Reliability and Maintenance (RAM) : The Path To World-Class Performance

Reliability and
Maintenance (RAM)
The Path to World-Class Performance

27th Brazilian Congress on Maintenance
Rio de Janeiro, Brazil
September 12, 2012
Al Poling
RAM Study Project Manager
HSB Solomon Associates LLC
Dallas, TX
Survival in Nature
“It is not the strongest of the species that

survives, nor the most intelligent that survives.
It is the one that is the most adaptable to
change.”
- Charles Darwin
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2 © 2012 HSB Solomon Associates LLC
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Survival in a Global Market
“It is not the strongest, nor the most intelligent

that survives. It is the one that is the most
adaptable to change.”
“Reliability and maintenance are tools in the

manufacturing survival tool kit!”
- Al Poling

Reliability and Maintenance
Benchmarking
• Benchmarking is the use of actual operating data to

compare performance of multiple entities (e.g., companies,
sites, production units, etc.).
• A benchmark is a performance threshold used for
comparative purposes (e.g., first quartile, median, etc.).
• Benchmarks can be average values (e.g., overall average,
better half or poorer half average, etc.) of a peer group’s
performance indices.
• Benchmarks can also be any breakpoint used to
distinguish performance between better and poorer
performers.
Benchmarking
Reliability
Monetized margin loss (maintenance downtime
times standard margin) due to a facility’s
mechanical unavailability and failure to perform as
designed compared to peers in the same industry
Maintenance
The normalized cost of conserving a facility’s
physical assets so they operate at design
performance levels compared to peers in the same
industry

International Study of Plant Reliability and
Maintenance Effectiveness (RAM Study)
• Implemented in 1996 to compare company, site, and unit
 Maintenance Costs
 Mechanical Availability
• Process Industry
 Chemicals and Petrochemicals
 Refining
• Redesigned in 2010/2011
 Focused on Factors that Impact RAM Performance
 Utilizing Contemporary Measures of Performance
• Benchmarks Against Better Half Average Performance

RAM Study – Core Indices
Maintenance Cost Index (MCI)
• Maintenance Cost Type

 Expense
 Capital (replacements due to end of life)
• Maintenance Cost Categories
 Labor
 Material
 Overhead/Support
• Maintenance Work Types
 Corrective
 Preventive
 Predictive/Condition Monitoring
• Maintenance Work Categories
 Routine Maintenance
 Turnarounds Including Short Overhauls
Mechanical Availability Index (MAI)
• Captures all reliability and maintenance related downtime

 Breakdown
 Turnarounds and Short Overhauls
 Slowdowns and Rate Reductions
• Monetizes all reliability and maintenance downtime
 Assigns a standard margin for each production unit
 Plant replacement value (PRV) × 40% × annual RAM downtime
• Captures downtime by equipment category
 Rotating
 Fixed
 Instrument/Electrical
• Benchmarks Mean Time Between Failure (MTBF)
 Pumps, compressors, motors, heat exchangers, etc.

Reliability & Maintenance Effectiveness Index (RAMEI)
• Reports Net Performance Gaps

 Reliability
 Maintenance
• Highlights Areas of Excellence
 Where performance is equal to or better than first quartile
performance
 Need to understand what enables excellent performance and
replicate throughout the site
• Sums Total Improvement Opportunities
 Maintenance Cost Improvement Opportunities
 Mechanical Availability Improvement Opportunities
• Provides a Basis for a Performance Improvement Plan
Culture
• Behaviors are driven by the local culture

• There are two distinct cultures in the reliability and
maintenance community
 Traditional Culture – based on the belief that failures are
inevitable, so they focus on being good at reacting
 Contemporary Culture – based on the belief that failure-free
operation is the objective, so they focus on failure
elimination

Traditional Culture
• High Maintenance Costs (Cost/PRV >1.4%)

• Low Equipment Reliability (<96.7% mech. avail.)
• Reactive Culture (reinforce reactive behaviors)
• Majority Corrective Maintenance (80/20)
• Annual Turnarounds (T/As) with Little Scope Management
• Change (Risk) Averse
• Focus on Optimizing Reactive Behaviors
• Reinforce the Current Culture and Related Behaviors
• Inefficient and Ineffective Organizations

Consequences of Traditional Reliability
and Maintenance
• Increased risk of a catastrophic incident
• Higher recordable injury rate
• Increased downtime, therefore less production
• More off-spec product, thus lower margins
• Larger replacement capital requirements (4–10%)
• Reduced revenue, therefore lower profit
• Resource intensive
• Lower return on assets
• Cannot compete in a global marketplace

Contemporary Culture
• Low Maintenance Costs (Cost/PRV <1.4%)

• High Equipment Reliability (>96.7% mech. avail.)
• Proactive Culture (reinforce proactive behaviors)
• Majority Condition-Based Maintenance (80/20)
• Efficient and Effective Organizations
• Failure Averse
• Low T/A Frequency (5–7 years) w/Scope Management
• Accept Failure-Free Operation as Normal
• Focus on Optimizing Overall Performance

Benefits of Contemporary Reliability
and Maintenance
• Lower risk – both safety and environmental
• Uninterrupted operation
• Higher product quality
• Increased throughput
• Higher return on assets
• Smaller replacement capital requirements (0–2%)
• Increased revenue and profits
• Optimum resource requirements
• Competitive globally

Traditional vs Contemporary
Which one are you?

How do you know?
You know by measuring

and comparing performance!

The Relationship Between
Reliability & Maintenance
Reliability and Maintenance Are Inextricably Linked
Reliability
Cannot cost cut your way
to improved reliability
Maintenance
Maintenance costs are
driven by reliability…or
the lack thereof
Best performers achieve high reliability at low cost!

Poor performers have high cost with low reliability!
Each 1% increase in mechanical availability can

translate into a 10% reduction in maintenance cost!
Traditional Approach
Pressure Applied Here
Maintenance
Costs
Reliability
(Margin)

Initial Traditional Result
Pressure Applied Here
Lower
Lower Reliability
Maintenance (Margin)
Costs

Long-Term Traditional Result
Higher
Maintenance
Costs
Lower
Reliability
(Margin)

Contemporary Approach
Maintenance
Costs
Reliability
(Margin)
Apply Pressure Here

Progressive Result
Higher
Reliability
(Margin)
Lower Apply Pressure Here

Maintenance
Costs

Optimización Confiabilidad-Mantenimiento
Total
Costos Mantenimiento
Reactivo
Proactivo
Disponibilidad Mantenimiento 100%

Optimización Beneficios
Costo Total
Costos
Costo
Mantenimiento
Lost Revenue
Disponibilidad Mantenimiento 100%

Path to First Quartile
>98
98
Mechanical Availability, %
Sustainable
Industry Leaders
97
Effectiveness
High Mechanical Availability

97 and Low Cost
96 Low Mechanical Availability

and High Cost
96
Not Sustainable
95
95
Facility
<95
1 1.4 >10
Maintenance Cost, % (US $/PRV)
Efficiency and Cost

World-Class Manufacturers
• Recognize the value of reliable operations

• Focus on failure elimination (uninterrupted operation)
• Build reliability into their corporate strategy
 Engineering Design
 Procurement
 Operation
• Compete effectively in a global marketplace

Summary
• If maintenance costs are not below 1.4% of plant

replacement value, you are not a world-class performer.
• If mechanical availability is not above 96.7%, you are not
a world-class performer.
• Best performers continue to get better while poor
performers continue to fall further behind.
• Regrettably, for some, it is already too late!
• The path to world-class performance begins with the first
step… what are you waiting for?

Questions?
Thank You!
Al Poling
RAM Study Project Manager
Al.Poling@SolomonOnline.com
+1-972-739-1731
HSB Solomon Associates LLC
Dallas, TX


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Reliability and

The Path to World-Class Performance

“It is not the strongest of the species that

Proprietary and Confidential

“It is not the strongest, nor the most intelligent

“Reliability and maintenance are tools in the

Proprietary and Confidential

• Benchmarking is the use of actual operating data to

Proprietary and Confidential

Proprietary and Confidential

• Maintenance Cost Type

• Captures all reliability and maintenance related downtime

Proprietary and Confidential

• Reports Net Performance Gaps

• Behaviors are driven by the local culture

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• High Maintenance Costs (Cost/PRV >1.4%)

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Proprietary and Confidential

• Low Maintenance Costs (Cost/PRV <1.4%)

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Which one are you?

You know by measuring

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Best performers achieve high reliability at low cost!

Each 1% increase in mechanical availability can

Pressure Applied Here

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Pressure Applied Here

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Proprietary and Confidential

Apply Pressure Here

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Lower Apply Pressure Here

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Disponibilidad Mantenimiento 100%

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Disponibilidad Mantenimiento 100%

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High Mechanical Availability

96 Low Mechanical Availability

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• Recognize the value of reliable operations

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• If maintenance costs are not below 1.4% of plant

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