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Hidden
Treasure: Eliminating Chronic Failures Can Cut Maintenance Costs Up to
60%
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By Charles J. Latino,
President, Reliability Center Inc., Hopewell, VA
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Where are failures
occurring and which represent the greatest potential for reducing costs?
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Every year, U.S. industry spends well over $300 billion on plant maintenance
and operations. An estimated 80% of these dollars are expended to correct
chronic failures of machines, systems, and people that occur daily, even
hourly, in plants across the country. |
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Based on my experiences and observations over 40 years in hundreds of plant
situations, eliminating these chronic failures can reduce maintenance costs
between 40% and 60%. And that savings to industry of up to $115 billion
annually can be realized without major restructuring, employee layoffs,
or sacrifice of product quality. However, it does require changes in existing
mindsets about how to maintain and operate facilities on a day-to-day basis. |
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Despite American industry's attempts to reinvent the workplace through
a long list of fashionable management techniques, millions of employees
still go to work every day and perform the same tasks the same way they
did last week and last year. |
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These men and women are keeping our plants operating. Their jobs are vital
to efficiency and productivity, yet they spend much of their time correcting
deviations in normal plant processes and fixing routine breakdowns. Often,
they spend hours conforming to outmoded, time-consuming administrative
rules and procedures. |
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This drain on corporate assets is caused, in large measure, by a mindset
that accepts these failures as routine and normal. It is a self-limiting
paradigm that says machinery breaks, people make mistakes, and systems
fail. However, by challenging this belief and taking steps to eliminate
unnecessary failures, managers can increase productivity, reduce downtime,
and increase profit dramatically. |
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The issue is not the once-in-a-corporate-lifetime catastrophe. Although
dramatic and costly, such failures are sporadic. When they occur, there
is a dedicated effort to discover the causes. Investigations are conducted
to uncover the root causes of the failure. The outcome may be design improvements,
enhanced safeguards, or more disciplined procedures to ensure the event
does not recur. |
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Because they occur infrequently, the high cost of catastrophic failures
can be amortized over many years. On the other hand, chronic failures are
characterized by low cost and high frequency. They are small and often
invisible, but they occur repeatedly and are far more costly than a catastrophe. |
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Sporadic failures are dramatic deviations from operating norms. When they
occur, they are readily apparent. When repaired, they restore the norm.
Solving sporadic failures restores the status quo. Chronic failure and
delays represent the status quo. Reducing chronic failures raises the status
quo to a higher level of productivity. |
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Once the inevitability of failure is rejected, what actions can be taken
to bring about productive change? The first step is to identify opportunities
for improvement. Where are failures occurring and which represent the greatest
potential for reducing costs? |
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Here, the well-known 80/20 principle comes into play: typically, a relatively
few problems account for 80% of a facility's losses. These are best identified
and solved by trained analysts. The remaining 20% can be resolved by field
personnel. |
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Failure occurs on three levels. First are physical root causes. What components
are failing? More importantly, why? Second are human errors or inappropriate
interventions. Finally, management systems to address chronic failures
may be poor or nonexistent. Analyzing management systems may well be the
most important activity because it frequently uncovers paradigms that impede
a plant's ability to perform. |
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Too often, managers are more concerned with a rapid return to operations
than with identifying the causes of chronic problems. "How soon" is asked
more often than "why." Under this pressure, supervisors and workers are
inclined to apply Band-Aid fixes. Quality thinking, craftsmanship, and
analysis are sacrificed for speed. A manager that asks for speed gets it.
A manager that seeks thoughtful solutions is generally rewarded with higher
quality and lower long-term cost. |
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We have found the need for maintenance can be reduced 40% to 60% for those
who have the courage and drive to pursue this goal. For example, a large,
mid-Atlantic producer of polymers doubled its output over a 10-yr period
while reducing maintenance. |
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Before it expanded, the operation employed 300 mechanics. Two years later,
it had 200 mechanics. Ten years later, the plant still had less than 200
mechanics even though it had doubled its capacity. This achievement resulted
from vigorously investigating and eliminating chronic failures. |
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A west coast refinery recognized that a 2-yr mean time between failures
(MTBF) for pumps was unacceptable. It put in place a policy to perform
a failure analysis on any pump with an MTBF of less than 2 yr. As a result,
the MTBF has increased to 6 yr. saving approximately $2 million a year. |
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These examples illustrate the opportunities that are available. Returns
of as much as 800% are reasonable with proper training processes in place.
Of course, there is the question of what happens to workers made vulnerable
by these improvements. In the examples here, no one was laid off. If anyone
had been, the facilities would have lost the sincere involvement of the
remaining mechanical staff. |
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Staff can be reassigned to performing work that ensures production continuity,
which is the greatest revenue generator when markets are demanding product.
Such workers perform advanced problem solving, participate in root cause
failure analysis, and improve the precision of repairs and installations
- activities that are beginning to be the center of attention in today's
manufacturing facilities. |
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From the standpoint of job security, what executive is not going to direct
financial resources to the areas that provide the greatest potential for
return? Such action spells growth. As productivity gains are realized from
solving chronic failures, producers will again invest in America. And such
enhanced growth means employment security for the nation as a whole. |
RCI Offers the full
range of Reliability Consulting Services and Training Programs for Industry.
We conduct facilitations, reliability assessments, FMEA & Root Cause
Failure Analysis Training - Public & On-Site.
For more information
contact:
Reliability Center, Inc.
P.O. Box 1421
Hopewell, Virginia 23860
Phone: (804) 458-0645
Fax: (804) 452-2119
Website: http://www.reliability.com
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