Life Cycle Asset Management

I read your article that compares maintenance costs to RAV and am inquiring to see what is your definition of ‘maintenance cost’ when measuring replacement asset value? Are you strictly referring to labor costs, or is this the cost of labor, services and capital equipment purchases to repair, replace or upgrade an existing machine?

Dear Tom,

In the example, ‘maintenance costs’ meant the direct and overhead maintenance costs – labor, parts, subcontract services and allocated overheads (i.e. supervision, management, associated infrastructure, etc. proportioned to direct labor hours) – incurred during the ‘normal’ operation of the car (i.e. the car is driven by a well-trained, responsible driver at the wheel). If you have a store/warehouse for maintenance parts then you add the proportionate cost of keeping and running the store to support the maintenance effort as part of the total cost of maintenance.

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Plant and Equipment Wellness (PEW) is a Physics of Failure based methodology for equipment failure prevention and defect elimination that results in the fewest activities, least resources and lowest expenditure to produce outstanding operational equipment reliability. PEW identifies the necessary business-wide processes and departmental actions an organisation needs to apply to get high plant and equipment availability. With high uptime comes more productivity, higher operating profits, and less capital expenditure. 

As much as possible PEW uses simple techniques that can be done by shopfloor people. Most companies do not have large staffs of university trained maintenance and reliability professionals. They have knowledgeable and experienced maintenance practitioners that know their plant and equipment. PEW does not require specialist RAMS software that none but mathematicians can understand, that very few companies can afford to buy or contract, and requires assumptions about the future that are hopeful at best. 

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Any standard EAM system can be adapted to achieve Operational Excellence with the PWW EAM methodology.

Rather than going from policy to practice, Plant Wellness Way starts with how to create a healthy environment for parts microstructure when equipment is in-service. By focusing on creating healthy operating environments for components, machines, equipment, and plants, your operation will perform at world-class levels of reliability.

The standard range of Enterprise Asset Management models available will typically use an EAM Policy to decree the purposes of the EAM system. From this statement processes and practices necessary to achieve the EAM Policy aims are chosen. People will then aim to meet the policy requirements for their team or department without taking the flow on consequences into account. As a result, businesses will unintentionally create an EAM system that instils randomness and variability into the company. In this situation is it nearly impossible to create a system that achieves operational excellence success.

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An example of an Accuracy Controlled Enterprise ACE 3T (Target – Tolerance – Test) Procedure with reliability standards to install taper spherical roller bearings on adaptor sleeves in Plummer blocks with taconite seals for 30mm-250mm diameter conveyor shafts 

 Machine performance is totally dependent on human beings. To address the problem of human error causing equipment failure, an Accuracy Controlled Enterprise sets best practice quality standards and uses 3T Target-Tolerance-Test work task quality control that assures high quality workmanship for high reliability results. Their work procedures are standardised so everyone follows the same methods to produce the same results, their training teaches people how to do craftsmanship work that creates outstandingly reliable plant and machinery. They create the reliability they want and as a result achieve operational excellence.

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ENSURING YOUR MANAGEMENT DESIGN-IN OPERATIONAL EXCELLENCE TO GUARANTEE THE LASTING SURVIVAL OF YOUR COMPANY IS WHY QUALITY GURU W. EDWARDS DEMING ASKED HIS FAMOUS “WHAT?” AND “HOW?” QUESTIONS.

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Deming would expect that managers had a solid answer to the question: “If you want your company to reach Operational Excellence in the next five years, then explain to us all, EXACTLY HOW will you do it?”

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WHEN YOU DO A RELIABILITY FAILURE STUDY LOOKING TO PROTECT YOUR BUSINESS AGAINST LARGE UNCOMMON FAILURES, AND THOSE FAILURES THAT ARE VERY COMMON BUT THOUGHT TO BE TOO SMALL TO BE A SERIOUS PROBLEM, BE SURE TO DO LIFETIME FINANCIAL ANALYSIS WHEN DECIDING THE FAILURES TO INVESTIGATE

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I am to do a reliability failure study and would like to know the definition of repetitive failure with respect to some recognized reliability standard.

We want to apply the recommendations in the standard for failure codes in our CMMS system to decide which equipment failures need a reliability failure study. For example, we have a centrifugal pump bearing fail twice in a year. I am of the opinion this is a repetitive failure.

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 All machines and equipment fail for two reasons—distortion or degradation. Distortion causes parts to suffer such high stress or fatigue that their atomic structures fail. When parts degrade their atomic structure is attacked by environmental elements. Physics of Failure methods lets us analyse equipment for situations that cause their parts’ atomic structures to suffer excessive stress, or to degrade. We can identify the real causes of atomic failure and so institute the fewest maintenance and operational activities to keep equipment at its highest reliability, and the operating plant at its highest availability.

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The aim of being in business is to satisfy customers in ethical ways while making a profit. To achieve this, variable and fixed costs should be as low as possible without sacrificing on quality products or customer experience.

The term Operational Excellence is often used to refer to a range of technical, soft-skills, and culture components. Regardless of how it is phrased, the core definition and goal are the same – to produce better operational results, and create value for customers and shareholders. In short, Operational Excellence performance is to produce the best quality products or services customers will buy for the lowest expenditure to maximize operating profit. The most successful businesses have built systems and processes that automatically keep their costs low and profits high

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 With the Quality that Improves Reliability

 Ultimately reliability is in the hands of the people that use, build and rebuild equipment. High equipment reliability requires precision workmanship and steady, considerate operation (known as Degradation Management). Both equipment operator and equipment maintainer need to be precise, they need to know exactly what to do to always produce great reliability. Most procedures and check sheets are so poorly written that they cause equipment to be failed. Standard operating procedures can create reliability if they ensure that users meet minimum quality standards. World-class standard operating procedures set not only a minimum level of quality, but they also set a highest level of quality that when achieved deliver amazing equipment reliability.

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Figures 1 and 2 are examples of getting stuck trying to fix your current business when instead you ought to throw your troubles away and build a better business system. 

This business is a renowned company in its home country. It is well respected and profitable enough. But it could easily be much wealthier. There are vast new fortunes sitting in the business, but they will never be seen by its owners and managers. They are totally focused each day on trying to make the existing business processes and system work properly. In reality, their operational processes need to be redesigned to remove the problems stopping them from delivering the organization’s purpose. [Read more…]

The vital difference between using consequence or chance reduction strategies if you want operational excellence results, is consequence reduction requires repairs and maintenance, whereas chance reduction removes repairs and maintenance.

In reading “Enterprise Asset Management Success the Plant Wellness Way for CEOs and Senior Executives” I was interested in your table on page 15 that showed risk based inspection and condition based monitoring techniques as consequence reduction strategies.

My understanding is that both RBI and CBM are specifically designed to prevent failure through reducing the likelihood of failure i.e. by detecting failure before it happens within timescales that allow mitigation action to be taken. In the API 581 RBI standard, consequence is treated as a constant over time so the methodology specifically targets risk reduction through more effective inspection or design changes. [Read more…]

The Physics of Failure Factors Analysis for selecting maintenance strategy is a one-person exercise that identifies all ways a component can physically fail. Equally important to its simplicity is its ability to select the most effective life cycle strategies for maximising reliability. Another powerful business advantage is the failure-addressing solutions arrived at are universal solutions that apply to every other identical component, whatever equipment it is in. Do a Physics of Failure Factors Analysis for one part and you do it for all identical parts for the life of your operation. It is a highly accurate and cost-effective maintenance strategy selection methodology.

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Charting historic equipment failure events visually shows the Failure Probability Density Function curve for that equipment. It is also known as a Failure Density Distribution Curve.

VALUE OF A DISTRIBUTION CURVE

Failure Probability Density Function curves, Failure Density Distribution Curves contain useful information about what has happened to equipment. These curves illustrate the chance of failure of an equipment over a period. Here, our fixed variables are the equipment’s components’ material-of-construction and design. As such, the only changing variable is the operating and maintenance strategies, including work processes, used by the company.

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How to conquer the last frontier in equipment reliability, maintenance, and industrial engineering asset management: Our machines and materials of construction do not cause our equipment problems and failures. The real problem for industry is the ‘human factor’ in stopping people making mistakes. You gain control over the ‘human factor’ by providing clear and comprehensive work procedures that explain exactly how to deliver the performance required and that give users the means to check and improve their performance. The Accuracy Controlled Enterprise 3T procedure layout and content lets you provide your people with the details of how to do their work with exceptional quality, and the means to correct and improve their efforts until they are that good.

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There is only one reason companies do maintenance on their physical assets—because it’s cheaper than not doing it. Unless doing maintenance makes a profit by saving money, it is wasting money. In the end, maintenance is about getting the best economics from physical assets. 

Keywords: plant maintenance management, equipment reliability, production risk management

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