maintenance efficiency report 2013

STUDY

Maintenance Efficiency Report 2013International study on development of maintenance efficiency in the process industry

02 | Maintenance Efficiency Report 2013

Contents03 INTRODUCTION

06 EFFICIENCY DEVELOPMENT FROM THE MANAGEMENT PERSPECTIVE Results of the Maintenance Efficiency Survey 2013

10 MAINTENANCE VALUE RATE On-Site studies of maintenance efficiency between 2001 and 2012

12 CONCLUSION

14 ABOUT T.A. COOK

Maintenance Efficiency Report 2013 | 03

For the process industry the operational role of maintenance constitutes a core competence. Nowadays the right maintenance strategy combined with efficient execution is a significant factor in competitiveness. This is the area which determines decisive percentages for high asset availability. This means that maintenance long ago emerged from the shadows of production to become a production factor in its own right. Through revised maintenance strategies and targeted measures for optimisation, many companies are increasingly realising the opportunity to mi-nimise downtimes and to increase asset availability. This also results in a greater need for a productive and efficient maintenance department. This report provides exclusive analyses on this subject based on comprehensive on-site studies supplemented by a recent survey. It provides those responsible with concrete information on how maintenan-ce can be better planned and more efficiently organised.

For almost 20 years T.A. Cook has focussed on the sustainable optimisation of operational maintenance processes and provided support in this area for customers from the processing industry. The international consultancy firm conducted its first global study on the development of maintenance efficiency in 2001 and has continued with this ever since. For this, the activities undertaken by members of a maintenance department were observed either on a daily basis or throughout phases of specific projects and the relationship between those activities that add value and those that do not thus determined. This type of study is referred to as a DILO („Day in the Life Of“). In addition to this, the causes of inefficiency are analysed, differentiating between the causes for time lost over which one can have an influence and those which are beyond control. The efficiency rating thus arrived at is an important benchmark for management in revealing existing potential for increasing efficiency in maintenance.

Introduction

Maintenance Value Rate

Industry Best Practice

0

20

40

60

80

100

Non value added45%

Value added55%

Figure 1Average ineffective time in comparison to industry best practice.


Benchmarking database for maintenance efficiency

In the Maintenance Efficiency Report 2013 the results of the studies are drawn together for the first time. The illustra-tions regarding the derivation of the Maintenance Value Rate (MVR) are based on T.A. Cook‘s benchmarking database. The MVR is one of more than 70 KPIs that T.A. Cook has been compiling in a structured fashion in its database over the last ten years and more. In addition to KPIs on the organisation of labour, it also contains key figures in respect of costs, performance, storage and staff from various sectors and regions. The Composite Maintenance Performance IndexTM (CMPI) is established on the basis of this data.

Consistent use of KPIs is highly important if companies want to optimise their maintenance strategies and processes – however, particular attention should be paid to those KPIs which relate to questions of efficiency. For this reason, the MVR is given a prominent position within the benchmarking database, because it shows very clearly what the causes for inefficiency and lost time are, and how management can leverage specific potential for optimisation. The average MVR values illustrated in this report are based on 1,562 studies (1,159 efficiency studies, 182 time-on-tool studies and 221 studies on management behaviour), which were conducted between 2001 and 2012. The study results cover a range of facilities within the processing industry from 14 leading industrial nations.

The evaluation of all the on-site studies to determine the Maintenance Value Rate undertaken by T.A. Cook before the end of 2012 shows that this key performance indicator fell by three percentage points to 52 per cent from 2011 to 2012. The average value for all the efficiency studies conducted lies at 55 per cent. The potential for improvement derived from all the studies conducted lies between 12 and 24 per cent compared to the average values for the best practices within the industry.

79 % maintenance efficiency is the industry best practice.

Food & baverages Industrial production

Automotive & automotive suppliers Other

Energy & other utilities Chemicals/Petrochemicals

Pharma

Refineries

Basic material industry

23 %

8 %

5 %

6%7 %

4 %

25 %8 %

14 %

Industry of respondents

[n=179]

Germany, Austria, Switzerland

Europe

USA

Other61 %15 %

21 %

3 %

Region of respondents

[n=179]


179 decision makers were questioned regarding maintenance efficiency and possible Optimization

Recent survey on maintenance efficiency

The summary of the Maintenance Value Rate is supplemented by the results of a recent survey on the development of ef-ficiency in maintenance. The central issue was whether and to what extent differences exist between outsider perceptions and how those surveyed see themselves: Outsider perceptions are based on the DILOs; the self-perceptions of managers from the maintenance sector derived from an on-line survey. In the course of our investigation, a total of 179 decision-ma-kers were surveyed between May and June 2013 using a standardised questionnaire. The purpose of this survey was to be able to compare the existing data held by T.A. Cook with the perceptions held by our contact partners in the industry. In addition to the effective development of maintenance efficiency, it dealt with the reasons for existing inefficiency and the preferred countermeasures.

The survey focussed in particular on the following points: » The development of maintenance efficiency from the perspective of the manager questioned » Causes for inefficiency and lost time » Possible measures to optimise maintenance » The use of benchmarks and KPIs

The managers questioned, predominantly from middle management (55 %), project management (21 %) and senior ma-nagement (16 %), are, for the most part, actively involved in the maintenance and technology sector (74 %). Others surveyed came from production, purchasing and other departments.

The study focusses on companies with more than 5,000 employees (43 %) and companies with between 1,000 and 5,000 employees (25 %). Representatives of the processing industry (70 %) with a focus on the chemical/petrochemical sector (25 %) and the energy/energy supply sector (23 %) constituted the biggest group surveyed.

Figure 2Respondents by region

Figure 3Respondents by industry sector

70 % of the surveyed are from the process industry

How has the maintenance e�ciency in your company developed over the last three years?

[n=179] has increased no change has decreased

0 20 40 60 80 100

74 % 18 % 8 %

Process optimization

Improving organizational responsibilities

Use of benchmarks and/or performance measurement systems Make or buy optimization

70 %

56 %

41 %

6 %

Which actions were most successful in increasing maintenance e�ciency?

[n=133] Multiple answers possible

0 10 20 30 40 50 60 70 80


The new role of maintenance as a powerful factor in competitiveness is reflected in the results of the Maintenance Efficiency Survey. 74 per cent of those surveyed reported that efficiency has improved over the last three years. Only eight per cent of companies had suffered a drop in standards. The main instruments responsible for improved efficiency were seen to be process optimisation at 70 per cent, and improvements with regard to roles and responsibilities within the maintenance department at 56 per cent. 71 per cent of those surveyed cited falling numbers of experienced expert staff as the cause for reduced efficiency, whilst 51 per cent of those who had actually suffered a drop in efficiency put this down to increased legal requirements or internal rules.

The high importance accorded to benchmarks and the use of KPI systems was particularly clear: companies which carry out regular benchmarking are leading the way when it comes to maintenance efficiency. Thus 86 per cent of this group declared an increase in efficiency over the last three years and only two per cent had to record a drop in standards. By contrast, where benchmarking was only undertaken on a single occasion only 65 per cent of the companies reported an increase in efficiency. Among companies who had not yet undertaken any benchmarking, 14 per cent admitted to a drop in efficiency.

Efficiency development from the management perspective – Results of the Maintenance Efficiency Survey 2013

Figure 4Development of maintenance efficiency according to the respondents

Figure 5Actions to increase efficiency

Benchmarks count:

86 % of companies which regularly conduct Benchmarks profit from increases in efficiency

How do you rate the use of KPIs for the evaluation of maintenance e�ciency in your company?

[n=173] Very good Good Satisfactory Poor

0 20 40 60 80 100

11 % 42 % 35 % 12 %

No monitoring of agreed upon targets

No suitable KPIs available

No defined targets

Di�erent understanding of targets by operations and maintenanc

Insu�cient use of KPIs

Basic doubts about the use of KPIs

26 %

29 %

61 %

24 %

18 %

17 %

Why do you see the use of KPIs for evaluating maintenance e�ciency critical?


0 10 20 30 40 50 60 70 80


Benchmarking was most useful when it was carried out regularly.

Not surprisingly, as a component of optimisation measures, benchmarks and KPI systems are more popular than ever before: 41 per cent of those surveyed consider them to be an important basis for the positive development of their maintenance efficiency - directly behind process optimisation (70%) and the reorganisation of responsibilities (56%). At six per cent a small number makes „make or buy“ decisions.

For many of those surveyed, the carrying out of benchmarking has been proven to work and is not only valued as an aid to orientation, but is increasingly conducted on a regular cycle. 75 per cent of those questioned have already implemen-ted at least one benchmark, and 37 per cent do this on a regular basis. The importance which those surveyed accord to KPIs and benchmarks for judging the efficiency of their company is correspondingly high, and there is good reason for that: KPIs such as the Maintenance Cost Rate, Asset Availability or the level of goal achievements provide a clear and objective measure of the actual state of affairs.

A majority of 53 per cent of those questioned assessed the use of benchmarks for evaluating efficiency as very good or good. Nonetheless, this means that half of those surveyed continue to be sceptical about benchmarks for various reasons.

However, even among this group there are no real misgivings (only 17 per cent of those surveyed reported these) about the use of benchmarks. Rather, the answers indicate a lack of experience or insufficient internal knowledge about the relevant KPIs or possible benchmarks. In particular, internal reasons are what prevent many of those surveyed from using KPIs and benchmarks consistently. So, for example, a majority of 61 per cent cited differences in objectives for the use of KPIs between production and maintenance. The partly different interests of these two departments have confirmed the results of the survey in practice.

Figure 6Assessment of the use of KPIs in maintenance

Figure 7Reasons for critical assessments of KPIs

Interestingly, 25 per cent responded to the question on the causes of inefficient work in the maintenance sector by saying that benchmarks and/or KPIs were lacking and therefore not used.

25 % of the surveyed compa-nies have no experience with the execution of benchmarks

Travel to or from a job

Problems with permits

Insucient schedule/coordination of trades

Waiting times

Inadequate or missing equipment/tools

57 %

58 %

21 %

19 %

7 %

What causes are mainly responsible for ine�cient maintenance work in your company?


0 10 20 30 40 50 60

75 %6 %

7 %12 %

Does your company systematically evaluate the development of maintenance e�ciency?

[n=179]

Yes, mainly through our own management.

Yes, mainly through external specialists.

No, there is no systematic approach to evaluations.

No, so far this has had a low priority.


Efficiency monitoring is predominantly an internal management task

The vast majority of those companies surveyed have implemented systematic monitoring of efficiency development in the maintenance sector. However, 75 per cent of those questioned admit that this evaluation is only undertaken by their own management. Only six per cent call in external specialists for this. But against a background of increasing cost pressure and the need for objective cross-sector benchmarks, external impulses in this area should be in demand.

Figure 8Systematic evaluation of efficiency development

The main causes for a loss of efficiency are „home-made“

The decision-makers were then asked generally about reasons for inefficient maintenance work. The main reason for inefficient work by staff was stated to be the complexity of the processes and of the organisation (54%). A lack of per-formance targets (28%) and the absence of KPIs or benchmarks (27%) were seen as almost equally important. What were considered less important were inadequate qualifications on the part of the staff (21%) and a lack of motivation among employees (19%). The second stage dealt precisely with the reasons for lost time. The majority of those surveyed see planning (preparati-on) in particular as the main cause of loss of efficiency, for almost 58% selected inadequate planning and coordination between the different trades as the main cause. This results in long waiting times according to 57% of the statements. Ho-wever, transit time (21 %), and problems with work permits (19 %) also play a significant part in optimising efficiency losses.

Figure 9Main reasons for ineffective work time in maintenance

54 % are indicating complex processes and internal organisation as the main sources of inefficiency

50 %

9 %

41 %

Can identified maintenance e�ciency potentials in your company be utilized by active management?

[n=179]

Yes, it is possible.

Yes, but only partly.

No, not under the current conditions.


Active management is an important variable

Those surveyed were optimistic about the chances of meeting the challenges. For an overwhelming majority of 91 per cent of those questioned, the solution for exploiting acknowledged potential for efficiency is active manage-ment. Thus, 50 per cent say they can definitely increase efficiency through active management, followed by 41 per cent, who are only partly convinced. Only nine per cent see no chance of this as things stand at the moment.

In the future the management focus will be on more efficient planning and order management as the most important prerequisites for increased maintenance efficiency, according to 58 per cent of those surveyed. This will be brought about by further optimisation of working processes (50 %). However, many of the decision-makers see further po-tential for optimisation in the maintenance strategy (38 %).

Irrespective of their company or working area, the maintenance managers who participated in the survey were then asked to evaluate the various measures for increasing maintenance efficiency (See image 11). For those surveyed better order planning and management and the introduction of a reliability centred maintenance strategy (RCM) which com-bines various maintenance strategies and other criteria such as business data, weather data, buildings etc. is high on the agenda. By contrast, for the decision-makers we questioned the introduction of internal market mechanisms and total productive maintenance systems (TPM) offered less potential. However, the human factor – that is to say qualifications, further training, education – is ascribed a high level of importance. Those surveyed considered the optimisation of controlling and the relationship between in-house and third party services to be less relevant. This is in contrast to the relationship between production and maintenance: in this case the decision-makers would like to see the roles and responsibilities within the maintenance sector adjusted to correspond to production.

Figure 10Use of efficiency potential through active management

91 % recognise active manage-ment as the answer

Implementation of a reliability-centered maintenance strategy

Qualification, further training and vocational education

Redesign of maintenance processes

Optimization of the ratio of in-house to external maintenance personnel

Expansion or implementation of a total produc-tive maintenance system

Adjustment of roles and responsibilities between production and maintenance

Optimization or introduction of maintenance controlling

Scheduling and job supervision improvements

Introduction of internal market mechanisms (maintenance as a profit center, internal service/price lists)

High potential Potential Low Potential No potential

Figure 11Evaluation of possible measure to increase maintenance efficiency

2% – 42%

55% – 69% 69% – 98%

Industry Best Practice

Quartiles

42% – 55%

0

20

40

60

80

100

4. Quartile,253 Studies





The Maintenance Value Rate is determined on the basis of on-site studies. Strictly speaking these studies are time records. In contrast to time studies following the scientific management method, the observed activities are categorised as „adding value“ or „not adding value“. Only the working time, without breaks, is considered in the evaluation. In this all activities are seen as adding value which are necessary to the fulfilling of duties and which are executed efficiently. The evaluation of the efficiency is based on the opinion of the maintenance experts who are supervising the process. An evaluation of the level of performance of the activity undertaken in order to derive standard times is not undertaken. The purpose of the study is to reveal working procedures which do not add value, so-called lost time, in order to gain, on this basis, specific information on how the process can be optimised.

The Maintenance Value Rate includes 1,159 studies undertaken at facilities in Austria, Belgium, Brazil, the Czech Republic, Germany, Hungary, Finland, France, Great Britain, Italy, the Netherlands, Sweden, Slovakia, and the USA. The average Maintenance Value Rate across all studies is 55 per cent. In 2012 the MVR indicator was at 52 per cent, corresponding to a drop of three percentage points compared to the previous year. Of the 45 per cent of activities identified as not adding value, 84 per cent of these were accounted for as lost time which could be influenced by management. This lost time constitutes the potential for optimisation. Industry best practice is an MVR of 79 per cent.

If we look at a quartile-based analysis of the MVR indicator, the industry best practice is at 79 per cent, with a limit of 69 per cent for the first quartile. This means that there is potential for improvement of 12 to 24 per cent over all the studies undertaken. Based on an 8 hour shift (wi-thout breaks), this means that the influenceable potential for improving efficiency is between one and two hours per maintenance worker. Half of the studies undertaken (557) show an above average efficiency rate. 589 of these studies show an efficiency rate that is below average.

On-site studies confirm the importance of resource and labour planning

In the analysis we essentially differentiate between four types of cause: organisation (causes inherent in the system), beha-viour (individual causes), skills (lack of experience of training), and technology (faulty machines or equipment). The detailed analysis of the organisational causes makes it clear that almost 50 per cent of lost time is caused by waiting times or inadequate capacity/misallocation of resources. The remaining 50 per cent are the result of insufficient planning and pre-paration. It is precisely in the day-to-day business of maintenance that significant lost time can be caused by unplanned or unscheduled ad hoc work orders. Benchmarks such as the level of planning (best practice > 85 %) and planning accuracy (best practice 85 to 100 %) are important orientation aids that can help to point the maintenance department towards greater management efficiency.

Maintenance Value Rate – On-Site studies of maintenance efficiency between 2001 and 2012

Figure 12Quartile description of the maintenance value rate

Work preparation/Equipments

Scheduling

Work permits

Planning & allocation of ressources

Waiting times

18 %

15% 28 %

29 %

15 %

10 %

0 5 10 15 20 25 30

Coaching Administration

Manual activities Active supervision Passive supervision Available time

0 20 40 60 80 100

28 % 21 % 7 % 26 % 12 % 6 %

13 % 21 % 2 % 40 % 11 % 14 %

34 % 18 % 11 % 19 % 10 % 8 %

Top: Studies | Middle: Self-Assessment Supervisors | Below: Desired time


Figure 13Analysis of the organisational reasons for ineffective work time in maintenance

Management behaviour is the key to success

A second lever is the management behaviour of the operative management, from the foreman, via the master craftsman right up to the production engineer and the departmental head. The level of the Maintenance Value Rate stands in di-rect correlation to the level of the proportion of active management. The studies undertaken clearly demonstrate that in maintenance management is predominantly a reactive topic (21%). The relatively high proportion of administrative tasks (40%) also has a negative effect on efficiency. The illustration shows, firstly, that many managers have an unduly positive perception of themselves and their activities, and secondly, that they are aware of the problem and wish they had more time for active management

Ideally active management should consist of eight different elements:1. Reaching clear agreements and conveying your expectations to employees2. Giving detailed instructions for individual tasks3. Checking the implementation of targets and tasks4. Providing support and coaching5. Giving (positive) feedback6. Giving (negative) feedback and pointing out ways of improving7. Solving problems that occur and analysing the causes8. Evaluating and continually improving processes

Figure 14Average values of conducted supervisor studies

The trend towards low, and, what is more, still further reduced in 2012; Maintenance Value Rates means that maintenance costs in the production industry are much higher than necessary. In a quartile-based comparison, the average potential for cost reductions, taking all studies into account, is approximately 12 to 24 per cent of the maintenance costs.


When considered as a whole, the results of the survey and the studies undertaken by T.A. Cook make it clear that there is considerable potential for optimisation in maintenance. However, the majority of maintenance managers are confident that they can use the existing potential. Concrete optimisation is predominantly planned through process optimisation and bet-ter active management by managers. On-site studies and the survey by T.A. Cook thus point the way in the right direction.

The picture is also consistent when it comes to inefficiencies and lost time. Both the on-site studies and the survey iden-tify planning of time and resources and the co-ordination of the various trades as the main problem. These give rise to extra transit or waiting times or problems with work permits which also cause additional waiting times.

Nonetheless there is a significant difference: According to those questioned, maintenance efficiency has invariably risen over the last three years. This was not backed up by the on-site studies, which rather showed stagnation or even a falling Maintenance Value Rate. This difference can be explained by the differences in perception between the managers them-selves and the external observers. A second significant reason is that 75 per cent of those taking part in the survey are companies who regularly measure maintenance efficiency, that is to say, companies that proactively make use of KPIs and benchmarks. This means that, for the most part, those companies which took part in our investigation are ones in which the performance in respect of maintenance efficiency is above average.

The report shows that there are still considerable reserves in efficiency that should be used, and that productivity within maintenance should be observed closely. This does, however, require the right measures to be taken, otherwise the po-tential will remain unused and, ultimately, the costs will rise. Companies which do not become active in this are missing the opportunity to turn maintenance into a real factor in competitiveness. Overall it is possible to identify five significant areas that the management should consider:

1. High level of potential for improving efficiency Based on the current MVR of 55, the average potential for improving efficiency is between 14 and 25 per cent. This

corresponds to around one to two hours of available working time. The most important reasons for lost time and inefficient working are mistakes in the planning and organisation, that is to say factors over which we can have an influence. Make use of the available potential and optimise your processes!

2. Benchmarking created efficiency In particular, the results of the survey on the topic of KPIs and benchmarks make the necessity of a systematic

evaluation of efficiency clear. Companies that do this consistently are leading the way when it comes to improving efficiency. Differences in objectives between maintenance and production may pose a challenge, but should not be an obstacle. A comparison with best practices can, therefore, be a useful support when planning change processes. An individual and continuous procedure for the use of benchmarks and KPI systems provides the basis for corresponding optimisation. This should include exchanges of information with similar companies and new impulses from outside. Look at the big picture and reap the benefits of making comparisons with others!

Conclusion


3. More active management Active management on the part of managers is accorded particular importance. On the one hand, this is confirmed

by the majority of the decision makers surveyed; on the other, this is also made clear by the management studies un-dertaken, as these show the unfavourable relationship between administrative tasks and actual active management. The managers themselves also feel this and wish they had more time for the precise description of individual jobs, coaching and feedback. Improve your efficiency by improving your management!

4. More planning and preparation Almost 50 per cent of lost efficiency results from inadequate planning and preparation. This fact is also recognised

by the responsible maintenance managers, and it is in this area that they see the greatest potential for improving efficiency. A typical schedule fundamentally improves efficiency in maintenance. It shows the greatest effect when combined with a clear increase in active management – the one influences the other. Act to avoid these losses and invest in planning!

5. New roles of maintenance managers The potential described here can only be realised through intensive collaboration between production and main-

tenance. This was also agreed by the maintenance workers surveyed, who complain of having too little influence over production. For without shared, clearly defined objectives and agreed procedures, potential for optimisation cannot be exploited. This applies both to the carrying out of benchmarking and to improvements in planning and preparati-on. Maintenance managers thus acquire the task of proactively developing a production driven maintenance strategy. Work together and jointly exploit the resultant efficiency reserves!


FRANK-UWE HESSManaging PartnerFon: 030/884307-23Mail: [email protected]

Consultancy and research

T.A. Cook is a management consultancy firm specialising in Asset Performance Management. Our core competence is the sustainable implementation of asset, service and operational excellence. As a change management specialist, T.A. Cook introduces measurable increases in productivity and value. For this, the consultancy firm offers a comprehensive range of services which target sustainable effectiveness and efficiency from all management processes - from strategy via management to organisation.

The company enjoys comprehensive expertise in areas such as asset availability, shut-down/ turnaround management, order planning, budgeting & controlling, CapEx management, contractor management, spare part management, main-tenance strategies, improving efficiency, SAP application optimisation.

T.A. Cook Research provides benchmarking and performance analyses in the field of Asset Performance Management.

Benchmarking focus groups

The T.A Cook focus groups are an exclusive network for managers and experts from the process industry - tailored to the special needs of the chemical and petrochemical industries, from refineries and energy producers. Our primary objective is the institutionalised exchange of knowledge and experience on important issues in the fields of maintenance and turnarounds. The members of the benchmarking focus groups can learn from best practices, initiate change processes in their companies and gain new perspectives on their own challenges.

T.A. Cook offers one special focus group for each of the areas maintenance and shut-downs/turnarounds. Central to the focus group is the benchmarking of selected maintenance processes and turnarounds. Access to T.A. Cook‘s maintenan-ce productivity database, and the most important figures and KPIs as well as individual opportunities for evaluation enable you to make a comparison with other companies from your own sector.

The focus groups meet regularly twice a year and provide an opportunity for personal exchanges between members as well as to maintain and expand professional networks. Here results are discussed, questions answered and strategic issu-es agreed upon. Between meetings, our exclusive Connect online platform provides an uncomplicated way for members to keep in touch as well as an easy access to benchmarking documents and data.

About T.A. Cook

Kontakt

TIMO RAHMANN Senior Research ConsultantFon: 030/884307-31Mail: [email protected]


IMPRESSUM

Publisher (All rights reserved)T.A. Cook & Partner Consultants GmbHLeipziger Platz 210117 Berlin, Germany

Tel.: +49 (0)30 / 884 307 - 0Fax: +49 (0)30 / 884 307 - 30

E-Mail: [email protected]

Study Maintenance Efficiency Report 2013Editorial deadline: 19.08.2013 | © T.A. Cook 2013

maintenance efficiency report 2013

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