AIChE Webinar Series Maintenance and Reliability for Chemical Engineers Part 4

Transcription

1 AIChE Webinar Series Maintenance and Reliability for Chemical Engineers Part 4 David Rosenthal, P.E. Reliability Delivery and Asset Management Manager Jacobs Engineering Group Houston

2 Presentation Contents Purpose Why is Reliability Improvement needed? Where are you in this journey? Assessment and the Journey Justification for Improvement Benchmark and Margin Analysis Closing

3 David A. Rosenthal, PE. Reliability and Maintenance leader with over 30 years of Chemical and Process Industry experience Reliability Delivery and Asset Management Manager, Jacobs Engineering Group Reliability Manager, Southern Region, Marsulex Refinery Services, Texas City Coke cutting, handling, and transport assets Maintenance Director, MEMC Electronic Materials, Pasadena Polysilicon manufacturing for solar cells and electronic components Reliability Consultant, Celerant Consulting, Lexington, MA LANXESS, Butyl Rubber Manufacture, Sarnia, ON Kellogg's, Snack Foods Division, Battle Creek, MI Maintenance and Reliability Manager, Rohm and Haas Company, Deer Park, Texas Acrylic Acid, Ethyl Acrylate, Butyl Acrylate, Sulfuric Acid manufacturing Manager of Manufacturing Excellence, Rohm and Haas Company, Bristol, PA Reliability Engineer, Rohm and Haas Company, Bristol, PA Technical Manager, Rohm and Haas Company, Bristol, PA Acrylic Emulsions manufacturing MS in Chemical Engineering, University of Texas, 1981 BS in Chemical Engineering, Drexel University, 1979 President American Institute of Chemical Engineers, 2012 Member of Society of Maintenance and Reliability Professionals

4 Where we left off (Part 1) Maintenance focus is on restoring function to meet production requirements. Reactive maintenance must be first addressed. The impact on the business is the first consideration when evaluating the reliability and availability of the process The business case for reliability lies in the hidden plant. Asset Management is about assets delivering the required function and level of performance in terms of service or production (output). Continuous improvement in the performance of the assets lies in the analysis of history and the developing of the appropriate care plan that addresses its failure modes.

5 90% of failures are random. Where we left off (Part 2) The highest risk for failure is when the machine is new. The earlier failure is detected the cheaper it is to restore its intended function. Maintenance alone cannot detect all failures. Chemical Engineers play a role in process reliability and working with Maintenance RCM and FMEA s determine asset care Ownership is a vital element of a reliability-based culture Operator care is an important element of a care plan

6 Where we left off (Part 3) Maintenance Execution Identification is key to efficient and effective asset care and repair execution Work Flow and RACI diagrams Maintenance Strategy Critical asset care needs to be established to attain proactive care goals Nomenclature, Hierarchy, Criticality, RCM / FMEA, and Asset Care Plans Defect Elimination is needed to minimize the probability of repeat failures and to identify unseen failure modes Root Cause analysis, 5 Whys, Cause and Effect diagrams, Bad Actor control, and MTBR / MTTR

7 Purpose Provide guidance for justifying attainment of maintenance and reliability practices based on their connection to the strategic business drivers for the site.

8 Why is Reliability Improvement Needed? MAINTENANCE AND RELIABILITY FOR CHEMICAL ENGINEERS Part 4 Business Case Development

9 Need for a Strategic View of the M&R Connection to Business Improvement View the World-Class Decision from a Strategic Business Viewpoint Must get out of the weeds Language of maintenance Need to connect M&R to a business driver Talk the language of business

10 Maintenance versus Business Strategy Fit Understand the strategic mission of the facility to the business. Cash cow generator versus growth through investment True Business Case Exists for Achievement - Competitive Core Value of the company Safety, Quality, etc. Burning Platform present survival of the business

11 Cost Quality Performance Where Does Your Business Compete? Delivery Time and Delivery Time Reliability Flexibility Innovativeness Others? Questions How does Maintenance and Reliability enable your business to compete in the above factors? What barriers are presented by maintenance to achieving competitive advantage? Which factors are minimum requirements to compete the marketplace and which are differentiating?

12 How Does M&R Drive Competitiveness Cost Quality Driver Compete in the Marketplace Differentiating Delivery Flexibility Innovativeness Maintenance personnel are multiskilled and minimize MTTR Maintenance care ensure all qualitycontrol related assets are calibrated and operational Asset reliability minimizes risks to meeting customer orders Operations and maintenance adjust equipment care schedules based on scheduled demand and mix Maintenance establishes equipment care strategies for new equipment Operations performs some maintenance and proactive tasks Maintenance specialists develop new technologies to ensure new quality measures can be implemented Customers see into site scheduling and delivery systems Maintenance personnel can be flexed in or out of production roles Operations and maintenance can work self directed to change equipment configuration

13 Assessment and Auditing MAINTENANCE AND RELIABILITY FOR CHEMICAL ENGINEERS Part 4 Business Case Development

14 Where are Your M&R Practices? Assessment Understand Current Practice State and Rank Against Benchmarks Plenty of assessment tools available through third party or internal resourcing Data generation is the toughest part of any assessment Not all practices need to be at the same level of implementation Leadership and Organization Preventive Maintenance/ Essential Care and Condition-based monitoring Maintenance Work Process - Planning and Scheduling Defect Elimination - Root cause problem elimination Maintenance Materials Management - Stores Facilities and Tools Engineering s interface with Maintenance Technical Database Mechanical and Reliability Skills Development A site s level of M&R practice implementation places that site on a spot on the journey

15 Maintenance Metrics Metric Description Benchmark Maintenance Schedule # Weekly WO Completed/# WO scheduled >85% Compliance (%) (Weekly) Planned Maintenance (%) Total WO s Planned / Total WO s for the Week >80% Emergency Work (%) Total Emergency WO/Total Number of WO s <10% Backlog (Weeks) Estimated MH s for Outstanding and Upcoming 4-6 WO s for Craft / Total Manpower Capacity Weekly Available MH s for Craft Craft Labor Utilization (%) Actual Hours WO s Minus Delay Hours/Total >85% Capacity Hours Available Planning Efficiency (%) Total Actual Hours for Completed Planned and >80% Scheduled WO s/ Planned Hours for Planned and Scheduled WO s Mechanic Wrench Time Total Mechanical Hours On Tools/Total 20-40% Maintenance Hours Available PM Compliance (%) Total # PM WO s Executed Per Schedule / Total # PM WO s Scheduled (Weekly) >90%

16 Reliability Metrics Metric Description Benchmark Proactive Work Scheduled Number of PM s and PdM WO on the weekly >40% (%) schedule / Total WO on schedule Pump MTBR (Months) Total Number of Pumps x Reporting Period/ >36 Months Total Pump Repair WO s in the Same Reporting Period Mechanical Availability (%) Production Losses (Hours) from Mechanical >95% Failure/ Total Available Production Hours $ Maintenance / $ Annual Maintenance Budget / RAV (%) 2-3% Replacement Asset Value RCA s and FMEA s Held for Root cause investigations and Failure Mode and >75% Bad Actors / Total Bad Actors (5) Effects Analyses held for Bad Actors / Total Bad Actors Stores Service Level (%) Number of Items Delivered as Promised/Total >95% Number of Items Requested Stores Value /RAV (%) Current Book Value of Stores / RAV (%) 0.5%

17 Where is your site on the journey? MAINTENANCE AND RELIABILITY FOR CHEMICAL ENGINEERS Part 4 Business Case Development

18 Paul A. Monus / Aug. 4, 1997 This slide was adapted from Winston Ledet, The Manufacturing Game (c) 1995 Defining the Journey Stable Operating Regions that are rewarded: Federal behaviors Performance Measures Don t Fix It Regressive Fix it after it breaks Reactive Fix it before it breaks Planned Predict Plan Schedule Coordinate Don t Just Fix It, Improve It Proactive Eliminate Defects Improve Precision Redesign Strategic Alignment (shared vision across BU) Integrating (supply logistics, mfg., mktg.) Differentiating (new system performance) Cost focus Value Focus Alliances Rewards: Staged Decay Short term savings Overtime Heroes No Surprises Competitive Competitive Advantage Best in Class Motivator: Meet Budget Breakdowns Avoid Failures Uptime Growth Behavior: Decaying Responding Planning Org. Discipline Org. Learning

19 Defining the Journey : SAMI Pyramid Asset Healthcare Model

20 FACTORS Reliability Losses Maintenance Cost Spares Inventory Maintenance Organization Maintenance Support Engineering and Investment Reliability Organization Work Scheduling Craftsmen / Contractors Labor Costs Types of Maintenance Operator Maintenance Labor Materials Supervisor / Planner Craftsmen Activity Defining the Journey Planned Years 1-2 No system in use CMMS cost recording Critical parts identified Mgr focus on execution Job descriptions for all Company standards in use Reliability job not defined 1 Week Schedule On shift 24 Hours WO s have estimates Work ID and Priority in use Operators Report Issues Core crafts identified BOM s identified All work on schedule Multiple crafts Proactive Years 2-4 Journey to World Class Loss systems created Costs at correct asset Parts levels optimized Mgr focus on downtime Reliability Eng exists Maintenance procedure Reliability / AM Strategy Prioritization in use Core crafts identified Labor against assets Root cause done Operators use CBM Maintenance strategy MRO strategy in use Proactive schedules Craft training Operational Excellence Years 3-5 Loss hierarchies defined Analysis reduces costs Parts delays removed Maint. Focus on CBM Maint. Support on days Following procedures Operators as owners Scheduling in CMMS Crafts on days only Labor standards in use Operations in RCA TPM, Checklists in use Leveraged contractors Approved Vendors CMMS field interface Multi-skilled Designed In Reliability Years 4-6 Losses drive projects Input for LCC Parts Standardization in use Maint. Focus on RAM Capital work integration LCC / RCM Used RAM use in Capital Capital scheduling Mechanics attend RAM Standard labor in Capital Failure history in use Operators review design Contractor participate Engineering / QC specs Specs on parts Advanced skills level

21 Justification for Improvement MAINTENANCE AND RELIABILITY FOR CHEMICAL ENGINEERS Part 4 Business Case Development

22 How Much Is It Worth To Achieve the Next Level? Determining the next level of performance establishes the business case for improvement Constraint Management considerations Where to apply improvement? Defining the next level desired planned?, proactive? Costs to Achieve Consulting Resources More Staff / Mechanics / Planners / Schedulers Meeting Time to Establish and Monitor Plan Increased Parts Inventory Level Maintenance Strategy Development Training Procedure Writing Engineering redesign

23 How Much Is It Worth To Achieve the Next Level? Savings - Means for Justification Uptime more sales margin from increased production Supply Chain reliability Lower operating costs Lower energy costs Less waste Out of-pocket Savings - People FTE Only! Less Parts and Materials Less overtime Lower Contracted Labor / Special Services Return on Investment / Payback Exceed company guideline hurdle rates Compared against other investments Not your typical project culture forming takes time Two years in minimum to recognize change

24 Justification: Benchmark Analysis Metric Unit Value Maintenance Cost Annual Replacement Asset Value of the Facility $MM $MM Maintenance Cost/ RAV % Maintenance Cost / RAV (Benchmark) (2-3%) Total Maintenance Cost Projected Opportunity $ Composition of Maintenance Cost Opportunity - People Number of Mechanics RAV / Mechanic (Current) RAV / Mechanic (Benchmark) ($6-8 MM RAV /Mechanic) Maintenance Labor Projected Opportunity % Crafts Only $MM $MM (at 7MM/Mechanic) $MM

25 Justification: Benchmark Analysis Composition of Maintenance Cost Opportunity Carrying Cost and Parts Units Storeroom Inventory/ RAV % Value Storeroom Inventory / RAV at Benchmark (Benchmark - 0.5%) $MM Storeroom Inventory (Difference) $ Storeroom Carrying Cost Opportunity (At 10 20% Carrying Cost) Parts Costs (Current) 1.5 Parts / Labor Parts Cost (Benchmark) 1:1 Parts / Labor Parts Cost ( at Target) 1.25 Parts / Labor $ $MM $MM $MM Total Parts Cost Opportunity $

26 Justification: Major Driver is Margin A more reliable supply chain and additional sales from increased production has the greatest impact to a business. Additional production generally requires only variable costs while fixed costs remain the same. May allow a site to differentiate themselves to attain market share. May allow a company to forgo constructing new faculties.

27 Major Driver is Margin Pre-Tax Profit Fixed Cost = $35 Million Break Even Point Slope of Line is Variable Margin 60% Base Case Sales Revenue = $90 Million at 60% Uptime, Profit = $19 Million Production 0.6 x 15MM sales =$9 Million or about 50% increase in profit New Case Sales Revenue = $105 Million = 10/60 x90 at 70% Uptime, Profit = $28 Million

28 How Much Is It Worth? Margin Example Calculation Step Description Comment Operating Days/Year Days Usually 365 Days Unavailability (Planned) % % Total Unavailability - % Turnarounds % Minus Turnaround Allocation Mechanical (Remaining) % Mechanical Unavailability - % Others (Planned) % % Other Unavailability - % Change Out (Planned) % % Cleaning, etc - % No Raw Materials (Planned) % % No demand - % Actual Production Time Days / Year Days Remaining Non -Operating Days/Year Days / Year 365 Days Remaining Output / Year (Planned) Lbs / Year Supply Chain estimate Production Rate (Planned) Lbs / Hr Converted to Lbs/Hr Actual Sales Revenue (Estimated) $ / Lb Sales Cost/ Lbs S&A and Operating Cost Fraction % Directs and Indirect Costs Margin Revenue $ / Lb Sales Costs Direct and Indirect Costs Increase in Availability Additional Yr Lbs Estimated Improvement in Availability Total Business Case Opportunity $ Fractional Improvement x Margin

29 Reaching the Next Level A site s business has ranked on-time delivery as an market qualifying factor. The main causes for missed shipments were equipment failures. The site needs to move from its current 85% equipment availability to 90% in a year. They do not have competitive advantage for on-time delivery Eliminate bad actors Improve the amount of planned work Improve maintenance strategies Identify critical parts Improve mechanic skills sets Site will plan its next 1-2 years to achieve this next level. The key action is the selection of practices that will enable the site goal.

30 Planned Journey T Map T-MAP TEMPLATE - RELIABILITY Stop The Equipment From Breaking Prioritize Work Everyone Involved in Reliability TO Redesign the PM System Plan Only The Work Needed FROM

31 Closing MAINTENANCE AND RELIABILITY FOR CHEMICAL ENGINEERS Part 4 Business Case Development

32 Summary A site within a company s manufacturing structure must understand its position and purpose in their business Before understanding the business case for M&R improvement, the site should understand which factors allow it to compete in the marketplace. After understanding these factors, the impact of M&R on those factors should be understood. The site should then assess itself against M&R benchmarks to understand the current state of its M&R practice implementation. The next level is set by a well-defined journey for M&R improvement. The next level can be justified loosely by benchmark analysis or by a margin analysis which includes costs benefits for the site.

33 Thank You David Rosenthal, P.E., CMRP Reliability Delivery and Asset Manager Jacobs Engineering Group (832) (office) (215) (cell)