How Maintenance Productivity Measurement Resulted Cost Reduction Opportunities

Labor productivity has a major impact on the cost of maintenance and few maintenance managers know the effectiveness of their crews. They should know and improve the conditions that affect labor productivity on their sites. The way they design and implement their maintenance management processes directly impacts the productivity of the maintenance workforce.

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White paper – copyright Quant 2015 How maintenance productivity measurement identified significant maintenance cost reduction opportunities By Jose Baptisa – Development Manager of Reliability - Quant Quant Plus 03 15 4 How maintenance productivity measurement identified significant maintenance cost reduction opportunities Jose Baptista, Development Manager for Reliability at Quant, identifies how facility’s can improve their business operations through outsourcing. Throughout my career, I saw, or rather felt, the various economic crises created by several factors from the 1970s oil crisis at the beginning of my career to the world economic crisis in 2008 when I first moved to the U.S. The crisis periods and an increasingly competitive market always results in one common remedy: an enormous pressure to reduce costs. Without the proper precautions or criteria, this cost cutting may jeopardize business continuity. Labor productivity has a major impact on the cost of maintenance and few maintenance managers know the effectiveness of their crews. They should know and improve the conditions that affect labor productivity on their sites. The way they design and implement their maintenance management processes directly impacts the productivity of the maintenance workforce. I will try to illustrate how the company, Quant, the global leader in industrial maintenance helped one Quant Plus 03 15 5 customer to identify and remove barriers to improve the maintenance workforce productivity. I will start by defining maintenance productivity as the ratio of the output to the input of a production system. With a given input, if output of products or services is higher, then productivity/ efficiency is higher. Efficiency is doing things right or it is the measure of the relationship of outputs to inputs and is usually expressed as a percentage. In summary, the total productivity of the maintenance workforce can be divided into three factors: 1. Utilization: The elimination and reduction of nonproductive work such as time spent waiting, walking or being idle. 2. Performance: Increasing speed of task execution through a higher quality of employees, improved tools and working methods and planning and scheduling. 3. Quality: The elimination of unnecessary tasks using work flow and plans analysis, organization analysis, failure analysis, execution quality and equipment design- out. Utilization X Performance X Quality = Total Productivity Our study focuses on the utilization factor only. We wanted to identify the wasted time associated with maintenance tasks, for example, the time technicians lose having to move around unnecessarily in different areas of the plant or wasted time waiting for work permits, spare parts, tools, instructions and other documentation required for completing an assigned task. To be able to measure productivity, we adopted the work sampling methodology, which is a measurement technique developed in the 1930s by L.H. Tippet to analyze, classify and quantify work using instantaneous observations of work in progress taken randomly over a period of time. It is based on the laws of probability and to determine the proportion of the total time dedicated to the various components of a task. To conduct a work sampling study, a large number of observations or snapshots are taken randomly and during each observation and the condition of the worker is determined and recorded in a predefined category of activity pertinent to the particular work situation. Inferences are then drawn concerning the total work activity from the proportions of observations in each category. Based on these measurements, we conducted this study in various petrochemical plants in Brazil. The study was carried out over a 30-day period, and observations were made at predetermined locations to cover the entire plant. Based on statistical calculations, the numbers of required observations were 8,800 with a margin of error of ± 1 percent. For the study, the maintenance activities were divided into three categories: productive, support and nonproductive: Productive: Working and Planning This category includes adjusting, welding, positioning, cleaning, inspecting, assembling, analyzing discussing execution, drawing sketches and a number of other activities. Support: Watching, Walking and Waiting Watching refers to supporting and serving as a stand- by, while waiting refers to time spent acquiring tools, materials, scaffolding, lifting equipment, work permits or instructions. Nonproductive: Personal and Idle Time Nonproductive time is classified and personal and idle time such as drinking water, coffee breaks, smoking and conversations not related to work. The study revealed the following percentages: Working: 26 percent Planning: 11 percent Productive (Working + Planning): 37 percent Waiting: 27 percent Walking: 28 percent Nonproductive (Personal): 1 percent Nonproductive (Idle): 7 percent Assuming a workforce of 100 people with an average labor rate of $40.00 per hour, these losses represent a substantial economic drain equal to $4.6 million each year. Assuming a workforce of 100 people with an average labor rate of $40.00 per hour, these losses represent a substantial economic drain equal to $4.6 million each year. Quant Plus 03 15 6 If we consider that the maintenance labor productivity benchmark for petrochemical industry is 60 percent, we can say that this company achieved their target. The results demonstrate the importance of monitoring maintenance functions in order to improve efficiency and productivity in manufacturing plants. Author: Jose Baptista – Development Manager, Reliability Quant For more information, please visit: www.quantservice.com or email info@quantservice.com Available daily hours per craftsman 7 Measure Value 37% Lost time per day (minutes) 265 Number of workers 100 Days per month 22 Lost time per month (hours) 9702 US$/Hour $40.00 Losses per month $388,080 Losses per year $4,656,960 The results of study were presented to plant management and interested parties and then working groups were created to analyze the causes of unproductive time and to propose plans for improvement. These groups studied and suggested actions for each of the priority items. For example, for the “walking time” issue, the working group identified the following causes: logistics and improper layout, incomplete maintenance planning, deficiencies in internal transport, workers stretching lunch breaks, unavailability of tools, difficult access to productive areas, unavailability of scaffolding, and lack of operators to issue work permits. Several actions were suggested and implemented to eliminate and reduce walking time including reviewing standard work order preparation, reducing internal bus intervals, reviewing meetings schedule, inventing a mobile tool cart so that workers would not have to go to the warehouse and allowing tools to be left at work during breaks and at the end of the day. After implementation, a new study was conducted with the following results: Working: 50 percent Planning: 10 percent Productive (Working + Planning): 60 percent Waiting: 17 percent In Transit (Displacement): 19 percent Nonproductive (Personal): 2 percent Nonproductive (Idle): 2 percent With the results above, the losses were reduced by approximately $1.7 million per year. Available daily hours per craftsman 7 Measure Value 60% Lost time per day (minutes) 168 Number of workers 100 Days per month 22 Lost time per month (hours) 6160 US$/Hour $40.00 Losses per month $246,400 Losses per year $2,956,800 Quant Plus 03 15 23 Maintenance is a people business www.quantservice.com Quant is a global leader in industrial maintenance. For over 25 years, we have been realizing the full potential of maintenance for our customers. From embedding superior safety practices and building a true maintenance culture, to optimizing maintenance cost and improving plant performance, our people make the difference. We are passionate about maintenance and proud of ensuring we achieve our customers’ goals in the most professional way.
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