InTech Home InTech Home

1 December 2003

The Many Faces of MRO

Today’s changing manufacturing environment.

By Mike Laszkiewicz

Copper production, even for an efficient producer such as Atlantic Copper, is typically a high-volume business, with single-digit margins—in an industry that inherently sees consistent price fluctuations. With a quarter of its $80 million annual operating budget tied to maintenance costs, even a small gain in maintenance efficiency could have a positive impact on the company’s bottom line.

“In 1997, 10 percent of our maintenance was preventive, and 90 percent was corrective,” said Charles Rich, manager of technical knowledge management. “Basically, everyone was running around putting out fires rather than doing planned interventions. Now, the percentages are switching as we focus more on preventing maintenance problems,” he said. “As a result, we’ve dramatically lowered our maintenance expenses and increased plant margins.”

Testimony to asset management By Marty Osborn Without an automated asset management solution, it was impossible for a St. Louis–based market research firm, Maritz Inc., to efficiently manage its sprawling facility. “Our stockroom was out in the open with four entrances and not a lock in sight,” said Bill Wright, administrative supervisor in facility services. “When an employee needed something, they’d go to the local hardware store and charge it. Equipment records were in equally bad shape. Our employees relied on binders full of hard-to-read data and inaccurate information.” Wright knew he needed an automated asset management solution that could help. Maritz needed to optimize inventory levels to drive down maintenance costs and improve overall facility performance. Wright and his team also needed a way to track and quantify the results of their operations, so senior management could budget more accurately and make sound business decisions. Wright sought out an asset performance management system that could automate the tracking and maintenance of assets and provide automated management of inventory. He found one that fit his needs perfectly, and in the next twelve years, Wright continuously improved his operations and adapted to changing operational requirements. Maritz upgraded to a Web-architected asset performance management solution, giving the company better access to robust functionality and reporting capabilities. The upgrade was easy, Wright said—with a transfer of equipment and inventory data, the company was up and running quickly. “We’ve already achieved a 30% cost savings in our inventory, and we rarely run low on parts,” he said. Maritz chose to upgrade through a service designed to get companies up and running in as little as three weeks. The company received on-site training and accelerated Web implementation, and within days was able to benefit from a configuration of work processes, screens, menus, and reports based on industry best practices. These capabilities give Wright an effective way to quantify performance improvements and justify costs to executive management. They could track everything about operations and show the performance improvements year-over-year. “This makes it much easier to justify budgets to upper management,” Wright said. “And we’ve actually decreased downtime an additional 90% since first implementing the software. The hosted deployment model frees us from having to think about managing the application, so we can focus on what we do best—keeping Maritz’s corporate headquarters up and running at peak efficiency.” Marty Osborn is vice president of West Coast operations at Datastream Systems in Greenville, S.C.

Atlantic Copper’s pursuit of a preventive strategic maintenance optimization project is just one example of how today’s manufacturers are no longer focused solely on all-out production. Instead, they are more concerned about finding ways to become leaner and more agile and have little tolerance for inefficiency. The need for speed and agility is paramount for manufacturers facing competitive pressures that continue to raise the bar on performance and delivery. Likewise, e-commerce and Internet use has injected a velocity into manufacturing that allows little room for downtime.

This shift from production to agility has inspired manufacturers to improve in the maintenance arena. They are employing productive processes, cutting-edge technologies, and proactive maintenance measures to help build production operations to new heights. This means equipment—from plant machinery to automation components—runs at full potential during scheduled production. The success of today’s maintenance repair and operations (MRO) programs is gauged by their ability to improve uptime—ensuring efficiency in running needed machines and components without fail.

According to an ARC Advisory Group study, industry loses more than $20 billion each year due to unscheduled downtime—that’s nearly 5% of total North American production. The traditional fail-and-fix approach to maintenance is no longer a viable MRO strategy.

NEW MAINTENANCE MINDSET

Today’s approach? Don’t simply fix a problem, but ferret out and correct the root cause of a machine or component failure. Go beyond acknowledging a motor bearing needs to be replaced. Instead, determine what exactly caused the bearing to degrade in the first place. It is a strategy to help find ways to predict similar problems in the future and prevent malfunctions.

The predict-and-prevent approach to maintenance is a shift in philosophy from just fixing equipment after failure. Even the most seasoned maintenance employee knows a breakdown strategy isn’t really maintenance at all. Rather, it is repairing or replacing parts as needed. The result is often more frequent and costly downtime.

According to the 2001 Census of Manufacturers conducted by IndustryWeek magazine, nearly one-third (32%) of survey respondents are already using some level of predictive or preventive maintenance, up 12% from the census’ 1999 findings.

COMING OF AGE

Maintenance engineers who have adopted predict-and-prevent maintenance strategies are reaping the benefits from key technological advancements. New sensing and monitoring technology, coupled with Internet-based programs that can quickly and cheaply share data among many different locations, means that remote monitoring and diagnostic systems have never been more accessible or cost effective. Such advancements enable manufacturers to hire outside experts to analyze and predict machinery inconsistencies before they can impact production. It is a strong break from the traditional fail-and-fix routine.

The MRO revolution also gets a boost from intelligent devices and advanced communication networks. This opens access to process data from every corner of the plant. Innovative monitoring and protection devices use a facility’s existing networking infrastructure and allow companies to optimize maintenance activities based on actual asset condition, rather than scheduled, routine maintenance. Manufacturers never imagined such opportunities to monitor and protect the health of their plant assets. When they apply these technologies on a plantwide basis, companies dramatically cut maintenance costs—giving manufacturers greater foresight of impending machine failures, reducing unplanned downtime, and minimizing wear on critical equipment.

In developing a new predictive MRO strategy, some manufacturers might not have the know-how to develop a plan that defines key goals and determines measurable results—an essential part of any successful strategy. Atlantic Copper sidestepped this issue by taking time to do a little homework. “We knew we had to first understand our assets and how to maintain them before we could truly understand the scope of the task ahead of us,” Rich said. “We knew the opportunities and possible cost savings of a predictive MRO strategy, but we didn’t realize it would have such a dra-matic impact on the company’s bottom line.”

PREDICTIVE TRANSITION

Speed and efficiency are important in making the transition to a predictive strategy. But sometimes a company might not have the in-house expertise and resources to analyze and apply what they learned from condition-based monitoring. In the past, manufacturers were typically self-sufficient and could perform most functions in-house, including research and development, engineering, maintenance, and distribution. Today most manufacturers have limited funds to cover every aspect of the business. That means they tend to collaborate to meet their production goals.

For the majority of manufacturers, the transition to a predictive MRO strategy is often too monumental to be made in a single effort. Most manufacturers instead implement such programs in phases, starting with the most critical machines and then expanding. For Atlantic Copper’s asset management program, upgrading to a predictive MRO strategy is an ongoing process of incremental improvements.

In phase one, the company decided to evaluate the variables involved in the project, including the combined needs of maintenance and information technology, to ensure the project was developed with the company’s long-term goals in mind. In phase two, Atlantic Copper brought in new technology needed for preventive maintenance. First, the company installed MAXIMO computerized maintenance management system (CMMS) to replace an outdated, mainframe-based in-house software application used to keep track of MRO. To further improve efficiency, Atlantic Copper used MAXIMO for all of its MRO procurement, warehouse management, and invoice-matching needs.
Some manufacturers are wary of a drastic revamp or replacement of an existing maintenance infrastructure, believing that it may prove to be a cost-prohibitive, risky investment. Arjo Wiggins, a worldwide manufacturer of paper products, discovered the cost savings and reduced downtime of a predictive MRO program can sometimes be so considerable that the payback period for the cost of installation can be as short as eighteen months.

Manufacturers also are turning to collaborative arrangements with suppliers or service providers to meet their production and efficiency goals. Even large companies with significant in-house capabilities have found that employing external experts to analyze data and recommend preventive maintenance actions can minimize on-site expertise and training requirements. This scenario allows organizations to achieve faster and more dramatic results, without compromising current production levels or adding additional responsibilities to already taxed maintenance personnel.

Air Liquide America, a gas supplier, is implementing a remote monitoring and diagnostics program designed to expand the scope of its predictive maintenance programs at gas production facilities across the U.S. Because the majority of their facilities operate automatically or with a single technician, the company does not have resources available at each site to effectively use data gathered from its machinery. So, engineers gather condition-based information from critical machines at each site and feed the data via the Internet to a single location, where monitoring technicians analyze it to identify developing faults in equipment and recommend corrective action for Air Liquide’s maintenance personnel.  IT

Behind the byline

Mike Laszkiewicz is vice president of asset management at Rockwell Automation in Milwaukee, Wis.