Uptime Strategies for Excellence in Main - Desenho Técnico (2024)

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John D. Campbell • James V. Reyes-PicknellT H I R D E D I T I O NUptimeSt ra teg ies fo r Exce l l ence inMa in tenance ManagementT H I R D E D I T I O NUptimeCRC Press is an imprint of theTaylor & Francis Group, an informa businessBoca Raton London New YorkA P R O D U C T I V I T Y P R E S S B O O KJohn D. CampbellJames V. Reyes-PicknellT H I R D E D I T I O NUptimeSt ra teg ies fo r Exce l l ence inMa in tenance ManagementCRC PressTaylor & Francis Group6000 Broken Sound Parkway NW, Suite 300Boca Raton, FL 33487-2742© 2016 by Taylor & Francis Group, LLCCRC Press is an imprint of Taylor & Francis Group, an Informa businessNo claim to original U.S. Government worksVersion Date: 20150609International Standard Book Number-13: 978-1-4822-5238-5 (eBook - PDF)This book contains information obtained from authentic and highly regarded sources. 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For organizations that have been granted a photo-copy license by the CCC, a separate system of payment has been arranged.Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.Visit the Taylor & Francis Web site athttp://www.taylorandfrancis.comand the CRC Press Web site athttp://www.crcpress.comJohn dedicated the first edition of Uptime to his wife, Bev. Thesecondedition was dedicated to both our spouses, Bev and Aileen. Thisthird edition is dedicated to Bev, Aileen and our daughter, Arianna.viiContentsForeword to the Third Edition ............................................................ xvForeword to the Second Edition ........................................................xviiAcknowledgments ...............................................................................xxiAuthor ............................................................................................... xxiiiContributors ........................................................................................ xxvIntroduction .......................................................................................xxxiSection i Leadershipchapter 1 Building a Maintenance Strategy ...................................... 3Framework for the Strategy .......................................................6Strategy Components ..................................................................8Strategy Deployment .................................................................10Strategic Planning Level ......................................................13Management (or Day-to-Day) Level...................................13Case Study Showing How Hoshin Kanri Is Used ............14Facilitation Is Key to Success ..............................................17Maintenance Initiatives ............................................................19Maintenance Review ................................................................ 20Closing the Gap—Implementation .........................................27Business of Maintenance Management ................................. 28Regulatory Compliance .......................................................32Quality Programs .................................................................33Insurance ...............................................................................33Banks ..................................................................................... 34Warranties ............................................................................ 34Contract Maintenance .........................................................41Uptime Summary ..................................................................... 44Endnotes .................................................................................... 46viii • Contentschapter 2 People and Teamwork ...................................................... 47People Really Are Your Most Important Asset .................... 48Teams ..........................................................................................51Managing Change .....................................................................53Have a Compelling Reason ................................................ 56Make It Theirs .......................................................................57Deal with Fears .....................................................................58Communicate ........................................................................61Show That It Works ..............................................................62Leadership ..............................................................................63Organizing the Maintenance Structure ................................ 64Multiskilling .............................................................................. 68Case Study..............................................................................75Learning, Training and Development ....................................77Career Development .............................................................81Total Productive Maintenance and Lean Operations .....82A Word about Lean Manufacturing ..................................83Compensation and Rewards ....................................................85Uptime Summary ......................................................................89Endnotes .....................................................................................91Section ii essentialschapter 3 Work Management ........................................................... 95Work Management Cycle .........................................................95Six Key Steps ............................................................................102Identify .................................................................................103Plan .......................................................................................103Schedule ...............................................................................106Assign ...................................................................................110Execute .................................................................................111Learn .....................................................................................111Planning Horizons ..................................................................113Life-Cycle and Long-Range Plans ....................................113Annual Plan and Budget ....................................................115Work Orders and Specific Jobs .........................................116maintenance responses. For example, modular equipment designs are “maintained” by substitution: Entire modules are replaced, and electronics are designed to be increasingly fault tolerant. Some “smart” technologies are even elimi-nating maintenance through systems that have the ability to self-correct, but those applications are few and far between. Well into the foreseeable future, we will be depending on complex physical assets that can break down.Managing failures and their consequences results in the delivery of uptime. Uptime enables performance that meets or exceeds desired lev-els of production, quality, speed, service, timeliness and consumption of resources.Maintenance and asset management are now recognized as business disciplines with “learned societies” and educational programs, several at the level of advanced degrees, like those for other professions. Our field is no longer the realm of technologists or technocrats. It is a legitimate professional endeavor. At its heart are a number of activities that must be understood and executed well. Those activities are the elements of the Uptime Pyramid of Excellence in Maintenance Management—the subject of this book.UPTIME PYRAMID OF EXCELLENCE INMAINTENANCE MANAGEMENTFigure I.2 is a graphic depiction of the structured framework used for applying these successful practices in your business. That framework is an overall strategy, or roadmap, that can be used to guide your choices about how you will manage maintenance in your business. Although it xlii • Introductionis not necessary to follow a prescribed approach to climb the Pyramid of Excellence, it is important to embrace all the elements in the lower two levels, leadership and essentials. Achieving at least a level of competence in these improves your ability to survive as a maintenance manager in today’s demanding business environment and positions you for continu-ous improvement on the top level. If you are striving for superior perfor-mance, then you will likely embrace at least one of the methods on the third level, choosing excellence, the key to transitioning from competence to excellence.Consider three people with varying degrees of competence at swim-ming. One is uncomfortable in the water and cannot swim at all, one can swim well and the third is an Olympic champion swimmer. When dropped into the water, the first will bob to the surface, thrash about, make a lot of noise, get nowhere and eventually drown. The swimmer will quickly gain his composure, determine which way he needs to go and swim to safety. The Olympic champion will do much the same, but he will be better at it. He will make it look easy, getting to safety more quickly and maybe even helping the others along the way. Extend this to maintenance management, and you will find some interesting parallels: Some people do not belong in the process, some function or manage reasonably well and someexcel.Choosing excellenceRCMContinuous improvementEBAMEssentialsWork managementBasic careMaterials managementPerformance managementInformation systemsLeadershipStrategyPeople and teamsFIGURE I.2The Uptime Pyramid of Excellence.Introduction • xliiiAny company that has physical assets to maintain will, by default, apply at least some of the elements from the essentials at varying degrees of com-petence. Even if a company does nothing more than run everything in a totally reactive mode, it will manage a workforce and materials, comply with some minimal level of regulated maintenance requirements, moni-tor costs, and use some sort of technology to help manage at least parts of it. Do this badly, like the poor swimmer, and you will eventually drown in high costs fines for noncompliance with regulations, lost revenues, an inability to see your way out of the mess you are in and poor safety records.You drown! In all likelihood, this happens because no one has consciously applied the principles represented by the leadership part of the Pyramid of Excellence and described in Section I of the book.Successful companies will consciously apply the leadership elements and may even achieve some level of excellence in executing the essentials. Doing this consistently dramatically increases profitability. Like the rea-sonably good swimmer, those companies will survive and may even do reasonably well, encountering only occasional problems along the way. High-performing companies will be consciously and consistently atten-tive to leadership and essentials, adding elements from choosing excellence into the mix. Like the Olympic swimmer, they will make the process look easy because they are so good at it. One measure of their success is that others will invariably attempt to emulate them.How well a company executes maintenance using all or some of the elements presented in this work depends primarily on how well it moti-vates its people. This factor is a key determinant of how far and how quickly a company moves toward improvement, success and sustaining itself.The Uptime Pyramid of Excellence is not a prescriptive “one-size-fits-all” approach to implementing successful practices. It is an underlying strategy, a framework, if you prefer, that provides many possible routes to achieving superior results. It works and can be found in one form or another, to various degrees, in many highly successful companies. It does not need to be followed in sequence from bottom to top, although that is a very practical approach. It is not necessary to excel at one level before attempting the next, and attempting to improve elements from multiple levels in parallel is achievable, provided you do not overload your people with too much at once.Within the pages of Uptime, you will find practical and relatively easy-to-implement suggestions and methods. Little of it, until you get into parts xliv • Introductionof the top level, is complicated. But it does require commitment and effort sustained over an extended period—often several years.It is hoped that the book will be of great interest to the general manager who seeks to understand more about maintenance and for the mainte-nance and engineering professional who wants to appreciate both the big-ger picture and the details needed to excel in his/her job. Both will gain valuable insights into the various successful maintenance management techniques and methods available today.ENDNOTE 1. Capital-intensive means that the company makes extensive use of physical assets, including plant, equipment, physical systems, fleets of vehicles, fixed assets, facilities, and utility infrastructure.Section ILeadershipCompanies that choose excellence are setting out on a journey toward high performance. They begin with a clear appreciation of where they are, where they want to go, what they will do to get there, what constraints can hold them back, what enablers they can use, what policies they will Choosing excellenceRCMContinuous improvementEBAMEssentialsWork managementBasic careMaterials managementPerformance managementInformation systemsLeadershipStrategyPeople and teams2 • Uptimeadhere to and how long it will take. They also review these criteria regu-larly to ensure that the parameters set still match the needs of their busi-ness. They recognize that the key to success is people and being proactive. They know that change is sustained only by highly motivated people. Such people will execute a well-thought-out strategy if they have participated in its creation, if they take ownership of it, if they can work in a collaborative environment to implement it and if the results help them achieve what they want. Success in this journey means success for your company, your people and you—it is a W3 (win–win–win) proposition. Any approach less thanW3 will result in less than the desired results.Today, we have a new standard for asset management that encompasses Uptime and its various tactical elements. Chapter 1 on strategy applies to both maintenance management and the broader perspective of asset man-agement in a corporate setting. Asset management in its entirety is beyond the scope of this book, but Chapter 11 introduces it and some key concepts that are highly relevant to the realm of maintenance.31Building a Maintenance StrategyThe biggest risk is not taking any risk... In a world that is changing really quickly, the only strategy that is guaranteed to fail is not tak-ing risks.Mark Zuckerberg (Facebook cofounder)If you know where you are going and you have a basic idea of how you will get there, then you have a strategy. The various twists and turns, the route you choose, the method of transportation you use, how fast you go, whom you go with, etc. are all tactical choices. Strategy describes the gen-eral direction. It is no more complicated than that. Asset Management (AM)—the management of the physical infrastructure of a business—is all about execution of an AM strategy. Maintenance is an important part of that overall strategy. Tactics are represented by the choices you make to implement the strategy and manage the people, processes and physical-asset infrastructure that make up your business.Regardless of whether or not you document your strategy, you are fol-lowing one. Even if you have no stated direction, you will still be following a strategy—albeit not consciously. This lack of definition will often result in a totally reactive approach to problem solving—failure, as Zuckerberg says it. Because you have not chosen your own direction, you are letting events and others choose it for you, and you end up in a reactive mode. You will be operating on a run-to-failure strategy in maintenance, regardless of how your company, at a corporate level, defines its strategy. If you have a defined strategy that is known to everyone in your organization, you will be identifying, analyzing and solving both old and new problems, introducing new tools, innovations, approaches, resources and capabili-ties. You will not be relying on doing things the same old ways. If you do 4 • Uptimenot have a sound strategy, you will benefit immeasurably from creating one, communicating it and then focusing on your tactical choices for how to achieve and sustain it.It is important at this juncture to clear up a bit of confusion about the definitions of the word strategy. One definition applies to high-level busi-ness; the other is unique to the field of maintenance management. In this chapter, strategy is used in the business sense. It refers to an overall direc-tion, goals and a high-level flexible plan that leads to good choices. An example is the choice to implement methods that will move a company from a reactive approach toward a proactive approach in maintenance—choosing that results in lower costs, more reliable and predictable opera-tion, improved safety performance and environmental compliance. The practical choices of how to implement strategic direction are tactical in nature.In the realm of maintenance management, strategy often refers to the tactical choices of how to manage specific physical assets. Decisions to utilize preventive or predictive maintenance methods are often referred to as “maintenance strategies” for the specific equipment to which they are applied. Here those are considered to be “tactical” (i.e., execution) choices as opposed to strategic.Strategy need not be complicated—in fact, many of the most successful strategies are little more than simple guidelines or sets of rules. They do not prescribe details, but they suggest alternative routes or actions (i.e., tactics) to take as circumstances shift, all the while keeping the ultimate goal or destination in sight. Stephen Covey (1989), in his book The 7 Habits of Highly Effective People, describes the habit “begin with the end in mind.” That is exactly what strategy does. A good example of this elegant simplic-ity is Sun Tzu’s Art of War. Written in about 500 BC, it is nothing more than a collection of pretty simple rules that no one seriously challenges. Indeed, Sun Tzu’s work has been translated and is used as a business tool even today!To be practical, however, your strategy must go beyond its apparent simplicity. Maintenance strategy must support the AM strategy, which, in turn, must support corporate strategy. Successful organizations have both strategy (direction) and tactical plans (specifics) at each level—corporate, AM, site and departmental (maintenance). The tactical plans at one level often create the strategic direction at the levels below. It must be sup-ported by tactical plans for how to implement it, and those plans must be executed. Without the plans, you will not have a clear idea of what you Building a Maintenance Strategy • 5are doing or how. Execution is critical, unless you carry them out, you will have produced little more than an interesting intellectual exercise. Tactical plans address the short-, medium- and long-term activities; the human resource (HR) needs (people, skills, knowledge); the change man-agement that will inevitably be required; and the investments and budget-ing for getting it all done.A good business strategy has the following elements:• A solid comprehension of the business you are in and its current products and services, and a description of key external customers and what factors keep them as key customers• An assessment of the regulatory/political, economic, social, techno-logical (PEST) and financial environment, especially as companies are increasingly global in scale• A description of your future business vision (the state of the busi-ness, say, 3, 5 or 10 years from now) generally supported by goals that are meant to motivate and galvanize employees into action• A statement of mission (what you are there to do), guiding princi-ples (the rules you will follow), major objectives to be accomplished (milestones) and the business plan to achieve them• A comprehension of the company internal environment with its various constraints and enablers as well as a sense of what to do with and about themMaintenance provides support to corporate strategy indirectly through an overall AM strategy (if it exists). Maintenance needs its own strat-egy, but that cannot be developed in a vacuum. Keep in mind that the corporate strategy is supported by various activities and analyses that helped develop it, justify it and provide a context for it. It is important to understand those and their potential implications. While not likely to be specific to maintenance, these can have an influence and impact on the maintenance strategy and must be understood. Maintenance impacts can show up in production levels (revenue generation), safety, regula-tory compliance, environmental performance, product quality, insur-ance considerations, financing considerations and even whether or not warranties are worth managing. A discussion of the business of main-tenance appears at the end of this chapter for those who want to dig more deeply into the interaction of maintenance with various other business functions.6 • UptimeFRAMEWORK FOR THE STRATEGYThere are several ways to build a strategy. Stephen R. Covey tells us to begin with the end in mind (Covey 1989). If you have a good idea of your current state (where you are now), create an overall vision (the end result you want to achieve), and then state what you will do to achieve it. If you do not have enough knowledge about your current state, it makes good sense to perform detailed analyses of this before launching into the vision and main tactical choices.Maintenancestrategy is based on the framework model depicted in Figure 1.1. Foremost in any business plan are the needs and wants of the customers, shareholders and other stakeholders. The key objectives for each function and element in the business strategy are drafted with themin mind. A successful technique for translating business objectives into functional or departmental objectives is Hoshin Kanri, discussed later in this chapter. Maintenance is likely to have goals and/or targets, somewhat like these examples (but specific to your own industry and business):• Maximize the production rate of a particular product through high reliability (e.g., increase availability from 93% to 96%).• Reduce costs per unit of output by doing only the safe minimum amount of maintenance (e.g., safely reduce maintenance costs per ton of concentrate from $42 to $35).• Add productive capability for an additional plant by supplying advice to the design team (e.g., designate experienced engineers to work with the design and commissioning team for the expansion of the processing line with a goal of increasing line availability from 90% to 97%).• Reduce stores inventories through vendor partnering (vendor-managed inventory), increased predictive maintenance and PM and drastic reduction of emergency work (e.g., reduce the value of stores inventory by 25% while maintaining stores service levels of 95%).• Support quality improvement initiatives through the application of precision maintenance on all production assets (e.g., introduce laser alignment techniques to improve rotating equipment reliabil-ity by eliminating all quality defects due to installation or repair misalignment).Building a Maintenance Strategy • 7A maintenance strategy must remain flexible. If the company’s situa-tion changes, so does the maintenance strategy. For example, if a business shuts down excess capacity, it makes little sense to continue to maintain plants that will be shut down.Companies have a unique culture and values, and it is important to remember that these will come into play and may get in the way of change. If the company has always been highly responsive to market shifts, it is likely to have a reactive culture that demands rapid response to any event. A maintenance manager in such a company will have difficulty shift-ing from a reactive “fix it when it breaks” mode to a proactive mode that focuses on avoiding breakdowns. In such a case the company’s strength (i.e., flexibility) has led to a reactive weakness in maintenance that is costly in any business environment.Successful maintenance practices can be learned from both outside and within the company. Many companies create their own road maps based on benchmarking results and observing what their best plants or others are doing. Regardless of where you get your direction, the description of excellence as you desire becomes your vision.Your asset environment is usually a given. Unless you are building a new facility or buying a new fleet of vehicles, the plant, the technology StakeholderrequirementsOrganizationalstrategic plan andobjectivesStrategic assetmanagement plan andobjectivesAsset managementplans(maintenance strategy)Mission/mandatePolicy/valuesObjectivesSuccessfulpractices Future visionEducation/trainingOpportunities Tactical plansCurrent stateFIGURE 1.1Maintenance strategy based on framework model.8 • Uptimeand even the people are already there. Your current practices, good, bad or somewhere in between, are also a given. If they do not match your vision, they need to be changed. When the gap between your present reality and your vision is understood, it can be closed. Closing that gap will require a plan that gets you there, and your plan must include all the people, behav-ior, systems, processes and other influencing factors that will be involved in the changes. Understand what drives behavior in your organization and what you can do that will influence changes in that behavior. Those activi-ties are the performance drivers for making the change happen. They will require a high degree of attention and focus to ensure timely execution.Stakeholder buy-in is also critical. Stakeholders are those who are most likely to be impacted by the changes you want to implement. This includes your own employees, contractors, suppliers, unions, and departments that interact with maintenance. Getting their input to future plans increases their buy-in substantially along with your chances for successful and sustainable deployment of your strategy.STRATEGY COMPONENTSStrategy is the basis for your tactical implementation. It provides a general direction, and it need not be complicated or lengthy. It includes the follow-ing components:• Mission: a statement of what you are there to do. This statement should provide a simple common and clear purpose for the orga-nization. One company’s maintenance mission was “to work with production delivering needed production capacity, consistently and safely.” The mission rarely changes over time, although the rest of thestrategy may change annually.• Vision: a simple statement of what you are trying to achieve with your maintenance strategy. If you want to improve, describe the standard you wish to achieve. Write the statement in the present tense as if you were already there. For example, “We are sought after as benchmark-ing partners of choice” indicates that your performance is so good that others want to copy it. Like the mission, the vision rarely changes.• Tactics: the projects you will implement to put in place new or improved processes and practices. For instance, you may choose to Building a Maintenance Strategy • 9implement RCM or total productive maintenance (TPM). Those are tactical implementations intended to achieve a strategic goal. Those goals, their specific targeted objectives, and to some degree, the tacti-cal choices are set using the Hoshin Kanri method (describedlater).• Target timing: a statement of when you plan to achieve your vision. This does not need to be a complicated Gantt chart with milestones. A single realistic completion date is enough for your implementation teams to work toward. For example, to achieve benchmark-worthy performance, “all critical production systems will have RCM-derived maintenance programs within 2 years.”• Values: a statement of a few simple rules you will follow in imple-menting the tactics. These rules will reflect shared corporate values for behavior that will hold when the vision is achieved and guide how things get done along the way to achieving it. Your rules should be easy to remember and follow:• Take care of yourself.• Take care of each other.• Take care of the equipment.• Take care of business.Putting a strategy together is a cross-functional team effort. Do not leave it all to the maintenance manager and his/her people. Operations, supply chain, HR, training departments, finance, accounting and plant management will all be affected. Include them in the strategy devel-opment team. Furthermore, the strategy must be linked to corporate strategy—without that, you are flying blind and potentially working at cross-purposes to the efforts of other functional areas. Because everyone at the table will have their own “agenda,” use a third-party facilitator who is completely independent of the result and the various agendas that each party brings to the table. The person who performed the maintenance review for you is the best candidate because he/she will be knowledgeable about your issues and objectives. Once a maintenance review has been carried out, the strategy development effort requires only a few days of teamwork. Keep it simple. Avoid excessive detail. Implementation plans are needed to support the strategy, but there is noneed to include them in the strategy document or statement. Manage those separately like any project.Because the overall initiative could take several years to complete, do not preplan the details for it all. No plan is ever executed exactly as intended 10 • Uptimewithout change, so don’t create work for yourself with plans that are very long. Plan for a year at a time, do an annual project review, determine what (if any) alterations to the original plan are needed and add in the details for the following year.STRATEGY DEPLOYMENTWithout a clear linkage of corporate strategy down through the organi-zation, departmental leaders are forced to interpret strategy and act in areas where they have control, often without collaboration from other departments. Many attempt to cut costs (and sometimes people), in an attempt to boost productivity and profit. But the improvements, as we so often witness, do not last. Many stand-alone initiatives never get imple-mented; instead, people cling to habitual ways of doing things. New ideas or state-of-the-art concepts do not spring forth from people at the front lines, because they are seldom consulted and too intimidated to stick their necks out. Energies are not released to create new tools or ways to better meet customer requirements, because people are too busy com-peting with each other to please their bosses. Sooner or later, new crises ensue, and the vicious cycle continues. A method to consistently deploy corporate strategic intent all the way to shop floor implementation is needed.And this is where Hoshin Kanri strategy deployment comes into play. The name Hoshin Kanri translates from Japanese to mean “direction management” (Japanese: 方針管理). It is a method devised to capture and cement strategic goals as well as flashes of insight about the future and develop the means to bring these into reality while ensuring coopera-tion amongst company functional areas and team members. Corporate strategy, often devoid of asset specific direction, must be converted into meaningful initiatives and projects that, if properly deployed, will yield and provide the expected results to the overall organization.Hoshin Kanri integrates strategic planning, change management and project management with the performance management methods that focus on delivering results. Some specific subprocesses include the following:• Identifying critical business assumptions and areas of vulnerability• Identifying specific opportunities for improvementBuilding a Maintenance Strategy • 11• Establishing business objectives to address the most imperative issues• Setting performance improvement goals for the organization• Defining change management strategies for addressing business objectives• Devising project charters for implementing each change strategy• Creating operational definitions of performance measures for key business processes• Defining business fundamental measures for all subprocesses to the working levelOnce a strategy has been set, the next challenge is to align the work that is being performed in the daily management system with the strategic direction.Hoshin Kanri strategy deployment is be top-down as well as cross-functional. It promotes cooperation along the value streams, within and between all associated business functions. It is crucial to state here that when we address the notion of “top-down,” we mean from the top execu-tive floor. Keep in mind that the enterprise as a whole has a myriad of business requirements that must be met over the course of a year. The AM organization within this enterprise plays a key role in delivering perfor-mance and has a big impact on the annual outcomes.The AM organization must consider and include two major inputs: what can our AM organization do to help with the achievement of the over-all annual goals, and, more specifically, what are our maintenance goals needed to support those? We need to devise the right initiatives and proj-ects and provide assurance they can indeed be met, yielding the desired bottom line.Hoshin Kanri utilizes an eight-step process: 1. Identify key business matters facing the AM organization. Consider both inputs from executive-level business strategies as well as spe-cific asset and maintenance management annual initiatives. 2. Establish succinct business objectives that deal with these unique challenges and will address them head-on. Team sessions begin by identifying these measurable objectives so that everyone knows exactly what they are there to achieve. 3. Define the overall vision and goals for the various principal AM value streams. The overall objectives, which may be somewhat vague, are translated into more specific objectives related to the various ways in which AM can contribute to the overall business objectives.12 • Uptime 4. Develop supporting strategies for pursuing the goals. In the mainte-nance organization, this strategy will include projects that encom-pass the use of AM methods, techniques and tools. 5. Determine the tactics and objectives that facilitate each of the strate-gies. On each organizational level downward, this initiative becomes more detailed and tactical, reflecting the specific segment or ele-ments of the maintenance management function for which they have been devised and deployed. 6. Implement performance measures (KPIs) for every support-ing AM business process. The specific list of these KPIs has been defined under point 2 above. KPIs should demonstrate the following characteristics:• Clear• Concise• Time based• Verifiable• Measurable• Easy to document and chart• Have assigned accountability• Understood and adopted by stakeholders 7. Measure, display and communicate all related AM business essentials and results. A useful approach is the “Visual Enterprise,” in which requirements and results are shown visually on graphs or other means for the entire organization to see. It makes progress visible to anyone and everyone, encouraging performance. Results must flow upward in the organizational chain, verifying that results are indeed supporting and contributing to higher-level objectives as originally intended. 8. Incorporate the Deming cycle (plan, do, check and act [PDCA]) promot-ing continuous-improvement principles. Ongoing review of progress and results should happen during the “check” phase, in accordance with the “plan” and “do” phases. Where results are less than desir-able, corrections and corresponding action items are devised under the “act” phase.The above process is repeated cyclically at successive levels through the organization using the “catchball” process. The word “catchball” denotes a simple game in which a circle of children throw a baseball around the circle. It metaphorically describes a participative process using iterative planning sessions to field questions, clarify priorities, build consensus Building a Maintenance Strategy • 13and ensure that strategies, objectives and measures are well understood, realistic and timely toward achieving stated objectives.Hoshin Kanri assumes “open-book” management with nothing hidden. One of its central features is a “balanced scorecard” of continuous process improvement targets that results from the use of cross functional teams in developing the tactical plans as the method cascades throughout the organizational layers.In many unsuccessful change initiatives the failure to link the achieve-ment of top management goals with daily management at an operational level is a major cause of loss of momentum. It is imperative to understand that perpetual examination and linking of results both upward and down-ward in the cascading chain is vital. KPI targets are allocated down and results accumulate upward through the various management levels.Hoshin Kanri integratesplanning and doing (execution) at all levels of the organization via an involved deployment process called catchball, cascading management ideas, from complex executive high-level strategic concepts into specific tactical initiatives and projects on the operational level.Strategic Planning LevelAny organization generally has a small number of key long-range corpo-rate objectives. They support the organization’s mission and take it in the direction of its future vision. They are called breakthrough objectives and typically last 2 to 5 years with little change. They are directed at achieving significant performance improvements or at making significant changes in the way an organization, department or key business process operates. Those changes could be triggered by new market and customer expecta-tions, new technology, innovation, government regulatory adjustments, business acquisitions and more. They are strategic and often somewhat vague, but they do provide a direction. They need to be formulated and redefined so they can more easily be understood at the next lower level, which will devise and deploy more tactical initiatives and projects aimed at achieving those objectives.Management (or Day-to-Day) LevelAt the management level, most of the time in an organization must be devoted to keeping the business running, carrying out the value-added 14 • Uptimeactivities of the key business processes, which fulfill the purpose of the organization. Examples of those could be operations, supply chain, AM, maintenance management and engineering. Supporting business pro-cesses that must be considered include finance, quality, HR, environ-ment, risk, security, etc. These day-to-day business fundamentals must be monitored on a daily basis in all parts of the enterprise. Following PDCA enables process owners to take real-time corrective action for continuous process improvement whenever diminished performance levels, reduced quality levels, increased downtime encounters and duration, escalation in incidents of customer complaints, etc. are encountered. Kaizen, the Japanese term for continuous improvement, is built into the Hoshin Kanri approach.Breakthrough projects deliver on the long-term strategic direction and achieve sustainable business strength while providing a tactical operat-ing plan to achieve short-term performance. Policy deployment antici-pates long-term requirements and focuses on annual plans and actions that must be met to accumulate long-term strength. Policy deployment begins when senior (executive) management identifies key issues or state-ments of vulnerability, where improvement will have its greatest impact on overall business performance. Communication of the focus area or theme for improvement provides direction. Hoshin Kanri assures align-ment of the entire organization to that direction while encouraging consensus among the management team from all functional areas on business priorities.Good practice of strategic management and the use of Hoshin Kanri to deploy your strategy provide the following:• Focus• Alignment• Integration• Timely execution• ReviewSo, how do we do it?Case Study Showing How Hoshin Kanri Is UsedA large mining company had a corporate strategy statement that con-tained four very-high-level goals:Building a Maintenance Strategy • 15• Financial: to consistently deliver superior shareholder value• Business partners/community: to manage our reputation• Internal processes: to safely achieve global benchmark practices and performance in all aspects of our business• People, learning and growth: to attract and retain a talented, inno-vative, diverse and engaged workforceLike all goals, these were high level and strategic in nature but, on their own, provided little insight into what must be done to achieve them. They did, however, have an accompanying set of specific targets (objectives) to be achieved to mark success in each of those four goals.For example, in the area of internal processes the objectives (targets) were as follows:• To achieve zero harm (with a specific “not-to-exceed” target for lost-time injuries)• To achieve industry best practice for support to core “full-time-equivalent” staffing ratio of better than 2.5 (i.e., no more than 2.5 support role personnel for each “miner” active in the operations)• To achieve industry best practice for support to core cost ratio of 20%• To improve efficiency of loss prevention to 85%• To be in the top quartile rating for global mining companies in the area of internal controls• To successfully implement the expansion of mine BThe above goals and objectives were mandated by the company’s board of directors and assigned to the CEO to deliver.The first cycle of Hoshin Kanri was carried out with the CEO and his entire executive leadership team. It flushed out the strategic objectives for the next level in the organization (i.e., those who reported to the execu-tives who were present in this first session) to meet each of the four cor-porate goals.That next tier of the organization, in all cases led by one of the executives present, managed the various functional departments and processes.The internal-process team session produced the following more specific objectives:• Simplify and standardize policies and procedures• Improve security inspection effectiveness16 • Uptime• Improve security physical prevention• Create awareness of product issues• Reduce product spoilage• Implement rapid results• Implement risk control guidelines• Create health, safety and environmental awareness• Improve the HR management operating system• Improve support function management operating systemsAgain, these were somewhat vague, but they allowed the team to see what sort of projects would be required. Each of those second-tier objec-tives was linked to specific “projects” falling under one or another of the original four main strategic objectives. Keep in mind that these senior executives have a good idea where the company had its problems, so the projects were aimed at addressing those problems to achieve the objec-tives. Those projects were as follows:• Review policies• On-the-job coaching and training• Security inspection booklet• Implement recruit training• Develop loss prevention and education program• Recover mine A spoilage• Enhanced recovery project at mine B• Identify and resolve high spoilage areas• Create temporary facility for mine A motorized vehicle support• Improve mine A vehicle workshops• Blasting effectiveness at mine B• Motorized vehicle availability/utilization improvement• Roll out risk control action plans• Implement near-hit and quality programs• First-line supervisor program• Train all mine trainers• Implement competency development process• Improve quality of HR master data• Shorten “recruit-to-hire” time• Automate supplier accounts-receivable process• Review supplier supply-chain policies and proceduresBuilding a Maintenance Strategy • 17These projects were quite specific and obviously meant to address known problems that arose in the discussions. Several clearly required changes in asset management and maintenance. Each of these projects was assigned to specific teams of “interested” or “affected” executive-level managers with a designated lead executive (sponsor). Each was also accompanied by specific time lines and measurable KPIs that would mark both progress and results.That ended the top-level session. The output of that session, the final list of projects, became the input to the next-tier Hoshin Kanri session. That was carried out with the various senior managers and the executives of the senior-level team and was chaired by the team sponsor.Again, a list of even more specific projects and actions was produced. Each of thosesubprojects, also with designed managers and KPIs, was the input to the next level down in the organization. In total, there were four levels of Hoshin Kanri sessions, each 2 days long: 1. Executive—corporate leadership (e.g., CEO and his direct reports, mostly senior vice presidents and vice presidents). 2. Functional executives (e.g., SVPs and VPs of operations, HR, finance, etc.) with their direct reports (directors/senior managers). There was one Hoshin Kanri session in each of the functional areas. 3. Operational management (mine general manager with their senior managers). There was one Hoshin Kanri session at this level at each of the large mine operations. 4. Mine and head office departmental levels—senior managers and their reports (e.g., mine engineering and maintenance manager with his section heads). There was one Hoshin Kanri session for each of the major operating departments (mining, ore processing and maintenance) and one for the remaining supporting departments.Facilitation Is Key to SuccessHoshin Kanri leans heavily on team facilitation, and the teams are typi-cally multifunctional or cross-functional. Like any facilitated effort, the maintenance organization and its supporting and supported functional areas will need to invest ample time away from the daily work environ-ment so they can brainstorm, plan and chart future strategies, projects 18 • Uptimeand plans. Hoshin Kanri sessions specific to maintenance will require par-ticipation from these other functional areas to be successful. Successful organizations put the effort in to ensure this happens and they use inde-pendent facilitators to avoid any conflicts of interest that can arise from using internal resources.Team facilitation uses a variety of tools to enhance and accelerate team performance. Meetings, workshops, training classes or seminars can leave us feeling drained, demotivated and far from satisfied with the actual out-come. Competent facilitation is required to avoid such energy sinks as the following:• Unbalanced distribution of participation efforts and input by group members• Unmotivated participants who are bored or destructive, unless given enough opportunity to speak, or those who feel they are being ignored by the facilitator or other participants• The facilitator taking center stage so that participants are only able to influence progress and results in a minor way• Failure to capture, prioritize and record all ideas that are tabled, resulting in insufficient follow-up action being designated and taken• Discussions that are not completely understood by all participants• Chairpersons interested in their own agenda• Endless discussions concerning minor points that result in the neglect of key items or issues• Group work that ends unsuccessfully in chaos; goals and results not achieved, putting the entire future strategic and improvement initia-tives in jeopardyGood facilitation ensures that those taking part do not just listen but also actively participate by each making a contribution to the visualiza-tion of the subject matter at hand. This encourages a high level of willing-ness to participate so that the topics discussed are well received, successful learning and development are guaranteed and high levels of comprehen-sion are achieved. To do that, good facilitation uses the following:• Visual dynamics—All participants are expected to contribute: their ideas, problems, facts, questions, statements, fears, etc. All are docu-mented and displayed, visible to all.Building a Maintenance Strategy • 19• Organization, clarity and tidiness—Similar or related statements are grouped together and given headings, simplifying follow-on tasks and initiatives.• Priorities, evaluation and consensus—Specific areas of work focus, interests, opinions, estimates, etc. are discussed, evaluated, priori-tized and voted on by the entire team.• Method variations and breakout action teams—Working groups and learning partnerships are formed to handle individual subject mat-ters and additional details.• Highlighting views expressed—The use of special signs and sym-bols allows inconsistencies, points of agreement or disagreement, subjects needing further clarification, etc. to be easily portrayed and visualized.• Gaining commitment and ensuring results—Lists of recommen-dations for action and associated plans are generated with detailed activities, deadlines and responsibilities assigned. This sets the group up for follow-up and the implementation of performance measures in the workplace.• Complete documentation—At the end of each session, detailed photo protocols are generated, providing a very useful reference document to be used in follow-up meetings or team activities. Photographs eliminate the possibility of misinterpretation by the facilitator.This approach allows for various communication and learning “chan-nels,” visual being the most prevalent. It encourages participation from all team members and ensures that their inputs are both heard and considered, thus eliminating potential sources of later conflict or resistance.MAINTENANCE INITIATIVESYour improvement initiatives, evolving out of the Hoshin Kanri process, will include activities as described in the rest of this book. The differ-ence between the current reality and the vision is what your maintenance improvement plan will address. The plan will have a number of projects with KPIs, designated accountability and a lot of activity. It is useful to fully understand the major differences between successful practice and 20 • Uptimecurrent reality. Two other items are critical: (1) ensuring that “successful practice” is a realistic vision for your industry sector and your particular operation and (2) setting priorities for the various activities.Training and benchmarking are excellent ways to determine success-ful practices. Benchmarking, discussed more fully in Chapter 6, involves looking at how the leaders in the field achieved their performance targets and will show you what realistic targets really are. Once you know what is realistically achievable and how others achieved realistic targets, you can emulate their approach and work toward achieving your own perfor-mance targets. Note that benchmarking is not needed to set your targets; it is needed to learn how to achieve them. You are not looking to keep score; you are looking at others in order to learn how they got to be successful.Understand your own strengths and weaknesses before studying how others manage maintenance. This is where your assessment results come in handy. When it comes time to compare notes with other operations, be sure to have a list of specifics. What you want to learn from them is how well they are really doing (i.e., the measures and statistics) and, more importantly, how they got their results.In Hoshin Kanri at the departmental level, those who will be respon-sible for achieving the results are involved in developing the maintenance improvement plan. The group needs to include your managers, superin-tendents, supervisors, influential tradespersons and union leadership. You will need people from departments that will be affected outside of main-tenance, such as purchasing and HR. An excellent way to do this is to bring everyone together for an off-site strategic planning session. Again, an independent facilitator is very useful. Giving participants the chance to help create the vision and plan will encourage them to pull together when it comes time to get it all done. Everyone feels more responsible for mak-ing it work if it is their baby.MAINTENANCE REVIEWMaintenance improvement fails when there is little understanding of the situation at hand. There may be a strong inclination in the department to retain the status quo, or there couldbe friction between production and maintenance. Technically, it may boil down to a lack of knowledge about automation or how to predict probable failures.Building a Maintenance Strategy • 21For instance, a city transit company wants to use RCM to become totally proactive so that it will have fewer breakdowns on the road. That goal will fail if the transit company does not establish a solid, systematic mainte-nance work management program—one that ensures that PM gets done on schedule all the time. It does not matter whether the goal or the pro-gram comes first, but both must exist to ensure good results.Before embarking on an improvement program, assess thoroughly the strengths and weaknesses of the present system and which areas head the list for enhancement. A maintenance review can produce a clear under-standing of the shortfalls relative to successful practices and let you see the necessary next steps to achieve the vision. It is comprehensive and covers strategic, procedural, technical, administrative and cultural issues. Never underestimate the impact of cultural issues. Experience shows that these are usually the biggest hurdle. The best time to do this is before the cor-porate Hoshin Kanri process moves to the site leadership level. Individual site assessment results will have no impact on corporate goals or objec-tives, but they can influence the decisions about what projects are needed when implementing those objectives at the site level.A complete discussion of maintenance reviews is included in Appendix A. Alternatively, a quick assessment can be done using a Maintenance Performance Grid. A simple grid, measuring the elements of the Pyramid of Excellence against the current status, can give a qualitative score on a scale from “innocence” to “excellence.” Table 1.1 provides an example of the grid. Each block contains an abbreviated description of the character-istics of a typical organization operating at different levels of development for each of the 10 elements of the Pyramid of Excellence.Comparing the perceptions of one department to another can also be quite revealing. At one base metal extrusion plant, four groups evalu-ated the status of their maintenance function. Production, maintenance and front office management all scored their status at approximately the “competence” level. Project engineering, however, rated it well below, at “awareness.” When the results were discussed with all groups together, it was clear that the project engineering team was remote from day-to-day activities and their opinion was driven by what they saw relative to other organizations not relative to results being obtained. This assessment not only shed light on a new strategy for maintenance but also highlighted the need for project engineering to become more involved on the shop floor and vice versa. Many companies still have well-defined functional bound-aries that act as barriers to cross-functional information and experience 22 • UptimeTABLE 1.1Simple Grid Measures the Elements of the Pyramid of Excellence against the Current StatusStrategyPeople and teamsWork ManagementMaterials Management Basic carePerformance ManagementSupport SystemsReliability centered MaintenanceReliability Quick Start and optimization eBAMexcellence Maintenance programs clearly support broader corporate strategic goals. Programs and practices well established, documented and undergo continuous improvement.Fully developed multiskilling, autonomous teams of operators and maintainers active. Specialist engineering support available.Long-term planning cycles and extensive use of standard job plans. Planning is used to determine all support requirements for new systems based on RCM results.Stockouts rare. Service level 98% plus. Inventory turns > 2times.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 integrated management systems sharing information across the enterprise. Information is widely used in EBAM and reliability work and performance management.RCM being used proactively for new projects. RCM, maintenance planning and support analysis used before new equipment/systems are put into service.Reliability enhancements rely on use of advanced mathematical models and data. RCM results are continually being improved upon. RCFA used occasionally.Data are useful. Any gaps are closed with a formal knowledge elicitation process to ensure that information is reliable. Decisions are regularly informed with trustworthy evidence.(Continued)Building a Maintenance Strategy • 23TABLE 1.1 (CONTINUED)Simple Grid Measures the Elements of the Pyramid of Excellence against the Current StatusStrategyPeople and teamsWork ManagementMaterials Management Basic carePerformance ManagementSupport SystemsReliability centered MaintenanceReliability Quick Start and optimization eBAMcompetence Maintenance strategy and plans align with corporate strategic goals. Improvements in place. Maintenance is “under control.”Multiskilling and managed teams of maintainers and operators. Regular use of RCFA and RCM analysis teams.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 in use with integration for sharing and reuse of important information. CBM and reliability analysis tools in place. EBAM in use.PM program fully developed using RCM/PMO and improved using RCFA. RCM resultsevident in procedure changes, training, equipment mods.RCFA used as complement to RCM program. Experimenting with more complex reliability tools/methods. PM optimization no longer needed.Data gathering is reliable and good information is available for improvement efforts. There are information gaps that are being filled by experienced workers.(Continued)24 • UptimeTABLE 1.1 (CONTINUED)Simple Grid Measures the Elements of the Pyramid of Excellence against the Current StatusStrategyPeople and teamsWork ManagementMaterials Management Basic carePerformance ManagementSupport SystemsReliability centered MaintenanceReliability Quick Start and optimization eBAMUnderstanding Management defined strategy and plans. Improvement efforts are underway and working.Some multiskilling. Mostly distributed maintenance teams with supervision. Task-based teams used as needed.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.CMMS, EAM or ERP is in use with report generation and analysis. CBM is supported with specialized systems. Documentation, financial records, maintenance, stores, etc.not integrated.RCM program in use for critical equipment. PM program blends manufacturers’ recommendations with experience and RCM results.RCFA used for more than just critical failures. PM optimization applied to “clean up” the existing PM program.Data are being used in problem solving (RCFA) but data problems are evident. Decisions still require mostly experiential inputs.(Continued)Building a Maintenance Strategy • 25TABLE 1.1 (CONTINUED)Simple Grid Measures the Elements of the Pyramid of Excellence against the Current StatusStrategyPeople and teamsWork ManagementMaterials Management Basic carePerformance ManagementSupport SystemsReliability centered MaintenanceReliability Quick Start and optimization eBAMAwareness Documented goals but no objectives or plans to achieve them. Attempts at past improvement programs have failed.Maintenance organized by shops. Some area maintainers assigned. Conventional supervision. Occasional teams used for RCFA.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. CMMS is in place and operating independent of other systems. A number of ad hoc systems are in use.Downtime analysis is performed and some improvements are implemented. PM program is being followed.RCFA used for highly critical/visible failures. It is the primary reliability tool.Data collection is done but generally data are in poor shape/useless for reliability purposes.(Continued)26 • UptimeTABLE 1.1 (CONTINUED)Simple Grid Measures the Elements of the Pyramid of Excellence against the Current StatusStrategyPeople and teamsWork ManagementMaterials Management Basic carePerformance ManagementSupport SystemsReliability centered MaintenanceReliability Quick Start and optimization eBAMinnocence No documented strategy. Maintenance is largely reactive to breakdowns.Centralized organization based on trades demarcation. No sign of teamwork. Operations and maintenance do not collaborate.No planning, little scheduling and poor compliance to scheduleFrequent stockouts. Service level poor. Jobs frequently waiting for parts.Poor regulatory compliance. Minimal or nonexistent 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 with little to no sharing of data and information among them. Maintenance is operating its own isolated information island.Plenty of downtime but no analysis of causes or attempts to improve. PM program missing or not followed. Production complains about how badly maintenance manages its assets.No effective reliability improvement efforts being made. Reliability poor and stays there. Production complains about how badly maintenance manages its assets.No use of data/information as evidence in analysis of systems, problems, failures, etc.Building a Maintenance Strategy • 27sharing. A diagnostic review helps to reveal those barriers so that choices can be made about whether or not to keep them in place.CLOSING THE GAP—IMPLEMENTATIONWith the maintenance review completed, the Hoshin Kanri processes completed, projects defined and a vision established, you must now do thehard work of implementation.Deployment of these plans is far more than a technical undertaking. It will require a great deal of human change, and that is the hard part. Do not shortchange yourself by ignoring change management at all lev-els in your organization. Chapter 2 deals with the human elements—the truly challenging aspects of making your improvement initiatives a success.One business with a solid history of reliability and profitability devel-oped an overall physical AM strategy that dealt with most of the asset life cycle depicted in Figure 1.2 and included company-wide objectives for fixed-asset accounting, economic evaluation of projects and maintenance management. Because of the high average age of the company’s assets, there was an increasing demand for refurbishment in an environment 1401201008060402000 10 20 30 40 50 60 70 80 90 100Fixed cost Variable cost Total cost SalesBreakeven pointMarginRevenues and costsFIGURE 1.2Fixed and variable costs.28 • Uptimeof cost reduction. One key operating division developed its maintenance strategy based on this companywide strategic direction:• The mission. “To maintain assets to meet customers’ needs cost-effectively, to continuously improve skills and processes to optimize asset life, using best-fit methods and technologies; to work safely and be environmentally responsible.” Each word was crafted after tedious but heartfelt debate by those who had to live with the fin-ished statement.• Objectives. A vision was set by looking at the current situation— challenges in structure, planning, methods, skills, applied tech-nologies and measures—and by coming to a consensus of what was possible over a 3-year period. Five long-term “breakthrough” objec-tives were selected to fill the gaps between the reality and the vision. The focus was on having higher equipment effectiveness than the industry average at a lowermaintenance cost based on the replace-ment value of assets employed.• Action. Each objective was “owned” by those responsible for ensuring successful completion and a champion, who committed resources, developed a timetable and structured a detailed implementation plan. Orchestration of these plans was key to overall success. Monthly progress review meetings were held to share successes, determine how to overcome obstacles, and manage frustrations.The company stuck to its strategy, making measured steps to improve-ment in a tough business climate, and succeeded at making the desired changes.BUSINESS OF MAINTENANCE MANAGEMENTMaintenance management supports a business by keeping its productive assets (plant, equipment, vehicle fleet, etc.) available for use. The product that maintenance delivers is “availability”—uptime. It also provides, indi-rectly, improved yield and process rate, quality, safety and environmental performance.Downtime is usually (but not always) unproductive time. It may be caused by lack of market demand, repairs or scheduled maintenance. Building a Maintenance Strategy • 29We can minimize the amount of time spent on scheduled maintenance by doing only the right maintenance. We can minimize the unscheduled maintenance downtime by being more reliable—that is, by consistently and conscientiously performing the right scheduled maintenance. Even where market demand is low, we can idle spare or excess capacity, cutting costs by idling less productive assets and reducing shift requirements. The role of maintenance must be fully integrated with production and sales strategies so that the company can meet its production targets to meet market demand. This means optimizing our asset availability and capac-ity for the business.Maintenance and plant managers have often been too technically focused. This shows whenever they try and fail to get improvements funded often becausethey cannot show the relevance of their ideas to those who will finance them. They need to understand the business as a whole and their role in it and get away from thinking only of technical matters, get-ting things fixed when broken or keeping them running to the end of the day or end of the shift. Ron Moore (2002) provides an excellent discussion of this integration of key business functions in his book Making Common Sense Common Practice. Uptime focuses primarily on the maintenance aspects of that integrated manufacturing strategy.Maintenance keeps an asset performing to the standard that is required by a business to achieve its objectives. This is a rather straightforward statement, but its full meaning relies on an understanding of the term objectives. One obvious objective is a healthy bottom line. From a purely financial perspective, maintainers can have significant influence on a company’s bottom line. In any capital-intensive industry, so long as pro-duction rates can rise to meet demand, production costs (i.e., the total of operations and maintenance costs) and revenues both rise and fall in response to the volume of sales. As Figure 1.2 illustrates, there are sub-stantial fixed and variable costs that must be recovered before a company makes any profit. Note that this is a simplified representation—fixed and variable costs are rarely as linear as shown. What should be obvious, how-ever, is that all companies want to maximize profit and increase the slice of the diagram labeled “margin.”Increasing the margin can be done in a number of ways. You can increase sales revenues if, in your competitive market, you can increase either the price or the volume of production, or you can reduce fixed and/or vari-able costs. Maintenance can have a significant impact on these business results by focusing on doing more proactive maintenance, reducing spares 30 • Uptimeinventories, planning and scheduling work more effectively. Good house-keeping (an underrated maintenance activity) can have a direct impact on quality of production, reducing scrap, rework and other non-value-added activities, improving employee morale, in turn reducing costly mistakes.Price is often set by market conditions, and maintenance is unlikely to have any impact on it at all. It can, however, have a profound influence on production volume. If your product or service is in demand and the market will buy more, then this is of value to your business. Additional or supplementary uptime increases your production capacity so that you can produce and sell more, generating greater revenues at higher margins. A cautionary note that must be considered is that if your business is mar-ket (or externally) constrained, you will be unable to sell the additional product, and increasing production output overall will not help. In fact, in this situation, you may already have excess production capacity, and increasing uptime seems valueless. Increased uptime, however, has other advantages.If you can increase uptime substantially, then it may be possible to meet the market demand using only a portion of your fixed-asset capacity. In this case, you can shut down and idle excess capacity, reducing both fixed and variable costs. For example, an aircraft parts manufacturer was able to meet demand using two production shifts instead of three. While the company’s fixed costs remained the same, its variable costs were cut by one-third.Another case demonstrates how uptime can be used to alleviate a dif-ferent problem: capacity constraint that may be related to a bottlenecked production process. In this example, a large open-pit copper mine was operating a fleet of 100 haul trucks, but capacity was constrained by the shovels used to load them. By increasing truck reliability, the company was able to increase overall haul truck availability by 3%—97 trucks could now haul the needed capacity. The mine removed three trucks from ser-vice, reducing both fixed and variable costs. In a similar case, the mine sold its extra haul trucks and recovered some of its capital investment.One newspaper printing plant is selling its spare printing capacity to other newspapers. The growth of online readership has decreased demand for hard-copy newspapers so excess capacity could be turned into a new line of business—contract printing.Of course, you can also perform maintenance more effectively (doing the right things) and efficiently (doing them well) overall. This has the effect of reducing both fixed and variable costs. Even an idle physical plant Building a Maintenance Strategy • 31requires a minimal amount of maintenance in order to preserve it for potential future use or resale. That is a fixed cost. If maintenance demand increases or decreases, it is evident that the cost of parts and labor will also fluctuate in unison, but the cost of managing them will not. Management costs are more or less fixed in most businesses, regardless of the variable demand. Changing fixed maintenance costs requires a reduction in the physical plant itself or a reduction in the management effort. Reducing the physical plant will also lower the financing component of fixed costs. If this can be done at the design stage of the assets, it has a substantial posi-tive business impact. That is one element of AM that requires experienced maintenance input, or the opportunity can be lost. Management effort can also be reduced through increased dependency on self-managing teams as described later in this book.Direct maintenance labor and parts costs are variable. The more main-tenance we do, the more labor we expend. In most cases, that also requires the use of parts, materials and other supplies. For example, as a rule of thumb, direct maintenance labor and parts costs are roughly equal in most industries in North America. If a company spends $5 million per year on maintenance labor, it will be spending close to $5 million per year on parts and materials consumed in maintenance activities. It makes little difference whether that labor cost is paid to a company’s own employees or contractors unless those contractors are paid less, trained less and receive fewer benefits than employees. Outsourcing is a complex strategic decision that must be addressed not only from a cost perspective but also from the perspective of the quality of workmanship received and the incentive to a contractor to deliver value in the long term as opposed to capturing only short-term profits.Direct maintenance (variable) costs can be reduced. An effective main-tenance effort results in higher asset reliability, increased uptime and more productive capacity for the effort and cost expended. An efficient maintenance organization delivers its maintenance program (and hence, the results it obtains) at a lower cost. The objective is to combine these two seemingly diverse matters and thus improve the overall system. The results can be very impressive and rewarding. One government report in the United Kingdom, for example, showed that a 10% improvement in maintenance performance could create a 40% increase in bottom-line business performance.Quantifying both the direct and indirect costs of maintenance to your company (including costs of downtime, rework, scrap, lost sales, penalties, 32 • Uptimeetc.) provides a tool for prioritizing maintenance activities and justifying maintenance improvement expenditure. An investment in maintenance can reduce downtime and its associated costs. Your business may also ben-efit indirectly as a result of an effective maintenance program. Regulatory compliance, compliance with quality programs, insurance, ability to bor-row and the elimination of extended warranty costs can all be of value.Regulatory ComplianceExtensive regulation has had a profound impact in thefinancial industries as well as on executives of major corporations—some of whom have been prosecuted and/or jailed for their roles in financial meltdowns, such as those that occurred at Enron and WorldCom. It will not be long before similar legal action is taken against executives whose management sys-tems have failed to prevent deaths due to industrial accidents. Legislation on this has already been enacted in the United Kingdom and will likely be followed by similar legislation in Canada, Australia, Europe, the United States and elsewhere.Most companies are doing all they can to comply with pertinent regu-lations about safety, the environment, maintenance of lifting apparatus and so on. Not following regulations that pertain to your industry, be it mining, food and drug, nuclear, chemical handling, workplace safety, etc., you are liable to be caught, fined, lose any AM certifications or even face jail time. Your company can lose its license to operate and risk being shut down, throwing many out of work. Even if this worst-case scenario does not occur, being cited for noncompliance can severely dent your compa-ny’s financial forecasts and damage its reputation. Consider, for example, how Exxon’s reputation suffered after the Exxon Valdez oil spill and, more recently, how BP’s reputation suffered as a result of the Deepwater Horizon spill in the Gulf of Mexico.At a bare minimum, then, your maintenance program must be compli-ant with regulations. Inspectors from various government regulating bod-ies are very good at spotting areas of noncompliance; they are also diligent about warning companies to change things before accidents happen. It is wiser to view these agencies as friends rather than as foes and heed their advice. But while getting a “clean bill of health” from your inspectors is certainly welcome and laudable, it indicates only that you are doing the minimum. To be truly successful, you must reach higher. One way to do this is to be scrupulously attentive to maintenance management.Building a Maintenance Strategy • 33Quality ProgramsQuality programs have two major components—quality management, which provides the strategic philosophy for the company’s quality pro-gram, and quality assurance, which includes the daily tactical activities to ensure quality of output. Many companies follow rigid quality programs and are certified to standards such as ISO 9001-2000, which requires that you document what you do, follow it, and be able to demonstrate that you are following it.Quality management includes elements such as a charter (philosophy), requirements for standardization, supplier performance, standards, etc., and requirements to meet both internal and external customer expec-tations and requirements. Independent International Organization for Standardization (ISO) auditors verify compliance and certify the company.Maintenance has its role to play. In addition to meeting the require-ments of its internal customers (operations), it must ensure that the physi-cal plant is capable of delivering to meet external customer requirements. This means keeping the plant reliable so it can meet production volumes and keeping it running well so it can produce quality output. Machines that are no longer producing within specified tolerances are creating waste and, ultimately, low-quality products.To do its job effectively, maintenance can use methods like RCM (Chapter 8) to define the optimum maintenance program required to meet quality standards.InsuranceYour company’s insurance will stipulate that you comply with all the applicable regulations. Your premiums will depend both on your perfor-mance relative to your industry and on your industry’s performance over-all. Industrial insurers also have inspectors who can help to identify risks that could lead to future claims or potentially higher premiums. These inspectors serve two masters—they help you identify risks so that you can take appropriate action, and they also help their own companies minimize their exposure to excessive levels of risk. If they deem your operation to be unsafe or excessively risky, you will either pay more for your coverage or become uninsurable. By managing an effective maintenance program, you reduce risks to your business, making it more “insurable” and pos-sibly even reducing your insurance premiums.34 • UptimeOne insurance company in Canada offered its client, a global mining firm, reduced annual premiums if the company agreed to use analytical approaches like RCM to determine its maintenance requirements and could show compliance with the maintenance program developed that way. RCM was instrumental in highlighting potential risks and defining appropriate mitigating strategies while providing a well-documented and defensible decision process. The company saved over $2 million per year, easily paying for the analysis work in the first year.At the time of writing, the California Public Utility Commission (CPUC) and the US Federal Energy Regulatory Commission are moving away from compliance-based regulatory schemes toward rewarding utilities for proac-tively managing their risks while penalizing those that do not. In Ontario, one utility was recently dropped by its insurers when the Ontario Energy Board rejected their application for funding the renewal of aging equipment.BanksMany companies borrow money to buy capital equipment or lease equip-ment for operations. That equipment will have a resale or disposal value at the end of its forecasted useful life and will depreciate in value over time. It will also have ongoing maintenance costs associated with its upkeep. Banks realize that a well-maintained asset will last longer, run more reli-ably, generate more revenue and have a higher resale value down the road. Like the insurance companies, banks want to reduce all potential risks associated with loaning your company money. Banks want you to repay your loans or keep current with your lease payments. If your business risk is minimized, so is theirs. Increasing asset reliability reduces your busi-ness risk. Higher utilization increases your profit potential, making your business more attractive to investors and lenders. Some banks will con-sider what you are doing to manage your assets and give you more favor-able terms on loans and leases if you are doing things well.WarrantiesWarranties are a form of insurance. You pay for them up front, and you pay to keep them in force. You must then follow the instructions of those who do not own or operate the assets and have no material concern in your costs or business results. The warranty provider has interest only in reducing its own risk.Building a Maintenance Strategy • 35RCM analyses often reveal that manufacturers’ recommended main-tenance is overkill while missing important failures that are unique to your operating environment and context. Consider that the manufacturer rarely operates their own product—they sell it to others. Many do not even maintain their products, so they have limited ability to learn about their own products’ failures and how they impact your business. They are rarely in a good position to recommend anything more than the most basic maintenance. Why tie your success to a requirement to follow their recommendations?Consider the cost of warranty. Typically you will pay 2%–3% of the capital cost to obtain warranty coverage. You are paying for your suppli-ers’ insurance coverage and then, should something fail, will battle with them for every claim! A thorough RCM program will cost about the same amount; when something fails, you still need to repair it, and you avoid the hassle of haggling with suppliers. In most cases, you are better off investing in RCM rather than warranties. Warranties are rarely worth the investmentContents • ixProjects and Shutdowns .........................................................117Shutdown Management .....................................................118Progressive Shutdowns ..................................................... 122Planning and Scheduling Tools ............................................ 123Gantt Chart ........................................................................ 124Critical-Path Method .........................................................125Planning Standards ........................................................... 126Pareto Diagram ...................................................................127Backlog Time Standards ................................................... 128Quality Standards ...............................................................130Mobile Workforce Management ...........................................130Uptime Summary ....................................................................133Endnotes ...................................................................................135chapter 4 Basic Care ....................................................................... 137The Minimum Is Not Always Enough .................................137Beyond the Minimum: Basic Care ........................................1405S Asset Management Housekeeping Excellence ...............1441S—Sort ...............................................................................1472S—Set in Order .................................................................1493S—Shine .............................................................................1504S—Standardize .................................................................1515S—Sustain ..........................................................................1525S Audits ...................................................................................1535S System Compliance ...................................................... 1545S Guideline and Routine Adherence ............................. 154Measuring What Matters ..................................................155Effectiveness of the Overall 5S Initiative .........................155Gauging Opportunities for Improvement.......................1565S Audit Form .....................................................................1565S Audit Form Example .....................................................1575S + 1 .........................................................................................160Before You Start 5S ..................................................................160Uptime Summary ....................................................................161chapter 5 Materials Management .................................................. 163Planning, Scheduling and Materials Management ............166Specify (Identify) ................................................................167x • ContentsSource ...................................................................................170Order ....................................................................................172Store ......................................................................................174Control .................................................................................176Use ........................................................................................178Analyze the Data (Learn) ..................................................179E-Business.................................................................................180MRO Improvements ...............................................................182Uptime Summary ....................................................................188Endnotes ...................................................................................189chapter 6 Performance Management ............................................. 191Measuring Maintenance .........................................................193Productivity .........................................................................193Equipment Performance ....................................................194Cost Performance ...............................................................196Process Performance ..........................................................198Benchmarking Maintenance ................................................ 202Balanced Scorecards ...............................................................210Uptime Summary ....................................................................212Endnotes ...................................................................................214chapter 7 Management and Support Systems for Maintenance ....215Systems Are Not Replacements for Strategy ........................216What Management Systems Should Do ...............................217Document Management ....................................................217Workflow Management .....................................................218Records Management .........................................................219Reporting .............................................................................219Different Types of Management Systems ............................ 220CMMS versus EAM versus ERP ...................................... 220CMMS Overview ............................................................... 227Management via the Web ..................................................231Specialized Support Systems ..................................................232Condition Monitoring .......................................................232Portable Computers and Handheld Devices.................. 234Decision Support Tools ......................................................235Contents • xiImplementation Considerations ........................................... 236CMMS Implementation .................................................... 236Justifying Your CMMS .......................................................... 246A Case Study in CMMS Implementation: MolsonCanada .................................................................. 249Hardware and Software Tools: An Overview ......................252The Importance of Data .....................................................253Where Are We Headed with Systems? ................................ 254Uptime Summary ....................................................................257Endnotes .................................................................................. 258Section iii choosing excellencechapter 8 Asset Reliability 1: Being Proactive .............................. 263Reliability-Centered Maintenance ....................................... 266Some Background on RCM .............................................. 268RCM Process .......................................................................273Step 1: Select Plant Areas That Matter ....................... 277Step 2: Prepare for the RCM Project ...........................278Step 3: Apply the RCM Process ................................... 283Step 4: Implement Selected Tasks ................................295Step 5: Optimize Tactics and Program ...................... 297Benefits of RCM: Creating Value for Customers ........... 299Simplified RCM Methods ...................................................... 300Implementing RCM Successfully ..........................................301Uptime Summary ................................................................... 302Endnotes .................................................................................. 304chapter 9 Asset Reliability 2: Quick Start and Continuous Improvement .................................................................. 307Preventive Maintenance Optimization ...............................and effort, and they only provide limited coverage for a limited time. RCM, for roughly the same cost, will provide benefits that far exceed the value of any benefit paid under warranty, and those benefits continue for as long as you own the asset.A good AM strategy considers all of these factors and their potential to help or harm your business.Until recently, many maintenance managers came from technical or trade backgrounds, and they seldom thought in terms of return on invest-ment. Although they understood the concept, they did not live it. Today’s maintenance manager cannot afford this luxury. He/she must understand and live the concept and pay strict attention to the business aspects of his/her role.Maintenance management deals with the tactical planning, organiz-ing, directing and use of the resources necessary to keep your physical assets running well and contributing to your customers’ as well as your own business success. Several questions can help you determine whether this is being done effectively and reveal where a more holistic AM regime (Chapter 11) may help your business:• Can the assets be designed for better maintainability and higher reli-ability? Will the added investment be worth it?• What is the impact of financing on the capability of new assets? Does the payback cover at least the cost of capital?36 • Uptime• How do operating expectations, procedures and practices affect assetperformance?• How do the efficiency and effectiveness of our maintenance efforts impact asset life-cycle costs?Clearly, maintenance is only one part of the overall asset life cycle, which covers everything from the time when the productive capacity needs of the asset (e.g., a vehicle, press or pump) are determined until the time of its disposal (Figure 1.3).On a linear time scale, the “operate, maintain and modify” cycle takes up most of the “life” of the asset. Modifications are made if the asset no longer meets the demands of the business or in response to continuous-improvement initiatives. Today, many organizations are rethinking their approach to managing this asset life cycle, often triggered by continuous-improvement ideas and adopting a different approach: physical AM (often abbreviated to AM, as discussed later in this book). This approach goes well beyond the traditional boundaries of maintenance and engineering Define RequirementPlanEvaluateDesignBuildAcquireCommissionOperateMaintainModifyDecommissionDisposeFIGURE 1.3Asset life cycle, which covers everything from the time when the productive capacity needs of the asset are determined until the time of its disposal.Building a Maintenance Strategy • 37by embracing financial considerations, market realities and the human capital necessary to make it all happen.Traditionally, most businesses were organized to think and act in func-tional silos—“I design, you operate and someone else fixes.” Many com-panies still operate this way. Within this framework, however, it is often easy to miss the overall business process. Those who subscribe to this mentality often miss out on insights that others in the organization can contribute. Those insights can often make a tremendous difference in the way assets are perceived, managed and maintained.Successful Lean1 manufacturers get away from functional silos. They rely heavily on teams of operators and maintainers working together. At the production-floor level, they combine their ideas and insights, mak-ing continuous improvements that relentlessly reduce levels of waste and improve productivity. Managers still have their role, but they, too, partici-pate in the teams and contribute insights that often lead to improvements. Anyone’s ideas, even those of casual observers who may notice something as they tour the plant, are treated as valuable inputs.Electric power, transmission and distribution utilities were once pub-licly owned monopolies charged with providing uninterrupted services. To ensure high reliability (i.e., uninterrupted service), they built in a great deal of hardware redundancy and usually overdesigned their systems. Costs were simply passed on to users and/or the taxpayers and justified on the basis of a need for high reliability. Now deregulated, these utilities are learning to compete in markets where overdesign reduces profitability. They already knew that reliability can be bought; they are now learning that it cannot be bought at any price. They are recognizing the need for more economical approaches to keep asset investment costs and operat-ing costs down and reliability and service levels up. Their business has changed, and so has their approach to managing their physical assets.Good AM begins by asking why the asset is required and how it impacts the business strategy and plans. Once this has been established, the pur-pose, function, standards of performance and key performance indi-cators (KPIs) must be set. Costs and benefits are evaluated; the asset is justified and ranked as an investment option by the company. Well run organizations ensure that lessons learned from past use of similar equip-ment are incorporated into the design and selection choices. The new asset is constructed or procured and installed. Once it gets a thumbs-up in test-ing, it is operated and maintained (and often modified as requirements change and as time goes on). A key to providing valuable decision-making 38 • Uptimeknowledge during the life cycle of the asset and input to the next cycle is the documenting of experience so that better decisions can be made for the next generation of assets. When the asset’s economic usefulness ends, it is disposed of, and its valuable past history is retained.Reaping the cost benefits of an asset rests on all steps in its life cycle. Ideally, maintenance, operations, engineering, materials, accounting and any other related departments can and will be involved each step of the way. Even before the systems are built, the decisions about what to build, how to build it, how to operate it and how to maintain it will have an impact on the business for years to come. Capable engineers must design the systems. In truly Lean environments, the concept of concurrent engi-neering is used. Operators, maintainers and even suppliers contribute during the design phase. An axiom related to this approach is that 95% of operating and maintenance (O&M) costs are determined in the design phase, the first 5% of the asset life cycle. Once the systems are in place, capable maintainers and operators must keep them running.It is almost paradoxical that the operators who run the systems and the maintainers who care for it often have very limited potential to influence the asset or system’s total life-cycle costs. Those costs are often driven by design constraints and limitations that they must simply “live with.” It is at the design stage that most decisions that have an impact on total life-cycle costs are made. Figure 1.4 illustrates the commitment and spending pat-terns during critical phases of an asset’s life cycle. As the figure illustrates, maintainability and reliability considerations have the greatest impact early in the process, during the design phase. Almost as soon as the asset is built and deployed into service, the flexibility to deal with maintainability and reliability problems is dramatically reduced, yet those same problems become far more visible and their impact on the business more apparent. Costs continue to accumulate, and the rate of that accumulation is largely driven by decisions made before the assets were commissioned.The operations and maintenance stage of the asset life cycle is dramati-cally influenced by the reliability of the design. If you are running and maintaining a system that is inherently unreliable,no amount of mainte-nance effort will improve it. Too often, there is no time to do it right the first time but plenty of time to do it over and over again later. You will need costly design modifications. Using the practical knowledge of experienced maintainers and operators at the design stage can result in significant sav-ings in O&M costs. These individuals can provide excellent insight into issues that are best dealt with before the design and construction begin. In Building a Maintenance Strategy • 39some cases, they may even help avoid excessive capital costs. For example, by including high reliability and design for maintainability as consider-ations for choosing among options for a fleet of buses, it is possible to get more available service time from individual buses. This, in turn, affects the desired overall fleet utilization as fewer buses will be required. Because fewer buses are required, less capital is spent up front. An excellent tool is RCM, which can be deployed at the design stage, often yielding very effec-tive design insights. RCM is described later in the book.In the United Kingdom, the privatization of the electricity industry led to a tremendous improvement in performance. This occurred because risk in AM was explicitly acknowledged, and this led to the development of decision-making models that consciously traded off cost versus risk versus performance. The net result was a 30%–40% across-the-industry reduction in cost (and manpower) with a simultaneous improvement in asset performance, which was measured as a reduction in customer out-age duration. Financial values were placed on customer service levels, image, environmental compliance or breach and regulatory compliance or breach, allowing optimization of the total picture.Most people tend to think of the steps in the asset life cycle as being sequential, but this is not always the case. The design, procure, build and operate phases may actually overlap. Operate and maintain certainly Funds committedLCC cost reduction opportunityFunds expended100%80%60%40%20%0%0%Conceptual design Acquisition cost Engineering,manufacturing,and constructionProduction andsalvageLife cycle span% of LCC100%95%85%65%FIGURE 1.4Commitment and spending patterns during critical phases of an asset’s life cycle.40 • Uptimeoverlap during the entire life cycle of an asset. When the need arises, both of these are overlapped by modification. Complex systems take years to design and build and are rarely built exactly as designers originally envi-sioned them. Compare any “as-built” drawings to the engineering draw-ings, and you will observe that. Design of the maintenance program ideally overlaps with the design of the asset. Up-front definition of the right maintenance through concurrent engineering and early deployment of RCM can lead to substantial benefits in life-cycle cost reduction. Design flaws are often found when this up-front analysis is performed—they can be corrected on the drawing board instead of in the field. Maintainability issues can become apparent and can be rectified so that downtime is mini-mized once the asset enters service. Knowledge of maintenance require-ments can drive the identification and purchase of spare parts. Often, spares are bought at the recommendation of manufacturers, not main-tainers. But ask yourself who benefits from this, and you will discover that having available the spares that maintenance says are needed when the asset starts can help avoid unnecessary downtime. If that seems too expensive an approach, then consider that the cost of those spares is very likely much less than the cost of the downtime avoided.Today, demographics are a critical issue for all industries. As the baby boomers retire, a massive succession problem has grown. The generations that follow are not smaller in numbers, but they have different work eth-ics and values. Postboomers (generation Y and millennials) grew up (and are growing up) in the Information Age. They learned far more about computers and high technology than about skilled trades. Few children or grandchildren of the baby boomers have shown an interest in learning a trade; their parents and grandparents have encouraged them to get col-lege degrees and become “professionals.” Two strategic issues arise from this state of affairs. Just who will replace the retiring boomers who are trade skilled? And how will we capture the knowledge that is leaving as seasoned workers retire? This problem began to materialize more than 10 years before the publishing of this edition of Uptime, when the boomers began to retire, and it is still unresolved. Economic conditions in late 2008 devastated many boomers’ retirement funds and plans, so there is a tem-porary reprieve as they delay retirement. However, that will not last for-ever, and it is keeping the door shut on job opportunities for the younger workforce.Dealing with these issues will be challenging, and solutions will not be quick fixes. Immigration, an old and reliable solution, will not work on its Building a Maintenance Strategy • 41own. Other countries are facing the same problems or do not have the abil-ity or resources to train people in trade skills. Outsourcing is an option, but even the outsource service providers are facing similar challenges. Part of the solution lies in doing more work with fewer people—in other words, becoming more efficient. Another part of the solution is working smarter—becoming more effective. Two particularly good ways to do the latter are through the proactive maintenance programs discussed in this book and through designing for reliability. Providing trades training and apprentice programs is also part of the solution and can be applied to new-comers from overseas who lack skills but are willing to learn them. Sadly, shortsightedness in government and industry has resulted in a dearth of these programs. Industry and government have not collaborated effec-tively in this area. Both have failed to see the strategic importance to both industrial success and national well-being.Contract MaintenanceMany businesses contract out some form of maintenance, whether spe-cialized technical work, like nondestructive testing, or overflow fabri-cation and machining work. Some contract out the entire maintenance function, while others contract out all operations and maintenance. The practice of outsourcing maintenance is common around the world (more so in Australia, Asia and Europe than in North America, but it exists everywhere). In fact, several very large contracting firms look after main-tenance for hundreds of plants worldwide.There are many reasons for contracting out or outsourcing mainte-nance. The most common is that a contractor can do the work more cost-effectively than you can. Some companies use outsourcing to transfer risk. By having a contractor take full responsibility for maintaining lifting equipment, elevators and hoists, for example, you eliminate (or substan-tially reduce) an element of risk and potential liability from your business. In other cases, the work requires technical specialties that are not available (or wanted) in house. Heating, ventilation and air-conditioning (HVAC) maintenance is very commonly outsourced for this reason. Occasionally, there is simply not enough work to justify having your own talent do it (e.g., some companies outsource their oil analysis work). Some companies look to outsourcing as a means of alleviating the demographic problem of finding enough skilled tradespeople, not realizing that the outsource service providers may have the same problem.42 • UptimeContracting maintenance has many benefits, including labor leveling for shutdowns and cost and capability factors. It also has some drawbacks,such as the difficulty in controlling quality and getting the labor experience needed. To answer the strategic questions of whether to consider contract-ing significant portions of your planned and preventive maintenance, first, understand the concept of competitive advantage. Your business has one or several core products and services that you provide to customers. There are a few core processes and physical assets that allow these processes to hap-pen, but no one, when asked, would consider their part of the business to be “noncore.” Can your cost-effectiveness and capabilities in maintaining these assets be considered a competitive advantage, something that allows you to compete and win in the marketplace? If so, contracting out maintenance of these assets may give away or diminish some of your competitive advantage.Many believe that maintenance is a core capability that cannot be con-tracted out. Rather than think in terms of core versus noncore activities, it may be better to think about “uniqueness.” If what you do in mainte-nance is unique to your business, then it is something you probably want to hang on to because no one else is doing it and it may be difficult (if not impossible) to find anyone to take it on. If it is something that is com-monly done by many other companies or service providers, then it can be considered appropriate for outsourcing. Something that is not unique is unlikely to give your company any competitive advantage. In fact, that sort of work may even be done better by another company since that company will focus on the work as a business instead of treating it as a “necessary expense item.” For example, an electrical rebuild shop that ser-vices several dozen customers may do a better job at rebuilding motors or switchgear than your own electricians, who also have many other, more pressing tasks to perform. The diagram in Figure 1.5 can help you deter-mine whether outsourcing is a good option.Strategic not strategiccompetitive advantageKeep work in houseConsider outsourcing (evaluate)no competitive advantageRework to provide advantageOutsourceFIGURE 1.5Is outsourcing a good option?Building a Maintenance Strategy • 43Ask yourself if the maintenance activity is of strategic value to the busi-ness. Is it unique to your business, or does having the capability in house result in some other advantage in the market? For example, if mainte-nance costs are typically high in your industry, you may want to keep it in house, where you can have better control over those costs, unless you can find a credible contractor who can promise better cost control or take it on for a fixed cost. On the other hand, a contractor who is more skilled at maintenance may deliver the greatest uptime. Which is more important, cost or results? Generally, if you can get more uptime, your costs will drop, and output will increase.The competitive dimension row in the diagram helps you determine whether or not you are already providing cost-effective maintenance compared to what is offered at what price by external service providers. If maintenance is of strategic value to your company and you are providing it cost-effectively, maintain the status quo. If what you are doing is not cost-effective but it is of strategic value, then consider an improvement program for your maintenance function so that you can deliver it more cost-effectively.If you do plan to contract maintenance, your key concerns will be con-tractor productivity and performance. Ideally, the contractors will be sub-ject to a thorough review, appropriately trained and not subject to high turnover. Contract out specific, well-defined projects or responsibilities and ensure that performance standards are set and closely monitored. “Service-level agreements” based on minimum acceptable standards of performance results have proven successful. Do not specify how to do what you want done; do specify the results or performance outputs you want. Leave the “how” to the service provider but give that provider an incentive to do the work well. Remember that providers expect to make money too; if they save you money, it may mean they are earning less. Successful outsource agree-ments stipulate that a contractor can earn more if savings are realized.Clear lines of demarcation should be drawn between in-house and contract involvement. Contracting can bring a lot of flexibility to your business, but it requires assertive management and control. Managing contracts is not the same as managing your own people—it requires a dif-ferent skill set and approach and may require new people or additional training for your existing staff.An example that illustrates the broad concept of outsourcing centers on some interesting challenges facing a global mining company that is choos-ing excellence. The company has chosen TPM2 as a preferred method for improving performance at all its global operations. Several of its mines 44 • Uptimeare already using outsourcing under Maintenance and Repair Contract (MARC) agreements. These were originally put in place using the manu-facturer’s recommended maintenance practices as a basis for pricing. There was no provision to encourage reliability and availability improvements, so performance remained relatively flat. There was also no mechanism to encourage teamwork between maintenance, which was outsourced, and operations, which were performed in house. Another problem can arise where the contractor refuses to accept input/guidance/direction from the contracting company. While you can outsource activities and risks, you cannot abdicate all responsibility. Contracts must allow for communica-tion and dialogue.In one mine, the company chose not to renew the MARC agreement and brought all the work back in house. Within a year, reliability and availabil-ity at the particular mine were up, and costs were down dramatically. The company is now seeking to challenge its other MARC service providers in ways that encourage similar improvements by using asset- and team-based approaches so that both the customer and the outsource contrac-tor benefit in a win–win arrangement. Service providers not interested in such an arrangement may lose the company’s business. An alternative solution is to outsource operations along with maintenance. Another is to perform all the work in house (as the mining company did). If the work is outsourced, gain-sharing3 provisions in the contracts can be used to encourage reliability and availability improvements using reliability meth-ods.4 This might also work for team based methods like TPM, although management of a joint program involving employees from two companies could prove challenging. There is no easy answer to this issue, but the onus is on the contractor to convince company decision makers that the work should be outsourced. Because many companies are becoming increas-ingly more selective about whether and to whom they should outsource, it is up to service providers to come up with attractive proposed solutions for their customers.UPTIME SUMMARYUptime’s Model of Excellence has three parts: leadership, essentials and choosing excellence. Having a clearly defined and achievable strategy with a vision of your future state and goals is a big part of good leadership.Building a Maintenance Strategy • 45In choosing excellence, you will be choosing a path of constant change and improvement, but remember that excellence demands leadership. Leadership is about vision and direction (strategy), its effective execution and your people—arguably the most critical element. Taking your orga-nization from ordinary to extraordinary requires an idea of what extraor-dinary looks like, a sense of where you are now and a plan to close the gap. Making those changes canbe a complex process, and it will not come without some angst and pain. Good leaders are there to rock the boat, and managers keep it stable—this dichotomy sets you up for conflict. It must be managed.Maintenance is a critical business function. It sustains your productive capacity, contributing to both fixed and variable costs. Reducing mainte-nance costs through efficiency gains (doing maintenance the right way) and effectiveness (doing the right things) increases operating margins. Maintenance also contributes substantially to the company’s safety and environmental performance and its overall risk profile as viewed by finan-cial and insurance institutions.Well-maintained assets meet production commitments easily and at low risk, something that lenders and insurers like to see. When building a new plant, consider the importance of maintenance and reliability deci-sions at the design stage, when you have the greatest opportunity, by far, to reduce total life-cycle O&M costs. Maintenance strategy is easily set in these “greenfield” scenarios but more difficult in an existing operation with all its habits.Strategy should be kept simple. Your business objectives, the asset envi-ronment, its present state and the state of maintenance management practices are your starting points. Understand what it means to be a high performer and using successful practices—training in Uptime is an excel-lent starting point. Bear in mind, though, that whatever is best for your company is what works best for your company—while there are successful practices, there are no best practices. Based on your organization’s strate-gic direction, decide what you want to achieve—that is your vision. Look at performance and practices today—they are good indicators of your ability to achieve your vision. Consider what successful practices, such as those described in Uptime, will be best to help you close any gaps. Develop a plan of action to implement those improvements. Plan the broad brush strokes for the entire initiative. Do not be surprised if it takes many years to complete. Detail that plan for the first year and begin implementing. Execution is what matters.46 • UptimeGood governance of your improvement initiative and integration of it with other improvement programs is essential. To avoid conflicts and competition for resources, use Hoshin Kanri to deploy your strategy. Ideally, that process begins at the corporate level so that your maintenance vision is driven by a clear sense of where the organization is going and how it is going to get there.In some cases, you may choose to outsource maintenance. Do it for the right reasons. It is not a way to unload responsibility, and transfer-ring a “problem” to someone else may not be the answer. If done poorly, it can even be harmful. If maintenance is of strategic importance or if it is unique to your business, you are probably better off keeping it in house.Once you have embarked on making improvements, it is important to sustain them. Excellence as described in this book is a journey, not a des-tination. Do not rush it, sustain the pressure to improve and never let up. Annual reviews of your strategic plans, tactical deployment activities and progress are essential elements to keeping on track with your journey. You will know it is working when you find yourself dealing with new chal-lenges every year and not revisiting the same ones.ENDNOTES 1. Lean manufacturing refers to a business model and collection of operational meth-ods that focus on eliminating all forms of “non-value added” activities (waste) while delivering quality products, on time and at the least cost. 2. Total productive maintenance (TPM) is discussed in detail in Chapter 10. 3. Gain-sharing concepts are described more fully in Chapter 2 as related to people, but they can be applied equally well in contracting situations. 4. Asset-centric methods are described more fully in Chapters 8 and 9.472People and TeamworkTalent wins games, but teamwork and intelligence wins championships.Michael Jordan (basketball star)At the time this edition of Uptime is being written, approximately half of the baby-boom generation is 60 years or older, and many are already retired. With them goes a lot of corporate knowledge that is contained in their heads. Many of them, particularly the older ones already gone, were not the best with computers, and they did not do a good job of record-ing what they knew for their successors to learn. That loss of corporate memory is exacerbated by several factors:• The widespread inability of many organizations to deploy com-puterized systems effectively so they can make up for the short-fall in providing valuable input to inform decision making. Technology has enabled a great deal, but we have been largely incompetent at harnessing that capability and leveraging it to its fullest extent.• The erosion of apprentice training programs that are government funded and provided through educational institutions puts the onus on industry to train its own. There is a recent trend making up for this, but so far, it is producing far fewer recruits than industry can use.• The failure on the part of industry to protect its own interests and run with the ball on apprentice programs whether in partnership with colleges or on its own.• The generally accepted drop in educational standards overall that make hiring someone who has not at least graduated from high 48 • Uptimeschool and preferably from some form of postsecondary education or training unattractive, thus limiting the available talent pool.• The high level of interest on the part of the baby boomers’ successors in computers and their capabilities has meant that fewer people are pursuing the trades and those jobs that are being vacated are becom-ing increasingly difficult to fill with someone who has the same level of skills.• The changing values that people hold today. While baby boomers tended to “live to work,” their successors “work to live.” Some lament that work ethics have eroded, but they have not—they have just shifted and arguably in a direction that anyone would want for his/her own children!• The desire for instant gratification that has been fostered by our grow-ing familiarity with technology and the quick answers and pleasures it can provide. All of us, young and old alike, are now used to getting what we want from technology more or less always on demand, and we tend to forget that in “real life,” things do not happen that fast. Our expectations on what people can and will do in the business set-ting are often unrealistic.Increasingly, we are being asked to “do more with less,” but what we really want is “more result with less effort.” Working smarter, more effec-tively and more efficiently are keys to success. In the dimension of human resources, we are especially challenged because increasingly, we have less to work with. We need increased productivity from fewer people. As our people adapt to the only constant we can count on, change, we gain securityand competitive advantage. Getting the most from your people by adapting to change, responsive team-based organizational structures, multi skilling, learning, training, development and compensation schemes all aligned with business goals is what this chapter is all about.PEOPLE REALLY ARE YOUR MOST IMPORTANT ASSETThere are three things that make up any business: its assets (financial, intellectual and physical), its processes (what it does and how it does it) and its people. The business itself is an extension of its people—whatever they bring to the business becomes a part of that business. Change only one person, and you change the business. Without your people, nothing People and Teamwork • 49will happen. Maintenance is a complex businessprocess with many sub-processes. It exists to ensure that your physical assets do what you want them to do, but it is the people in your maintenance group that makes this happen. Leading companies recognize how important their people are and put them first.Excellent companies that truly recognize the value of their people keep their turnover costs down and provide consistent service to their custom-ers. When motivated and inspired employees remain with a company, they help it grow and expand. These employees constantly look for ways to improve things and are always adding value. They know what needs to be done, and they do it, often delighting the customer in the process. Motivated maintainers keep operations happy, much like frontline sales staff does when dealing with customers. Employees who are demotivated, uninspired or unhappy will not expend that level of effort, and many will leave. Employee turnover is expensive—recruitment, replacement and training costs are measured in multiples of annual salary or wages. A hid-den expense is lowered productivity while a new employee learns how to do a job an experienced employee has left. This is exacerbated now that seasoned baby boomers are retiring in large numbers and replacement generations are showing up with different values and skill sets. Managing this transition to take advantage of the new skills and values is proving a challenge as conventional management models and ways of thinking still dominate in management today.There are significant changes in the social landscape we inhabit. Fewer young people embrace trades, seeking careers in the technology sector, which are perceived to be more challenging and rewarding. Many of these young people have a social awareness about things that did not concern previous generations. They value social responsibility, personal growth and development. At the same time, they want autonomy and a great degree of self-actualization. They make extensive use of social media and elec-tronic communications to remain connected and value team collaboration. Managing them successfully is different from managing baby boomers.The baby-boom generation was not as prolific as its parents, and it is fast retiring. This is leaving businesses scrambling for fewer available workers having the right skills to do an ever-increasing amount of work. Replacing the aging baby boomers and capturing their knowledge is going to be one of your most significant strategic challenges.Demographics have always been a driving force for change in society and in business. Today, perhaps the greatest demographic concern to 50 • Uptimeindustry is the dwindling number of skilled tradespeople. There simply are not enough qualified tradespeople to do things the way we used to do them, and our most seasoned tradespeople are retiring. With them goes considerable “corporate memory.” Simply capturing and storing their knowledge is not enough. You must be able to use it too. For example, you can easily get hold of your supervisors’ contact lists, but can you get their contacts to call you back when you use it? Replacing these people is difficult because the pool of skilled workers is smaller. Government skill training programs, which were once numerous and reasonably effective, have all but disappeared. Successful companies realize that they must tackle this problem themselves. Many others are struggling, and this is no simple challenge.Although the replacement workforce may be highly skilled, the skills younger workers have do not always match what a company might need, and there are far fewer of them. As noted in the previous chapter, immi-gration is not keeping pace with the demand for new workers, and this presents an additional problem. In some companies, this has already reached a truly critical stage, and work management looks like emergency room triage. Confronting these problems, companies are forced to rethink what it is their people are doing and create viable solutions that are often radically different from the old labor solutions. (Some of these are dis-cussed later in the chapter.)To deal with the problems of a shrinking labor pool and an environment that is unpredictable and sometimes chaotic, the successful maintenance manager must be far more than a competent technical person. In addi-tion to management skills, this individual must have consummate “people skills.” He/she is a coach and a nurturer who enables people to get their jobs done by clearing away barriers and providing resources. The astute maintenance manager does not control people tightly but, rather, tells them what needs to be done and then gets out of their way. This person encourages reasonable risk taking, rewards success and attacks problems, not people. These “soft” skills are the hallmarks of the modern mainte-nance manager, indeed, of any successful manager. They are critical in dealing with today’s biggest challenge.Individual workers may or may not rise to the challenges when told what is expected of them without clear guidance on how to do it. Teamwork addresses this challenge. Successful organizations are increasingly struc-tured around self-managed teams. Teams leverage the creativity and col-lective talents of their members, unleashing potential that is otherwise People and Teamwork • 51bottled up in conventional, command-and-control organizational struc-tures and approaches.TEAMSThe dominant methods used by companies that strive for superior results are team-based. There is a simple reason for this: These humanistic approaches work well. Reliability-centered maintenance (RCM), root cause failure analysis (RCFA) and preventive maintenance optimization (PMO) are all team-based methods that focus on physical assets. Developing an effective strategy and then following it also depend heavily on teamwork among maintainers, operators, finance, human resources and supply chain. Multiskilling enables maintainers to work in smaller teams and sometimes even alone, but it also enables maintainers to work closely with operations, satisfying many of their immediate needs as important contributors to the production team. Work management (Chapter 3) also requires a form of teamwork because operations and supply chain both play critical roles in the process along with maintenance. Basic care and 5S (Chapter 4) utilize a team approach—operators can do simple maintenance tasks and help maintainers while they do more complex work on systems that are shut down. Total productive maintenance (TPM), a component of the highly successful Toyota Production System, is a team-based method. Teamwork is clearly important, but so are team size and structure.In The Tipping Point, Malcolm Gladwell describes Robin Dunbar’s 1992 anthropological work relating the brain size of primates to the number of group members in the primates’ groups. Bigger brains are needed to handle larger groups with many more relationships. Humans are at the top of the list for brain size and for the size of the groups we interact with. And size matters. The number of people in a group with whom any one person can maintain genuine social relationships is approximately 150. Several organizations use this rule of 150 to determine maximum group size. Hutterite colonies are limited to 150 members before they split to form two colonies. Gore Associates (makers of Gore-Tex) limit their plant sizes to 50,000 square feet and their parking lots to 150 spaces. Once these are full, the company builds another small plant. We have seen many instances where smaller organizations work very informally yet produce superior results. In military organizations the world over, the basic fighting unit is the “company,” which typically has between 120 and 150 soldiers. 52 • UptimeA company commander andall of his/her troops will know everyone else in the company, but a battalion command (a battalion contains several companies) will not. What these organizations have found is that small groups develop a form of group memory and the ability to transfer knowl-edge easily. They can work toward common goals quite naturally. Within these small groups, informality works best. But larger groups, with more than 150 people, begin to need more formal structures simply because the relationships within those larger groups are less well developed. Smaller teams are quicker at decision making than larger ones, and the quality of their decisions, as measured in results obtained from implementing them, is often better. They do not get bogged down in analysis paralysis, and they are less worried about company politics. These teams simply work!In Finding Our Way: Leadership for an Uncertain Time, Margaret J. Wheatley describes living organizations in their own right, and they are, simultaneously, made up of many other living organisms: people. If com-mand and control are removed from these organizations, they (and the organization they inhabit) become self-organizing. Each self-organizing unit creates for itself the necessary aspects of organization used to achieve its goals, including communication networks, structures, values and behavioral norms. Research shows that self-managed teams are far more productive than teams formed or organized in other ways. There is a clear link between participation and productivity, and productivity gains of up to 35% have been documented. Unfortunately, many organizations are designed to accommodate command and control by their leaders, often harming productivity. Teams and the benefits they can generate are stifled in such organizations.Leaders of highly structured organizations argue that control is needed to manage the risks inherent to turbulent times. Those leaders give far too much power to their fears of failure. In military organizations, however, commanders learn that the greater the risk, the more they benefit from everyone’s commitment and intelligence. By controlling too tightly, lead-ers stifle creativity and prevent intelligent work. In April 1992, Argentina invaded the Falkland Islands (Islas Malvinas) in the South Atlantic. British junior officers were given unprecedented authority to make deci-sions and simply get things done. The result was a rapid and very effi-cient mobilization of a large fleet sailing a long way from home on very short notice. As Wheatley noted, effective leaders are better at relying on their people and not controlling every detail themselves. Machinery needs structure; people do not. Machines cannot adapt to change; people can. People and Teamwork • 53Running an organization like a machine might maximize control, but it suboptimizes performance.Team-based methods for maintenance use small teams: groups of people who have a common mission develop relationships and create highly productive output. To confirm this point, just observe the results generated by teams of various sizes working on problems of any sort. Smaller teams will generally be far more productive. The cautionary note here is that quality suffers if a small team lacks diversity in experi-ence and knowledge. Striking a balance between team size and compo-sition also matters.We all know that the only constant in life is change. Today, change is faster than ever, and it is largely unpredictable. Many businesses are left scrambling, uncertain how to catch up. Mergers, acquisitions, divesti-tures, strategic alliances, increasingly stringent regulatory requirements and deregulation are all driving substantial and often unexpected change. Such a charged atmosphere demands quick reflexes and well-thought-out approaches to remain competitive.MANAGING CHANGEIn this ever-changing environment, companies and individuals alike are subject to challenge. Even if you think you are static, you are really under-going some form of change, albeit slowly. Things around you are always in motion—technology, processes, people, etc.—and you must keep up with this motion and these changes to stay ahead of competitors. As the opening quote of this chapter implies, change is necessary for survival in today’s business world.History teaches us that dogmatic approaches to change tend to produce mixed, short-term results at best. Today’s workers simply do not buy into this approach—you cannot just direct them to change and expect that it will happen. It will not. Even your older employees are likely to balk at such directives. Although they might have responded to them in the past, they are no longer receptive to many changes. Most are looking forward to a smooth and predicable transition into retirement. They do not want change, and they especially do not want change by coercion. A simple truth shines through all of this—none of us likes to be changed, but we are all very good at changing on our own terms. It is like shopping—many people enjoy shopping so that they can buy something they want, but they 54 • Uptimedo not enjoy it when salespeople approach them and try to sell them some-thing that they may or may not want. Some people will even resist being “sold” when they actually want what the salesman is pushing—the experi-ence of being sold is so abhorrent to them that they look for an excuse not to buy from that pushy salesperson. The idea that something is needed must be theirs, and the buying choice must be theirs.Today, for both younger and older workers, change must be driven from within. It is human nature to change if there is benefit to be gained. New initiatives must grow from your own ideas, not the recommendations of others, even if others are used to help move those changes forward in areas where you lack sufficient expertise to teach or implement them on your own.Successful organizations steer their own courses in an organized fashion toward a predetermined goal or vision, navigating among many challeng-ing constraints. Change can be described as a movement from one state to another, through various transitional forms, to some final state. For plant engineering and maintenance, the main objective is usually to boost equipment productivity. There are many factors involved, all of which can be in a state of change simultaneously:• Increasingly complex technology in every aspect of work.• Integrated information and data management systems for employees, fixed assets, costs, performance and virtually all business activities.• Advancing process automation and robotics requiring fewer opera-tors but more highly trained technicians.• Tighter design tolerances for higher-quality products and less main-tenance intervention.• Shorter obsolescence cycles as time to market for new products, especially in the area of high technology.• Larger scale of plants with increasing flexibility to serve today’s demands for mass customization.• Increasingly prevalent use of modularity in designs allowing for automated troubleshooting and then replacement of whole modules rather than repair of components.• Higher targets for return on investment and profit margins in the new global economy with few business boundaries.• More rigorous health, safety and environmental standards in all juris-dictions. Failure to meet standards can cost your company dearly, shut it down or, in some countries, send your executives to jail.People and Teamwork • 55• Increased degree of contracting as businesses stick with their core competencies and contract out the rest.• Product liability law changes.• Workers’ expectations for self-realization in their jobs, especially among younger members of our workforce. Skills and knowledge are highly portable, workers are highly mobile and many do notmind moving. If a company provides a terrific working environment and interesting people to work with and for, people will stay. If it does not, they leave.• Workers’ expectations of their bosses. A good boss helps attract and retain good people; a bad one causes them to leave.• Less emphasis on loyalty both to and from employers and employees alike. The security of having “jobs for life” is largely a thing of the past. Changes like the demise of defined-benefit pension plans have made staying in one company for an entire career less attractive.For maintenance managers, these changes represent a great challenge. It can be met in part by having a strategic direction, as described in Chapter 1. Within this strategic direction is a successful vision, which is embraced by every employee at all levels. This is a tall order. Anyone involved in maintenance management or any management knows that a project can be derailed by employees unwilling to execute it. Thus, achieving your maintenance strategy will require change on the part of everyone in your organization. All employees must understand, accept and, most importantly, internalize the inevitability of change in order to improve.Organizations are ultimately altered and shaped by the individuals involved in the change process. Getting them involved requires a com-pelling case that drives their desire to change and move toward a shared vision of the desired future state. The process also requires the means to make it happen. We cannot expect new processes and methods to happen without investing time, energy and money. The major steps in the process are as follows: 1. Identify the need. What is the business case that calls for a change? 2. Identify a champion for the change initiative. Who is accountable for the results? 3. Enroll the team that will lead and execute the change. Who is going to make it happen?56 • Uptime 4. Define the change. What is it you intend to do? 5. Demonstrate that the specific change is really the best option. What are the alternative solutions? Which alternative is best? Who needs to know? 6. Plan the change activities and plan your work. What are the specific objectives or goals, approach, timeline and boundaries? 7. Communicate the plan. Does everyone affected understand what is going to happen and why? 8. Carry out your plan. What gets done? 9. Measure and communicate results as you implement. What has been done? Did it produce the right results? Who needs to know? 10. Foster continued engagement and development of the people affected to support the change. Involve them to the extent practical in defin-ing the change. What will sustain the change?To ensure success, include detailed change management assessments and plans with your primary plans. These need to be worked into the plans for any technical change not managed separately. Managing the change entails considerable emphasis on the human element, which is often overlooked in technical projects. Implementing improvements in maintenance and engineering often entails a number of technically ori-ented activities. Do not forget that the improvements are carried out by real people who have feelings, judgments, fears, ambitions and emotions. If they are not fully onboard with your program, it will not work the way you intended.Change is difficult in any organization. There are several things that make it easier, more successful and faster.Have a Compelling ReasonThe most difficult aspect of change is usually convincing those concerned that there is good reason to change. That is not easy, especially when it means destabilizing the entire organization. Any sane person will ask, “Why put ourselves through this pain?” The impetus for organization-wide change can take many forms: the threat of business closure, the desire to remain competitive in a changing market, the desire to avoid being outsourced or the need to make up for natural attrition in the work-force. These are reactive reasons. There are also proactive reasons to want a program of change. For example, customer satisfaction surveys can People and Teamwork • 57provide information on how the organization is perceived by its clients. In maintenance, this can be an internal customer survey.Regardless of the reason for the change, any change means shaking up the status quo, encouraging employees to think of better alternatives and allowing the organization to move forward. Unfreezing old think-ing is usually the best place to start. New concepts will often clash with old ideas and perceptions. Challenge the old methods, show more logi-cal alternatives that work and give people a chance to accept those new ideas. Education and training are usually the most effective ways to do this. Do not just train the people who will be directly involved in making the change happen. Train those who are also going to be affected by the change, and provide some sort of informative overview for others so they are kept abreast of developments in their company. Ideally, the change will make work more interesting and satisfying. You want your employees to endorse the new methods, but more importantly, you want them to play a large part in designing them. If they are not involved, resistance will be high, ownership will be low, the present situation will not improve much and the organization may even be harmed. The most successful organiza-tions at making change “stick” are those who involve the entire workforce in the decisions about what and how to do things in the future. These organizations are great at execution because they embrace a culture of change.1 The Hoshin Kanri strategy deployment methodology described in Chapter 1 involves those who are involved in leading and implementing the changes at each level in the organization. One of its objectives can be seen as the minimization of resistance to change.Make It TheirsReliance on outsiders to perform assessments, as discussed in Chapter 1, can result in resistance to the changes recommended. Everyone on site knows his/her own job to one degree or another. They know what works and what does not. They know what gets in their way and what helps them. They have creative ideas about how to make it work better. Those ideas are seldom captured, and even if they are, they are often not acted upon. Failure to act on ideas or to explain reasons for not acting will quickly shut down the source of those ideas, and everyone just accepts the status quo as a given and stops caring.Getting those creative juices flowing will generate excitement about making positive changes. Education in successful practices, as discussed 58 • Uptimein Chapter 1, will generate discussions and dialogue. That will lead to those ideas flowing. Capture them and turn them into your improvement program, and you will have their hearts and willingness to change. They will “own” it.Deal with FearsPeople resist change for many reasons. Chief among these is fear: fear of the unknown, of losing skills and status and of not being able to cope in a new environment. Some employees may see a proposed change as implied criticism: “It’s been working well for years. What do you mean we had it wrong all along?” Others may criticize those introducing the change: “What do they know about our business?” “Our business is unique. How can someone from outside possibly know what’s best for us?” This is where externally led assessments run into trouble. (Note: It is never a good idea to have an outsider lead the change for you.) Still others may not agree with the targeted end result, especially if they have had little or no input or they believe that the new plan is being foisted upon them from outside (including changes coming from the “head office”) and especially if the change will lead tosome perceived or real pain. Managing change requires that these people be allowed to choose. Let them choose to come onside and make the change theirs. All of this is far more complex to manage than simply giving orders, but it works.When introducing significant change in people’s lives, it helps to under-stand what psychologists refer to as the change cycle depicted in Figure2.1. Whenever we undergo a radical change, we go through six identifiable stages: loss, doubt, discomfort, discovery, understanding and integration. The change that triggers this is anything that will be seen as losing some-thing people are familiar and comfortable with. We all experience this with any change that is imposed on us from outside, and we all go through it at different paces.• Loss: It generally takes people time to adjust to the news of a change. The feelings are fearful, and we get cautious about what is happen-ing. Not much can be done at this time, and we feel paralyzed to some degree—we just do not know at this point what the change will mean to us.• Doubt: We commonly react with “this doesn’t apply to me” (or my department). This is a form of denial where we feel some resentment, People and Teamwork • 59we are skeptical that it can work and we are likely to resist the change. For example, it is difficult to accept contracting out much of what was perceived for many years as core work. We doubt that it can be successful, and we will do whatever we can to avoid the change, including improving performance using the old methods. Of course, those improvements are short-lived unless the change is quick and new ways simply sweep away the old.• Discomfort: We are starting to learn about the new change, and we have not quite let go of the old ways. We are anxious and confused. Productivity usually sags. We see the new way of doing things as somehow worse than the old way. Some people may actively resist or attack the change. Discomfort can lead to anger and more fear. If we do not deal with this effectively, we will struggle to embed the change.• Discovery: At this point, the change has not gone away on its own, and efforts to stop it have failed. There is a resignation to the new order, and some learning takes place. With that comes anticipation of improve-ment, and we start to look at ways to leverage and even improve on the change. The mood is more upbeat, and people are energized.LossDoubtChangeDiscomfortDiscoveryUnderstandingIntegrationFIGURE 2.1Change cycle.60 • Uptime• Understanding: As learning spreads and familiarity with the new order grows, there is more ease. People feel more confident in their success with the new ways, they are very practical about what it can do for them and they become more productive.• Integration: The new order is producing results, and those are vis-ible. Confidence grows into satisfaction, and people are focused on doing things well using the new ways. The anxieties are gone, and people relax as the change has now become just another part of the way things are done here. The metrics you’ve implemented are show-ing sustainable results. This is success.Be aware that this cycle affects everyone, though not at the same pace. Some people go through it quickly, and others never quite make it to the end. Some people embrace new ideas immediately, some accept changes slowly and some never will. In every population, there are innovators, early adopt-ers, a majority that comes along eventually, laggards that come aboard long after everyone else has and those that simply refuse to budge. Recognize that your workforce comprises all of these. The innovators and early adopters can help bring the majority along. If the laggards and those who refuse to budget don’t get onboard eventually, they may be better of elsewhere. Geoffrey A. Moore (1999) describes how to use this concept in marketing and the selling of high-tech products to mainstream customers, but it is just as applicable to entire organizations and to maintenance management.Figure 2.2 depicts another concept: a force field showing that change occurs only when there is an imbalance between the sum of restraining Drivers/enablersLess work but same payJob gets easierAvailability increasesCustomer satisfaction upAttrition of staffNo additional payLack of confidenceChange not neededRestraints/inhibitorsOrganizationChangeFIGURE 2.2Force field shows that change occurs only when there is an imbalance between the sum of restraining and driving forces.People and Teamwork • 61and driving forces. The premise behind this concept is that there are three basic strategies for achieving change: (1) Increase the driving forces, (2) decrease the restraining forces and (3) a combination of 1 and 2. Another way to look at this is that change will occur when the status quo becomes so uncomfortable that the future state is perceived to be more comfortable. People will go with the least discomfort even if that means changing. When a steering group, study team or task force is inaugurated, consider conducting a force-field analysis. Document the key drivers and restraints to change in the organization. The challenge, of course, is to esti-mate the relative strengths of the driving and restraining forces. Recognize that this is not an exact science, but it will provide some interesting insights!As humans, most of us naturally resist change because we want to remain comfortable. Change means facing the unknown, and fear of the unknown is usually greater than our fear of any discomfort associated with the status quo. People often resist change even if they are shown the benefit of change. They tend to evaluate from a present frame of refer-ence, which means staying with what they know. Eventually, however, dis-comfort with the status quo becomes so great that the change begins to look like a more comfortable option and becomes desirable. That is when people choose to change. Interestingly, discomfort is the mechanism that makes them accept change. Rather than being proactive and choosing to benefit from a changed state, they wait to experience discomfort before accepting change and whatever comes with change. The pattern is to defer the inevitable in hopes that the unknown will become known before they are compelled to choose.CommunicateBy providing information through communication, education and train-ing, you will greatly improve the odds for success by reducing the fear factor. This can help employees understand the driving forces behind complex business imperatives and to see the benefits of a proposed change. By providing relevant communication, education and training, you also enable your employees to participate more meaningfully in the design and implementation of the change process. By trusting them to provide their input, you also empower them. Instead of having to accept a change that is entirely directed from the top, employees can participate in the makeover, be given the time to get used to it and even have a stake in the process of making it happen. Your chances for success with this kind of participation 62 • Uptimeare high. Successful organizations use all available channels to get through to both their employees and others who are likely to be impacted by any change, including the employees’ families.When deploying strategy as described in Chapter 1, communication can be accomplished by the people who determined what change initiatives are needed. Each level of decision making can explain the changes and challenges to the level below. The more participation that can be accom-plished in the decision making processes, the easier the communication challenge becomes to resolve.Show That It WorksNothing succeeds like success. When you plan a change initiative suchas improvements in plant maintenance and engineering, you might turn to benchmarking for support. The benchmarking of indicators, processes and organizational structures can also help you determine the direction and rate of change that have worked elsewhere. That can serve as a useful guide and as a showcase for skeptical employees. It is particularly valuable if the organizations studied are the best in their field. Field trips for key employees (i.e., those who have a great deal of influence) can be incredibly valuable in showing the organization what it takes to succeed. Those influ-encers return from seeing it firsthand to spread the word, often through informal communication channels.Benchmarking companies that have been successful at transforming themselves reveals some noteworthy patterns of how change came about:• It was directed strategically and led by a clearly recognized leader (Kotter 1996).• It was participatory. Employees understood what was going on and were deeply involved.• It was well planned.• It was developed from previously established principles and prec-edent, not from personal edicts.• A team approach was used. Teams were used for projects, subproj-ects and tasks and were empowered to make decisions. They were also held accountable for results.• It was balanced in functions, not one sided or targeted only at one group. For example, a change to plant maintenance performance did not target only the maintenance trades—it included maintenance, People and Teamwork • 63repair and overhaul (MRO) supplies; purchasing; human resources; etc.• It was flexible—one size does not fit all.• It was integrated (not simply interfaced). For computer system imple-mentations, tight integration among different systems often works better than leaving data interfaces to manual and batch processes.• There was excellent communication; timely and meaningful mes-sages were sent and heard. All communication had content relevant to the audience, not just the sender.• The participants in the change benefited from its implementation. There was something beneficial for everyone involved, and there was no threat to financial or emotional security.Leadership“If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.”2 Leadership style is another key to imple-menting change. If leaders are not fully committed, if they vacillate, subtly or overtly question why they are doing what they are doing or have more pressing priorities, then chances for success will be severely diminished. On the other hand, if leaders dominate the change process with a personal vision or agenda, others can resent it and become inflexible. Leadership is often walking a fine line between too much and too little. Micromanaging is not leadership, and neither is allowing others to do whatever they want. The trick is to find a balance, and that means motivating without browbeating, nurturing without excusing and giving direction without hamstringing.Leaders will lead by example. They communicate through their actions as well as their words. People will follow the way they are led, so it is impor-tant to set the example of the behavior you want to achieve. Ideally, you want people you are leading through change to want the change. As Dwight Eisenhower said, “Leadership is the art of getting someone else to do some-thing you want done because he wants to do it.” Change your own way of doing things, and you will change the way that others around you work. Say one thing yet do another, and you will get results that match your actions.In organizations where change is embraced, it is often implemented quickly, and the changes stick. A culture that focuses on execution (Bossidy and Charan 2002) is successful. A corollary to this is that when organiza-tions make significant changes, one of the things that must change is the organizational structure. If you set out to do things differently, you often 64 • Uptimefind that the current structure simply will not work or even gets in the way of execution. Structure follows function. Note that if you are implement-ing changes that will result in a reduction in staff sizing, you may find a great deal of resistance. In those cases, function (the changed processes) may best be implemented after the structure is changed provided that the new processes can be implemented immediately.ORGANIZING THE MAINTENANCE STRUCTUREBuilding on the earlier topic of teamwork, today’s successful maintenance organization has abandoned Industrial Age command-and-control con-cepts and replaced them with looser, self-organizing structures that allow autonomy for small but effective service delivery teams. Autonomous teams are relied upon to meet or exceed agreed-upon expectations for per-formance. These organizations are tapping into the power and creativity of motivated and inspired individuals to truly add value to the companies they work for.Traditionally, many maintenance organizations were centralized through the maintenance manager, who was often an experienced tradesperson with good management skills. Typically, this person was responsible for manage-ment and centralized dispatch of all aspects of plant and facility support and services, while all spares and materials were regulated from the main or central stores.The strength of this system was threefold: (1) It ensured control over policy, procedures, systems, quality and training; (2) leveling of the work-load across the operation was guaranteed; and (3) it worked well when decision making was needed at the top. This still works well in smaller organizations, but its major disadvantage is inflexibility, and this was felt in many ways, particularly in larger organizations:• Sluggish response time to production requests.• Workers’ lack of familiarity with specific equipment in the plant and difficulty matching the skills to the job.• Workers who felt unappreciated.• Rigidity in approach, procedures and policies (what worked in the past was expected to work today and for the foreseeable future). It is also highly dependent on the personality, knowledge and skills of the central leader—change the leader, and it can all fall apart.People and Teamwork • 65• High charge-out rates reflecting bloated management infrastructure and bureaucratic processes.• Customer dissatisfaction over allocation of resources.• Strict demarcation among trades, which complicated even simple jobs and often created turf wars.• Focus on process efficiency rather than process effectiveness. Emphasis was on doing things right, not on doing the right things.Today, only small maintenance organizations (i.e., those with fewer than 50 people) seem to be able to overcome these drawbacks, and successful centralized maintenance organizations are found only in small compa-nies. Elsewhere, different approaches were needed and emerged.In large organizations, production became the responsibility of area or product managers, who must react quickly as economic conditions change. Management participation and job enrichment for frontline work-ers improved productivity and effectiveness. Especially in larger organiza-tions, structure shifted toward decentralization, and maintenance moved into the mainstream of operations. In some organizations, the mainte-nance manager completely disappeared and was replaced by produc-tion area superintendents. In Japan in the 1970s, the Toyota Production Systememerged and was enhanced by the teamwork concepts embodied in TPM.Despite its popularity, decentralization was not a panacea either. It was difficult to manage risk and maintenance engineering consistently from one production department to another. Often, neither was handled very well. Some production areas ignored proactive maintenance,and pockets of chaos coexisted with plant areas that were well run. Standardization became attractive to senior management, but decentralized groups pre-ferred to go their own way, and in the absence of standards, conditions often deteriorated. When standards were applied and enforced, decentral-ized organizations worked very well. TPM builds on this concept very suc-cessfully, but it does not work well everywhere. Clearly, there is no one approach that is best for all.There is no one correct organization structure that can be transferred from a book to a real-life situation. There are only options that can be applied in specific situations. Usually, the best solution in larger organiza-tions is to restructure for maintenance as a hybrid of centralized and local area functions that have close, regular and formal liaison with operations and engineering. This hybrid model was implemented in a plant in the 66 • UptimeMidwestern region of the United States. A brief look at what was done and why is in order.The 2-million-square-foot plant of a microelectronics operation was divided into four focused factories producing different products: chemi-cals, components, hybrid electronic circuits and capacitors. After the introduction of the just-in-time manufacturing philosophy, these focused factories were further divided into 60 production cells. This new arrange-ment was supported by a centralized maintenance group and suffered from unacceptably long response times and less-than-satisfactory cus-tomer service. Within the focused factories, it was rare to have the same maintenance technician dispatched to the same cell on different days, so the learning curve for technicians exacerbated the delay time. After much soul searching and debate, maintenance and production managers agreed to try a new structure for maintenance:• Central maintenance for facility maintenance (heating, ventilation and air-conditioning [HVAC], etc.), parts inventory warehousing and control, fabrication and machine shops, tooling, information database control and specialized trades training• Focused factory maintenance for workshops, planning and schedul-ing, operator training in maintenance and maintenance engineering• Cell maintenance for multiskilled teams (sometimes covering sev-eral cells), urgent maintenance, PM and consumable and free-issue parts and suppliesBefore investing time and resources into the change in structure, plant management considered the implications and weighed costs and benefits. The new, hybrid model satisfied the ultimate objective of the maintenance function admirably, providing rapid response and equipment uptime safely and at a reasonable cost.Today, we are focused sharply on corporate responsibility to various company stakeholders as well as to society at large. As a result, another organizational shift has begun and has precipitated an increasing aware-ness of the importance of physical assets to business. Compared with past changes, this shift has been rather subtle, but it is getting an increasingly higher profile with the advent of international asset management stan-dards, specifically ISO 55000, 55001 and 55002—the subject of Chapter 11.At the shop-floor level, for example, the focus on stakeholders is almost imperceptible because most of the changes are happening at the most People and Teamwork • 67senior management levels, where physical asset management is becoming a hot topic.In highly automated systems, poor design, poor execution, unsafe prac-tices and equipment failures of all kinds can result in safety and environ-mental problems and severe business losses. These events are bad enough, but their consequences are worse. Because executives are increasingly being held liable for these consequences, they have begun to take a hard look at how to fix the underlying causes. What they have discovered is that businesses need competent professional support in managing the technol-ogy and physical assets for which senior executives are ultimately respon-sible. This is, in large part, what has given rise to the advent in 2014 of the international standards for asset management.In large global organizations, there is a trend toward standardized models for maintenance and engineering that requires corporate-level leadership but allows for execution at the local level. At the same time, as businesses automate more and rely more heavily on computerized controls and sys-tems, they put less emphasis on the operator and more on the maintainer. And while maintenance is still viewed as an engineering function, in most organizations, it is often located in a separate department. All of this points to the real nature of the current shift—the emergence of physical asset management as a new paradigm and the new international standards.With so much efficiency already built into management processes and systems with complex networks connecting suppliers and custom-ers, it is apparent that meeting today’s standards and demands means working smarter, not just harder and better. Physical asset management encompasses the entire spectrum of asset life-cycle management, from conceptual design to disposal. It includes traditional engineering and maintenance functions and recognizes that operations contribute to asset integrity by operating the assets correctly.Slowly but steadily, maintenance management, once relegated to a corner of the shop floor or the warehouse, is being elevated to the executive suite, often with engineering in newly emerging asset management roles. Many companies now have VPs or directors responsible for physical asset man-agement, and corporate standards are being set and applied to maintenance, engineering and operations in much the same way as they are applied to any manager who incurs expenses or any manager who hires and fires employees. Like the hybrid organization, the physical asset management organization manages some services centrally and others at a local level. Responsibility for execution of the work is separated from the responsibility 68 • Uptimefor creating and maintaining the standards. The VP manages the latter and focuses on compliance. The maintenance, engineering and operations man-agers are responsible for doing the work and for complying with those stan-dards. Figure 2.3 shows a typical organizational chart for this model.What this figure and the previous historical analysis of organizational infrastructure suggest is a shift away from dogmatism and toward a more flexible approach better suited to the behavioral complexities of today’s workplace. As previously noted, Industrial Age solutions do not work for children of the Information Age. Margaret J. Wheatley (2005) points out that command-and-control structures do not work well anymore—they hold us back from progress. Particularly in dealing with the challenges of replacing an aging workforce, anything that holds us back is clearly unwel-come. The new model to embrace involves greater reliance on people who are free to choose their own paths and respond to their environment within a self-organizing team-based system. Although this may sound chaotic, this model has the potential to unleash latent talent and capability that can solve some of our most pressing problems. Studies (Wheatley 2005) show that productivity gains in truly self-managed work environments are on the order of 35% greater than gains possible in traditional organizations. One proven practice that unleashes some of the latent talent in a workforce and illustrates the ability of individuals to expand is multiskilling.MULTISKILLINGAs decentralization took hold and flexibility increased, it became essential to improve labor skills, planning and scheduling. Managers had to offset PresidentVP finance VP operationsVP humanresources308Root Cause Failure Analysis .............................................311Decision Optimization ..................................................... 320Reliability and Simulation Modeling ....................................323Increasing Awareness ........................................................ 324Uptime Summary ................................................................... 324Endnotes .................................................................................. 326xii • Contentschapter 10 Evidence-Based Asset Management .............................. 329Evidence-Based Asset Management .....................................329Optimizing Life-Cycle Costing Decisions ...........................330Option Evaluation ..............................................................330Time Value of Money .........................................................332Calculating the Optimum Buy Option............................332Case Study: Replacing Aging Screeners with NewOnes in a Mining Company ................................334Case Study: Selecting the Best Gas Meter Replacement/Repair Option for a Gas Distribution Company ..................................................335Economic Life of an Asset ......................................................336Economic Life of a Steadily Used Asset ...........................338Developing the Model ...................................................338Numerical Example .......................................................339Case Study: Purchasing the Best Combustion Engine ............................................................................. 340Case Study: Economic Life of a Bus Fleet Used in Urban Mass Transit ...................................................... 343Case Study: Optimizing Economic Life Decisions for XYZ Bus Fleets ........................................................ 343Case Study: Economic Life of a Light Truck ............. 343Case Study: Optimum Replacement Age for Underground Steel Mains ............................................ 343Case Study: Optimum Replacement Time of an Old Turboexpander with a Technologically Advanced Substitute ..................................................... 348Concluding Remarks on LCC .......................................... 349Optimizing Maintenance Tactics ......................................... 349What Is a Maintenance Tactic? ........................................ 349Time-Based Maintenance ................................................. 350TBM Case Studies ......................................................... 350Condition-Based Maintenance ....................................353CBM Case Studies ..........................................................353Calculating Spare-Part Requirements ................................. 354What Is Spare-Part Provisioning? ................................... 354SPP Case Studies ................................................................ 356Contents • xiiiOptimizing Failure-Finding Intervals ..................................357FFI Case Studies ..................................................................359Uptime Summary ....................................................................361Section iV Asset Managementchapter 11 Asset Management ......................................................... 365What Is Asset Management? ................................................ 367Why Bother? ....................................................................... 367Standards, “Anatomy” and “Landscape” ............................. 369GFMAM’s 39 Subjects ........................................................377Implementing AM ...................................................................379Documentation, Record Keeping and Information Management .............................................................................381Certification ............................................................................ 383Putting Uptime in an Asset Management Context ............ 384Uptime Summary ................................................................... 385chapter 12 Information Management and Governance ................. 387Defining the AIM Program .................................................. 394AIM Program Organization and Roles .......................... 398Authorizations and Controls ............................................401Data and Information Requirements .............................. 402Data Rules ........................................................................... 405Data Flow, Data Management Processes and Controls ........................................................................... 406AIM throughout the Asset Life Cycle ............................. 407AIM Sustainment—Proactive, Reactive and Ongoing Processes ..............................................................411Uptime Summary ....................................................................413Section V the Journeychapter 13 Implementing Uptime .................................................... 417Why Bother?.............................................................................418Getting There—Implementing Uptime ............................... 420xiv • ContentsAssessments versus Training ................................................ 422A New Approach .................................................................... 424Planning ................................................................................... 425Governance ............................................................................. 427Initiative Overload ................................................................. 429Action Teams ...........................................................................431Middle Management ...............................................................431Just Do It .................................................................................. 434Sustainability ........................................................................... 435Uptime Summary ................................................................... 438Conclusion ............................................................................... 439Endnotes .................................................................................. 440Appendix A: TheUptimeAssessment ............................................... 441Appendix B: Glossary of Maintenance Terminology ....................... 455Appendix C: Rapid Preventive Maintenance (PM) Deployment Suggestions .......................................................................................... 469Bibliography ........................................................................................ 475xvForeword to the Third EditionThe first edition of Uptime (1995) was written by John Campbell. The sec-ond edition (2006) was by Campbell and James Reyes-Picknell. As Reyes-Picknell is extremely aware of developments in the workplace, he realized the necessity for this third edition. Yet the third edition of Uptime is more than a minor tweaking of a popular book. In many ways, it is an entirely new book, with the addition of new contributing authors and the major rewriting of chapters to reflect current thinking.The third edition may still say “Campbell and Reyes-Picknell” on the jacket, but in fact, there are many contributors. Contributing authors include Larry Johnson, Carlo Odoardi, Richard (Doc) Palmer, Paul Picknell, Uri Wittenberg, and Ali Zuashkiani. By embracing insights from others, Jim has made this book even more valuable than the second edition.Uptime includes trends in technology, reliability maintenance improve-ments, and the challenges of finding qualified maintenance personnel due to an agingVPadministrationVP marketingVP physicalassetmanagementProduction Maintenance Logistics Engineering Standardsand policyFIGURE 2.3Typical organizational chart.People and Teamwork • 69the inevitable duplication of talent that arises in a decentralized system with higher asset performance and labor productivity. One highly success-ful option was to train workers in multiple skills or multiple trades. Initial attempts met resistance from trade unions guarding against encroach-ment on their specialties. In response, many organizations collaborated with their unions to help enhance skills and pay extra for their use. Today, multiskilling has become a staple of many organizations and is one of the solutions to the current problem of reduced availability of skilled trades. It is a viable option but not always easy to implement. Multiskilled employ-ees possess all the skills necessary to do their tasks safely across tradi-tional disciplinary boundaries. In some companies, tradespeople hold more than one recognized trade certification or are “ticketed” in more than one trade. Generally, the multiskilled worker may not necessarily have all the skills to qualify in multiple trades but does have the skills needed for his/her particular job. Multiskilling works best where jobs are relatively simple and of short duration. For example, it is ideal for jobs like changing out a small motor but is not as well suited for calibration of a variable frequency drive. The objective of multiskilling is not to have everyone do everything, eliminate specialist skills or loosen the stan-dards for quality work. Specialists are still important. A secondary, but equally important, function of multiskilling is flexibility. Multiskilling can help reduce costs because increased flexibility reduces the number of jobs for which you will need multiple people with multiple skill sets. A cautionary note to this is to avoid approaching multiskilling simply as a method to slash costs, because the most significant long-term benefit is improved productivity.In organizations in which multiskilling was used primarily to reduce workforce size, it has failed, sometimes miserably. Usually, those organiza-tions had more to do than they could handle, and reducing the workforce through multiskilling failed to address the basic problems of too much work, poorly managed workforce deployment (planning and scheduling) or both. One example serves to illustrate what can occur if multiskilling is implemented with the sole intent of reducing the workforce in a facil-ity overburdened with too much work. Multiskilling was instituted over a 3-year period by an aluminum industrial product manufacturer in cen-tral Canada. In the first year, training was provided to increase workforce skills. The excessive backlogs of work were gradually reduced. Late in year 2, following a downturn in the business, the workforce was cut. Backlogs gradually returned to previous levels, and the workers who survived the 70 • Uptimecuts, now demoralized, gradually stopped using their multiple skills. By the end of year 3, the backlog exceeded previous levels, and multiskill-ing was all but forgotten. The workload required more people than ever before, but there were fewer to do it. The situation deteriorated, and a once-proactive maintenance organization became reactive.In all cases, introducing multiskilling has it challenges: boundary disputes and communication difficulties, workload leveling among the various distributed work areas, demands for job enrichment and vari-ety, unequal opportunities for overtime and general management career path planning and trade union resistance. There is also a need to ensure the skills are used —if tasks requiring the new skills occur infrequently, the skills are lost. Make sure that multiskilling is applied for frequently occuring tasks. Some organizations contract work out in order to smooth workload peaks. Others have centralized floating teams for shutdowns and major overhauls. Maintenance and production duties are sometimes shared, increasing the know-how of the decentralized maintenance and operations teams.Multiticketing, where a tradesperson is fully qualified and recognized (ticketed) in more than one trade, is an excellent way to introduce multi-skilling. Union resistance to this approach is usually less strident than it is to the less formal multiskilled approach. Multiticketed tradespeople are very well compensated with premium wages. In some cases, unions actu-ally support the practice as it has clear benefits for their members.On the other hand, organized labor’s resistance to multiskilling in gen-eral remains rather strong. There are several legitimate concerns about the practice:• There may be no marketable, generally recognized skill certifica-tion that can be transferred to other organizations or jurisdictions. Multiskilling programs can lock employees into an organization because their skills are unique to that organization. This is becom-ing less of a concern as more companies, in response to challenges in replacing experienced workers, are seeing the value in multiskilled as well as multiticketed workers.• Training programs can be poorly conceived or inadequate. Often, a lack of up-front definition of the work is the culprit. Simply throwing together a training program without adequate analysis and without training follow-up does not work. A great deal of effort is required in training needs analysis, training development and delivery.People and Teamwork • 71• Multiskilling ignores traditional career patterns, in which long or valuable specialist experience often leads to promotions into man-agement. With multiskilling, those who are the most capable can now move forward more quickly. Seniority or tenure is no longer enough to ensure advancement or promotion, and workers with more seniority, a pillar within many trade union arrangements, understandably resist the shift. Increasing pay with increases in skills that are utilized can help overcome this resistance while encourag-ing workers and their unions to participate rather than resist.• Some organizations attempt to generalize skills to meet immedi-ate needs. This reduces mobility and is a shortsighted approach that unions are right to challenge. Over time, workers become bored, and turnover rates increase. This presents a new, high-cost prob-lem. Turnover results in lost knowledge (equipment history, organi-zational issues, human issues and technical knowledge); additional recruiting requirements; cost of getting recruiting wrong; and lost time associated with learning curves and errors that occur while new employees learn and gain proficiency in their new jobs.• Multiskilling is sometimes viewed as a precursor to contract maintenance, making the workforce more attractive to a potential contract service provider under an outsourcing agreement. This appears to be a legitimate concern, but in practice, few companies have prepared themselves very well for contracting out the mainte-nance function.• Often, organizations introduce multiskilling programs with staff reductions and inappropriate compensation schemes. The desire to cut costs quickly leads to rapid cuts, usually before the payback of multiskilling is realized. As in the example above, it harms the very people needed to pull it off successfully. The emphasis needs to remain on productivity gains, not on cost reductions.To foster employee commitment to multiskilling, it is important to encourage their involvement in addressing these issues openly and early in the process. If the process is thrust upon them without adequate notice and preparation, you have a recipe for disaster.Planning and training for multiskilling centers on a “training needs and tasks analysis.” Whattasks are currently being carried out and by which tradespeople? Is the current skill level appropriate? What are the most fre-quently performed tasks of some typical jobs or work orders? What tasks 72 • Uptimewill be performed in the future? The concept of “natural work” applies here. Tasks that may entail a variety of different trade skills that are rel-atively simple are appropriate for multiskilled workers. Tasks requiring very complex skills in one or more trade areas will demand a multiskilled worker with a great deal of training in several trades. It is often not cost-effective to provide all that training. Moreover, multiskilling does not replace truly unique specialists. They have and likely always will have a valuable role to play.To perform the training needs and tasks analysis you can search for task requirements in work order histories, industrial engineering stud-ies, maintenance manuals or employee questionnaires and surveys. Organizations that use RCM have an excellent source of defined task requirements. Figure 2.4 shows an example of the relationship between various trades and some of the tasks performed.Through the needs and tasks analysis, you can develop an overall edu-cation and training approach. Because high school dropout rates remain high, and schools have deemphasized basic and trade skills, many organi-zations find that this process requires basic education before skill training can start. New employees today often have a better formal education; that education is rarely focused on useful trade skills. Hiring practices may attempt to weed out the less-well-prepared, but in tight job markets, those standards are dropped. In those cases, new employees may actually be less educated than their predecessors. Some senior employees who have “learned on the job” may have failed to keep up with developments in Trade/taskMechanicElectricianInstrument technicianCNC machinistPipefitterWelderRiggerStationary engineerMachinistMillwrightMasonCarpenterPainterMobile equipment operatorBlueprint readingRequisitioningPLC programmingVibration analysisPneumaticsHydraulicsDrillingSawing/shearingMeasuringWeldingRiggingFramingTroubleshootingLubricationBalancingAlignmentThermal cuttingBricklayingFIGURE 2.4Relationship between various trades and some of the tasks performed.People and Teamwork • 73computing technology. In today’s world of pervasive technology, tablets, fablets and smartphones, the technological laggards are fewer and farther between, but where they exist, they are now working alongside younger and more tech-savvy workers. Depending on your workforce demograph-ics, the first priority may be upgrading employees’ literacy, facility with numbers and basic computer skills. All employees will benefit from a clear understanding of the company’s markets, customers, products, services and overall strategy for success. Never assume that just because people have worked in your organization for many years, they really know the business. Recognize that employees who understand the basics of your business are more likely to make meaningful and rewarding contributions to its success.3Other general knowledge that will benefit employees includes basic sta-tistics, modern concepts and methods in maintenance management and quality management. Try alternating classroom and on-the-job expe-rience, including job rotation. There is a vast array of training methods and tools. Classroom-based training is still useful where it is important to learn how to put what is studied into practice, particularly in team-based methods. Computer-based training, simulations, gaming and electronic manuals, documentation and testing and study guides are all available. No matter what media is used, case studies are always useful to drive home the points being made. Games combine classroom learning with hands-on practice, often using simulation techniques that appeal to the visual and tactile learning styles common among maintainers and opera-tors. The results of the detailed needs and tasks analysis will, of course, set the agenda.It may help to segment the many tasks performed by maintenance into skill modules. Clusters of these modules are then linked for logical multi skilled groupings and progression. Common groupings are fairly obvious: mechanical, electrical, control. For example, the new “indus-trial mechanic” skill set includes the traditional skills of fitting, pipe fitting, rigging, welding, millwright and mechanics. Increasingly preva-lent robotics has led to specialists in mechanical and control systems. Engineering schools now have degrees in “Mechatronics.” Multiskilling will clearly blend these skill sets.Implementing multiskill training in tandem with changes in com-pensation works best. Employee representatives can help design pay-for-knowledge systems, in which workers are paid for learning and using new skills. To be eligible for the extra pay, they will use a skill when and where 74 • Uptimecalled for. Make sure you can measure the output and reward improved performance and teamwork with bonuses and other benefits. Setting up a pay-for-knowledge system can necessitate changes to existing collective agreements and to the less formal but traditional expectations that make up your corporate culture.If you need to hire new employees and train them to become multi-skilled workers, you will need to be picky even though the available talent is limited. A study of candidates for multiskilled positions in the United States revealed that only 37% had multiskill aptitude. Only 6% of elec-trical trade applicants met entry requirements, 18% of mechanical trade applicants met entry requirements and less than 1% were able to perform multi skill tasks.Multiskilling has its costs, and it helps to be aware of these before you begin multiskill programs. To the direct cost of increased compensation, add significant investment in training and facilities; management time; and changes to existing systems, methods and labor agreements. The com-pany will also pay, at least initially, for some of the time used for training, either directly (paying for your employees’ training time) or indirectly (alarger workforce to get the work done while your core workers are out being trained).Many colleges and trades schools are now producing multiskilled grad-uates, and many of today’s new hires are already multiskilled to a degree. What they lack, however, is job-specific experience. Apprentice programs ensure that this experience is gained while the knowledge is fresh—avoid the traditional approach of starting too slowly because a new hire needs to “get adjusted.” The best adjustment comes with appropriate training. Do not use your most junior tradespeople for predominantly menial tasks. You will lose them. Younger workers today want to be challenged intel-lectually, not just physically. They have invested in their own education up to this point and expect you to continue the process. Minimize their value, and they will go somewhere else.The long-term benefits of multiskilling are worth the investment you make. You can expect the following:• Increased flexibility in scheduling workers• Shorter response times• Reduced supervision• Greater labor and asset productivity• Higher morale among workersPeople and Teamwork • 75• Improved scheduling, communication and integration among departments• More stable employment• Greater job satisfactionCase StudyThe following case study shows how one consumer goods company, Lever, dealt with severe business challenges by using an extensive multiskilling program. Lever, a Unilever company, manufacturessoaps, detergents and other laundry and personal hygiene products, and operates several plants in the United States and Canada, one of which is located in Toronto. The North American Free Trade Agreement (NAFTA), signed by the United States, Canada and Mexico in January 1994, was about to increase the competition for the rights to manufacture various products among the various Lever plants. Unless the Toronto plant could find a way to pro-duce at lower costs, all of its products could be manufactured at other plants and imported as tariffs began to fall. Responding to this perceived threat, the Toronto plant increased the productivity and flexibility of its maintenance workforce through multiskilling. The overarching philoso-phy was to achieve “one job–one person,” and the overall objectives were as follows:• Broaden the scope of skills for each tradesperson• Reduce the complexity of trade demarcations• Provide new career paths• Increase the skill level of key tradespeopleWorking closely with two local community colleges, Lever designed a series of courses that enabled millwrights to acquire basic electrical skills and electricians to become skilled at alignment and vibration. A career progression plan was developed so that millwrights and electricians could achieve a supertrade category, earning skill-based incremental pay as they progressed. Figure 2.5 summarizes the training modules required for the multiskilled trade designation at Lever.During the first round of training, about 80% of the tradespeople partic-ipated in upgrading or expanding their skills, with 95% of these eventually passing their courses. Each participant’s record of the various modules completed and those yet to be achieved was documented. The company 76 • Uptimeis continuing its multiskilling process, with management and the local Teamsters union negotiating the fine points and implications for workers.The provincial government approved the trade of “multiskilled indus-trial mechanic,” with the requisite skills and training requirements. This recognition increased the marketability of participants. Lever and the union worked toward the development of a supermultiskilled tech-nician, with expanded troubleshooting and technical training skills. Module/skillSafetyCommunicationsTrade scienceBlueprintsHand and power toolsMachine toolsMeasurementFastenersLubricantsRiggingMaterials handlingPower transmissionCompressors and pumpsPrime moversWeld, braze, solderBearings, seals, packingValves, pipingFans, blowersElectrical controlsPneumaticsHydraulicsPredictive maintenanceMilling, grindingLathe workPacking machinesElectrical circuitsElectronic systemsElectronic power distributionPLCsDrive systemsMicroprocessorsProcess equipmentProcess control systemsMillwright/industrialmechanicPacking mechanicElectricianInstrument technicianSupertradeFIGURE 2.5Multiskilled trades at Lever (Toronto).People and Teamwork • 77Multiskilling has been a major factor in the decentralization of the Toronto plant’s maintenance organization structure. Now the multi-skilled tradespeople are an integral part of the area operation teams. The plant survived its NAFTA challenge and is thriving despite a change in ownership in 2002, ample proof that the approach was sustainable. Central to Lever’s success with multiskilling was their commitment to learning, training and employee development.LEARNING, TRAINING AND DEVELOPMENTToday’s business environment is highly competitive and constantly chang-ing. Knowledge is no longer static, and information is readily available online. Knowing how to use that information most effectively requires constant learning. A key feature of organizations as they move toward physical asset management from older maintenance models is that they are learning and developing their people. They have a technical/managerial career path that embraces learning and continual development.Learning is constant, a way of life. Those who value knowledge do not hesitate to investigate what they suspect is a more productive way of com-pleting a task. If they find that their assumption was correct, they adopt the practice and let others know about it.Despite the trend toward continuous learning within companies, there are variations in performance from plant to plant and even within plants and among departments. Productivity can vary greatly from one plant to another. Even in large plants, an innovative practice that has been skillfully adopted by one department is often ignored by another. Inconsistencies occur in integrating operations and maintenance, cross-training or multi-skilling tradespeople and empowering supervisors. Making employees (whether they are salaried or paid hourly or on a contract basis) responsible for productivity and profits will not necessarily produce the desired results.Finding the most productive methods has a great deal to do with access to information of several kinds and sharing ideas and innovations. Having an open pipeline to the best practices in other, similar industries is also important. Much also depends on the attitude, knowledge and skills of employees. People have to want it, or it will not happen.In The Age of Unreason (Handy 1991), Handy describes the learning pro-cess as a wheel divided into four parts. It starts with a question or problem to be solved. Then it moves on to speculation or theory. Next comes testing 78 • Uptimethe theory, and finally, reflection. This sequence is used extensively in set-ting up benchmarking studies—formalized learning by the corporation. The learning wheel runs on the “lubricants” of self-responsibility, per-spective and forgiveness. A well-oiled attitude includes accepting owner-ship for the future, being able to view events from many angles and being capable of living with uncertainty and mistakes. The underlying premise is that people learn from their mistakes and improve. If they are not mak-ing mistakes, they are not trying hard enough.Employee education and training is the starting point for fostering a learning environment. A good education and training strategy includes the following:• A clear objective• A review of the training requirements• An understanding of the unique work culture• An implementation plan addressing both training and the work culture• A budget for the associated costs and expectations of where the ben-efits will be captured• A method for continual assessment of whether the objectives are being metTraining can range from basic literacy (so employees can at least read the employee suggestion form) to the latest methods of managing techni-cal people, and just about everything in between (Figure 2.6).Here, it is important to point out the distinction between education and training and examine why each is important in a different way. A simple example explains. Most people would probably agree that teenage chil-dren benefit from some form of sex education; education, after all, enables intelligent decisions. A more debatable subject, however, is the benefit of training in sex—does any parent really want their children to become sex-ually competent at their age?As the example above suggests, the objective of education is to expand knowledge of a topic, to bring an uninformed individual through stages of awareness to understanding and to enable the right decisions. The aim of training is to upgrade a person’s skills so that he/she acquires proficiency in a given job or task.To define education and training requirements, you match tasks with the skills required to execute them. In a greenfield operation, this bottom-up People and Teamwork • 79approach works well in combination with the use of RCM (Chapter 8).RCM produces task requirements that are easily translated into skill and knowledge requirements that feed training definition.For an existing operation, you should look from the top down and review plant and equipment performance against performance and out-put requirements or expectations. You will invariably see thorny areas. Many of these are caused by gaps in knowledge or skills. Recognize what work can be done and the skills required to do it. Then look at the train-ing needed to deliver the necessary skills and competencies and provide it. When planning a training program, you should obviously factor in the skills and competencies that need to be learned, but you should also give some thought to the following:• Who—to optimize the costs and impact on the available workforce• When—considering plant schedules, cultural issues, after hours• Where—on site, off site, at home, out of town• By whom—community college, supervisors, vendors, consultantsAdministrationPersonnel managementTeam leadershipProblem-solving techniquesMaintenance planning and controlDiagnosticsEquipment effectivenessPreventive maintenanceEmergenciesTroubleshootingPlant and instrument diagramsWork orders and requisitionsEquipment elementsBasic hand toolsBusiness process/environmentSafety/hazardous materialsNumeracyLiteracyElectronics3 phase ACControlsProtective devicesInstrumentationSingle phase ACDC circuitsElectrical measurementsCondition based monitoringPneumaticsHydraulicsPumpsBearingDrive componentsLubricationPrecision measurementsElectricalMechanicalFIGURE 2.6Scope of training requirements.80 • Uptime• How—mix of classroom and on the job, lecture, audiovisual, com-puter based, web based, home study• How much—standards, evaluations and certificationsManaging others is as essential a skill as expertise in the maintenance trades. Too often, however, very little thought is given to training people how to manage. The typical first-line supervisor is promoted for being technically adept and a team player. He/she may not have any inherent ability to manage, and all too often, technically oriented people lack the interpersonal and leadership skills to be effective as managers. Technical skills reside in the left side of the brain; interpersonal and leadership skills (which are more art than science) reside in the right side of the brain. Most of us have a preference for one or the other, and your best technical people may prefer left-brain functions and knowledge that does not give them the right skills for supervisory and management roles. They may also lack formal training in business. Promotion of your most competent technical people can, in some cases, result in a double negative—you lose an excel-lent technical resource and gain a poor supervisor.A maintenance manager with no understanding of leadership, admin-istration, budgeting and productivity control can be a liability. In The 108 Skills of Natural Born Leaders (Blank 2001), Warren Blank writes that no one is a born leader but that we all have the potential to become leaders. Somewhere along the way, we learn and develop the skills to make this happen. Self-awareness, self-management, social awareness (empathy) and relationship management are skills required to be “emotionally intel-ligent,” and they are key to leadership (Goleman et al. 2002).Many planners act solely as parts chasers, clerks or data entry personnel. Because they sometimes have little shop-floor experience, their credibil-ity is seriously questioned by the tradespeople and supervisors they serve. They end up dissatisfied with their roles and rarely make valuable contri-butions that planning can make if it is executed well. Planning is a valu-able skill, and a well-trained planner is probably the most highly leveraged employee in maintenance. A good planner can keep up to 40 tradespeople very busy, but planner training, like management training, is often inad-equate (in some cases, nonexistent).When change in an organization occurs, old paradigms are shattered or unfrozen; new ideas are planted and allowed to grow. For people to learn to handle change, education is key. Encouragement is also important, and People and Teamwork • 81the best way to encourage people is to acknowledge and share positive results, ensuring more of the same. Nothing succeeds like success, and public recognition will motivate others while expanding and extending knowledge.Another element in Lever’s success was their tying of compensation to the demonstrated use of new skills. Compensation in a variety of forms is important if you are to attract and retain the best workers.Career DevelopmentToo often, we hire and fire people as if they are commodities. We expect new hires to have the knowledge and skills required for their jobs—par-ticularly if we hire into senior positions. Many people will change jobs because they see opportunities for advancement and end up in positions with responsibilities and authority that they have not had before. They are learning on the job, and sometimes, they make costly mistakes—that is part of learning.When someone leaves to go elsewhere, you lose a knowledgeable and skilled asset. It will be expensive to fill the gap left—recruiting, hiring and training all take time and money. This hurts companies in a financial sense as well as impacting on productivity overall. When someone leaves, particularly someone in a key position, the impacts are often negative. Why not keep those people happy so that the opportunities where they are today outshine the apparent opportunities elsewhere?One large mining company developed a model for career progression for its “engineering” staff (which included maintenance as well as proj-ect, mine and ore processing engineering). They defined the various lev-els at which their “engineers” could work all the way from apprentice up through senior manager at the mine and on to corporate-level asset manager. At each level, they defined the sort of responsibilities the indi-vidual could have along with the skills and knowledge they needed. Some of these were defined from their own experience, and they enhanced it with external information, including the Institute of Asset Management’s “Competences Framework,” which defines seven asset management roles along with specific activities that the individual must be capable of demonstrating at increasing levels of competency. This broadened their perspectives on what they could be expecting and provided an excellent framework on which to develop their talent in house at each level.82 • UptimeFor each level, they went on to define the specific learning require-ments and how they were to be achieved—classroom work, on-the-job experience with demonstrated task accomplishments and any formal testing or certification requirements that would enhance learning and capabilities. This also proved very useful in helping them define the job requirements for positions within their organization and for recruiting purposes.Needless to say, they are developing some amazing talent and have become somewhat of a target for recruiters. Their compensation schemes have kept pace, and few have reason to want to leave. For their efforts and investment, they are getting a top-notch workforce with top-notch man-agement, retaining employees, and seeing savings in costs to recruit and replace employees due to the low attrition.Total Productive Maintenance and Lean OperationsTPM is a team-based approach to organizing and working that has proven highly successful in a variety of industrial environments such as auto-motive, light manufacturing, brewing and chemicals. It is a feature in many “Lean” manufacturing operations. Similar to quality approaches, it emphasizes the importanceof integrated teams of operators and main-tainers who work together, care about their work and are committed to team success. From that flows the overall success of the organization. The small team is one of the distinct features of TPM. Operators and main-tainers work together toward the same goals with common performance measures and methods. The traditional work boundaries tend to blur between them, and extensive training is used to help maximize flexibility and capability while retaining safety. The teams are allowed to operate autonomously, are responsible for their own decisions and support overall plant or operational goals.TPM’s three distinct features are reflected in its primary objectives:• To maximize equipment effectiveness and productivity by eliminat-ing all machine losses• To create a sense of ownership in equipment operators through a program of training and involvement so they can perform autono-mous maintenance• To use small-group activities involving production, engineering and maintenance to promote continuous improvementPeople and Teamwork • 83Each enterprise has its own unique approach and vision for TPM, but in most cases, there are common elements: 1. Asset strategy—take a hard look at the physical configuration of equipment and systems to reduce waste in all forms to optimize operability, maintainability and ergonomics. 2. Empowerment—autonomous teams making their own decisions and acting on them within broader guidelines and management direction to achieve well-defined goals. 3. Resource planning and scheduling—to ensure maintenance resources are utilized effectively with operators who may be working in tandem on manufacturing cell-based teams. 4. Systems and procedures—to document successful practices as they are implemented so that they may be sustained. 5. Measurement—to demonstrate results and progress toward goals, often using visual management methods so the results and progress are well known to all team members. 6. Continuous-improvement teams—to identify chronic problems and address them with design and implementation of solutions on an ongoing basis. Improvement is intended to be gradual and continuous. 7. Processes—a new definition of the working processes is needed as they replace more traditional maintenance processes such as plan-ning and scheduling and the management of PM.Teams optimize the value of employee input into your company, and TPM is an excellent approach that works well in the production environ-ment. With blending maintenance and operations into autonomous self-directed teams achieving superior results, TPM provides a framework for exceptional team achievement.Various models of TPM can be found. Here, it is considered to be the effec-tive implementation of all the elements of the Uptime Pyramid of Excellence in a collaborative, team-based environment with considerable autonomy being granted to a well-informed and knowledgeable skilled workforce.A Word about Lean ManufacturingThe term Lean has been overused and abused by many. Lean manufac-turing and all that it entails is all about eliminating waste. Unfortunately, 84 • Uptimemany companies, likely driven by a hyperfocus on costs, have tended to focus on cost reduction. In asset maintenance and materials manage-ment, that means eliminating the use of people and materials. While that may, in fact, be one result of Lean efforts, it is not the objective to elimi-nate anything as specific as people or materials unless they can be shown to be “waste.” Eliminating them implies that either they were not needed before or the way they are utilized can be replaced with some more cost-effective means.It is that search for the more effective means that triggers the elimina-tion of waste, not the reverse. Programs that focus on elimination of head-count or arbitrarily reduce levels of inventory without consulting the users of that material are ill-advised and doomed to failure.In many ways, this entire book is about Lean operation without really calling it that. We are searching for the most cost-effective, safe and envi-ronmentally sound ways of caring for our physical assets so that they can continue to produce or provide the services they are intended to pro-vide without wasted (nonuseful) downtime. The use of Uptime will not necessarily result in lower headcount or reduced inventory of spares. It could easily increase those if, in fact, the current maintenance programs are not achieving their objectives. As a rule, the cost of downtime is far more than the cost of maintenance or spares held in inventory. Reducing maintenance resources or the support they need to be effective is often a false economy.In one sawmill far into northern British Columbia, increasing the size of the maintenance department by four trades persons enabled the mill to reduce its breakdown maintenance by over 80% and reduce over-time that was running at well in excess of 20%, and had a secondary benefit of reducing on-the-job injuries because the workforce was less fatigued. That 20% level of overtime was waste. It actually cost them the equivalent of 10 full-time employees to sustain that. Adding four per-sons enabled the performance of their proactive maintenance program. Overtime dropped to only 5%, so the net gain was 12% of their mainte-nance labor costs. That dropped operating costs sufficiently to improve profitability and sustain operations in that location longer than they had previously forecast.Being Lean is not about becoming “cheap.” Reducing staffing and other resources without taking the steps to truly operate more efficiently and effectively is a false economy that will backfire every time. Eliminating waste may entail an increase in costs if it means greater effectiveness and People and Teamwork • 85more uptime. Avoid the temptation to slash costs directly—you will not create a Lean organization that way; you will create one that is anorexic and incapable of functioning well.COMPENSATION AND REWARDSThe younger generation of workers has a different set of motives and val-ues than their predecessors, and money is not always at the top of their list. Money, in fact, is a motivator with hidden defects. If you pay only by the hour plus overtime, you encourage inefficiency. If you pay a straight sal-ary, you discourage overtime and do little to encourage efficiency. Various schemes exist for compensating the workforce, but the bottom line is that money is only one of many rewards that make people want to work in any given company.The best way to attract qualified, enthusiastic technical employees to challenging careers is to offer generous financial incentives. If you do not pay well or provide attractive benefits, the talent you want will go else-where. Even the prospect of a major commitment to education and training will pale without a direct payoff because even though increased skills can bring long-term rewards, most people want to see something more imme-diate. The best way to retain employees is to create an environment that they want to work in. Without such an environment, people turn off their brains or go elsewhere. If they stay, they do so only for the money. A team-based environment where individual and team contributions are valued is highly effective at retaining talent. Another successful practice is to help your employees develop their full potential in a meaningful way, even if it means you might be helping them create a more attractive resume.One major supplier of industrial equipment had about 20 apprentices in one of its maintenance shops. The manager went to extraordinary lengths to get them the required field experience so they could become ticketed quickly. The apprentices appreciated the effort, and they were compen-sated for the additional experiencethey gained—the maintenance shop had the best employee retention record in the company.Your compensation program is best linked to your organization’s overall objectives as well as to your maintenance strategy. One or more approaches may be appropriate. The following categories of compensation can be mixed and matched to make up the total compensation package:86 • Uptime 1. Base pay. In any compensation system, base pay is competitive and guaranteed. The technical trades employed in maintenance work are in great demand, and the supply is shrinking. If you want low turn-over, begin with an appropriate base pay. It is normally related to an employee’s position, grade or seniority, skills and the tasks or duties required in the job description. In the case of multiskilling, tie base pay to the knowledge or skill level demonstrated and applied by the employee. Ideally, your base pay is sufficient, precluding the need for overtime payment. 2. Overtime. Base pay often covers only a specified number of work-ing hours per day. If more effort is required, overtime is paid. Unfortunately, overtime provides a disincentive to getting work done during the normal working day. It puts more pay in the employee’s pocket and increases maintenance costs. Overtime pay can also become addictive to employees, especially if it forms a substantial part of their compensation. It encourages reactive working environ-ments and provides a disincentive to do any proactive maintenance. This results in plenty of extra overtime, call-ins and unplanned shut-downs. If you find yourself in this situation, considering making the average overtime payment a part of the base pay and eliminating overtime altogether. This will require a concurrent effort to improve planning and scheduling, as described in Chapter 3. It does not raise labor costs, and it provides plenty of incentive for the workforce to become proactive. Workers are paid as much as they were paid when they were working more, and you get improved reliability and performance. 3. Profit-based incentive pay. Incentive schemes can be designed for either individuals or groups. These schemes pay out a share of prof-its based on gains made by the company, equity or stock options. Incentive pay can be decided at the discretion of the manager using some formula based on time worked or piecework achieved. Some programs offer incentives for suggestions that are implemented or compensate for sick and vacation time not taken. With increasing emphasis on teamwork, there is a trend toward group rewards as opposed to individual awards. Such plans reinforce desirable team behavior and employee involvement. Individuals in these schemes are under pressure from their peers to perform for the benefit of the entire team. Productivity gains are shared between the company People and Teamwork • 87and the employees, according to a predetermined schedule. These schemes are often very effective at achieving their goals. 4. Gain sharing. This is a form of incentive pay that is not tied to prof-its. Incentive payments are based on the attainment of specific goals, regardless of profit. The goals might be related to produc-tion levels, availability or reliability targets. This has an advantage over profit-sharing schemes because payout is not tied to profits, which employees often feel are beyond their control. It also avoids the inevitable disappointment and disillusionment with the profit-sharing program that arise when goals are met but profit expecta-tions are not. 5. Benefits. Traditionally, benefits have comprised a social safety net and basic life and disability insurance. In many jurisdictions, some of the basics, such as unemployment insurance and pensions, are legislated. Beyond those, however, most companies provide addi-tional paid benefits. These packages have become expensive, and in some cases (e.g., the steel and automotive industries in most of North America), they have led to severe financial hardship for com-panies. With cost cutting aimed at remaining competitive with off-shore companies, there is a trend toward contracting with insurance and other providers for the management of these benefit packages. Some enterprises are offering a menu of benefits, usually grouped into packages that are carefully tailored to cater to various employee desires (e.g., single employees vs. married vs. married with children vs. nearing retirement etc.). Each is priced so employees can select the most appropriate cluster of benefits up to a preset dollar limit. These can include participation in pension programs, savings pro-grams, medical and dental programs, drug programs, etc. The best packages offer a lot of variety and individual choice. 6. Perquisites. Perks are popular when the economy is expanding and competition for highly qualified employees is keen. In maintenance management, the most common perks are subsidized personal work tools and equipment, education leave and financial assistance. Other perks include car allowances, free parking, cell phones, work cloth-ing, education and day care, fitness clubs, social clubs, cultural and recreational activities and employee discounts on purchases of com-pany products or shares. Beware of the temptation to pull the perks when times get tough. Companies tend to view perks as a privilege, 88 • Uptimebut employees tend to view them as an entitlement. Eliminating these perks, once they are established, can be a challenge. If a perk is “lost” by the workforce and is not replaced with something else, workers are likely to resent it. (Overtime is a good example of a busi-ness requirement that has become a perk and an entitlement.)Non-monetary rewards are another way to compensate employees. Besides base and incentive pay, you can recognize individuals and groups for a job well done. There is usually no set pattern for these rewards, which vary greatly depending on the organization. Most companies that offer such rewards began to do so as a form of thanks to employees for their achievements in throughput, safety or project management, or for completing formal training courses. Now, they are also offered for sig-nificant contributions in quality service, cost and time improvements and advances in job-based knowledge or competence. Awards can range from certificates, medals and trophies, to dinners and getaway weekends. Make sure you reward the desired behavior. Avoid the temptation to reward the white knight—the one who rescues you from a major failure situation—while ignoring those whose efforts helped to prevent other such situations. Also be aware that some individuals do not want public attention drawn to them. In such cases, public recognition would be counterproductive, so keep it private and personal.Today’s trend in compensation is moving away from pay for a single trade skill toward pay for demonstrated knowledge and multiple skills. An excellent practice is to have all employees on salary with specified annual hourly contracts. Incentives are paid based on business results or outputs rather than individual or departmental results alone (for example, increas-ing production levels by x% or reducing unit production costs, which include maintenance costs, by y%). This encourages interdepartmental cooperation and helps break down the old maintenance/operations barri-ers. Additional incentives based on individual or departmental results are kept to a minimum to encourage teamwork. Incentives are paid regardless of profits because profits can be impacted by market conditions that are completely out of employees’ control. This also shows that management appreciates employees’ efforts to improve the business, even if external factors negate their efforts.This chapter began with a look at the extent of change in themarketplace and the business imperative to respond quickly and effectively. Handling change really boils down to managing people well. Doing that is not only People and Teamwork • 89something you teach now and again; it is a lifelong learning process. Your own workplace version of the three Rs—reassess, recognize and reward—will earn you top marks for your efforts. Best of all, you will make change work for you.Managing people is a huge challenge, but an astute leader will have a workforce motivated by free will and people who choose to work toward common goals. People make all the difference between companies that are good and those that are great. If you get the people part wrong, other goals will suffer.UPTIME SUMMARYGood strategy deployment and ongoing execution of your maintenance or asset management system (and we do not mean information technol-ogy) require the right quantity of the right people, suitably motivated and rewarded to achieve your strategic goals. It only happens through people—nothing else. People are an important, arguably the most impor-tant, strategic asset you have got to work with. You cannot provide solid leadership without people to lead.An organization is an extension of its people. It stands to reason that we need to focus on people if we want our organizations to thrive and change. Your people truly are the most important part of your business. Both you and your people need to make the choice to take this journey together and for each other’s benefit, not just for the company or profits or sharehold-ers. Narrow vision focused only on the business will cripple your efforts to improve.Managing the change is critical to success, but it should not be a separate project work stream running in parallel with your improvement efforts. It must be an integral part of all you do—built into every activity and com-munication. Excellence is a journey where change will be constant—you need to be good at managing people and managing change.Purely technical approaches, the long-time favorites of engineers and technical people, no longer work well on their own. Installing a new com-puterized management system is not a solution, nor will it guarantee suc-cess. View technology as a tool, do not put it on a pedestal and look to your people for the answers you need, and you will do well.Today’s effective managers are less likely to be purely technical people. Rising through the ranks on the basis of technical merit alone is a recipe 90 • Uptimefor poor management. Choose your managers on the basis of their suitabil-ity for the role they are heading into, not on the basis of past performance or technical merit alone. You need a balance of technical, managerial and human skills. Promoting a good technician purely because of technical merit or skill on the tools ensures that you will lose a good technician and gain a poor supervisor.Organizational designs continue to evolve. Centralized, military-style organizations have given way to more responsive decentralized structures. To deliver maximum business benefits, traditional maintenance, engineer-ing and operations departments are working together under the umbrella of asset management. Increasingly, they are becoming single-delivery orga-nizations. Traditional departmental boundaries are blurring, and the focus is shifting to the delivery of business results, not departmental results.There is an old saying that “two heads are better than one.” Teamwork has been proven time and again to produce superior results. It is the basis for many successful methods like RCM, PMO, RCFA, TPM and even the highly technical evidence-based methods as described in this book. While your people are truly important both individually and collectively, it is organizations that make extensive use of teamwork, especially self-directed teams that truly see exceptional performance. Self-organized teams bring out the best in people. They encourage creativity, partici-pation and innovation. They use team/peer pressure (ever so subtly) to ensure that people are all working toward the same goals. In turn, these teams deliver enhanced productivity and superior results.Smaller teams tend to be more effective than larger teams, provided they have sufficient breadth and depth of knowledge to handle assigned tasks. When teams grow into large groups or departments, they begin to need more formal management structures and processes in order to remain effective. If you have a group with more than 150 people, you will find formalized approaches necessary. In groups with fewer than 150 people, such as a small manufacturing plant, a degree of informality works well. Keep this in mind when looking at organizational arrangements. Smaller groups and less formal organizations do not need or rely on command and control to get things done—management becomes easier. Command and control stifles initiative and creativity and harms productivity, especially in today’s well-educated, socially aware and tech-savvy workforce.Learning, training and development are critical to companies that strive for excellence. Our educational systems are no longer geared toward industrial careers, and the onus is shifting to companies to foster their People and Teamwork • 91own talent. Without a focus on developing people, companies will become victims of the demographic realities of our times. Attracting, retaining and rewarding talent is critical. There is no point spending a great deal on recruiting and developing people in house if you do not retain them through a competitive and attractive compensation program that recog-nizes their individual and team contributions and successes. Encouraging career and personal development and then paying for new skills that get used at work are excellent ways to motivate and retain talent. Multiskilling continues to grow in popularity as a means of developing workforce flex-ibility and enabling more efficient deployment of maintenance resources.ENDNOTES 1. Larry Bossidy and Ram Charan discuss this at length in their book, Execution: The Discipline of Getting Things Done (New York: Crown Business, 2002). 2. John Quincy Adams, sixth president of the United States, 1825 to 1829. 3. This concept is described as “open-book management” in The Great Game of Business by Jack Stack with Bo Burlingham (New York: Currency/Doubleday, 1992).Section IIEssentialsThis section of the book describes the core elements of maintenance man-agement, which all companies use, albeit with varying degrees of com-petence. High-performing companies make it look easy, but even those companies that perform poorly find that they provide at least some level Choosing excellenceRCMContinuous improvementEBAMEssentialsWork managementBasic careMaterials managementPerformance managementInformation systemsLeadershipStrategyPeople and teams94 • Uptimeof consistency and stability. For companies that are underperforming in maintenance, building a conscious awareness of strategy and managing people more effectively (as discussed in Chapters 1 and 2) will help spark improvement. For companies that are performing well, these issues may be less of a concern, and the greater focus may be on moving from good to great (as discussed in Section III). In either case, mastering the essential core elements discussed in this second section of the book is a step on the road to success.953Work ManagementSo much of what we call management consists in making it difficult for people to work.Peter DruckerPerhaps the most important process that maintainers “own” within any business is “work management.” It is all about getting needed work done. The work itself is dictated by preventive, predictive, detective, and run-to-failure strategies, and it may includeexecution of projects that modify the plant. Getting all the work done in an effective and efficient man-ner is what work management provides. If that is achieved, operations experiences the least disruption to their operating cycles, they can then produce more, maintenance costs are minimized and equipment oper-ates well, producing good-quality outputs with the least input of energy and the least generation of pollution. Good work management gets the most productive effort out of your workforce, keeping them busy doing meaningful work and getting the work done that keeps production run-ning. Arguably, if you achieve this last goal of getting the most productive effort from your workforce, you will achieve the other goals much more easily.WORK MANAGEMENT CYCLEDrucker’s observation above does not apply to those few companies that are truly high performing in maintenance. Making it easy to do the right work the right way and in a timely manner is what work management is all about. At the heart of the maintenance function are work planning 96 • Uptimeand work scheduling, but these tell only part of a complex story. Work management includes planning and scheduling, but it also extends to other activities that, together, comprise a six-step work management cycle, depicted in Figure 3.1.As the figure illustrates, planning and scheduling are two important steps in the cycle. Planning defines what gets done and how; scheduling defines when. The problem with focusing only on these two segments of work management is that this presumes that operations always proceed without problems or variations, and that is rarely the case. For this reason, the material presented in this chapter deals with the entire work manage-ment process, including an emphasis on shutdowns and on managing a mobile workforce.What every plant or fleet manager wants most is to sleep soundly—to turn off the office light at night confident that the equipment will be run-ning reliably and efficiently the next morning. Unfortunately, such peace of mind is rare. Breakdowns, emergency repairs, unplanned and unsched-uled downtime, overtime, and maintenance stores’ stock-outs all rob a business of capacity and profits. Avoiding these pitfalls requires effort in four areas: 1. Having the materials you want available at the time you want them. Materials management is covered in Chapter 5. 2. Doing the right proactive work that eliminates or at least minimizes the disruptive consequences of equipment breakdowns. Reliability-centered maintenance is a technique for identifying the most appro-priate work in a systematic way and is covered in Chapter8.Identify Plan ScheduleAssignExecuteLearnEmergenciesFIGURE 3.1The work management cycle.Work Management • 97 3. Having the skills and abilities available to do the right work effi-ciently. This has been covered in Chapter 2, People and Teamwork. 4. Getting maintenance work done the right way through effective work management practices.Let us begin with the assumptions that you have good materials manage-ment support, you have the right people with all the right skills and ability at your disposal, and you have a well-defined maintenance program. It is the maintenance work management process that pulls these elements together so that the right work gets done by the right people using the right materials at the right time. The six-step work management process depicted above is the framework that enables that to happen:• Identify. Preventive, predictive, and failure-finding work orders are usually generated from your proactive maintenance program sched-ules. Repair work arises as a result of failures that are reported, usu-ally by operators, using your work management support system.• Plan. This describes what work is to be done and how. A sequenced, documented plan is made, with descriptions and drawings, as nec-essary, of what has to be done for each job. All known materials are made available, and repair manuals are reviewed to get any needed relevant information. The job is not scheduled to start until all the right parts are on-site.• Schedule. Once materials and labor availability has been confirmed, the job can be put on a schedule for execution. Jobs are scheduled for the best production window with the least disruption to customers. For maintenance not requiring special shutdowns (discussed later), there are two schedules, weekly and daily. Advance scheduling is best performed for a weekly cycle, which means identifying next weeks’ work before the end of this week. The scheduler (usually the planner) creates the weekly schedule as a batch of work as a goal to focus the supervisors. The crew supervisor creates the daily sched-ules usually a day or two in advance as the week then progresses using the weekly batch and working in new emergencies and other urgent work that cannot wait until the next week. The best practice is not to allow any portion of the weekly schedule for “break-in” work but, rather, allow the supervisor the freedom to break the schedule. The goal-setting aspect of a full-capacity schedule focuses the crew 98 • Uptimeand leads to completing more work than normal. The compliance to the schedule also leads to management focus on areas to improve because it clearly identifies the gap in labor capacity versus schedule accomplishment. Because extra work completed is usually proactive, the increased productivity allows your proactive maintenance pro-gram to take effect and eventually reduces the number of emergency and urgent work situations you experience. This improvement is also reflected in eventual higher schedule compliance.• Assign. Maintenance supervisors assign the various tradespeople under their direction to the various jobs on the weekly schedule, given the planned work package and any additional instructions the supervisor deems appropriate. There is a blend of scheduling and assigning work. The daily schedule essentially is the supervisor assigning the work a day ahead of time and ensuring that opera-tions will support having the equipment available. On the day of the work, the supervisor may shift actual persons among jobs depending on any absences and new emergency or sometimes urgent work that should not wait. Assigning persons to work is a skill for supervisors considering many factors, including risk and human nature. Among these considerations are who works well together versus who works best alone, who gets along with certain others versus who does not, who is the most highly skilled for a certain task versus training less experienced persons, and how important the timely completion of the work is versus who and how many persons should be assigned. The supervisor properly assigning persons to work is a critical part of supervision. The supervisor should make thoughtful assignments rather than simply assign whoever is available or whoever will stay on overtime.• Execute. In successful companies, work crews do the work as best they can, and this is where trade skills, multiskilling, and training pay off. Do not rush the work. Be careful with slogans such as “do it right the first time.” This statement should mean that if something does not go exactly as planned, correct it. Do not try to work around it just to meet the schedule. Too many people, however, take that statement to mean that everything should go perfectly as planned and management punishes imperfections. Such punishment leads to hiding mistakes and shooting the messenger. No, do the job the way it needs to be done, and then report any problems with the plans and the execution so we can do a better job next time.Work Management • 99• Learn. When the work is completed, inform operations. Typically, Maintenance reports to Operations that the work is completeand the equipment may be operated. Many times, operations does not want to immediately operate or test the equipment, and mainte-nance should not simply wait around for operations. However, if either maintenance or operations is ready and wants to test the results, operations should test the equipment as soon as practical while maintenance is conveniently available. If operations is satis-fied that the work is indeed ready, the equipment will be deemed ready for production. The work crews record the parts used, materi-als used and other relevant data on the work order along with any feedback to the planners. The planners close the work order by mak-ing any necessary improvements to standard job plans and making the job history data available for reliability. Closure of a work order is a learning step in which the organization learns from each job as it is executed so that the next time the job is done, it will be done better.As with every complex business specialty, maintenance has a language of its own—terminology that describes conditions, processes, tasks and practice. A few definitions will facilitate comprehension of maintenance management concepts and protocol:• Break-in work. Work that is added to a weekly schedule for execution after the weekly schedule has been finalized.• Corrective maintenance. More commonly known as repairs, this is work done to correct a defect or restore a failed device to working order. Generally, corrective maintenance will be less urgent than so-called reactive work. It would be a defect or failed device that can be corrected before it significantly bothers operations.• Detective maintenance. Also known as “failure-finding tasks,” this form of proactive maintenance is work done to detect failures that have already occurred but remain undetected because the function-ality that has been lost is normally not used or dormant. This work is most often done on backup, standby, protective or safety systems.• Emergency maintenance. Work that is treated as if it were truly an emergency, whether or not that treatment is warranted. Emergency work gets top priority regardless of other work that is being executed. Emergency work always “breaks into” an existing daily schedule and displaces other scheduled work if encountered during a workday or 100 • Uptimeshift and justifies calling in someone outside of the workday or shift. Every effort is made to hasten work execution, including but not lim-ited to expediting missing parts, use of overtime, use of contractors on callouts, etc.• Planned maintenance. Work where a planner has considered the job in advance of it being scheduled and assigned to work crews for execution. Planning is used to increase work effectiveness, ensur-ing that the work is done to the best of the company’s institutional knowledge and can be scheduled. The planner usually creates or uses, sometimes with modification, an existing “standard” plan. The planner also assigns required craft skills and estimated labor hours. The planner has deemed that all known parts and tools are available. Work is not “planned” if it has not first gone through the hands of the planner, where the planner sees about attaching a standard job and estimating hours. The standard job holds the company’s insti-tutional knowledge learned in the past, and the estimated hours support scheduling. If some workaround was later needed, the plan obviously could be improved in some way. Capturing this knowledge via feedback and improving the standard job is essentially the very reason for planning.• Planned job. A single maintenance job that is fully planned, as described above.• Planned work. Work on planned jobs, as described above.• Predictive maintenance. Also known as “condition-based mainte-nance” or “on-condition maintenance,” this form of proactive main-tenance is work done to look for signs of impending failure so that corrective maintenance can be done before equipment functional-ity is lost. There are two stages to predictive maintenance: “condi-tion monitoring” and “inspections” (also known collectively as “condition-based monitoring”). These are used to determine the condition of the equipment followed by corrective maintenance performed only when that condition is deemed to be unsatisfactory. High-performing companies monitor the success of their condition-based monitoring closely by tracking the corrective work that arises from it on separate work orders. Usually, predictive maintenance employs some sort of high technology, such as vibration monitoring or ultrasound.• Preventive maintenance. This form of proactive maintenance is work that is scheduled and executed to replace components or restore Work Management • 101them to original condition regardless of their apparent condition at the time. This work is done for failures that are age or usage related, and it is done before the failures manifest. This type of work is con-sidered planned work because it has a standard job plan and time estimates, although the planning was done not necessarily for the current work order but in the past, when it was first created or later revised.• Proactive maintenance. Work that is done with the intent of avoid-ing the consequences of failures. This includes preventive, predictive anddetective (failure-finding) work.• Reactive maintenance. Repair or corrective work that is done when something fails. Distinguished from corrective maintenance (above), reactive maintenance is usually more urgent and a current bother to operations.• Scheduled maintenance. Any work that is committed to a time schedule for execution before the scheduling cycle in which it is to be executed. Work added to a schedule after it has been committed is known as break-in work. Scheduling is done proactively to increase the efficiency of use of the workforce and materials. Work is sched-uled if it is carried out or started within the scheduling window as scheduled. If scheduled work is started outside the intended schedul-ing window, it is effectively unscheduled.• Unplanned maintenance. Work that is not planned before execution because it did not first go through the hands of a planner for adding any instructions or attaching a standard plan or a time estimate. It is difficult to properly schedule unplanned work because it does not have a planner-supplied time estimate.• Urgent maintenance. Work that is prioritized so that it may require break-in to the current weekly schedule, but the situation is not so serious as to demand that the work be done immediately. There is some time for preparation before the job is executed. Planners might be able to quickly plan such work even though it might be executed before the next weekly schedule.Studies done by several research teams, including Alcan, GeneralMotors and the author’s own consulting team, have shown a clear link between planned maintenance and reduced costs. When work is planned, it is eas-ier and less expensive to execute than work that is unplanned. This is not only logical but also statistically sound. A conservative rule of thumb is 102 • Uptimethat unplanned running repair work will cost at least 50% more than fully planned and scheduled work and that emergency work will cost 3 or more times as much. A ratio of 1 to 1.5 to 3 times can be used to estimate the breakdown of work costs if you know the ratios of planned and scheduled, unplanned and emergency work. Estimates of 1 to 3 to 9 to 14 are also fairly common—the actual ratio will vary considerably from industry to industry and from plant to plant. One underground mining manager esti-mated his emergency repair costs to be 14 times the cost of planned work. A large nickel refining operation had estimated ratios of 1 to 3 to 5.Planned and scheduled work is botheffective and efficient. Planned work may be effective from the perspective of those carrying it out, but it is not cost-effective unless it was scheduled as well. It is possible to carry out planned work using parts that were flown in from far away at great expense in order to meet a hastily prepared or ill-conceived schedule. It is more cost-effective to get both planning and scheduling right.Some work is very simple to execute, requires no parts and needs only minor hand-tools to be completed by a single, trained tradesperson. Clearly, not every running repair warrants detailed planning and scheduling— that would be going overboard—but it is clear that jobs involving complex procedures, specialized skills, multiple trades, replacement components and parts certainly do. Nevertheless, simply running even “simple” jobs through the hands of a planner allows the planner to help the tradesper-son avoid any time-consuming delay encountered in the past and also allows scheduling. More work that does not get planned encourages the abandonment of full-capacity scheduling, a huge key to productivity. Furthermore, companies frequently find that when they allow so-called simple jobs to bypass planning, many major jobs bypass planning as well. Under most circumstances, leaving the work planning to the tradesperson who will also execute the work is inefficient.SIX KEY STEPSEffective maintenance work management comes down to six key steps that are the same regardless of the industry or circumstances. The process starts with identifying what has to be done and ends with analyzing why you had to do it in the first place (Figure 3.1).Work Management • 103IdentifyMaintenance work can spring from something as simple as a noisy bearing or pushing a “test” button to something as complex as interpreting trends in vibration signatures. These are examples of using the equipment condition to trigger the repair work and are considered to be “proactive.” Random observations have a low probability of catching a problem before its condi-tion becomes unacceptable. The most effective observations are those that are both disciplined and regular. It is also much better to program inspec-tions by operators or maintainers who are equipment sensitive and know what they are looking for. It is not good enough to tell someone to “check it”—you must specify what to look for, what is acceptable and what is not.Like your family car, your equipment will benefit from regular clean-ing, lubrication, adjustment and observation for signs of abnormal per-formance. These are important checks that give us early signs of problems, and they can help you decide where in the “repair queue” a job might be positioned. Work prioritization determines what gets repaired soonest.Waiting for equipment to fail is one way to be certain you are repair-ing it without wasting “useful running life.” However, this may also bring unacceptable consequences, such as loss of production or interruption to customer services. This approach of waiting for failures is known as reac-tive maintenance. Organizations that are highly reactive plan less of their work than proactive organizations—some even plan none of their work in advance. Unfortunately, the cost ratios still apply to them, and they are choosing the most expensive approach. These organizations are also easy to spot but not so easy to change.PlanPlanning is ensuring that all the known resources necessary to do a job are accounted for and available. Scheduling (discussed later) is a matter of when to do the job. In many organizations, people refer to planned main-tenance when what they are actually doing is scheduling their work. The two are quite different.The most obvious planning tasks are to determine what has to be done, in what sequence and with what skills. Parts, materials and components are usually necessary and sometimes not immediately at hand. Sometimes, extraordinary items or resources may be needed, including engineering drawings, outside contractors, special tools or mobile equipment. Safety 104 • Uptimereminders or regulatory direction may also be required. Some tasks will need work permits, locking out and tagging out of equipment. All of these should be identified and included in your job plans. Miss even one item, and the tradespeople who are trying to do the work will be spend-ing their time looking for whatever is missing—and driving up the costs. Nevertheless, the level of detail a planner places in a job plan depends on how much work there is to plan. A planner must plan all the incoming work. This work excludes only emergencies and urgent work where the supervisor has said the crew has already completed it or will start almost immediately. In emergencies, planners help chase parts as requested, and on urgent work, they quickly add plan details and time estimates within a few hours. Rather than plan each job perfectly (which cannot be done), the planner’s objective is to put all the work through the Deming cycle of continual improvement. The planner’s objective is to plan all the work in as much detail as possible subject to the constraint of planning all the work. The only way the planner can accomplish this feat is through count-ing on the existing skill of the tradespeople for current plans knowing that in the future, plans might one day be developed to the point where trades-people new to the site can easily use them. Even then, the plans should be seen as continually improving and never perfect. So the planner tries to plan around all the delays that might impact a tradesperson but knowing that problems that are encountered will be reported as feedback for future avoidance. These job plans are called standard plans, but they are never really ever standard or settled.Getting the plan off to a good start and then continually improving requires a planner protected by management to plan. Current best prac-tice shows that a planner can plan work for 20 to 30 tradespeople, although depending on circumstances, such as the proactive nature of the plant or the maturity of the planning program, the number of tradespeople per planner could be much higher. On the other hand, a single planner plan-ning for multiple trades, a plant that has poor support systems (such as stores), or a plant that is geographically situated with only a few trades-people might dictate a planner planning for fewer than 20 tradespeople. In some such plants with fewer tradespeople, a planner might also be allowed a role in helping chase parts for jobs in progress (usually not a planning duty).Selecting capable people for planner positions is critical to making plan-ning “work.” The planner should have technical skills and plant-specific experience to be credible to those executing the plan. The planner should Work Management • 105also possess skill in collecting and organizing data. The planner should also be a good communicator. Of these three skill areas—technical, data, and communication—the planner could be weakest in the technical area because the planner will never be as knowledgeable as the cumulated wis-dom and experience of 30 tradespeople. Nevertheless, considerable craft skill is desirable. The planner uses field inspections, his/her own knowl-edge of the equipment and systems, and all additional available informa-tion to lay out a job and estimate how long it will take. Finally, the planner often estimates the overall cost, which facilitates cash flow projections and repair-or-replace decisions. The estimated time to do the job is used together with “net capacity” in the scheduling process.Again, it is worth noting that not every job requires planning in detail. There are many jobs that can be done in just a few minutes by one trades-person, using standard-issue hand-toolslabor force. In addition, it gives a thorough review of what it takes to achieve excellence in maintenance—a key business process in any capital-intensive industry. The book describes how changes in technology and changes in demographics (younger workforce, different values, ways of communicating, retirement of boomers) are combining to influence how maintenance is managed and how changes are implemented in the field. Technology has enabled the integration of business processes across enterprises, but the workforce has typically not kept up with the changes. A tendency on the part of technocratic leaders (not uncommon in the maintenance world) is to rely on technology and forget the human side.This book achieves an appropriate balance between technology, includ-ing its use for decision-making processes, and human factors and will surely be welcomed by individuals and organizations seeking excellence in maintenance management practices.Andrew K.S. Jardine, PhD, Professor emeritusUniversity of Toronto xviiForeword to the Second EditionIt has been about 7 years since the first edition of Uptime—Strategies for Excellence in Maintenance Management was published. A lot has happened in that time. The expected “new economy” did not materialize as rapidly as expected, but it is cropping up in selected sectors and industries. Y2K was a wake-up call for many businesses, my own included, and was one of many things that have led to the rapid and dramatic advances in computer and software technology. While computers, the Internet and Y2K were making the headlines, a quieter evolution was also taking place. The world of the maintenance manager was changing, and it continues to change.In their quest for growing revenues, higher profits and increased shareholder value, companies have grabbed all the low-hanging fruit. Production processes have been upgraded and automated; computeriza-tion supports many business decisions; purchasing has become strate-gic procurement; supply chains have been rationalized and streamlined; many functions like information technology, knowledge management and payroll have been outsourced; and administrative functions are being replaced by intranet and portal technology. One of the last areas where profits can be squeezed from an existing organization is the maintenance of physical assets. The plants and equipment we use to produce our goods and the fleets we use to deliver services still break down and still require maintenance. Until very recently, we considered maintenance to be a nec-essary expense—perhaps even an evil.Today, the money maintenance managers spend comes straight off earnings. If they do not spend, then their companies can be more profit-able. The assets they are charged with maintaining generate much of the revenue that goes to the top line. The maintenance manager of only 10 years ago could be a highly skilled craftsperson with people and man-agement skills. The maintenance manager of tomorrow must be a savvy businessperson.As we entered the new millennium, I looked at the last chapter in the first edition of Uptime and was pleased that much of what I suggested would happen is happening. The watchwords of the future were going to be flexi-bility and reliability. They are. Interpreting condition-monitoring data was a growing challenge. Today, it is often left up to computers and experts. xviii • Foreword to the Second EditionExpert systems were in their infancy but growing. They were being pro-grammed then; today, they are “learning” by themselves. Technicians were to become more multiskilled among trades and cross-skilled with opera-tors, but that trend has not progressed rapidly. Real teams are still a rarity and may require a generation to take hold. Universities were beginning to recognize and teach maintenance management as a distinct specialty, and that trend has continued. Today, for example, we are teaching mainte-nance management principles in the University of Toronto’s physical asset management certificate program. The roles of design engineer and main-tainer are slowly blurring. The need to match increasingly sophisticated and complex assets with an equal level of expertise in maintenance strat-egy and tactics was growing, but a greater need for this has emerged. With demands often driven by legislation and regulation in an increasingly liti-gious society, safety, environmental concerns and even our license to oper-ate in some industries depend on reliable assets. As companies look for the fixes without the need to invest, the need for sophistication has never been more challenging. Accounting terminology is increasingly commonplace in all aspects of our businesses. Indeed, the new millennium is proving to be every bit as challenging as predicted—and then some.Around the time that Uptime was first published in 1995, I hired an ex–navy engineer who had served time in several other industries in maintenance and asset management. Since graduating with a degree in mechanical engineering in 1977, Jim Picknell has worked as a ship’s engineer, a rotating equipment specialist in petrochemicals and a mainte-nance and reliability engineering manager in shipbuilding and aerospace, all before he joined my relatively young practice. His focus on reliability seemed a good fit with my predicted vision of the future.Since then, Jim and I have worked closely together, building a strong practice in physical asset management. We have become, in addition to good friends, leading thinkers whose opinions are sought after. We have worked in a very diverse set of industries on remarkably challenging prob-lems, and we have learned a great deal. Our joint experiences range from Mickey Mouse to rocket science: Our clients have included operators of world-class amusement parks and world-leading space launch and vehicle maintenance facilities. We have helped improve maintenance manage-ment practices in large scrap-metal operations; open-pit, surface and underground mines; large hospital complexes; Ivy League universities; oil refineries; airlines; thermal and nuclear power generation plants; gas transmission pipelines and stations; electric transmission and distribution Foreword to the Second Edition • xixnetworks; fertilizer plants; automotive plants; furniture and office equip-ment plants; pulp and paper mills; tissue-converting plants; sawmills; ply-wood and engineered-wood-product plants; asphalt and cement plants; and elsewhere.As our practice grew, we saw and heeded the need to change our ser-vices. Some of these changes were propelled by a shift in focus from computer system installation (i.e., the old silver bullet) to complex reli-ability improvement efforts aimed at satisfying a variety of business and regulatory-driven requirements. Others were motivated when industry moved from simply putting solutions in place to recognizing the need to change those who use the solutions and then sustain the change for long-term payback.Jim and I have worked to satisfy these changing needs in a dynamic, constantly evolving business environment. I am not able to continue this pace for very much longer, but Jim is. I am passing the torch to him and have asked him to write this second edition of my original book and to share what we have learned with you. He has kindly agreed to take on this work, and this book is the result. Enjoy and learn.John Dixon campbellnote: John completed this Foreword near the end of his long and coura-geous battle with cancer, only days before he passed away on November 11, 2002. His friends and colleagues have since created an award and scholar-ship in his name at the University of Toronto, where he studied.xxiAcknowledgmentsThe first edition of Uptime was based on observations of clients and other successful companiesand no parts. These simple jobs are well within the tradesperson’s skill set and require little to no prepa-ration in advance. One mining operation claimed that up to 60% of its work fit that description. We still want that job to go through the hands of a planner whenever possible. A planner can simply check the equip-ment records to avoid past reported delays and set time estimates to allow scheduling. Try to avoid work charged to blankets or standing work orders that cannot be scheduled. Blankets also get abused. Obviously, it makes no sense to plan such simple work in detail, but a planner can simply say, “Do this or do that, and it should take one mechanic 30 minutes.” Now the work can be scheduled, and there is a discrete work order in which to cap-ture feedback. It is not just that we want to schedule that one work order. It is more that if too much of the work is not on work orders, we have lost the ability to schedule to fill the net capacity mentioned in the preceding paragraph. Even so, the planner should not get bogged down putting in too much detail on such work and should spend more time working on more challenging jobs.Parts availability is a matter of checking the on-hand status of the main-tenance stores or the lead time of any items ordered directly from suppli-ers. In many cases, there is a gap between what the stock records indicate and what is actually there. “Open stores” where there are few controls on issues and returns are usually the worst, especially if they are in a reactive maintenance environment. Maintainers in a hurry are not usually good record keepers. Visual confirmation of parts availability is highly recom-mended until you gain confidence in your stores and your inventory con-trol system. Most maintenance management systems will do this check 106 • Uptimefor you using their integrated inventory and planning modules. Of course, the data they supply must be accurate, and you want to ensure that it stays accurate, or you will find yourself resorting to manual checks. “Kitting” or “staging” of parts and special tools is usually recommended for shutdowns but can also be almost necessary if you have a poor storeroom. The indus-try traditional definition of a planned job that mentions all parts should be kitted is false. If you have a good storeroom, many times, kitting will only be taking a chance on losing or damaging the parts because you got them out before you needed them. Kitting parts is not the answer to pro-ductivity anyway; scheduling is the answer, as discussed below.ScheduleScheduling determines when the work will get done and is a matter of resource and asset availability. Because the work has been deemed planned, you should have the parts and have the strategy of the job deter-mined. When is the equipment available to be worked on? When can you coordinate the people who have the right skills? Do you have the agree-ment of the production department to release the equipment? Only when all of these conditions are in place can the work progress smoothly. If your tradespeople have to wait for any of these, they are being paid but under-utilized. We will consider the weekly schedule to be the schedule. The daily schedule will be considered in the following section on assigning work.To schedule the resources of your tradespeople, first look to see who is scheduled to be at work, sick, on vacation or on a training course for the following week. This gives you a pool of labor to draw from.Bear in mind that the estimated time to do a job considers not only pro-ductive working time but also nonproductive working time. There is also a lot of nonproductive working time, including time spent on breaks, wait-ing for parts, waiting for instructions and permits, travel time between the shops and the job site and cleanup time. In planning individual jobs (as discussed later), the planner takes into account breaks and other plant cir-cumstances to include in the overall time for jobs longer than a few hours. The planner considers how long the job would take if a tradesperson was available (not in training, vacations or special meetings) to the supervisor. When you take away all of the time spent on vacations, known sick leave, safety meetings, training, etc. (but paid), you are left with net capacity. In many organizations, net capacity can be less than 60% of the time for Work Management • 107which you actually pay the workforce. Much of your lost capacity is used in vacations, sick time and mandatory meetings. That time reduces the availability of the workforce to perform work. Planning and scheduling eliminate many of the delays and help to increase your ability to do work within the net capacity you have. Furthermore, within that net capacity, the actual time of tradespeople doing productive work (wrench time) is only about 35% in most companies. If you have 50 tradespeople and an estimated net capacity of 70% and a wrench time of 35%, you are getting the productive effort of the equivalent of only 12 tradespeople full time, taking no breaks and wasting no time in unproductive activities like wait-ing for anything. You cannot increase the net capacity without modifying your training or leave policies, but you can increase the wrench time with planning and scheduling. Increasing the wrench time to 55% (a realis-tic target) will add another 57% (55/35 = 1.57) to your equivalent labor effort—you will have the equivalent of 19 (12 × 1.57 = 19) tradespeople full time in a productive effort (pure wrench time). You will still be paying 50 because you cannot eliminate all the nonproductive time (breaks, lunch, etc.), but you will be getting more value from your workforce. As for the 50 original people, they would be worth 78 people (50 × 1.57 = 78). So the improvement to the workforce is really 28 extra persons. You are paying for 50 people, but you have the effort of 78. You have gained 28 persons for free to come to your plant to do proactive work.Nevertheless, none of this productivity improvement happens with-out scheduling, because of Parkinson’s law. Parkinson’s law states, “The amount of work assigned will expand to the time available.” The tradi-tional view of planning and scheduling is that planning reduces delays during jobs and scheduling reduces delays between jobs. But because of Parkinson’s law, simply planning work does not improve productivity, because crews then “take their time” accomplishing that work. Therefore, the true purpose of scheduling is to assign enough work, not just to say when the work will be done.Traditionally, the weekly schedule was made up of daily schedules for each of the days covered in the coming week. The thought was that if the maintenance workforce was really well organized and could tell opera-tions when to have all the equipment ready, the crews could complete more work. Added to this thought was the commitment of management that “if we are going to do scheduling, let’s do it right!” And furthermore, most computerized maintenance management systems (CMMSs) naively think that maintenance time estimates are very accurate. However, the 108 • Uptimeuncertain nature of many time estimates is a reality as is the significant amount of urgent work in many plants. Therefore, trying to predict exact days and hours of work nearly a week in advance in a weekly schedule leads to frustration.Instead, current proven best practice is simply to start each crew with a batch of work that matches their net capacity (or labor available) for the next week. This batch of work must be acceptable to the crew supervi-sor and operations, who then both use it as a focus for the next week to later create daily schedules as the week progresses. This strategy, in line with this book’s overall philosophy not to overcomplicate andnot to take away lower-level freedom, remarkably empowers first-line supervisors. It focuses them on this week and frees them from having to continually comb through the backlog (if there were no schedule) or constantly revise entire schedules (if there were a series of daily schedules in advance). Even if there were a scheduler to constantly revise advance multiple daily sched-ules, the supervisor would have to constantly communicate with that scheduler because the supervisor is the only person involved enough with the crew to know the status of all the current work in progress. Instead, the simple batch of weekly work frees the supervisor to check on the cur-rent work for the day and figure out what to do tomorrow. Actual plant results of such simple scheduling demonstrate its effectiveness in increas-ing productivity.In creating the weekly schedule (the batch of work), the planner now has the labor hours available but must organize the backlog of work orders that are already planned into a suitable order to consider them for inclusion. There are also mandatory jobs that will have priority. These include regu-latory compliance work; some proactive maintenance; urgent work that, for some reason, was not started; and carryover work. Many times, plants have urgent work that was not started even though operations has tried not to abuse the ranking system. Somehow, during the week, however, the maintenance supervisor and operations group decided not to work over-time or on the weekend to finish it. This is why it is so crucial for plan-ners to knock out quick plans including time estimates for as much urgent work as possible. Not only do these quick plans allow the use of previous feedback to avoid new delays; the jobs can now be easily included in the new schedule. Carryover work (work that already has been started yet will not be finished) can be handled in various ways, such as rescheduling the remaining hours or simply taking those hours out of the labor availability for the next week. Considering the normal load of emergency work that is Work Management • 109expected to occur yet again the following week, this work is not considered for the schedule. Many plants schedule for only, say, 90% of the available labor capacity for the next week knowing that they usually experience 10% emergencies. Or they may only schedule 70% knowing they usually get 30% schedule breakers. Experience has shown that these plants usually lose both the goal-setting aspect of scheduling and management’s ability to recognize the extent to which the plant is acting proactively. In goal set-ting, if the goal is set too high or too low, it does not affect performance. The objective of scheduling is to focus the supervisors to complete more work, not simply to meet a schedule. If the latter were the objective, the extreme would be simply to schedule the work you know you will do and achieve 100% schedule compliance. And your wrench time would remain at 35%, no improvement. Management also has a better opportunity to recognize the extent of reactive work if the schedule provides a standard. For example, are we completing 400 hours’ worth of work with the 400 hours’ worth of labor available? If not, why not? The extent to which a crew does not complete all the work in a fully loaded schedule is usually due to the extent of reactive work. So, in filling this 100% of the labor available, the planner considers the mandatory work along with the priorities of the other work in the backlog. The scheduler can provide a valuable service to the supervisor by constantly looking to group lower-priority work with the higher-priority work that must be done. Identifying and grouping work that could be done under a combined locking out and tagging out for systems or at least work in the same area can be a real time saver for maintenance, and not just mobile crews that travel to various areas outside a single plant’s boundaries.It is essential to make sure that operations agrees to make equipment available before it is scheduled for maintenance and that any production operation knows when the work will be performed. Coordinating main-tenance and production schedules requires a close working relationship among maintenance planners, production planners and shop-floor lead-ers. The exact coordination between maintenance and operations occurs in two steps. In the weekly step, the scheduler has a backlog of work that has been coded to identify whether it does not require any outage (or other unusual circumstance), so it could be done during a normal week. The scheduler sorts this work into a preferred order as described before and then allocates all of the available labor to as much preferred work as pos-sible. The scheduler might also first check with operations and the main-tenance supervisor for special work they simply feel should be included. 110 • UptimeThen the scheduler meets with operations and the supervisors to present the schedule. Operations is asked, “Is this work for which you could rea-sonably make the equipment available, given a day’s notice, or is there any special notice you need?” Then later, in the daily step of scheduling, the supervisor continually monitors the crew’s progress on current work and talks with operations about what should be made available for the next day or two.Except for emergency work, no job escapes scheduling. As discussed above, even jobs that require no planning can and should be scheduled by someone simply adding estimated hours. But where we can, we do want to plan even those small jobs to take advantage of the Deming cycle improve-ment and to avoid possible abuse of blanket standing work orders where possible.In one large paper mill with a highly reactive culture and an almost chronic state of chaos, one remedial activity used by the author’s team was to schedule all work. Using rough time-slot estimates, the team even sched-uled work that was not planned. The schedules were posted where the work crews, shops, materials people and production people could see them. At the end of each week, the team marked up the schedules to show which jobs were done and which were outstanding and then posted the following week’s schedule. Initially, slack time was built into the schedule to allow for 20% break-in work. The graphic depiction of performance inspired the workers involved to improve schedule compliance, even in the absence of planning. Within a few weeks, they achieved 75% schedule compliance. Furthermore, they maintained this percentage and even increased it once they introduced planning and were able to reduce their break-in work. Their backlogs began to drop, and most of the chaos dissipated.AssignThe assignment of a job depends heavily on organizational structure. Autonomous, self-directed work teams do all but the most specialized maintenance diagnostics and repair work themselves. More traditional organizations usually delegate the day-to-day work assignment for a particular area to the area foreperson or to a supervisor. In either case, it is very important to start the team or foreperson with a week of work planned and ready in advance (that is, the weekly schedule). The schedule does not dictate specific days for the vast majority of the work. Giving the crew a batch of work, but not specifying the days, gives the crew focus but Work Management • 111also allows for the flexibility to deal with emergencies and urgent work, jobs that run over or under their estimates and crew changes where there might be sudden absences or other problems. The job of work assignment falls to the first-line supervisor or the self-directed work team. These are the people who know the skills and abilities of the tradespersons the best. A few organizations leave work assignment to planners.This is not a rec-ommended practice, because the planners provide the most value to your company if they are focused on future work—not today’s. Getting the plan-ner involved in today’s problems detracts from the proactive approach you are creating by having planners. Planners are not supervisors, and they are not parts chasers. Both of these roles drag planners into the daily churn and compromise planning.ExecuteThis is where “the rubber hits the road.” Well-trained, motivated team players keep the maintenance process revolving. They add real value: qual-ity and service that is cost-effective and timely. They reduce risk by getting the job done as best they can. All of this happens if the maintenance team is supported by effective management systems, treated fairly and allowed to proceed with proactive and planned work.Effective work execution requires that the skills and abilities of the tradespersons be matched to the work at hand. That, in turn, requires that qualified people be hired, trained, retained and motivated. Your work crews have to want to do what they are assigned to do. A poorly motivated crew is more error prone and less efficient. Not only can that cost you more; it can also result in rework or in equipment that is not maintained at the “as good as new” standard.LearnGathering good history is critical to plant improvement. The planner plays a key role in making sure the work history is valid for use in reliability decisions and standard job plan improvement. Closing the job entails far more than changing the status of a work order from “pending” to “com-pleted.” Of course, no job is truly finished until the paperwork is done.Reliability engineers count on good equipment history. Their thought-ful analysis of the work history, their response to it and whether or not failures could have been avoided will lessen the chance of repeating the 112 • Uptimesame mistakes. If maintenance work was significant, for example, a plant might consider redesigning preventive maintenance and operating pro-cedures so that the related failure does not recur. Feedback about why or even whether the equipment failed in service is also very important. This information is invaluable to both the standard jobs and the reliability engineers who may be looking at the repair history 2 years from now, so the tradespeople and the planner must carefully document actual condi-tions and history. It is quite common for equipment to be removed from service for repair work only for it to be discovered that nothing was really wrong with it. But if the records do not reflect that, decisions made later may be compromised. The reliability engineer depends on your accurate and complete maintenance records to preclude future problems.From a purely planning perspective, the planner also uses the work his-tory to improve standard job plans. Careful collection of information—parts used, the condition of parts removed, tools used (if different from what was indicated in the plan), skills used (if different from what was indicated in the plan) and the amount of time the work took—pushes the quality of maintenance job plans ever higher through continual improve-ment. This feedback enables the planner to do his/her job most effectively. Closure is a never-ending process of good data collection and usage, not simply an event for a single work order.At the very least, any maintenance work should be part of the equip-ment history. Only by collecting this history can it be work that leads to improvements.The six steps presented above comprise the core maintenance manage-ment process. Many enterprises, however, seem to be programmed to hit only the execute button (shown as the shortcut line from “identify” to “assign” in Figure 3.1). Firefighting is certainly exciting, and people feel a tremendous sense of accomplishment when the fire is put out. But this method of managing maintenance leaves less and less time for sober thought and careful planning. People get hooked on the adrenaline rush while the fire rages, and some enjoy the “dragon slayer” status of getting it under control. See this behavior for what it is. Give praise to those who prevent the problems and counseling to those addicted to the crises.Organizations that choose not to deal with this addiction to firefight-ing are inadvertently choosing high maintenance costs along with unreli-able operation and the business consequences that arise as a result. Failure to get this under control can result in unreliable delivery to customers, and that can result in contract penalties that can sometimes be fatal to a Work Management • 113business. In one large tissue paper converting plant in the eastern United States, this kind of reactive maintenance was leading to delivery problems with a major retail customer that was buying up to 80% of the company’s production. The result was a new supply agreement with that customer, which included a penalty scheme for late deliveries. After the first late delivery, the plant received a warning. After the second late delivery, the plant lost $100,000. After the third, it lost the contract. Eight hundred peo-ple were laid off, and the plant was sold.PLANNING HORIZONSIssuing a work order to repair a faulty circuit breaker is clearly a different undertaking from maintaining the civic-run power scheme that supplies it with electricity, yet these are related. All types of fixed assets, from a switch to a power station, require at least three kinds of planning: (1) life-cycle and long-range plans; (2) an annual plan and budget, which includes projects and major shutdown work; and (3) work orders for specific jobs (Figure 3.2).Life-Cycle and Long-Range PlansThis type of planning is closely associated with strategic planning for maintenance, as discussed in Chapter 1. The planning process involves creating a vision of future performance, including human, financial and physical resources. It also includes action plans to achieve the vision.Life-cycle planning for the physical plant, equipment and fleet means getting the most from maintenance and operating activities and doing it economically. Because most failures are caused by random events, age is not the best indicator of pending failures in most complex equipment sys-tems. It is usually helpful to develop a long-range forecast of major project and maintenance costs, based on past experience and/or the output of a thorough reliability-centered maintenance analysis. Besides studying his-tory, scheduled work for age-related failures, such as painting (to avoid corrosion); restoration of deteriorated roads, civil structures and roofing; restoration of worn mining equipment working surfaces; and replacement of fatigued cyclically loaded components like aircraft landing gear all con-tribute to the plan.114 • UptimeEquipment and system life-cycle plans are geared for major or signifi-cant work. They can fit neatly into the operation’s overall business strat-egy. For example, aircraft have long-term overhaul schedules based on flying hours; naval ships have 4- to 6-year refit cycles to accomplish major restoration and replacement work; metal presses have a fixed number of cycles between die changes; steel mills have scheduled furnace relines; and buildings have a roof replacement schedule based on age. Keep in mind that any new or replacement capital purchases will have a direct bottom-line impact on maintenance requirements of all kinds. There is an opti-mum age at which replacement achieves the lowest equivalent annual cost of ownership for any asset.Long-term plans help your finance department arrange for suitable funding for big-ticket items. They also facilitate decisions about other sig-nificant expenditures, such as those associated with plant expansions.Multi-year,asset life-cycle viewOne year viewStrategic long termlife-cycle planAnnual planAnnual planMonths,weeks anddays durationProject 1Project 2, etc.Weeks, daysand hoursdurationJob 1Work order 1Job 2, etc.Work ordersJob 1Work order 1Job 2, etc.Work ordersShutdown 1Shutdown 2Days and hoursdurationDays, shifts and hoursdurationFIGURE 3.2Planning horizons.Work Management • 115Annual Plan and BudgetIf you do not plan and budget, you jeopardize all of your efforts to improve maintenance quality. A poorly crafted budget will be scrutinized by finance and plant management and is likely to lead to demands for cuts. Sadly, those cuts usually impact training, equipment upgrade funds and, in extreme cases, your workforce.The maintenance budget is created from your maintenance plan for the next year. This plan includes all the elements from your long-range plan that are coming due along with anything that has arisen and been deferred this year. It also includes all your planned maintenance with allowance for breakdown work and improvements. Inputs to this plan include accurate equipment histories, results of periodic inspections, condition-based mon-itoring and an emphasis on continuous improvement. Plant shutdowns, equipment overhauls and major inspections are forecast by month, priced and incorporated in the plan. New technology, systems, procedures and organizational changes that affect capability are also factored in. The plan is then converted to dollars, item by item, to create the budget.This type of zero-based budgeting and planning is more challenging than relying on last year’s budget, plus or minus 5%, but it is far more use-ful for scheduling staff, long-lead-time parts and material and cash flow. It commits everyone to the concept of planned maintenance throughout the year. In addition, a zero-based budget sets the expenditures to match resources required to deal with specific events both planned and reason-ably likely to occur. Items can be deferred or excluded if the consequences of doing so are fully appreciated and accepted. Knowledge of the cost of downtime and the total costs of maintenance is essential to this process.Budgeting solely on the basis of historical costs is a mistake. Like most organizations, yours is probably adding equipment, controls and more automation to address demands for greater environmental integrity, safety, production capacity, customer service and quality. That new equipment means there is more to fail, and that drives more maintenance. Allow for it—failure to plan is planning to fail.If you have used the zero-based approach, defending your budget from the inevitable attacks and requests for cuts becomes much simpler. Remember that those requests often come from accounting and financial people who do not really appreciate what you are trying to accomplish. Answer requests for cuts with “what don’t you want me to do next year?” Recognize that giving up budget is also giving up work scope that you can 116 • Uptimeexecute—customers who would have received the benefit of that work may want to be involved in the decision to cut it out. Making the pain theirs will help fend off these requests for cuts so you can achieve your long-range vision. Perhaps they will not mind the rain and meltwater ingress in their administration building when their roof replacement is deferred!Work Orders and Specific JobsTop-performing organizations use work orders for all their maintenance work, regardless of who does the work: their own maintainers or con-tractors. Maintenance work, like purchases and sales, comprises a large number of separate “job” transactions that can be tracked. Similar to the purchase orders used by purchasing and order fulfillment functions, the record of these maintenance transactions is called a work order. The basic maintenance work order specifies what work is to be done, authorizes its execution and serves to collect information about the work. Today, most work orders are computerized documents. Paper copies are sometimes used by maintenance supervisors assigning work to their crews and by tradespeople recording information in the field. The various functions of a work order are as follows:• To identify and authorize work to be done.• To facilitate planning and scheduling for complex jobs and subse-quent improvement.• To facilitate planning and scheduling for simpler jobs and subse-quent improvement.• To record what work is assigned to individuals, contractors, work centers, etc. for execution.• To collect cost information for labor, stores requisitions, purchase orders and services to charge against a piece of equipment or pro-duction cost center.• To record the “sign-off” or approval of work that has been done, accepting the equipment for production use.• To capture information about work duration and maintenance-related delays to use in measuring productivity. (Reported delay information can be helpful, but proper wrench time studies take independent observations.)• To provide work estimates to create schedules, make assignments and determine and manage work backlogs.Work Management • 117• To provide a means of acquiring equipment and work history data to be used in improving standard job plans, analyzing failures and determining the effectiveness of preventive maintenance efforts.Without work orders, your maintenance records are incomplete, and your maintenance work will not be managed as well as it could be. Without records, you will never know for sure.There are hundreds of different computerized maintenance management software packages available on the market today. These packages range in scope and price from simple and inexpensive to complex and expensive. They can range in scale from single-purpose work order systems to highly integrated systems that provide other enterprise management functions like human resources, accounting, purchasing and timekeeping. The trend today is toward large integrated enterprise management systems, but even companies with these massive computer systems often rely on simpler maintenance-specific software packages that are easy to use. These are discussed further in Chapter 7.PROJECTS AND SHUTDOWNSMaintenance departments are often involved in capital projects: improve-ments to the plant and equipment. Strictly speaking, these are not main-tenance jobs, because they are not maintaining existing capability or capacity; they are extending, enhancing or expanding it in some way. Usually, these jobs are overseen by a project engineer who is not other-wise associated with maintenance work. Maintenance tradespersons have most, if not all, the skills needed to execute many projects successfully. Top performers segregate capital work from maintenance work, even though they manage it all using work orders. They know how much real maintenance work is being done and how much project work. Knowing this allows them to measure maintenance productivity without clouding their figures with project workloads.What maintenance departments lack in capability or capacity can be contracted. Contractors can be less expensive, but when contracting proj-ect work, take care not to violate any agreements with your trade unions or employee associations. Many of these agreements prohibit the use of contractors except in very specific circumstances.118 • UptimeShutdowns are disruptive major maintenance activities that are nor-mally characterized by many small jobs being done at the same time while a production unit is out of operation. They are similar to projects in how they are managed, but they are purely maintenance work.Both projects and shutdowns are labor intensive and entail some shut-down of production capacity. Fortunately, most of the work in many projectscan be done without disrupting existing operations, but the final tie-ins and connections to any existing plant will normally require shut-down of at least part of operations. Shutdowns, being major maintenance jobs, inherently take production down. They cost a great deal, and as they are executed, your capacity to generate revenue is zero. That is a great incentive to end shutdowns as quickly as possible. Like it or not, however, shutdowns are a normal part of most plants’ operations. They are needed to clean, overhaul or inspect equipment at predictable intervals. In suc-cessful operations, they are forecast in both the long-range and annual plans and budgeted accordingly. Projects are also part of long-range plans, but those plans are generally managed by engineering rather than mainte-nance. Successful organizations coordinate the budget activities of main-tenance, engineering and operations to ensure that everyone is aware of the need for downtime and project-specific resources. For example, main-tenance needs to know if a project is going to require 100 tradespersons during a planned maintenance shutdown to ensure that enough skilled people are available for all of the work to be done.Projects can arise as a result of changing market demands that are not always predictable over the very long term, so they may not be part of an overall strategic capital plan. If projects are not planned as far in advance as practical, they can be very disruptive to normal operations and the normal maintenance function. Successful organizations maintain regular communication about project, shutdown and production requirements among the engineering, maintenance and operations groups.Shutdown ManagementTop performers avoid shutdowns whenever possible; if a shutdown occurs, they minimize the downtime required to handle what caused it. From the perspective of the production manager, downtime for any reason is a bad thing because it detracts from the ability to produce and generate rev-enue. Shutdowns come in two flavors: planned and unplanned. It is best to avoid the latter as much as possible, and that is a major reason to perform Work Management • 119proactive maintenance. Planned shutdowns are useful from time to time. They can, for instance, facilitate planned maintenance activities or allow for cleaning of process equipment to maintain product quality standards. Regardless of the reasons for the shutdown, there is much that can be done to minimize the downtime periods and maximize the time between them.Unscheduled shutdowns are a result of failures of critical equipment that an organization has failed to prevent, predict or design out. When a shutdown occurs, it creates a business emergency. Production is down, and revenue is not being generated; yet many of the operating costs of labor are still being paid. Moreover, maintenance will probably be work-ing overtime to fix the problem. In any case, costs are up, but revenue is zero. The best way to avoid this situation is to institute an effective proac-tive maintenance program, and that is what successful organizations do.Even the most successful enterprises cannot always prevent unplanned outages. They do not, however, allow these events to become crises. Instead, they see unplanned outages as a window of opportunity for other planned but unscheduled work to be done. Top performers never extend these unplanned outages to get other work done; they squeeze in what they can without lengthening the downtime period. This opportunity allows them to clear at least some backlog, but this is not done haphazardly. For it to work well, jobs that are squeezed in must have been fully planned, and all necessary resources must be available for execution on very short notice. If you expect such opportunities to arise, use a separate work order clas-sification to make identification of those opportunity jobs easy.One plant called these planned and unscheduled jobs that require shut-down “if down, do” jobs, or IDD. The maintenance and production shifts always knew what jobs were on the IDD list so they could be done during production changeovers or setup adjustment times when the equipment was down anyway. However, it is never a good idea to stay down any lon-ger than you have to, so avoid the temptation of trying to get too much done. Do not add any workload that will extend downtime. Avoid adding big jobs to your unplanned shutdown and avoid adding jobs that could possibly interfere with the critical-path job. Always remember that top performers have all the needed materials and other resources available at short notice for these IDD jobs. If you do not follow suit, you run the risk of lengthening the duration of the downtime and increasing your costs.If your critical-path job is missing materials or a plan or other resources, there is little you can do besides get them—expeditiously and at any cost necessary. If you are already down, you are in an emergency situation; 120 • Uptimeinaction hurts business. The best you can do is to minimize the damage. Noncritical jobs, jobs that are not yet planned or for which parts or mate-rials are missing, should not get priority during a shutdown. Do not create an opportunity for some logistical glitch on a noncritical or secondary job to extend shutdown time.Today’s maintenance management systems can quickly pull up a list of outstanding work from a backlog file. A quick check of work order status to identify the planned and ready-for-scheduling jobs will tell you which can be executed with the materials that are available or near to hand. Those jobs are planned already, so you can move to scheduling them within the anticipated shutdown window. Allocate your net capacity available in a way that allows you to deal with critical-path jobs first; then execute sec-ondary shutdown jobs as expeditiously as you can.Successful organizations plan shutdowns beginning with forecasts years in advance so that a window of time is planned into the production sched-ule and the financial resources are available when needed. That shutdown window is your planning and scheduling constraint. Avoid jobs that will take longer.Preparing for a planned shutdown requires lead time, and industries that deal with planned shutdowns exceptionally well have long lead times. In oil refining, for example, preparation can take up to 18 months. Needless to say, budgeting for a planned shutdown can easily span 2 bud-get years. Because of the nature of shutdown work (the jobs are usually large and complex, the materials are rarely held in stock and may take a long time to procure), preparatory lead time is essential. This lead time, in fact, is the primary reason for the long planning cycle. In successful organizations, the work scope for the shutdown is fixed or “locked down” well in advance of the shutdown date to allow for long-lead-time items to be procured. Remember to allow time for your normal procurement approval processes, vendor lead time and, if the materials fit your crite-ria for capitalization, enough time for your capital expenditure approval process.Well-planned shutdowns focus only on those jobs that absolutely require equipment shutdown. Each of the jobs approved for the shutdown period is planned in detail, as described earlier. All job plans are then integrated into a master schedule for the shutdown. That schedule is essentially a project plan, and it is managed the same way. For top performers, break-in work is not added after the official lockdown date for work scope without careful consideration of the ramifications and very-senior-level approval. Work Management • 121The plan also includes all the work that will be required of any contrac-tors as well as operators to shut down, isolate, lock out, drain and prepare equipmentfor work and their start-up activities.Minimizing downtime entails doing as much work outside the down period as you can. Successful companies prepare the work areas prior to the shutdown (as long as this does not interfere with normal opera-tions) by erecting scaffolding, removing roofing or wall panels to facilitate equipment access, renting cranes and other lifting equipment and moving them into position, staging and prepositioning parts near targeted equip-ment, prepositioning tools and rehearsing procedures for critical jobs that will be performed. Rehearsing the work steps is particularly important because practice improves job performance. (A good example of this is the planned and practiced work execution performed by racetrack pit crews.) Generally, the more you can do in advance, the less you risk extending your downtime.When the shutdown begins, your plans are put into motion. If there is a great deal of work to be done, as is often the case, you will probably have contractors supplementing your workforce. They will require supervi-sion by knowledgeable supervisors or senior tradespeople from your own staff. If the shutdown is extensive, you may even have all of your own staff, supervisors and tradespeople serve in supervisory roles for teams of con-tractors. By this time, you have a plan for all the work; all you do now is work the plan.When machines are opened up for inspection, there are often surprises, and these lead to new work. If there is a likelihood of this happening, it is best to anticipate this contingency and to plan for it. Top performers, for example, predict what may happen and keep relevant parts on hand and other resources available so they are not caught off guard. They rarely have surprises because they have done an excellent job of forecasting all main-tenance requirements that might be associated with a shutdown.But even this level of preparation is not foolproof, and despite rigor-ous efforts, some surprises do arise. Some may require emergency mea-sures. Others may not be critical in nature. If this is the case, deferring the work until the next shutdown may be the best option. You must deter-mine whether the surprise is critical or not and decide what to do about it quickly.Throughout the shutdown, have a series of shutdown management meetings to update status and discuss problems that have arisen and how to resolve them while maintaining tight coordination over needed 122 • Uptimeresources. Keep track of work completed, work in progress and its status. Use checklists to ensure that everything is done—do not forget to inspect the job for completion, deisolate the equipment, remove locks and tags, close work permits, etc. As work is completed, close it off just as you would for running repair work orders. Do not waste time moving work crews to their next jobs. If they are done, send them home. Extra people get in the way of those who are still working.When all of the work is completed, turn the plant back over to opera-tions for start-up. It is an excellent practice to keep a maintenance crew on hand during start-up to handle any failures or surprises that crop up while equipment is coming back on line. Your plan should also include the time it takes to ramp production back up to normal once the maintenance work is completed. Another successful practice is to plan production output at reduced but gradually increasing levels to allow for glitches during start-up. (For example, a company may expect 25% of normal rates from the first shift, 50% from the second, 75% from the third and full production by the fourth.)Progressive ShutdownsMost production processes1 can tolerate some minor production disrup-tions, and the operators are usually very good at managing these. These often occur due to the loss of feedstock or other non-equipment-related causes and contribute to less-than-ideal production rates. In a progres-sive shutdown, you can make use of the ability of the operators to handle minor disruptions to create windows of opportunity on parts of the pro-duction line while it is still operational.In a batch process where you have the capability of building up some work in process (WIP) between the batch steps, you can take parts of the process down fairly easily without disrupting overall process flow. The duration of the downtime window is dictated by the time it takes for downstream processes to draw down the WIP between the steps. Needless to say, this takes careful planning and preparation. The advantage of this highly suc-cessful technique over a full shutdown is that production only slows down for a period of time—it does not come to a complete stop. Production levels are sustained, albeit at slightly lower levels. Avoiding a complete shutdown also avoids the time it takes to ramp back up and the inevitable start-up glitches that occur. On the other hand, the just-in-time (JIT) philosophy is a production technique that wants as little WIP as possible between batch Work Management • 123steps. This theory wants to identify line problems as soon as possible by not allowing potential defects to accumulate in WIP between steps before it is used. JIT makes maintenance very difficult simply by adding a level of pressure to deliver rapid response to virtually every problem that arises and limiting the ability to benefit from planning and scheduling.In a continuous process, production flows do not normally stop, and there is often little or no capacity to store WIP between process steps. In these processes, the feed is shut down to a part of the process, and the production line downstream is allowed to empty. Areas where equipment is empty can be shut down for work for a short duration. When the work is completed, the feed is turned back on, and the empty portion of the pro-duction line moves downstream. In this way, the portion of the production line that is down for work moves in the direction of production flow. The next section can then be shut down for work, and the maintenance crew moves to that area. The process requires careful coordination of activities, but the payoff is that you do not need to take production all the way down and incur only minor slowdowns. Operators are very good at handling these situations and can ramp up shutdown sections to full production without difficulty. It is simpler and far less disruptive than restarting the entire plant after a complete shutdown.A good example of progressive shutdown in practice is Molson brewer-ies in Toronto, which is using this technique successfully on sections of its high-speed bottling lines. The decision to go with a 2-hour time frame for this was based on the resources the company had available to work on line sections and a realistic assessment of how much work could be managed in a single fixed window. Molson gets 50% more productive effort from the maintenance workforce using this system because those involved are fully engaged during the shutdown windows on those sections of production line. The company has also experienced improved compliance with its proactive maintenance schedule, enhanced operator involvement in doing “soft maintenance”2 tasks and increased levels of production.PLANNING AND SCHEDULING TOOLSThe most effective tool for managing work orders is the CMMS. Most commercially available systems have comprehensive modules that include work order management, equipment records and history, preventive 124 • Uptimemaintenance tasks, interfaces to external scheduling systems, costing and budgeting, materials management and labor skills capacity planning. Because of its importance, Chapter 7 deals with this tool in detail. This chapter provides an overview.Gantt ChartSuccessful shutdown and project managers use the Gantt chart to man-age activities, sequences,duration and dependencies among the various jobs that make up the total work scope. It is a useful yet simple tool for planning and scheduling, first introduced by Henry T. Gantt at the begin-ning of the twentieth century (Figure 3.3). Gantt charts list key steps and activities required to complete a job in a vertical column and depict the time to accomplish these activities with corresponding horizontal bars. When properly constructed, a Gantt chart shows the following in graphic format:• The sequence of tasks (events)• The duration of each task• The start and end times of each task• The overall shutdown or project start time and end time• The dependencies among tasks (e.g., showing that a machine must be disassembled before it can be repaired)The chart also provides information (for each task), such as the resources required, costs and any interdependencies among the tasks that make up 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20DesignMaterial quotesExcavateFormPour concrete/setBuild framePlumbing/heatingElectricalGyprockInterior finishingSidingFIGURE 3.3A Gantt chart.Work Management • 125the entire job. The job being planned can be a single repair to a piece of plant equipment, it can be a major plant shutdown with many jobs or it can be a capital project that uses contractors as well as maintenance and operating personnel. It is highly versatile, and because it is a visual tool, it can make the job of planning and scheduling quite easy.It is particularly useful for events that are either strictly sequential or independent. It does not, however, clearly show interdependence among different projects unless it is linked with the other projects where the dependencies exist. Today’s better-computerized project planning tools enable this complex integration of multiple projects. They include features that allow individual resource calendars to be considered so that holidays can be avoided and calculate cost automatically. They are easy to use once the planner understands the project management basics on which they are developed. Successful planning organizations use the Gantt chart, usually in computerized form, to plan, schedule and manage shutdowns, projects and large single jobs.Critical-Path MethodA critical path is the sequence of tasks that must be completed when work-ing through a project or shutdown and determines the length of the over-all shutdown. Any job that is on this path is known as a critical-path job. Organizations that successfully stay on schedule in their shutdowns and projects are very good at managing these critical-path jobs. They are also very good at managing work arising during the shutdown—they avoid adding anything to the overall plan that would increase the duration of any critical-path job, add to the critical path or change the critical path.Critical-path jobs can be shown on a Gantt chart, often in a different color from other jobs. As Figure 3.4 illustrates, critical paths are usually shown as a network of activities that resembles a flow chart.Once the entire network of jobs is plotted, the path with the longest duration is highlighted on the critical path, usually in a different color or different style. In the figure, the jobs in double “bubbles” are on the critical path. This path is the sequence of tasks that are related to each other that requires the closest scrutiny during work execution in order to ensure that the entire plan is accomplished on time. Other jobs can generally tolerate a small amount of schedule overrun if it occurs with-out lengthening the overall duration. However, large schedule overruns on other jobs can change the critical path. For example, if the material 126 • Uptimequotes take much longer than expected, they may become a critical-path job and lengthen the whole project duration. In that case, excavate, form and pour would no longer be critical-path jobs. There are several software packages of varying sophistication available to help determine the critical path. They can also plan and schedule the resources necessary to execute the plan. These packages can often switch back and forth between Gantt chart and critical-path views to suit the user’s preference. (Note that both the Gantt chart and the critical-path method are best used for shutdowns or projects. They are overkill for most routine weekly maintenance work and schedules.)Planning StandardsThe term “time standards” is not well received in maintenance. It conjures up images of a dogmatic, authoritative organizational culture with every-thing being measured and tightly controlled. It is a reminder of the days when techniques such as Universal Maintenance Standards, Methods-Time Measurement and engineered performance standards kept employ-ees on a tight leash. These methods were almost universally despised by the workforces being managed. The lesson learned from that experience is that you cannot motivate people to do better if you are constantly irri-tating them. As Dwight D. Eisenhower said, “You do not lead by hitting people over the head—that’s assault, not leadership.” Frederick Herzberg’s motivation–hygiene theory recognizes that unsatisfied “hygiene factors” Denotes critical path job2 1 1 2 6 4 2 45 33Start Design Excavate Form Pour Frame Plumbing/heating Gyprock Finish EndMaterialquotesSidingElectricalFIGURE 3.4A critical path.Work Management • 127can act as demotivators. Recognize that people work first and foremost for their own self-enlightened interests—they are truly happy and mentally healthy through work accomplishment. Because draconian management techniques demotivate the workforce, they undercut improvement efforts.Consequently, these techniques are of little value in today’s workplace. If you believe in a team approach to continuous improvement and an environment that truly values the total employee, you will see no ben-efit in time standards that measure and control individual productivity. These techniques attempt to cure a symptom, not root causes. A moti-vated individual will perform; an unmotivated individual will not. And in the best of all worlds, the ideal workforce is not only motivated but also self-motivated.Planning standards, then, begins with the understanding that the peo-ple affected by those standards and related processes will not respond well to time standards like those described above. Nonetheless, it is still important to know approximately how long a job will take in order to schedule it. To do this, you estimate its cost, schedule it along with other jobs and determine the equipment downtime necessary to complete the work. In a broader sense, you can apply useful standard-quality, operat-ing, and maintenance procedures, as well as benchmarks for equipment performance and cost. Then you seek the input of the workforce in refin-ing these with the objective of improving scheduling, not with the objec-tive of making them “work better.”Pareto DiagramThe Pareto diagram (named after the Italian economist Vilfredo Pareto who, in 1896, noted that 20% of the population of Italy owned approxi-mately 80% of the land) is a simple tool for determining what work should have the highest priority. In successful organizations, it is used by planners, maintenance engineers and total productive maintenance (TPM) teams to determine what equipment merits the most attention. Planners use it to determine where they should put their planning efforts. By determining what equipment requires the most downtime for repair, planners can look for innovative ways to shorten the duration of down-time by modifying the job plan. They can also use Pareto to determine which equipment causes the greatest downtime or greatest maintenance cost in order to identify improvement effort priorities for maintenanceengineers. Another technique, known as log scatterplots (Knights 2001), 128 • Uptimecan be used to highlight failure frequency and mean time to repair as well as the downtime and cost factors, making prioritization of the problems to be tackled even easier.Backlog Time StandardsWhen maintenance work is planned, successful organizations will esti-mate the duration of the job to facilitate effective scheduling of work. For complex jobs requiring more than one trade skill, the task duration is also estimated to facilitate the coordination of arrival and departure times for the tradespeople involved in the job. This helps supervisors assign work more efficiently and increase actual hands-on-tools time.For many maintenance jobs, a planner’s judgment is adequate provided the planner has planning experience and, even more preferred, extensive trade experience and skill, as well. The planner simply views the job and considers how long a tradesperson that generally knows what to do would take if the job does not encounter any unusual surprises. A qualified plan-ner can easily make judgments to estimate many jobs in a single day that are as accurate as more “scientific” estimates. The planner can also com-pare the estimate with historical times for the subject equipment or a simi-lar job. The accuracy of such maintenance estimates has a great variance in that they might be plus or minus well over 50% accurate. But expe-rience has shown they have a very normal distribution, where as many are under as they are over, allowing the estimates to be used for creating quite-accurate weekly schedules and generally assigning work. The prob-lem with simply using historical data is that many times, past work orders were completed in an environment without proper scheduling to increase wrench time, and past work orders may have been assigned to tradespeo-ple of varying degrees of technical competency. Instead, we would like a “standard” of what the job requires of a competent and motivated trades-person operating under a weekly scheduling program.With that said, we do want to consider two practical methods for esti-mating how long a job will take, which are equipment history work-order file times and time-slotting; these can be used by the planner as aids as necessary. Top organizations record the work completion time on their work orders, which can be used to determine the average time it takes to do any job. This average time, in turn, can be used as a standard, but only when adjusted by the planner’s judgment.Work Management • 129If you do not have such records, or if the plant or equipment is relatively new, time-slotting may be a better solution. Time-slotting is a simple com-parison method. For example, it takes less time to change a tire than brake pads and less time to change the pads than the master cylinder. Standard time-duration ranges are assigned to these tasks. The tire and brake-pad jobs may fit in the 1- to 2-hour range while the master cylinder fits in the 2- to 3-hour range.Typical time slots used in industry are 2 hours or less (the time between subsequent breaks), 4 hours or less (half a day or shift), 8 hours or less (asingle shift or day) and numbers of days. One major newspaper uses a 2/4/7 concept—jobs are slotted into 2-, 4- or 7-working-hour peri-ods. All of those fit into a normal working shift. An integrated steel mill usedoperational time windows: 30 minutes to change a work roll, 4 hours for a backup roll and 12 hours for a shutdown. The mill used 30-minute, 4-hour and 12-hour slots for any work requiring equipment downtime.The planner selects several common jobs of varying duration and com-plexity and then times them, using observation, time cards or expert opinion of those performing the work. The timed jobs are grouped into categories and used as benchmarks for similar jobs (Figure 3.5).If an average of the actual time taken is kept, that number can be used for the planned time. For example, the jobs slotted in D will likely be of the same repetitive type in that particular area over which the planner has responsi-bility. Organizations using CMMSs often use the average times, but, for ease of scheduling, slot them into convenient time slots. This usually allows for a little bit of extra time in case something goes wrong or allows tradespersons to move on to the next job a bit early, although as a rule, planned estimates generally count on a job without “extra time just in case.” Not automatically giving extra time promotes full-capacity scheduling and also encourages better feedback when problems do arise that delay jobs.SlotABCDETime range0−33−66−1212−2424−48Plan time1.54.591836Actual average(6-monthsmoving)2.23.89.121.735.4FIGURE 3.5Time-slotting method.130 • UptimeQuality StandardsIt seems ironic that while the quality standards on products and the tech-niques used to produce them are becoming more uniform and precise, the work environment from which such standards spring has become less rigid. There is, however, a logical underpinning to this irony.Many successful companies, in their relentless quest for lower costs, are reinventing themselves into lean, flat organizational structures. Often, employees now operate in autonomous, self-directed work teams. There are many examples of this throughout the automotive industry and its suppliers, where cost cutting has become an art form. Working in teams has freed people up to develop the best processes and procedures to achieve near-perfect conformance in their work area. The now-popular Six Sigma method is aimed at eliminating defects through fundamen-tal process knowledge. It integrates business, statistics and engineering to achieve its results. This self-directed, integrated move toward leanness can also be applied to maintenance procedures, particularly to repetitive tasks such as preventive care and tool and die maintenance. Overall, there is little reason today for getting these wrong.Quality standards are not a matter of employees having the freedom to do what they want. It is, rather, a matter of excellence that results when everyone involved is responsible for developing the delineated best prac-tice and is accountable for carrying it out. In our case, for planning and scheduling, we plan for the best we know and improve it over time, and then we schedule for the best we can and then look for opportunities to complete more of the schedule in the future. Six Sigma is implemented through extensive education and then facilitated through design experi-ments to identify factors that cause waste, which are then eliminated in a controlled environment. Once the best practice is determined, the time standard can be determined using actual time averages or the time- slotting techniques. Nevertheless, we know that even the best practice is subject to improvement.MOBILE WORKFORCE MANAGEMENTIndustries with physical assets or service points spread over a large geo-graphic area are likely to have mobile workforces. These pose unique challenges for work management. The crews, once dispatched to their Work Management • 131initial jobs, can be away from their supervisors for an entire shift. In some cases, mobile workers may not go into their depots or shops or see their supervisors for days. Work management practices for the mobile work-force arebasically the same as for workers in a plant, but there are a few exceptions:• Communications with your workforce during the day may be chal-lenging; however, today’s communication technology is rapidly making this a problem of the past.• Normally, planners consider travel time in job plans, and that is taken into account by full-capacity scheduling. However, the net capacity of your mobile workforce to get work done will be lowerthan it is in a fixed-plant environment because of the travel time between jobs. Scheduling should consider this travel time to some degree either by reducing the net capacity or not scheduling fully 100% of the available labor. To maximize workforce efficiency, schedule jobs geo-graphically close together.• On the other hand, balancing that lowered net capacity is a tendency of mobile workers to be more efficient than their plant counterparts. They do not have many distractions while working on-site, and they often prefer to get the work done quickly to avoid overtime or having to return to the same site the next day.• The provision of parts and materials can be handled differently because the mobile workforce is usually deployed in light trucks that can carry many of their own supplies. This can actually simplify the planning required for many jobs.Mobile workers have a special need to have their work assigned and to communicate job status back to the dispatch office while they are in remote locations. There are many ways to handle this:• The worker can phone or radio in at the end of a job to get his/her next work assignment.• The supervisor can visit the work sites of all crews and assign work personally.• Enough work can be assigned for an entire shift. This can mini-mize communication throughout the shift unless there is an emergency that requires you to break into the mobile worker’s schedule for the day. Pagers, radios, cell phones or tablets can be 132 • Uptimeused for that purpose. The work orders assigned can be tracked using paper documents or with portable computing devices that store data collected throughout the day and download it when the crew returns to the shop, if not sooner, on a wider area or even a mobile phone network.• Handheld computers with built-in communication systems can be used to receive, update and close work orders while remote from the office. Some of these are very sophisticated and can access databases of repair information such as spec sheets and drawings.Communications used to be a great time waster for mobile work crews, but today, that is no longer the case. Technology today has resolved many of the problems associated with communication. Cell phones, pagers, per-sonal digital assistants, handheld computers, data-logging devices, Global Positioning System (GPS), geographic information systems (GISs), etc. have all come to the rescue.Traveling between jobs reduces the net capacity of the mobile workforce, but this is balanced by efficiency. The key to increasing the net capacity of mobile workers is to schedule the work so they do the least amount of trav-eling. Linking asset locations to a GIS will help the scheduler to pick jobs that are physically close to each other and balance relative job priorities, locations and duration of work.GPS can be used in the mobile trucks to pinpoint and report their loca-tion. This enables dispatchers to see, on a map, where their work crews are located relative to the assets that require work. When work arises, this location information is useful in selecting which mobile crew to dispatch to the job.Parts and materials are often stored and carried around in the vehicles used by mobile work crews. Materials that are commonly used are usually in stock on the truck, so the work crew can simply pick what they want for any given job directly from the truck. Trucks can be restocked during the off shifts. Oftentimes, mobile crews do more or less standard jobs, so provisioning their vehicles for those jobs is relatively straightforward. Odd jobs or jobs requiring parts and materials that are too large to be carried or manhandled off a truck by the work crew will require special handling. Special vehicles provisioned for transporting and unloading these materi-als can be dispatched as needed. These jobs will require the same degree of work planning that would normally be applied in a fixed plant; the more common jobs will not.Work Management • 133Some mobile work crews are assigned to specialized vehicles,forinstance, cable vehicles in municipal utilities. These vehicles and their crews may be required in conjunction with other crews for some jobs. One electri-cal distribution utility was engaged in jobs such as underground vault transformer replacements that required upward of six separate crews to cover all the skill, material, special-purpose and lifting requirements. Coordinating those crews required excellent planning. Timing the arrival of the various crews so that they arrived when wanted and spent as little time as practical waiting for their role was a challenge for the schedulers. This difficulty is what usually accounts for the times you see several vehi-cles from the same company at the same location with workers standing around idly—they are usually waiting for their turn to work.UPTIME SUMMARYThe essentials are the activities, processes and tools you use to deliver the most visible aspect of Maintenance—people working in the field, efficiently doing the right work. The essentials consist of those things you cannot do without if you are to be effective and set the stage for continuous improvement. Work management is supported by a reliable source of parts and materials. The work you do (basic care) goes beyond compliance with regulated requirements; it delivers basic reliability and sets the stage for improvements. Your department is managed using an effective set of key performance indicators using information that is gathered and stored in a maintenance management system to support decision making.At the core of the maintenance function is work management: a six-step process for getting maintenance work done—identify, plan, schedule, assign, execute and learn. Without a good process, workforce deployment becomes reactive to emergencies, and maintenance costs will be high—much higher than they need to be. Work done in those reactive situations is anywhere from 1.5 to 3 times as expensive as fully planned work that is carried out to a schedule considering availability of materials and other requirements for the work. In some industries, the cost of emergency work is even higher—consider lost production, fines and other penalties when your equipment fails. Choosing excellence means mastering the work management process.134 • UptimeThe simple six-step work management cycle is something that highly effective maintenance departments do well. Scheduling, using nothing more than reasonable estimates of job duration and a rudimentary check to make sure materials are available, is a great first step to enhanced pro-ductivity. Over time, more thorough planning will enhance the gains. Not only will work be less expensive to execute; good work management will free up craftsperson time to do more work. Individual tradesperson/artisan productivity can nearly double. This improved efficiency opens the door to enhanced effectiveness through a variety of reliability improve-ment initiatives.There are planning and budgeting cycles to consider. These range from detailed job plans through project, shutdown and annual cycles, to strate-gic multiyear and asset life-cycle focus. The basics of planning and sched-uling apply to all work. Individual jobs, projects and shutdowns are all managed the same way, the only difference being the scale and scope of work. Shutdowns, in particular, are high-cost, intensive activities that occur when revenue generation through production is zero. It is impor-tant to get it right and avoid the temptations to do too much unplanned or poorly planned work in the available time windows. Good use of predic-tive maintenance techniques helps identify work scope and reduces the volume of work arising during shutdowns.Mobile workforce management differs from fixed-plantmanagement. Communications are challenging, and a variety of technologies have been developed to deal with that. Work order and work reporting via tablets, laptop computers, smartphones and other ruggedized handheld devices are becoming common in mobile workforces and even in larger plants.Scheduling plays a big role in efficiency because of the need for travel from job to job. Technologies like GPS coupled with GISs help keep mobile workforces productive while meeting the demands of far-flung customers. Mobile work crews are autonomous by nature and carry much of their own support parts and materials with them, but those must be replenished regularly, or excessive travel time will result. Planning and scheduling to accommodate geographic considerations is a key to success in managing a mobile workforce.Work management is the most important maintenance process. Paying attention to it provides substantial benefits.Work Management • 135ENDNOTES 1. This technique was developed in and works very well in nonproduction environ-ments. It is commonplace in building, railway and other infrastructure maintenance programs. It has also been adapted to batch and continuous production processes. 2. Soft maintenance includes work that requires little training; the use of no parts; and few tools such as lubrication, cleaning and minor adjustments.1374Basic Care“Institutional paralysis” and “lamentable failure.”two of Lord William Douglas cullen’s comments in his report on the Ladbroke Grove rail crash that killed 31 people in 2001THE MINIMUM IS NOT ALWAYS ENOUGHMany business-related regulations that exist today are the result of past failures by companies to do even the minimum to protect their workers, the public or the environment. Those failures have led to horrific acci-dents, and regulations are society’s way of setting minimum expecta-tions for its citizens and companies. They are often written in vague and legalistic language—open to interpretation and, more importantly, to misinter pretation. Despite those efforts to minimize, eliminate or con-tain harmful events and their consequences, bad things still happen.Recently, we have seen a spate of rail accidents in North America in which trains carrying hazardous materials have derailed. In the case of Lac Megantic, Quebec, derailment of a runaway train caused serious loss of life and destroyed the center of the town. Incidents like this trigger reflection, massive investigation and analyses often bringing on changes, only because we have not been proactive or used all the technologies and techniques available to use. Some examples are as follows:• The proliferation of process safety management regulations and standards since the 1984 accident at Bhopal, India138 • Uptime• The widespread acceptance of Lord Cullen’s far-reaching safety rec-ommendations following investigations into the 1988 explosion of the offshore rig Piper Alpha• The comprehensive reforms to the offshore oil and gas regulations by the US Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE) in the wake of Deepwater Horizon in the Gulf of Mexico• The reviews and changes to regulations for the rail shipment of haz-ardous substances in the wake of a spate of derailments, fires and deaths in North America in early 2014These illustrate how regulations are spawned by disasters. Australia, India, Britain, Canada, the United States and other countries now have laws that hold employees, supervisors, managers, business executives and directors of their companies liable for accidents that seriously injure or kill people. All these laws and regulations have one thing in common—they were put in place after the fact.After mistakes were made and lives lost, regulators stepped in to protect the public, the workforce, the environment or other stakeholders. These regulators, who are representatives of governments or government agen-cies, appeared on the scene because businesses were seen to be remiss in protecting people or the environment and deemed incompetent or unwill-ing to regulate their own behavior. Sadly, they only respond when the head count of casualties is already excessive. They are not proactive. Businesses often complain of overregulation, sometimes with good reason, but we cannot deny that regulations are often a reflection of our own failures to manage our businesses responsibly.The volume of rulings and rules we are asked to follow is almost impos-sible to digest, let alone adhere to. In some cases, regulators have almost surely gone too far. Noble intentions have sometimes led to unduly restrictive, prescriptive, overwhelming, inappropriate and often costly new requirements that must be met. All of those constrain business and productivity, ostensibly for good reason but often through misinforma-tion or poor understanding of technical issues by legislators. At the same time, it can be argued that without all this, many companies would not do enough to reduce risks and consequences; some would have failed to take even minimum precautionary measures. Despite all the corporate rhetoric about safety being a priority, the truth is that it is profits that are driving most decisions, with safety and environment as secondary considerations.Basic Care • 139Following regulations is not enough if we are to be responsible corporate citizens. Recognizing potential risks and their consequences and manag-ing them is the most important function and priority of the maintenance manager, and it is central to the thrust of today’s international standards in asset management. It is a great responsibility and requires consummate attention.Arguably all of those disasters resulted from running something to fail-ure, but that does not mean that doing so is wrong unless, as in those cases, the consequences were unacceptable. Running equipment to failure is a legitimate maintenance strategy when the consequences of failure can be tolerated—if safety is not compromised, the environment is not com-promised, product quality is not jeopardized, regulations are not broken, the business can tolerate the costs and the choice is made consciously with adequate deliberation. But this choice must be conscious. Allowing everything to run to failure is clearly unacceptable. Most companies lie somewhere between these two extremes, consciously allowing some fail-ures, preventing some, and all the while remaining unaware of the poten-tial consequences of others that have not been examined thoroughly. In our increasingly litigious and heavily regulated social environment, errors and omissions are seldom tolerated. We all pay the price for others’ errors with increased regulation, higher workers’ compensation insurance pre-miums, high liability insurance premiums, environmental taxes and loss of business. Those who are not diligent invite litigation, more regulations, punitive fines and jail time and can have their operations shut down.Lord Cullen, one of Britain’s most respected judges, led formal inqui-ries into several disasters, among them Piper Alpha (July 6, 1988) and the Ladbroke Grove train tragedy (October 5, 1999). His criticism of man-agement, particularly in the case of Ladbroke Grove, was especially bit-ter and included the quote at the start of this chapter. The report of the US Chemical Safety and Hazard Investigation Board on the 2005 refinery explosion and fire in Texas City, which resulted in 15 deaths and 180 injuries, noted individuals’ errors, misleading and inadequate safety per-formance metrics, cost cutting that left much of the refinery equipment and infrastructure in a state of disrepair and vulnerability and cutting of operator training and staffing. Management was certainly neglectful in its tolerance of those situations. Following the 2010that were high performers in maintenance management.The second edition of Uptime was born in discussions with John Dixon Campbell in 2000. The dust generated by Y2K was beginning to settle, and the consulting industry, which had done very well in the previous few years, was heading into a period of upheaval. Our maintenance man-agement practice was doing very well and had grown substantially since Uptime was first published in 1995. Developments in computing technol-ogy and the explosive growth of the Internet had changed the landscape for management information systems dramatically, and that part of the book was clearly out of date. We had been using Uptime very successfully with a number of clients, made a few mistakes and learned a great deal about its application in the changing business environment. During the 2-year period preceding his death, John and I discussed these topics frequently, and thus, the first person to be acknowledged here is John Campbell—my good friend and mentor. Without his leadership of our practice, his dedi-cation to excellence and his insights, the inspiration for the subsequent editions of Uptime would not exist.All of the professional consultants and clients I have worked with have helped me learn and have had an impact on my personal and professional development. They are too numerous to be named here, but they know who they are, and they are all very much appreciated and thanked.I remain indebted to Bev Campbell, John’s wife, for her encouragement andsupport, and for helping me work with the publisher of this book. Bev, without your collaboration, John’s legacy work, Uptime, would not be as fresh and useful today as it was when he first set pen to paper in the early 1990s.I would like to acknowledge my wife, Aileen—a “nonmaintenance pro-fessional”—who read and commented on the drafts and helped me remain true to John’s original intent of making the book an easy and informative read. Furthermore, she has provided encouragement to get and keep work-ing on this when I was having difficulty focusing. She challenges me to reach far and has never faltered in her love and support. Aileen—thank you.xxiiiAuthorJames V. Reyes-Picknell is founder and president of Conscious Asset, a Canadian-based consulting and training firm specializing in asset man-agement. James is a licensed professional engineer (Ontario, Canada), certified management consultant (international), certified maintenance and reliability professional (United States), RCM practitioner, member of the Institute of Asset Management, member of the Plant Engineering and Maintenance Association of Canada (PEMAC) and honors graduate of the University of Toronto with a degree in mechanical engineering (1977). He has done postgraduate studies at the Royal Navy Engineering College (United Kingdom), the Technical University of Nova Scotia and Dalhousie University in Halifax.Before founding Conscious Asset in 2004, James was already recog-nized as a leading authority on the enterprise asset management prac-tice of IBM Business Consulting Services (formerly PwC Consulting, PricewaterhouseCoopers and Coopers & Lybrand). He worked as a marine engineer afloat in the Canadian navy, as a specialist machinery engineer with Exxon Chemicals in Canada, as the maintenance and support plan-ning manager for a large warship design and construction project and as logistics support manager for helicopter and microwave landing systems projects.In his capacity as a maintenance management consultant, James has assisted numerous clients worldwide to achieve significant improvements in maintenance and overall business objectives. His extensive experience includes asset management; plant, fleet and facility maintenance manage-ment; strategy development and implementation; reliability management; engineering; spares and operating supplies; life-cycle management and analysis; diagnostic assessments; benchmarking for best practices; busi-ness process design; and enterprise asset management systems.James has coauthored or contributed materials to several books and authored three. His articles on maintenance management have been published in numerous trade journals, periodicals and his online blog. He has taught physical asset management at the University of Toronto’s Professional Development Centre in support of the programs offered by the university’s Centre for Maintenance Optimization and Reliability xxiv • AuthorEngineering and taught the first module of PEMAC’s maintenance man-agement professional certification program, where the second edition of Uptime has been a major reference. The second edition of Uptime is used in several postsecondary institutions as a textbook on maintenance man-agement and by many companies as the model framework for their main-tenance management programs.xxvContributorsThis third edition of Uptime makes extensive use of input from several colleagues who have contributed a great deal of its new and revised con-tent. Uptime now reflects a far broader and deeper wealth of experience and knowledge. All have contributed in one way or another to the entire book and extensively to specific chapters. Those contributing authors are as follows:Dr. Andrew K.S. Jardine (Foreword)Uri T. Wittenberg (Chapters 1 and 4)Richard (Doc) Palmer (Chapter 3)Larry Johnson (Chapter 7)Carlo Odoardi (Chapter 8)Dr. Ali Zuashkiani (Chapter 10)Paul Picknell (Chapter 12)Each of these contributors deserves special mention.Dr. Andrew K.S. Jardine contributed the Foreword to this third edi-tion of Uptime and, indirectly, through his leadership of the University of Toronto’s Centre for Maintenance Optimization and Reliability Engineering (C-MORE). We first met in John Campbell’s consulting prac-tice, where Dr. Jardine was spending a sabbatical from his work at the university, and as we worked together closely, we became good friends. His friendship is highly valued and his professionalism has been an inspi-ration to me. He has always been willing to act as a sounding board for my ideas and offer his sage advice. Dr. Andrew Jardine is director of C-MORE. He is author of economic life software AGE/CON and PERDEC, the OREST software used for optimizing component preventive replacement decisions and forecasting demand for spare parts. In addition to writ-ing software, C-MORE, under Dr. Jardine’s guidance, has developed and commercialized two software packages: EXAKT for the optimization of condition-based maintenance decisions and SMS for the optimization of stockholding policies for slow-moving expensive capital spares.xxvi • ContributorsDr. Jardine is a prolific researcher and advocate of advances in mainte-nance decision making and reliability engineering. His views are sought after by industry, he has published numerous books and papers and he presents his work at professional seminars and conferences worldwide. His first book, Maintenance, Replacement and Reliability (1973), is in its sixth printing. He is coeditor with J.D. Campbell of Maintenance Excellence: Optimizing Equipment Life Cycle Decisions (CRC Press, 2001); the second edition was published in 2010 as Asset Management Excellence: Optimizing Equipment Life-Cycle Decisions. The second edition of the bestselling Maintenance, Replacement and Reliability: Theory and Applications (CRC Press, 2006), coauthored with Dr. A.H.C. Tsang, appeared in 2013.In 1998, Professor Emeritus Jardine was the first recipient of the Sergio Guy Memorial Award from the Plant Engineering and Maintenance Association of Canada in recognition of his outstanding contribution to the maintenance profession and was elected a fellow of both the Institute of Industrial Engineers and the Canadian Academy of Engineering in 2013.Uri Wittenberg has had extensive input toDeepwater Horizon disaster, the US presidential administration launched the most aggres-sive and comprehensive reforms to offshore regulation and oversight in US history.140 • UptimeSimilar investigations have followed the 2014 spate of rail disasters in North America involving the shipment of hazardous hydrocarbons, previously shipped largely by pipelines. Interestingly, it is the increas-ingly restrictive environment for building pipelines (i.e., environmental regulations, safety considerations, First Nations’ objections, “not-in-my- backyard” syndrome) that have led to the use of rail as an alternative, arguably self-defeating the intentions of all those special interests.No business wants to be the trigger or subject of such a report. No manager wants to be held responsible for environmental disasters, deaths or busi-ness failure. Nonetheless, accidents happen because not everything can be predicted. So how can companies avoid these situations and consequences?The simple (possibly naive) answer is to do everything possible to avoid endangering people, the environment and the businesses. Be aware of the risks, take conscious steps to avoid the dangers and mitigate the damages. Even with the best intentions and follow-on efforts, not every possible risk is likely to be identified. However, being able to say under oath that you have done all you knew you could at the time will certainly help you feel better if something does go wrong.Basic care is about following the rules and taking incremental steps to improve what needs to be improved. It is not about doing all you can; it is about getting started and then taking reasonable steps beyond the mini-mum. It is about doing what we can to avoid failures, and it is about look-ing for warnings of pending failures that could lead to disaster before they occur—it is about being proactive.BEYOND THE MINIMUM: BASIC CAREBasic care goes beyond regulatory compliance. It includes having some form of proactive maintenance program, participation by operators in basic maintenance activities (i.e., cleaning, lubrication, inspections) and enterprise housekeeping (5S).The minimum your business must do is to comply with regulatory requirements. Sadly, we do not need to look far to find examples of compa-nies that have suffered some sort of failure that’s impacted employees, the public or both as a result of failure to comply with regulations, and worse, some have not even heeded good common sense. Start there—identify and then follow the rules. But putting blind faith in those rules is demonstrably Basic Care • 141wrong. As already described, the rules are inevitably created after the fact, are often flawed in some way (technically) and rarely anticipate failures that have not yet occurred. They are almost always put in place reactively.There is more that you can do that will reduce risks further, potentially lead to better business performance and help you sleep better at night.Basic care entails taking care of equipment at a basic level as the name suggests, but it is also about behaviors and habits around that activity. It will not eliminate all possible causes of failure or eliminate all failures, but it will keep you running in reasonably good order and provide more productive uptime. Top performance comes into reach when you begin to apply the reliability methods described later in this book.Think of your plant or fleet of vehicles as if they were your brand-new family car. Regulations require you to keep it in safe working order and get exhaust emissions checked regularly. Beyond that, you probably make sure the oil and fluid levels are maintained, the windshield wipers are in good working order, the brakes work, the tires (including the spare) are fully inflated, tire treads are still deep enough to provide traction, the upholstery is clean, the seat belts are working, the child restraints are secure and the lights (including brake lights) work as they should. Periodically, you wash the car. When you wash it, you may find chips in the paint,small cracks in the windshield or leaks in the door sealing systems. You may notice that oil, coolant or transmission fluid leaks on your driveway. When you find those minor defects, you are fairly likely to correct them, especially if they are still under warranty. Over time, we begin to take our family car for granted, and our interest in caring for it wanes. As the car ages, you are likely to become less inclined to look after the aesthetic features but retain focus on the safety- and operability-related features.Companies are collections of people just like us. These companies treat their physical plants as you might treat your old family car. The older the physical assets are, the less mindshare and overall attention they are likely to get. Yet these physical assets still generate revenue, keep people employed and produce products that are used by your customers. If the family car breaks down, you can always take a bus or a taxi or hitch a ride with a friend. If the old plant breaks down, work-around plans may not exist, the problem is not as easy to fix and business suffers; conceivably, if it is too expensive to fix, it jeopardizes the company’s (or at least that site’s) future.Basic care helps to get the plant to a condition of safe and reliable opera-tion that can be sustained and improved. Reliability-centered maintenance (RCM; Chapter 8) and Optimization Techniques (Chapter 9) will move 142 • Uptimeyou from mere compliance to truly doing all that you can. These are the most comprehensive approaches you will find. But are you ready for them? You may be just starting your improvement program, reliability may be poor and most of your organization’s approach to maintenance very pos-sibly follows the mantra “if it isn’t broken, then don’t fix it.” Organizations like this demonstrate a low level of competence in managing maintenance. They are not yet ready for RCM, and any attempt at it will fail to achieve desired results. There are, however, basic approaches that will serve you well, delivering quick paybacks on your efforts and investment, eventu-ally paving the way for advanced methods like RCM. These will help you design a basic maintenance program that works for you in your present operating environment.Doing the right maintenance matters—you need to determine the most appropriate maintenance tactics, or you will be wasting time and effort doing things that do not work or possibly even leading to other failures. Every time you interfere or intervene with something, there is a risk of making a mistake or triggering a failure mechanism. Once you know the “right things” to do, start doing them the right way. Planning and schedul-ing helps you get things done more efficiently. Create an environment that screams “continuous improvement,” and embed that attitude or mentality into your culture. Basic care and specifically 5S (enterprise housekeeping) can do exactly that.Maintenance practices recommended by your equipment manufactur-ers are one place to start, but be cautious. Manufacturers may not know your operating environment, and they may not know how you are operat-ing their equipment. Their recommendations may not always be entirely appropriate.You cannot trust manufacturers’ recommendations blindly. They make and sell parts. They do not know or cater to your specific operating cli-mate, operating condition and level of workforce skill or experience. They rarely operate and maintain their machines. Blindly following manufac-turers’ recommendations, or worse, their sales representatives’ recom-mendations, is risky. Basing your maintenance program solely on their recommendations is usually a mistake.Your existing maintenance program (assuming you have one) may be preventing somethe material on strategy in Chapter 1, which has been substantially rewritten, and the material on basic care in Chapter 4. Uri introduced me and several clients to an extremely effective technique for strategy deployment (Hoshin Kanri). That technique has been instrumental in client success ever since meet-ing him; it has become a regular part of our firm’s service offering, and it is now a part of Uptime. The crucial, yet previously missing, deploy-ment component has been added to Chapter 1. Uri is an entrepreneur-ial business coach with extensive experience in strategic planning; policy deployment; Lean business and methodology deployment; the Toyota Production System; and benchmarking in the areas of operations, supply chain management and maintenance management, predominantly within the manufacturing industry. He has designed, developed and delivered organizational business process improvement and change management solutions for enterprise-wide collaboration fluidity, customized learn-ing concepts and experiential tools. Uri’s Lean-enterprise experience and knowledge have enabled his contributions and revisions to Chapter 4 on basic care, where he has also added considerable material on the 5S tools and how to deploy them successfully.Richard “Doc” Palmer, another friend and colleague, is already well known. Even before retiring after a career of more than 25 years as a Contributors • xxviipractitioner, Doc began helping companies with their maintenance plan-ning and scheduling efforts. Today, companies worldwide benefit from his skills and expertise through his company, Richard Palmer and Associates. He provides consulting, education, guidance, mentoring and training for maintenance planning success with a strong theme promising that you can “increase your workforce without hiring.” His Maintenance Planning and Scheduling Handbook (now in its third edition) is widely regarded as the prime reference for planners and schedulers the world over. Doc extensively revised and added to the material on work management in Chapter 3. His considerable insight reflecting contemporary issues and his extensive experience in deploying planning and scheduling in numerous companies are now major enhancements to Uptime.Larry Johnson, another friend and colleague, extensively rewrote Chapter 7, “Management and Support Systems for Maintenance,” effectively replacing the old chapter to reflect significant technology changes. This is the chapter that has provided the catalyst for both the second and third editions of Uptime. Technology has never slowed its pace, and there will always be a need to keep up with it. Larry is the founder and president of Fractal Solutions. He is an internationally known consultant, lecturer and trainer in asset management and equipment reliability programs. He is an expert in integrated maintenance programs, planning and scheduling and computer-based maintenance management system design. He has helped thousands of maintenance and operations personnel apply reliability improvement programs at their facilities. He has extensive maintenance experience in various capacities, having spent 25 years in consulting, management and training.Larry has published numerous articles in the reliability field, includ-ing “Improving Equipment Reliability and Plant Efficiency through PM Optimization,” and has made presentations at large international confer-ences such as the Society for Maintenance and Reliability Professionals Annual Conference and the Strategic Industry Research Foundation’s industrial round table. He is the pioneering developer of the preventive maintenance (PM) optimization methodology, an alternative and comple-ment to reliability-centered maintenance, now in use at many facilities worldwide. Larry designed PREMO XPERTS, PREMO PAS, the EPRI RCM Workstation and other computer applications in use by numerous organizations. He has worked on the application of reliability-centered maintenance at more than 70 sites in the United States and around the xxviii • Contributorsworld, and trained thousands in reliability-centered maintenance through his interactive workshops.carlo odoardi has been a long-time friend and colleague, working exten-sively with my firm for the past several years. He revised and rewrote large portions of Chapter 8, “Asset Reliability 1—Being Proactive,” formerly “Asset-Centric Approaches 1—Being Proactive.” He has added consider-able material on reliability-centered maintenance (RCM), increasing the depth in this chapter and reflecting his years of experience implement-ing RCM. Carlo is a business reliability professional with a passion for helping asset-intensive companies achieve sustainable, world-class opera-tional performance. For more than 25 years, he has provided consulta-tion on industrial culture change management, business transformation, advanced industrial technologies’ applications and management informa-tion system solutions. Carlo advises senior executives about what steps must be taken to achieve cost-effective business results and then imple-ment an optimal mix of proven methodologies and technologies. He is a passionate teacher and an advocate of positive change through mentoring, adopting new organizational philosophies that result in clear direction, and business transformation initiatives.Dr. Ali Zuashkiani has contributed the entirely new Chapter 10: “Evidence-Based Asset Management.” Ali and I met at the University of Toronto’s Centre for Maintenance Optimization and Reliability Excellence (C-MORE), have worked together on many occasions and have become good friends. His chapter introduces us to the new gold standard for asset management decision making. He introduces and provides considerable detail on evidence-based asset management (EBAM), life-cycle cost and various decision optimization methods and illustrates them with a num-ber of case studies. Ali also presents knowledge elicitation, a technique that he has used successfully to deal with incomplete, inaccurate or missing data—a common problem that many struggle with today. Ali consults and trains globally in the area of asset management. He has given hundreds of seminars and workshops in national and international conferences and published a book titled Expert Knowledge Based Reliability Models: Theory and Case Study, and chapters in several other books and various articles. Ali was selected as a Young Global Leader by the World Economic Forum in 2013, and in 2008, he was awarded as a Young Global Leader by Asia Society. Ali is CEO of PAMCo and director of educational programs at Contributors • xxixC-MORE at the University of Toronto. He is a reliability-centered mainte-nance (RCM) practitioner responsible for implementation throughout the Middle East.Ali and I also acknowledge the University of Toronto and Dr. Jardine’s firm, BANAK Inc., for their contributions. Most of the case studies pre-sented in Chapter 10 were conducted by researchers at the University’s C-MORE and BANAK’s consultants under the direction of Dr. Andrew K.S. Jardine.Paul Picknell has been known to me since he was born. He is my youngest brother, and by odd twists of fate on very different paths, we have come together working in related fields. Paul contributed another new Chapter 12, on asset information management. This chapter discusses the manage-ment of information and its governance as applicable to the broad field of asset management and is clearly needed in a world swimming in data yet information starved and clearly in need of help to make better decisions. Paul is a senior manager with extensive experience in program and proj-ect management. He is experienced in all aspects of the system delivery life cycle and highly skilled in managing a variety of information tech-nology (IT) service functions. Paul excels in core project management functions, with specific strengths in risk and stakeholder management, strategic planning, budget and scope management, workshop and semi-nar facilitation and communications. Through his career, he has played a crucial role in delivering projects ranging in scale from the business unit to enterprise-wide.In addition to the contributors there are three colleagues who carried out independent reviews of the draft material and provided valuable insights, corrections and suggestions that have been incorporated in this work. Thanks go out to Mick O’Sullivan, Marcelo Aliendre and Alun Roberts for all their help.xxxiIntroductionWHY UPTIME?Your operations run 24/7, generating millions in revenue every day. The markets are good, production is running flat out and your customers are happy. You have some minor stoppages, but they are fixed quickly—total loss of production is relatively minor. Then, late in the week, there is a major equipment outage. It takes several days to get a critical part and a few more days to fix the problem. Total downtime: 5 days. By now, cus-tomers are screaming for product. You resort to buying and repackaging a competitor’s product for resale to satisfy your customers. Throughout this time, a good part of your production staff was idle. Your maintenance crews, already short staffed because you have not been able to find quali-fied tradespeople, worked around the clock at premium rates. You cannot make up for the lost production. You are backed up and already running flat out. This one incident has reduced annual revenues, taking more than 2% from your bottom line.Only a short distance away, your competitors were able to ramp up pro-duction to help you make up for your lost production. They were happy to help—your situation generated more revenue for them and at a premium price! They do not have a problem with outages, and although they com-pete for the same labor pool as you, they do not seem to be short staffed. Their operations are similar to yours, their product is virtually identical, but they are more profitable. What is their secret?You arrange a visit to the competitor’s plant, hoping to find an answer. The plant manager is your host and gives you a tour. The plant is not new, but you are immediately impressed with how clean and orderly everything is. Much of the equipment is the same as yours but better cared for. You see operators using handheld device checklists and helping the maintainers while they do repairs. There is a crew of maintenance people who do noth-ing but condition monitoring—today, they are doing a combination of vibration checks, oil analysis and thermal imaging. The storeroom is tidy xxxii • Introductionand manned only during the day shift. At night, it has a card access; bar code readers and radio-frequency identification (RFID) tags are used to record stock transactions. Maintenance performance statistics are posted alongside production; safety statistics are posted on boards throughout the plant, and they are current. You notice that the plant’s recorded acci-dent rate is 0.5 reportable incidents per 100,000 man hours; yours is 2. It is probably a given that their insurance premiums are lower than yours, too.When you ask how they achieve this remarkable performance, the plant manager explains that maintenance is a critical business process and a key to the company’s success. He knows his competition and knows that they do not have that same view—he considers it a not-so-secret competitive weapon. He views maintenance as an investment in productive capacity. You have been viewing it as a necessary evil—a cost center.And it is precisely this scenario and these divergent views of mainte-nance that are the crux of the message of Uptime: Strategies for Excellence in Maintenance Management. What may, at first glance, be a seemingly trivial difference of opinion separates a successful operation from one beset by outages, staffing problems and a host of related costs and other irritants.UPTIME’S HISTORYUptime: Strategies for Excellence in Maintenance Management was pub-lished in 1995. Since then, John Campbell and I, along with our colleagues, used it to help hundreds of companies move toward excellence. While applying the concepts and theories described in Uptime, all of us have learned a great deal more about them: where they work, where they do not and how to apply them. Maintenance managers, who made up the major-ity of readers, were asking for more detail on how to apply Uptime. That request, along with significant changes in technology that had occurred, led to our choice to produce a second edition.By the time the second edition was published in 2006, our team had collectively gained more than 500 years of experience in a wide array of circumstances, industries and environments. Today, this third edition represents several hundred additional years of experience.This third edition of Uptime is an updated and expanded affirmation of the premise promulgated in the first edition and expanded in the sec-ond edition, and it provides current insights and practical suggestions for Introduction • xxxiiiimplementing maintenance management as a viable and valuable asset for any industry seeking to improve its operating systems. This edition goes deeper into the how-to of Uptime’s model of excellence, adding consider-ably from experience gained since the first edition was published in 1995. Indeed, in doing so, this edition features material from six additional contributing authors, all professionals that John Campbell either knew or would have been proud to know.USING UPTIMEJohn intended Uptime as a senior-level reference for both maintenance and nonmaintenance professionals alike. Both used it effectively. It was maintenance managers who made up a large part of Uptime’s readership—they would remark that it was the first book to ever describe their job to them. They loved it, and they asked for more depth on how to apply Uptime. Subsequent editions have included more material specifically in response to that request.Uptime provides an overview of maintenance management and, in this edition, expands that overview, now introducing asset management—the next step in our evolution as a profession. It examines various elements that maintenance managers deal with and offers guidelines for maintenance success, specifically, useful information about what works well and how to achieve it. We have attempted to stay away from excessive details that are likely to be more confusing than illuminating. If you want to focus on only one topic, you can. Each chapter stands alone as a guide and each gives an indication of other Uptime elements you should take into account.While this edition contains even more guidance on implementing Uptime and its elements, it is not a field manual. Keep in mind that you are likely to need help from experts as you implement some parts of Uptime, and for other parts, you will not.We have provided enough information to help the dedicated mainte-nance professional make informed choices while also providing overviews for the nonmaintenance reader.“Uptime Summary” sections were added to the second edition, appear-ing at the end of each chapter. These outline key points for executives and managers who want to focus on significant points without getting bogged down in minutiae. Feedback from readers was positive—they xxxiv • Introductionloved the summaries. This third edition has new versions of those Uptime Summaries. They were written as a single document, divided by topic to address each chapter’s material and then placed at the end of each chapter. Readers who want to skim the book will get a great deal from those alone. Managers whowant a quick start with Uptime are encouraged to read this introduction and then each of the 13 Uptime Summaries. In a very short time, you can gain a good understanding of Uptime’s breadth and depth without getting into the details.CHANGESThe first edition was subdivided into four parts: “Leadership,” “Control,” “Continuous Improvement” and “Quantum Leaps.” Those translated into four levels in the original Uptime Model of Excellence (Pyramid).In the second edition, there were four parts, with new titles: “Leadership,” “Essentials,” “Choosing Excellence” and “Epilogue,” but the pyramid was changed to include three levels as it does in this third edition.The first three sections of this third edition discuss the model and its 10 elements. Section IV is entirely new material on asset management. It provides a bridge from the world of maintenance management into the broader world of life-cycle asset management, reflecting the emergence and popularity of international standards that are driving our profession to higher levels of achievement warranted by the significance of physical assets to businesses and the world today.Section V covers implementation of Uptime—a much-needed addition that provides considerable guidance on how to implement the Uptime Pyramid in today’s working environment. The advice in this part of the book is intended to help you get started and moving successfully and then sustain Uptime for years to come.Section I, “Leadership,” discusses strategy, strategy deployment, people, teamwork and managing change.• Chapter 1 now includes material on how to deploy your strategy suc-cessfully with the addition of Hoshin Kanri. We also have empha-sized and recommend a new approach to beginning your Uptime journey that avoids many of the initial change management chal-lenges that an Uptime implementation can face.Introduction • xxxv• Chapter 2 reflects the increasing importance of teamwork in today’s workplaces. The material on teamwork has been moved from the top level of the Uptime Pyramid and included in Chapter 2 on people in this first or foundation level (leadership).Section II, “Essentials,” discusses the elements of Uptime that must be present in any organization that delivers maintenance successfully while setting the stage for high levels of performance.• Chapter 3 on work management has been reworked to reflect suc-cessful practices in today’s working environments: plants, mobile workforces and shutdown situations.• Chapter 4 on basic care has seen significant edits and changes. The detailed material on equipment failures has been moved to Chapter 8 and is covered with reliability-centered maintenance (RCM), where it is a better fit. Given the emphasis on teamwork (Chapter 2) we have also added a highly successful team-based approach to enterprise housekeeping—5S, taken from the world of “Lean.”• Chapter 5 on materials management has seen several edits, largely to remove material that is of little interest in the maintenance commu-nity. Materials management professionals will consider this chapter to be “basic,” but maintenance professionals ignore the remaining material at their peril.• Chapter 6 covers performance management, key performance indi-cators (KPIs) and benchmarking. It has been edited to simplify and clarify it from the second edition.• Chapter 7 on information technology has been totally rewritten. Needless to say, since 2006, there have been substantial changes in the world of technology and what it enables.Section III, “Choosing Excellence,” discusses and presents three aspects of reliability that are keys to accelerating your performance beyond ordi-nary toward extraordinary.• Chapter 8 on proactive methods is dedicated to RCM. RCM is cov-ered in more depth now and adds considerable insights from the field on its implementation.• Chapter 9 covers additional reliability tools used in getting started quickly, optimizing your existing preventive maintenance (PM) xxxvi • Introductionprogram and optimizing your decision making. Rapid deployment of PM, PM optimization, root cause failure analysis, decision opti-mization, reliability modeling and simulations are covered.• Chapter 10 introduces an entirely new topic—evidence-based asset management—the new gold standard in decision making in our field. This chapter also introduces a method, knowledge elicitation, for use where the data needed to make evidence based decisions are lacking.• Material removed from this part of the book on teamwork and total productive maintenance (TPM) has been moved to Chapter 2. Material on process optimization has been removed entirely. It was primarily relevant to the processes described elsewhere in Uptime, and each of those chapters already addresses what is needed to opti-mize their respective processes.Section IV introduces a new topic—asset management. While the second edition of Uptime was being written, this “new” field emerged, and global awareness began to grow. Since then, asset management has emerged on the world stage and is the subject of new international stan-dards published early in 2014. Asset management is a much broader topic than maintenance management—indeed, the latter is a part of the for-mer. It is the direction in which our profession is headed as we continually improve and consider all matters of the asset life cycle—thinking out of our traditional box.• Chapter 11 is entirely new and discusses asset management, provid-ing an overview of the subject, its various topics, the international standards and their voluntary requirements.• Chapter 12 is also entirely new and covers the important topic of asset information management. Arguably we need this to be effective in maintenance management, but the topic covers a broader scope of information than what is used by maintainers. AIM is a good place to start with asset management, particularly if you are considering certification against the new standards, as it is central to providing the information you will need in all your efforts.Section V is also new—implementing Uptime. Since the first edition was published in 1995, people have asked, “How do we do this?” The second edition (2006) answered some of those questions, and many companies Introduction • xxxviihave implemented Uptime successfully using advice found in its chapters. This third edition goes beyond that chapter-by-chapter/topic-by-topic advice and provides an overview of how to implement the entire Uptime Pyramid and sustain the changes in your company.• Chapter 13 provides that advice on implementing the already suc-cessful Uptime Pyramid, with tips and considerations based on years of experience in applying the model in a wide variety of environ-ments, industries and cultures.Appendices supplement the book materials.• Appendix A provides a discussion of maintenance assessments (the traditional approach to starting an Uptime implementation) and the newer approach that begins with training. It presents questions that can be asked in getting started and introduces a new online app—the Uptime Performance Assessment app that can be used as a handy tool in starting your journey.• Appendix B is an expanded and slightly edited version of the glossary that was introduced in the second edition of Uptime. Edits largely reflect the changes in emphasis that appear elsewhere in the book.• Appendix C is a guide for rapidly deploying a PM program for orga-nizations that presently have none.UPTIME IN YOUR BUSINESSPeople and companies are a lot alike. For individuals, there is substantial evidence that physical and financial well-being are interrelated. There is a clear link between wellness and success—the healthier you are, the better you do. Conversely, failure is related to both physical and emotional distress.Those who take good care of themselves physically, emotionally and spiri-tually often do better than those who do not, and they sustain it for longer. They also feel more satisfied and are more likely to be seen as happy people. Companies are made up of people, and like people, if they are healthy and stable, they do well, and their people feel good about working there.Keeping healthy both on the personal level and as a company means keeping all your systems and parts in proper working order. Neglect leads xxxviii • Introductionto breakdown, disease (dis-ease) and worse. We all know we should exer-cise, eat healthy and avoid overstressing ourselves. Nevertheless, many of us neglect our physical health and indulge, favoring short-term gratifica-tion over a long and healthy life. Many organizations are also like that, and the result is clearly negative. The human body and the corporate body suffer because we do not pay enough attention to physical health through maintenance.Most businesses today are highly dependent on technology, automa-tion and physical assets, decreasing their dependence on labor. We are witness to technological growth at a remarkable pace. As technology grows, it enables more. We can do more with less human intervention while becoming more profitable, safer and less vulnerable to labor short-ages. At the same time, we become more dependent on our physical assets. Sometimes, new technologies are much more reliable than whatever they have replaced, but not always. For certain, they will be complex, and due to our emphasis on consuming less of our planet’s resources, they will put their component parts under high stresses. Like the human body under stress, those highly stressed and complex assets can fail—they are depen-dent on effective maintenance, preferably delivered in a cost-effective way.What we gain by maintaining our physical assets diligently is uptime—the capacity to produce and provide goods and services. We also expand our ability to produce high-quality goods and services quickly and satisfy our customers consistently. Finally, we provide a safe and controlled work or service environment, with minimum risk to the health and safety of our employees, our customers, the public at large and our environment.Maintenance is treated, in the accounting world, as an operational expense, including repairs, proactive maintenance, consumption of parts and materials, labor and contractors. Some parts that are consumed in extending the useful life of assets may be treated as capital investments, but most will be written off as expenses. The largest cost associated with poor maintenance and operating practices is the “hidden cost” of down-time (lost revenue and damage to reputation). Fines or other penalties due to low quality or failures to deliver on time are more visible but often treated separately from maintenance costs. On the income statement, maintenance is often buried as a component of “operating costs,” not even visible to senior management and executives, but its impact can be huge.Though they vary in direct proportion to the capital intensity of a given business, budgeted maintenance costs can be as high as half of production costs (Figure I.1).Introduction • xxxixAlthough high enough, the numbers in Figure I.1 are not “total costs”—they do not include the sales value of lost production or the cost associated with rework, rejected product, recycled materials, fines or other penalties. Those costs can make the maintenance costs look small in some indus-tries. Understanding the total cost of maintenance and its impacts enables rational decision making and can often justify increases in maintenance budgets. The result of this is often a lower total cost to the business relative to revenues generated—you become more profitable.The more capital-intensive1 a business becomes, the less it depends on operators, and the more it depends on maintenance. The costs associ-ated with this dependence on maintenance grow as a direct result of our increased dependence on physical assets for production. But if we manage our assets well, those costs will decline, as will the cost per unit of output. It pays to think in terms of cost per unit output (effectiveness) rather than just cost (an input).Maintenance is a complex business function, and getting it right is a challenge. A lot of questions need to be answered:• What maintenance activities do we focus on? Can we become more predictable and less reactive? How can we do that?• How do we attract and keep capable people to maintain sophisti-cated equipment systems?• How can we get more productivity from a shrinking skilled workforce?SectorMiningPrimary metalElectric utilitiesManufacturingProcessingFabrication and assemblyPercentage DirectMaintenance to OperatingCosts20 to 5015 to 2515 to 255 to 153 to 153 to 5FIGURE I.1Ratio of direct maintenance cost to total operating costs.xl • Introduction• What is the optimum level of inventory of maintenance parts, mate-rials and consumables? Where can we get them?• Can we extend the life of our aging assets? Is it worth our while to do so?• Do we need specialist maintenance engineering support?• What organization arrangements are most appropriate in our business?• What should we contract out and how much of it?• What are the risks associated with failures of our major systems? How can we deal with those?The world is getting smaller. Global competition makes it more impor-tant than ever to get the answers right. Business is under enormous pres-sure to be financially productive. Maintenance is a major production cost. If it fails to deliver uptime cost-effectively, then plants can be shut down and production outsourced or moved offshore. Everywhere, the dictum is the same: Maximize the output of goods and services, and minimize input of resources—financial, human and physical. Provide the best value to both the customer and the shareholder, but at the same time, be safe and environmentally conscious.Providing value clearly has to do with giving the best quality and ser-vice, quickly and at the lowest price. To satisfy customers, an enterprise must respond quickly to service its goods throughout their useful life cycle. In connection with this, we see “product life-cycle management” emerging as a new discipline closely related to maintenance management but focused on maintaining the products sold to customers. That same thinking has grown into “asset management” today as related to our phys-ical assets that are used to deliver value for our companies. We also want to expose ourselves and our customers to minimal risk (whether financial, market, operational, environmental or safety related), so it follows notion-ally that ValueQuality ServiceCost Time Risk=×× × The higher the quality and service we can deliver for a given cost and response time, the more value the customer perceives. It is essential that the physical resources employed—equipment, fleets, facilities or plants—be available when needed and produce at the required rate and quality, Introduction • xliat reasonable cost. It goes almost without saying that environmental and safety risks must be consistently minimized, but also business risks.Today, we expect a lot, and we expect it at low cost. Getting it all right has its costs too. Those costs are truly investments in your capability to sustain your assets. The strategies described in this book will require some initial investment to implement. Like going to the gym, your improve-ment is contingent on a commitment to expend the necessary effort and finances, and the reward is a high payback.New manufacturing and processing philosophies and cost-effective designs of capital equipment have spawned corresponding