlyA CMMS is in use but there is no reliability analysis and trades don’t enter job details on work orders that are being closedReliability improvement is being done by trades deciding what changes to make to equipment design after problems have occurredMajor problems are solved with small task force (team) effortsMaintenance and MRO processes are documented but they don’t work smoothly – planners must order materials themselves and supervisors often don’t use work orders until after the work is done

How do you score this maintenance department on the scale of innocence to excellence?

How many of your organizations are close to this description?

Process

Teams

Reliability

Perform

Systems

Basic Care

MRO

Work Mgt

People

Strategy

ExcellenceCompet-ence

Under-standing

AwarenessInnocence


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The result

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People

Work Management

Materials Management

Basic Care

Performance Management

Support Systems

Asset Reliability

Teamwork

Processes

Satisfaction

The scores reveal opportunities


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Develop the road map


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Map the opportunities

HR14

HR2 PR2

HR5

HR3

PR7HR7

HR1

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MM5

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MiningCo Opportunity Mapping

Degree of Difficulty

Ben

efit

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ium

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h

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LegendHR - Human ResourcesMM - Materials ManagementPR - ProcessesEQ - Equipment

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Value

Cost


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Plan activities

For each of the opportunities you choose to work onDetermine the action steps requiredEstimate the time and resources requiredDetermine the benefits that should be generated and how they will be measuredAssign responsibilities

Check dependencies among the various action items and adjust the plan

Acquire necessary approvals, funding and resources


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Implementing a strategy successfully


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Execution

Companies that succeed excel at execution of their strategies and plans

They don’t just talk about doing it, they go out and do it

When a plan is put into motion it gets all the support that it requiresHuman resources – people to execute elements of the planPhysical resources – the equipment that is neededIntellectual resources – the software that is neededSupport resources – the outside help, training, etc. that is neededFinancial resources – the funding to pay for it all

Execution is tracked along with the benefits that are being generated by the planThe work is being monitored and managedProgress is measuredResults are measuredIf progress or results are “off track” then corrective action is taken


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The role of management

Maintenance improvement is not just a maintenance activityChanging a crucial part of any business is an important corporate activityIt involves operations, engineering, human resources, training, finance, accounting, information technology, etc.

Senior management must be engaged in the execution of your strategic planIt cannot be successfully delegated to the maintenance manager aloneIt cannot be successfully managed by a committee of maintenance manager peersSenior management is providing the necessary funding and resources so it has a legitimate need to see a return on that investment

Watch progressMonitor resultsExpect to see corrective action when something isn’t working as expectedIntervene where it will help

Demonstrate that you care – nurture the entire process so you get the results you are paying for


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Is it working?

Things can go wrong – expect some errors to be made

Watch for:Flaws in the implementation plan (these can be common)

Unidentified activity dependenciesUnder-estimated costs and time framesUsing the wrong resources for the tasks or missing key players

Flaws in the overall direction (these are less common)Strategic direction has changed – markets improved so you can now sell everything you can make or conversely your markets have gone sourRegulatory environment changes

Changes that effect the visionNew (disruptive) technologies appearCompany undergoes a change in ownership or expands rapidlyNew management / executives demand changes


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Remain flexible

Appreciate that changes can be driven by external events, internal events, errors, omissions, changes in personnel, disruptive technologies, etc.

Strategies and their implementation plans must remain flexible in order to deal with these factors

Regular review of the strategy and its implementation will provide early warning of the need for changes

Don’t remain rigidly bound by a plan that is no longer valid

Expect and accept change – it’s the only constant!


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Thank you for listening

Recommended Reading:Campbell, John & Reyes-Picknell, James: Uptime, Strategies for Excellence in Maintenance Management, 2006, Productivity Press, NY

Eisenhardt, Kathleen M. & Sull, Donald N.: Strategy as Simple Rules,Harvard Business Review

Any questions? Please feel free to contact me:James (Jim) Reyes-Picknell: +1-705-431-6598 or [email protected]

Web site:www.consciousasset.com

maintenance strategy

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