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Strategic dimensions of
maintenance management
Dimensions of
maintenance
management
Practical implications
Maintenance is often regarded as a necessary expense that belongs to the
operating budget. It is a common item on the hit list of cost-reduction
programs. With asset availability and reliability becoming critical issues
in capital-intensive operations, the strategic importance of maintenance in
such businesses should be recognized. This paper identifies four strategic
dimensions of maintenance management. Making the right decisions that
relate to these dimensions will enable organizations to rise to the challenge
of the new business imperative. The thorough review of options and detailed
discussion of key decision areas offer managerial insights into ways for
achieving business success through excellence in maintenance operations.
Introduction
Turbulence is the hallmark of the contemporary business environment. In such
a trying time, organizations are hard pressed to enhance continuously their
capability to create value to customers and improve the cost effectiveness of
their operations. Maintenance, as an important support function in businesses
with significant investments in physical assets, plays an important role in
meeting this tall order. It has been found that in the UK manufacturing
industry, maintenance spending is between 12-23 per cent of the total factory
operating costs (Cross, 1988). In refineries, the maintenance and operations
departments are often the largest and each may comprise of about 30 per cent
of total staffing (Dekker, 1996). Acquiring the right mix of physical assets and
making the best use of those already in place to meet business needs are the
Part of this paper is based on the thesis submitted by the author for his PhD degree awarded by
the University of Toronto.
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Figure 1.
Input-output model for
the enterprise system
Service-delivery options
In the past, when the merits of vertical integration were emphasized in
management thinking, maintenance activities were typically performed by
internal suppliers. External suppliers were used only under the following
situations:
.
The in-house maintenance service provider did not have sufficient
capacity to meet peak demand. In such cases, short-term outsourcing
would be used to fill the shortfall.
.
The expected volume of maintenance work was too small and the
variety of maintenance-related specialist skills too wide to justify a
specialist on standby.
.
The organization did not have the expertise and specialized facilities to
perform the maintenance work; the cost of developing such capabilities
and assets in-house would be prohibitive while there were established
suppliers in the market to provide the required services.
In recent years, a new trend has emerged that subscribes to the concept that
unprecedented business performance can be achieved if the skills and resources
are leveraged to focus on a set of core competencies a bundle of skills and
technologies that enables an organization to provide a particular benefit to
customers (Hamel and Prahalad, 1994). Thus, maintenance activities for which
the company has neither a strategic need nor a special capability are prime
candidates to be outsourced. The maintenance services typically outsourced
include the maintenance and repair of generic and common equipment,
electronics, environmental equipment, mobile fleets, buildings and grounds,
projects and improvements, as well as plant overhauls (Campbell, 1995).
The selection of maintenance service-delivery options should not be
regarded as a purely tactical matter. The decision should be made in the
context of the company's overall business strategy. When companies consider
outsourcing of their maintenance activities as a strategic option, they need to
answer three key questions:
(1) What should not be outsourced?
(2) What type of relationship with the external service supplier should be
adopted?
(3) How should the risks of outsourcing be managed?
What should not be outsourced
There are two key strategic issues that determine the option between
outsourced and internally provided services (Quinn and Hilmer, 1994). The first
factor is the potential for achieving a sustainable competitive edge by
performing the work internally. If management perceives that excellence in
performing certain maintenance services done cheaper, better or in a more
timely manner will enhance the company's competitiveness, such services
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should be carried out internally. The second factor is the degree of strategic
vulnerability if the work is outsourced. If there is insufficient depth in the
market, an overly powerful supplier can hold the company hostage. On the
other hand, if the individual suppliers are too weak, they may not be able to
supply quality and innovative services as good as the buyer could by
performing the work internally. Knowledge is another important dimension
that affects vulnerability. It is extremely risky to outsource work when the
company does not have the competence either to assess or monitor suppliers, or
when it lacks the expertise to negotiate a sound contract.
The caveat that companies should not outsource those activities that are
crucial elements of their core competencies is often not heeded when
outsourcing decisions are driven by cost-cutting and headcount-reduction
criteria. As a result, control of activities critical to establishing the company's
competitive advantage can be unwittingly ceded to suppliers. Another common
fallacy in making outsourcing decisions is to regard ``core competencies'' as
``things that we do best''. This misconception is damaging as it encourages
management to outsource activities with which it is having problems. If the
company has difficulty in managing an internal supplier, it probably cannot
communicate its requirements adequately to the external supplier. Thus,
internal problems are traded with more sticky problems of dealing with
external suppliers. It will be even more devastating if the problematic activity
over which the company relinquishes control is a critical link in its current or
future value-creation process.
When an external supplier offers a significant cost-saving deal on the
company's core activities, management should refrain from outsourcing them.
Instead, the internal service provider should be challenged to improve its costeffectiveness, using the supplier's offer as a benchmark of performance.
Furthermore, one should not rule out the possibility that the supplier may be
using a ``loss-leader'' tactic in making the favourable offer to the client the
price differential could well be the supplier's investment in controlling and
developing such strategic capabilities (Lonsdale and Cox, 1997).
Not all the ``things that we do best'' would qualify as the organization's core
competencies. Venkatesan (1992) argues that these capabilities are core to the
organization only if they:
.
have a high impact on what customers perceive as the most important
service attributes;
.
require highly specialized knowledge and skills and specialized assets,
all of which are in short supply; and
.
involve technology that is still fluid, and a clear technological lead is the
likely prize of being the successful pioneer in applying that technology.
When a maintenance service, which can be one of the ``things that we do best'',
has been classified as a non-core activity, it can be considered to be outsourced.
However, the decision depends on the relative costs of in-house and external
provision of that service. Apart from the direct costs involved, the relevant
transaction costs in the two options are:
(1) Internal provision: continuing R&D, personnel development and
infrastructure investment that at least match those of the best supplier
to maintain a competitive edge; overhead for managing the in-sourced
activities.
(2) Outsourcing: the costs of searching, contracting and controlling the
outsourced activities.
If it is found to be more cost-effective to keep an exemplary but non-core
capability, the company should explore the possibility of commercializing the
expertise to serve the needs of non-competitors. For example, a railway
company may have developed a high-speed, in-process inspection system to
monitor the wear on brake plates while the train car is being cleaned in the carwash. Since the automated system is not a key element of the company's
competitive edge, it can be made available to other railway companies or
maintenance service providers to generate extra revenue.
Choosing the type of contractual relationships
The potential benefits of outsourcing maintenance activities include less hassle,
reduced total-system costs, better and faster work done, exposure to outside
specialists, greater flexibility to adopt new technologies and more focus on
strategic asset management issues (Watson, 1998; Campbell, 1995). However,
these are seldom realized because the contracts tend to be task oriented rather
than performance focused, the relationships between the client (user) and the
contractors are adversarial rather than partnering. This phenomenon is caused
by the problem that the profit motives of the parties involved in the
relationship are not shared the contractor wishes to maximize returns, whilst
the client's major goals are to minimize costs. As a result, competitive bidding
is the preferred mechanism for selecting contractors. In response to the lack of
long-term commitment from the client, the supplier makes minimal investment
in staff development, plant, equipment and new technologies. This short-term
tactic adopted by the contractor, in turn, often causes the client to replace one
adversary with another, thereby setting a vicious circle in motion.
The type of maintenance contract in use is an important factor that
determines the relationship between the outsourcing company and its service
suppliers. Martin (1997) classifies maintenance contracts into three types,
namely work-package contracts, performance contracts and facilitator
contracts (see Figure 2). Brief discussions of these contracts follow.
Work-package contracts are the most basic form of maintenance contracts.
Design of the maintenance concepts, planning and control logic, as well as
spare-parts management are performed by the client, who tells the contractors
when they are needed to do what maintenance activities. Evidently, this mode
of contracting is task oriented, and the contractors are engaged as mere
providers of skilled manpower and tools to execute well-defined work specified
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Figure 2.
Types of
maintenance contract
associated with service delivery does not motivate the external service
providers to apply innovative practices and make continuous improvement.
PSMC is the preferred contracting policy for strategic outsourcing because
of its potential of leveraging the contractor's knowledge and creativity to
deliver optimal maintenance service. The experience of government agencies
and state-owned organizations in Australia which had outsourced their
maintenance activities showed that more value can be obtained from this type
of contract by incorporating the following features (Pyman, 1998; Watson,
1998):
.
specify performance measures linked to the client's business plan and
regulatory requirements;
.
the supplier's management staff and field technicians dedicated to the
contract are located at the client's premises the integration provides
the benefits of an in-house workforce such as instant communication,
minimal disputes, ownership of work and system knowledge;
.
contractor and client use the same maintenance management system
for processing of both job and financial transactions; and
.
reward performance with contract extension penalise persistent nonperformance with termination of contract.
The co-operative relationship engendered in this approach can significantly
reduce the transaction costs of receiving maintenance services and information.
This is because contracts focusing on demand-side requirements (the desired
maintenance performance), joint rewards and information sharing are more
flexible, less complex and less expensive to execute.
Term-lease contracting offers the benefits of PSMC at a higher cost by
taking the burden of capital investment off the outsourcing company. For
assets already owned by the company, transferring the ownership of these
items to the maintenance contractor provides a source of cash infusion to the
company.
Frey and Schlosser (1993) specify the proper focus of strategic outsourcing.
In the case of outsourcing maintenance services, companies should focus more
on enhancing business-critical performance parameters rather than on
reducing headcount, more on minimizing total cost than on minimizing
elemental costs, more on capturing asset-management knowledge than on
buying maintenance services, more on developing meaningful relationships
with a few suppliers than on enlarging the supplier base.
Managing the risks of outsourcing
While outsourcing a whole range of maintenance services has the potential for
significant benefits, it also exposes the company to the following risks (Quinn
and Hilmer, 1994; Campbell, 1995):
.
Loss of critical skills. The company can quickly lose its critical
maintenance skills after the related services have been outsourced. It
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Apart from the above risks, there are other factors that render the expected
benefits of outsourcing unattainable. These include:
.
Shifts in the balance of power during the contract period. While managers
are alert to the risks of outsourcing into a supply market with only one,
or very few, feasible suppliers, they often overlook the possibility that
the balance of power may change during the period of a contract even in
broader supply markets. Companies that have lost their maintenance
skills will be at the mercy of their service suppliers when the contractual
relationships are adversarial. Signals that demonstrate a contractor's
dominance over the relationship include a decline in responsiveness to
requests, a decline in the quality of the work provided, and the
replacement of the original contract team with one of an inferior grade.
Employee morale. Most employees perceive outsourcing as a negative
development. They have to face the uncertainties of radical changes
such as new roles, new skills or, if they also consider the option of
moving to an external service supplier, new organizations. Employee
morale will suffer if these anxieties are not addressed by management in
the early stage of the move (Lonsdale and Cox, 1997).
Hidden costs. Companies often underestimate the set-up costs of
outsourcing, including staff-redeployment costs and longer-thanexpected hand-off or parallel running costs, as well as the costs of
contract management (Earl, 1996). Excess charges are another form of
hidden costs. They arise due to incomplete coverage of a contract.
Certain aspects of maintenance work are mistakenly believed to have
been covered in the scope of the contract.
Access to external talents. Contrary to common belief, access to external
talents can be limited. First, the outsourced work is often supported by
the company's previous technical staff. Second, contractors often siphon
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This type of work can be prioritized, planned and scheduled in the long
term.
(3) Third-line work. It comprises major shutdown, plant overhaul, capital
projects and modifications. It creates peak loads at medium to long-term
intervals.
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responsibilities for first-line (level 1) work, and for the necessary resources, are
best shouldered locally, within each plant. Due to its specialized nature, thirdline (level 3) work is usually performed by a centralized unit located away from
the plant.
The knowledge and skills involved is another factor that determines how the
maintenance function is organized. If the work requires a new capability to be
developed by the service provider, as in the case when power electronics is first
introduced to replace electro-mechanical controls in a railway system, it is best
done by a centralized unit. Apart from simplifying the management of the
learning process, the requisite expertise can be built up more quickly when all
such work is channeled to the central unit. After ample experience and deep
knowledge of the work have been acquired, deploying decentralized units to
provide the maintenance service becomes a feasible option.
The degree of centralization of the maintenance function can also be a
function of asset life cycle. Consider a railway system, during the initial stage;
most of the activities are project oriented. Accordingly, only a small and
centralized maintenance team would be required. When the system gradually
entered into full operation, both the level of activities and the tradeforce of the
maintenance function would increase, thereby driving the need for
decentralization. As the system matures and the organization becomes more
decentralized, effective communication and synergy will suffer. Through
automation, some dispersed activities can be performed centrally to improve
performance.
Workforce specialization
Trade specialization is a characteristic of traditional maintenance
organizations, the drawbacks of which have been highlighted earlier. Where
the work requires special skills and where the workload can be made relatively
smooth, it is appropriate to adopt trade specialization. This situation can exist
in the second-line reconditioning workshop. However, it is more usual to find
maintenance work that requires a range of skills, although one skill is usually
predominant. In such cases, inter-trade flexibility is of paramount importance.
This can be achieved by developing a multi-skilled tradeforce. However,
making the transition from a highly specialized structure to a flexible one is
often a lengthy and expensive process because of the investment in training
and the installation of the new structure
Apart from introducing inter-trade flexibility within the maintenance
tradeforce, there is another emerging trend in maintenance management
amalgamating the roles of plant operator and first-line maintainer. The
operator-maintainer is trained both to operate the plant and do first-line
maintenance across all the traditional trades. An advanced form of this
approach is autonomous maintenance, a key element of total productive
maintenance (TPM) (Nakajima, 1988). The concept, to be discussed further in
the next section, fosters a sense of plant ownership by developing the operatormaintainer to be involved in continuous improvement.
Dimensions of
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skilled engineering to support the more complex, varied, flexible and changing
process technology because of the frequent interactions (Clamp, 1996).
Teamwork
Hierarchy and fractionated tasks (a result of specialisation) are the design logic
of traditional organizations. In this approach to organizational design, people
are not expected to respond to unpredictable events. It works fine for stable
environments, but is ill-suited in work situations with inherent uncertainties, as
in the case with maintenance work: the multiple possible locations of a fault,
the variability in the extent of damage caused by a failure and the differing
windows of opportunities available for disruptive work to be performed on the
plant. Self-managing teams (SMTs), which aim at leveraging and enhancing
employees' capabilities and commonly used in agriculture, mining, and
construction, are better suited for such uncertain environments. Members in a
self-managing team are responsible for executing the task as well as
monitoring and controlling their own performance. Each SMT needs to contain
sufficient variety to match the range of its work tasks. It also needs the
autonomy to adjust and reorganize its internal resources, skills and
competencies in response to the changed needs of its work. With these design
features, SMTs are immensely flexible and responsive, and members are highly
satisfied in doing their work.
Sociotechnical systems (STS) concepts (Taylor and Felten, 1993) provide the
theoretical basis for SMTs. The design principles for establishing SMTs as
proposed by Kolodny and Stjernberg (1993) are:
.
Team activities are task oriented and designed with a strong
performance focus.
.
The team is organized to perform whole and integrated tasks.
.
The team should have some autonomy (that is, control over many of its
own administrative functions such as self-planning, self-evaluation and
self-regulation.) Furthermore, members should participate in the
selection of new team members.
.
Detailed specifications of tasks, procedures and methods are kept to the
minimum. Only those essential for information sharing with outside
parties, for scheduling or for coordination are established. Within the
team, standards are arrived at through agreement on group norms. The
flexibility allows the team to evolve and change as members grow and
develop, and increase their competencies through multi-skilling.
.
Multiple skills are valued. This encourages people to adapt to planned
changes or occurrence of unanticipated events.
Examples of successful SMTs and their critical success factors are reported by
Hackman (1986a), Kolodny and Stjernberg (1993) and Gephart and VanBuren
(1996). Work groups consisting of operator-maintainers, introduced earlier,
who are also empowered to manage their day-to-day activities with minimum
direct supervision are SMTs with first-line maintenance work in the portfolio of
their responsibilities (Kelly, 1997).
Introducing self-managing teams in an existing maintenance organization is
a major undertaking with pitfalls. Figure 3 shows a four-stage process for
making the transformation.
Self-managing teams do not exist in isolation. A support system must be in
place to make them successful, as highlighted in some of the managerial work
in the transformation process. The support systems that should be in place for
successful implementation of various strategic initiatives of maintenance
management are discussed in a subsequent section.
Dimensions of
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Maintenance methodology
To keep it in running condition, a plant needs to receive primary care, which
includes routine servicing such as cleaning, fuelling and lubricating, as well as
periodic inspection and calibration. On top of these essential activities, policies
have to be established to maintain plant availability. There are four basic
approaches to maintenance: run-to-failure, preventive maintenance, conditionbased maintenance and design improvement.
(1) Run-to-failure (RTF). Only routine servicing is performed on the item
until it fails. This can be justified when the impact of failure is
inconsequential or the investment in preventive measures exceeds the
expected benefits of improved reliability or higher availability.
(2) Preventive maintenance (PM). Items are replaced or returned to good
condition before failure occurs. The most common forms of this policy
are scheduled PM and condition-based maintenance (CBM), respectively.
In the former approach, PM action is performed on the item at the
scheduled time regardless of its actual condition. The schedule can be
usage based or time driven. Since the schedule is often drawn up on the
supplier's recommendation made with limited, if any, local knowledge of
Figure 3.
Stages of
managerial work for
creating SMTs
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Being relieved of the primary care activities, the expertise of the maintenance
department can be redeployed to focus on more specialised work such as major
repairs, overhauls, tracking and improvement of plant performance, creation,
replacement and modification of physical assets. Instead of having to attend to
numerous chores, it can devote its resources to address strategic issues like
formulating maintenance policies, implementing maintenance information
systems, scanning and introducing new maintenance technologies, training
and development of the workforce in operations and maintenance.
TPM is not a quick solution. It requires a change in employees' attitude
and their values, which takes time to accomplish. Therefore, it demands
long-term thinking and planning. Quick and company-wide performance
gains should not be stressed in the initial stage. Senior managers must
demonstrate their commitment to TPM by devoting time and allocating
resources to create and sustain the cultural change and to provide
necessary training to employees to achieve autonomous maintenance.
Experience shows that planning and correct timing of moves are important.
Full-scale implementation will be short-lived if it is not done after a
corresponding change in work culture. To limit uncertainty and enhance
the chances of success in the initial stage, small-scale pilot projects should
be conducted where quick and visible benefits can be expected. The
experience gained from these pilot projects can also be used to fine-tune
the subsequent full-scale implementation (Tsang and Chan, 2000).
Support systems
The strategic initiatives discussed above, such as multi-skilling, inter-trade
flexibility, outsourcing, RCM, TPM, redesign of work processes and
structures, often fail to deliver the expected benefits. The main reason for
such failures is that values, management behaviours and support systems
(including information, training, performance management and reward
systems) that align with these initiatives were not in place when the
change programs were implemented. Effective deployment of information
technology[1] in support of maintenance operations is also a critical issue. The
convergence of digital technologies that gave birth to e-business has created
new options for maintenance, just as it does for other business functions.
Participation and autonomy
Employee empowerment is a core concept shared by these change
programs, with the expectation of creating internal commitment in
employees. To get internal commitment, management must involve
employees in defining work objectives, specifying how to achieve them and
setting stretch targets. If employees have little control over their destinies,
the organization only gets external commitment that is akin to contractual
compliance. Many organizations believe that they have embraced
empowerment in their change programs. However, in more cases than not,
employees receive mixed messages in these programs. For example, in
many change programs all the steps involved have been precisely
prescribed by the change agent (management). The mixed message
employees get in these initiatives is ``do your own thing the way we tell
you''. With all actions and requirements defined externally, the resulting
behaviour cannot be empowering and liberating. While autonomy should be
a core concept of empowerment, management retains control through
information systems, processes and tools (Argyris, 1998). Thus, employee
participation and autonomy must be in place for empowerment to take
root.
Hierarchy and communication
Evolutionary psychology, the science which asserts that human beings
retain the mentality of their stone-age forebears, provides insights into
human behaviour at work. Some of its findings that relate to hierarchy and
communication in organizational settings are (Nicholson, 1998):
.
People tend to classify others into in-groups and out-groups. It explains
why some groups, such as operations and maintenance, within
organizations are so difficult to mix, an impediment to communication
and organizational learning.
.
Bad news is heard first and loudest.
.
People tend to be risk averse when they stay in the comfort zone. They
are more willing to take risks when dissatisfied with the status quo.
.
Informal communication networks exist throughout the organization
and information passes through them rapidly. Having managers who
wander around and ask questions can be an effective way to
communicate, as long as it is done in a climate of trust and openness.
Such informal practices also have the benefits of sending out positive
signals and reinforcing official messages.
Managers will do well to recognize the above innate tendencies of human
beings when communicating with employees. This is particularly important
on sensitive issues such as outsourcing, de-layering and restructuring of
work. Framing the situation as a crisis looming on the horizon (losing
competitiveness due to high maintenance costs) and taking steps to address
the expected anxieties of employees (no-lay-off policy) are useful moves to
get buy-in for change programs.
In a culture that stresses participation and autonomy, the function of
hierarchy is not control but support. Decisions on broad-based issues, such
as implementation of RCM or introduction of a new reward system, are
made after management has entered into a dialogue with the affected
employees. In their new roles, managers provide overall direction for the
work that is clear and engaging. They also offer hands-on coaching and
consultation to help employees avoid unnecessary losses of effort, to
increase task-relevant knowledge and skills, and to formulate uniquely
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appreciation and one-shot responsibilities such as leadership in a systemcommissioning task or a plant-refurbishment project.
A wide variety of remuneration programs that take into account factors
other than rank, experience and length of service are being used in some
progressive organizations. In the pay-for-skill program at MTR Corporation,
Hong Kong, maintenance tradespersons are paid for acquiring and applying
new skills and knowledge required by their jobs. Corning and Eastman
Chemical have similar reward programs to develop their multi-skilled
employees. Pay-for-performance and goal-sharing programs award bonuses
that are linked to group performance. For example, ``work-group excellence''
is a pay-for-performance program at Xerox that rewards the performance of
a work team as a whole. Within each team, rewards are distributed on the
basis of factors such as experience. In Corning's goal-sharing program, 75
per cent of each bonus dollar award is based on how well a business unit
meets its objectives. The remaining 25 per cent is based on Corning's
return on equity. All employees in the unit receive the same percent of
base pay as a goal-sharing bonus (Gephart and VanBuren, 1996).
If an organization stresses teamwork, the remuneration structure should
promote teamwork rather than undermine it. From a study on two bestpractice organizations (Fel-Pro and Steelcase), Meimoun (1995) identifies the
following critical success factors for a reward and recognition system that
encourages teamwork:
.
Argyris (1998) cautions that offering employees the ``right'' rewards alone is
unlikely to produce sustained empowerment. The power of such methods
wears off with use, creating dependency to maintain commitment. Trust,
involvement and autonomy are the lasting ingredients that drive human
energy and activate the human mind.
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Performance measurement
Performance is measured with reference to clearly defined objectives.
Measuring maintenance performance in its totality is complicated because
multiple interacting objectives are involved. Some of these aims affect each
other in an inverse relationship. For example, if prompter service and faster
response to service calls are desired, it may be necessary to employ more
people in maintenance, have more strategically located sub-stores, and
better communication and transportation methods. Such decisions will
probably increase the cost per maintenance hour (Priel, 1974). One may
argue that better service and lower maintenance costs can be achieved by
reengineering the process of delivering maintenance services. However,
major process innovations in a specific function such as maintenance do
not occur continuously. In view of the complications, it becomes common
practice to measure individual aspects of maintenance performance. The
commonly used maintenance performance indicators can be classified into
three categories (Campbell, 1995):
.
Measures of equipment performance, such as availability, reliability and
overall equipment effectiveness.
.
Measures of cost performance, such as labour and material costs of
maintenance
.
Measures of process performance, such as ratio of planned and
unplanned work, schedule compliance.
Typically, these performance indicators are tracked because of the following
reasons:
.
These indicators have been used by the organization in the past.
.
Some of them are used for benchmarking with other organizations.
.
The required data are easy to collect.
.
Some of them are mandated by regulators or the corporate office.
These are diagnostic measures (Simons, 1995) that determine whether the
various aspects of maintenance operations remain in control or compare
favourably with counterparts elsewhere. Thus, they are used largely to
support operational control and benchmarking purposes. Given their
retrospective and introspective perspectives, these generic measures are
inappropriate to provide a holistic assessment of maintenance's
performance. Furthermore, it does not provide information for predicting
the unit's ability to create future value needed to support the business
success of the organization. To achieve that purpose, performance measures
that are linked to the espoused strategy of the maintenance function must
be tracked. These are known as strategic measures. Tsang (1998) presents
a process for managing maintenance performance from the strategic
perspective (see Figure 4).
Dimensions of
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Figure 4.
Strategic maintenance
performance
management process
Figure 5,
The balanced scorecard
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other and their operating practices are inconsistent. This is because these
so-called legacy systems were developed at different times to serve their
dedicated purposes with little, if any, due consideration for integration with
other systems.
The emergence of enterprise systems (ES) software packages with
fully integrated modules for the major processes in the entire organization
offers the promise to integrate all the information flows in the
organization with the following benefits:
.
Replacing a large number of the legacy systems with an integrated
one produces significant cost savings. It eliminates the expensive
tasks of maintaining redundant data, transferring data between
incompatible systems, and updating and debugging obsolete
software code.
.
Managers can make informed decisions when data on multiple
aspects of operations are readily available for analysis. If the
financial-reporting system cannot talk with the maintenancemanagement system, then optimal decisions on equipment
replacement cannot be made with confidence. If the work-order
control system is incompatible with the inventory-control and
purchasing systems, then maintenance jobs cannot be done
efficiently when the critical spares are not available. Fragmentation
of information is a cause of incoherent decisions.
The decision to install a generic, off-the-shelf ES has its pitfalls. Managers
must consider the implications on their business imperatives. They should
check whether the logic of the system is in conflict with the logic of the
organization's practices. The suitability of an ES should be determined
from a strategic perspective. In other words, the enterprise should be
stressed, not the system (Davenport, 1998).
If maintenance is a significant function in the organization, the ES
should have modules supporting maintenance management. The required
features in these modules include facilities for maintaining records of
equipment history, support for preventive maintenance, work-order control,
inventory control and purchasing. Through integration with the other
software modules that handle payroll, accounts payable, cost accounting,
shop-floor data collection, knowledge-base diagnostics, etc., real-time
decision-support information can be retrieved by managers using userfriendly interfaces.
To leverage the benefits of enterprise systems that support maintenance,
managers are advised to specify the following requirements in the software
modules:
.
To exploit the wealth of information embedded in their maintenance
data, there should be functions that support modelling of life-time
distributions, inspection or preventive maintenance schedules, or
E-maintenance
A major aspect of maintenance management is optimisation of inspection,
maintenance and replacement decisions. This ability depends on the
availability of good quality and timely data captured by the various
computerised systems in supplier, user and service-provider organisations
(Tsang et al., 2000). The volume of data available to managers responsible
for maintenance is expanding rapidly. The problem is exacerbated in the
case of organisations with operations covering large geographical areas,
such as public utilities, transportation and mining operators, building-
Dimensions of
maintenance
management
33
JQME
8,1
34
Dimensions of
maintenance
management
35
Plant specialization
Workforce location
Workforce specialization
Structuring of
maintenance work
Interface with operations
Key decisions
Focus on asset-centred
methodology RCM
Focus on people centred
methodology TPM
Focus on maintenance as
a core competency
Outsource maintenance
activities which are not
part of the company's core
competencies
Activities to be kept
in-house
Relationship with external
service suppliers
Managing the risks of
outsourcing
Support systems
Maintenance methodology
Strategic options
Table I.
Strategic dimensions
of maintenance
management and
the key decisions
Service-delivery options
36
Dimension
JQME
8,1
Dimensions of
maintenance
management
37
JQME
8,1
38
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