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Plants have a value stream. In general, raw materials arrive at one end of the plant and finished goods exit at the other end of the plant. The plant's production process is in the middle. The process may be continuous, such as in a power generating or chemical processing plant, or it might be batch and queue, such as an automotive manufacturing or food preparation plant. In all cases, there is a series of sequential processes that must be accomplished. It's crucial for the reliability of the value stream to be managed because, in most plants, process "A" feeds process "B," which, in turn, feeds process "C" to deliver finished goods to the customer. If we're managing reliability along the value stream, why then are most plants and factories organized into functional groups, in particular operations and maintenance, the focus of this article?

Figure 1 represents the typical organizational structure of a plant or factory. The plant manager is in charge. The operations manager reports to the plant manager and oversees the work of the operations supervisors. The maintenance manager also reports to the plant manager and oversees the work of the maintenance supervisors. Reliability engineering is, strangely, a dotted line connection to maintenance, which has always baffled me since reliability engineering is and always has been focused on assuring safe and effective production.

fig 1

Figure 1: The traditional plant management structure creates barriers to communication

Under the typical, functional organization structure, communication, apart from meetings which are usually formal gatherings, occurs via email. While email is a great way to convey facts, it's not a real form of communication. This organizational structure, while common and convenient from an administrative perspective, usually fails. It fails because it's functionally-focused, not value stream focused. Your value stream and the problems that interrupt it are cross-functional. If you hope to solve cross-functional problems, you need to organize accordingly.

While not exhaustive, some symptoms of the failed organization policy include the following:

  • Operations team members believe that the only thing maintenance people want to do is shut down the machines to work on them.
  • Maintenance team members believe operations people don't care about the equipment and are happy to run it into the ground to get another ton, megawatt hour, etc.
  • A high percentage of maintenance work is reactive.
  • When equipment fails, either shutting down or slowing down the line, operations people call maintenance and then vacate the scene.
  • Maintenance teams plan work without input from operations.
  • Operations managers routinely cancel or move a scheduled shutdown, sending the maintenance team back to square one in the planning process.
  • Operations teams don't participate in the reliability process by inspecting, cleaning and creating maintenance or basic care work requests.
  • Maintenance team members don't communicate and educate about how and why failures occur, and how minor changes in the operation of machines can avoid a lot of failures without compromising throughput or speed.
  • When something goes wrong, whether it's equipment-related or operations-related, the "blame game" is afoot and the incendiary comments about the affecting functional group are made by the effected functional group.

If you're experiencing some of these symptoms, you probably need to reorganize your plant, changing from functional-focused to value stream focused.

Creating a Value Stream Focused Organizational Structure
It's really quite simple to reorganize your plant to reflect your real goal of creating value (Figure 2).

fig 2

Figure 2: Organizing for success by focusing on the value system

Let's start at the top, with the senior plant management team. Typically, in a functionally organized plant, the operations manager and the maintenance manager are in separate areas, have separate, function-oriented metrics, and only communicate via formal meetings, email and on an ad hoc basis when something goes wrong. Here are some simple steps to align your senior plant management team to focus on creating value.

1. Geographically, locate your senior management team together - at the same place in the plant. Ideally, the senior plant team will be placed in the same room, or at least in a management module. The objective is to facilitate routine, ad hoc communication. Meetings are too formal, too infrequent and usually problem-focused - they fail to facilitate proactive cross-functional communication.

2. Create value stream focused goals, metrics and rewards. Typically, the production team's metrics and reward systems (both extrinsic and intrinsic) are based on maximizing tons, megawatt hours, or some other production volume metric. The maintenance team's metrics and reward systems are usually based on minimizing parts, materials and labor costs. Neither goal, in-and-of-itself, can maximize value creation. Maximizing value creation requires that the plant optimize production volume and costs. To facilitate this, create a balanced scorecard of metrics that spans the value stream and facilitates cross-functional cooperation. For example, a balanced scorecard and associated rewards for the operations manager might include 30% for overall plant profitability, 40% for typical operations goals (production yield and quality) and 30% for typical maintenance goals (availability and maintenance cost). For the maintenance manager, the balanced scorecard would be exactly the same, except it would be 40% focused on typical maintenance goals and 30% focused on typical operations goals.

It's important to note here that the common elements of overall equipment effectiveness (OEE) - availability, yield and quality - aren't independent. Increasing yield (speed or throughput) can detrimentally affect availability, quality and cost. This mutually-dependent relationship between goals sets the organization up for conflict and failure if we don't manage cross-functionally to focus on the value stream. The balanced scorecard gets everyone on the same page.

3. Employ Management By Wandering Around (MBWA) as a team at least once a week. As the name implies, MBWA requires the team to take a look around. Done correctly, it's very effective. Here are some tips for making it work.

    • Senior management makes unannounced MBWA walk-throughs of the plant as a team, which includes the plant manager, operations manager and maintenance manager. Make sure your walk-through is focused on your Top 10 or Top 20 problem or loss areas.
    • Look at equipment, but above all, TALK WITH (not to) PEOPLE - be an active listener. Remember, on the plant floor THEY'RE THE EXPERTS. Ask them:
      • How's it going?
      • How's their family?
      • Are there interesting things going on in their lives? Make note of the personal stuff and ask them about it the next time you see the individuals with whom you spoke.
      • What's working well in the plant?
      • What's not working well in the plant?
      • What problems are imminent?
      • What can you do to make things better and easier for them?
    • Meet with your team to discuss your observations and findings. Summarize your findings into action plans with assignments and timelines.
    • Follow-up on the ideas and suggestions you received from employees. Tell them what you're going to do to address their concerns. If there's nothing you can do in the near term or in the foreseeable future, tell them why. They deserve the respect of honesty.

    With this phase complete, you can then start focusing on bringing the value stream concept to the supervisor level in the plant. Rather than situating your operations supervisors together in an office or area and your maintenance supervisors in another separate office or area, create value stream production area teams and locate them together to facilitate the all-important informal communication. Create a balanced scorecard for them that is 10% focused on plant productivity (see Figure 3), 20% focused on the performance of the production area they feed into and/or feeds into the area of their responsibility, 40% focused on the functional performance within their value stream production area (operations or maintenance) and 30% focused on the complementary functional performance within their value stream (operations or maintenance).

    fig 3

    Figure 3.  Example of a balanced scorecard for process area supervisors

    The Lean Inspection
    How often do inspections fail to lead to actions that are effective and implemented in time? If you analyze inspections, I think you'll be disappointed by your answer to this question. To be successful, the problem must be found in the inspection, then reported, diagnosed properly, assigned a priority, approved by a supervisor or manager and acted upon. If each step in that serial process is 80% effective, as Figure 4 shows, the overall effectiveness of the inspection is only 33%!

    figure 4

    Figure 4: The Inspection process, when performed as a decoupled series of actions, has a low probability of success.

    The problem is the hand off in communication. If the person detecting the problem lacks the skill to diagnose it, further work is required. Likewise, once it's diagnosed, it has to gain approval from a busy supervisor before action can be taken. The traditional approach to inspections is fraught with risk in that hand offs won't occur due to communication problems and time constraints. With every hand off, you must find the next person in the process and then bring that individual up to speed. It's an ineffective and inefficient process. Moreover, operators, mechanical maintenance techs, electrical maintenance techs, instrument and control (I&C) techs, reliability techs, etc. may all be inspecting the same machine, but looking at it from their own narrow perspectives.

    What's the answer, then? It's applying the lean cell concept to plant inspections and walk-throughs. As a team, the operations and maintenance supervisors, along with rotating members of their teams to include a lead operator and a lead maintenance technician, should walk through the plant at the start of each day or shift with a Top 10 or Top 20 list of equipment and operations "bad actors" for their respective area. If possible, include lead mechanical, electrical and I&C techs in the walk-through as many of the problems you encounter will have multidisciplinary elements. A team approach facilitates on-the-spot problem detection, creation of diagnostic and prescriptive actions, and approval to execute those actions. All parties are present. Goals for your cross-functional lean inspections should include:

    1. Identify problems and opportunities
    2. Identify the actual or potential impact on the plant

    • Lost production
    • Increased cost
    • Health, safety and environment concerns

    3. Identify and classify causal factors for the undesirable condition

    • Lack of/insufficient procedure
    • Lack of/insufficient training
    • Equipment/material problems
    • Lack of supervision/enforcement
    • Other

    4. Identify potential action plans
    5. Engage support where required
    6. Perform business case analysis
    7. Make a decision and act upon it

    By incorporating all aspects of the inspection process into a single, multifunctional lean cell action, the likelihood of success increases and time wasted on cumbersome communication and hand-offs is minimized. Lean cells make perfect sense for a manufacturing process. Why not apply the same principles to the inspection - our primary reliability assurance process?

    As for your reliability engineering team, stop using the word reliability as a synonym for maintenance. Require your reliability engineers to help you analyze, understand and mitigate risks to the value stream. Focus reliability engineering talent on each production process in the value stream. They should accompany the operations and maintenance supervisors and team members during their structured lean inspections and participate in senior management MBWA walk-throughs.

    Conclusion
    Gaining a step change in the performance of your plant requires a behavioral change. Continuous improvement isn't enough. Organizing for success is a critical first step. Most plants are organized to get exactly what they're getting - conflict, blaming and non-cooperation. Organize your people, your metrics, your scorecards and your inspection processes to achieve your real goal - creating value for the shareholders and stakeholders of the organization.

    Drew D. Troyer, CRE, CMRP is the founding principal of Sigma Reliability Solutions. He has more than 20 years of experience in the industrial reliability engineering and management field and has published more than 200 books, chapters, technical papers and articles on the subject. He was a cofounder and the former CEO of Noria Corporation. Presently, he's working extensively in Australia, on assignment with Visy Pulp & Paper. www.sigma-reliability.com.

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