A Guide For Implementing Cost Reduction

How to apply basic process improvement principles to increase maintenance productivity and reduce costs


Again, don’t be surprised if the initial OME averages 25 percent of the overall process. The OME typically reveals types of backlog loaded with Muda – undocumented backlog, i.e., reactive maintenance cannot be addressed until capacity improves, otherwise these efforts become additive making the forecasted backlog and ready backlog target-rich areas where Muda hides.

Forecasted Backlog. This is the part of the backlog that is always known in advance, typically including preventive maintenance (PM) and predictive maintenance (PdM). Because these tasks are recurring, there is a significant opportunity for waste elimination or minimization using a process of PM Optimization (PMO).

This is a series of 14 techniques that are analogous to the application of 5S (a Lean concept used to create a clean, orderly environment where there is a place for everything and everything is in its place) to PM and PdM tasks, typically yielding:

  • 40 percent reduction in PM labor hours.
  • 35 percent reduction in scheduled downtime.
  • 50 to 100 percent increase in PM coverage.

PMO utilizes Lean tools itself by incorporating waste removal in Phase 1, initial optimization through an application of four of the 5S components to the PM data, as well as the identification defects in the PM; Phase 2, task pass/fail analysis; and Phase 3, equipment reliability analysis which provides the sustainment aspect of the 5S as the PM program is now dynamic.

Ready Backlog. This is the part of the backlog that is already documented, minus forecasted PM work. It usually includes corrective projects and carryover jobs. Based on the ride-along studies, Muda identified are evidence for planning optimization.

From various stages of starting planning to dialing in an existing effort, organizations can realize:

  • 50 to 100 percent reduction in work order cycle time.
  • Minimized spare parts time and costs.
  • Minimized scheduled downtime as shorter cycle times are applying quick change over disciplines.

Principle 4 Have the customer pull value from the previous upstream activity.

Having the customer pull value from the process is comparable to not performing work before it is required. It is frightening to see how many organizations think of backlog as a bad thing. They see this work as being overdue.

Allowing work to accumulate in the backlog for a reasonable amount of time provides several benefits, including:

  • Providing more time to plan the jobs, assuring all resources are available and ready prior to the work commencing.
  • Enabling more efficient scheduling of work.
  • Allowing work to be completed based on the importance to the organization via work priority and equipment criticality.
  • Eliminating backlog that is usually indicative of a highly reactive maintenance organization. In these cases, more work exists than what is known and documented in the backlog. It is just not addressed until it fails.

Principle 5 Pursue perfection though continuous improvement.

As with anything, the goal must be to continuously improve against your key performance indicators (KPI). However, once a process is documented, particularly one as intangible as maintenance, it becomes easier to make adjustments that can be leveraged across the organization.

With a documented plan, and using the exact tools in other areas of the operation, it becomes easier to communicate the maintenance process, ensuring less chance that performance will slide back to what it was prior to the improvements.

SURVIVE TO THRIVE

By removing Muda in the maintenance process through proven Lean techniques, work order cycle time is forecasted and ready backlog is reduced, driving the need for optimized scheduling to fill smaller windows of availability. This cause and effect scenario demonstrates a dynamic process where true continuous improvement can be pursued.

Although you can find most companies already working on “pockets of excellence” driven by local need – such as planning and scheduling, PMs and work order systems, true systemic strength comes not from activity-based improvement, but from a holistic solution focused on flow.

The identification, measurement improvement and analysis of maintenance’s true commodity – applied (value-added) labor hours – is the key. That’s because the powerful combination of these tools in the correct order will almost double the flow of the maintenance system without increasing individual performance. This untapped capacity is the key to survival.

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