Implementation and benefits of introducing a computerised maintenance management system into a textile manufacturing company

Implementation and benefits of introducing a computerised maintenance management system into a textile manufacturing company

Journal of Materials Processing Technology 153–154 (2004) 226–232 Implementation and benefits of introducing a computerised maintenance management sy...

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Journal of Materials Processing Technology 153–154 (2004) 226–232

Implementation and benefits of introducing a computerised maintenance management system into a textile manufacturing company C.D. O’Donoghue, J.G. Prendergast∗ Department of Mechanical and Manufacturing Engineering, School of Engineering, Institute of Technology Tralee, Co. Kerry, Ireland

Abstract Equipment, be it sophisticated or basic in operation and design, depending on its usage, will inevitably malfunction and breakdown. Within any organisation where manufacture is the primary activity, it is crucial that procedures exist for equipment maintenance. Not only does equipment maintenance need to be planned for, the possibility and probability of breakdowns and disruption to operations must also be considered when planning and scheduling production. This paper examines the basis of various maintenance management strategies used to date in international manufacturing. These strategies assist the maintenance function and enable the process of maintenance to be optimised. Special attention is given to Computerised Maintenance Management Systems (CMMSs), how this particular strategy was successfully implemented in a medium sized Irish textile manufacturing company. © 2004 Elsevier B.V. All rights reserved. Keywords: Manufacturing; Maintenance management; Computerised maintenance management systems (CMMSs)

1. Manufacturing maintenance objectives Considerable sums of money are wasted in business annually, because of ineffective or poorly organised maintenance [1]. However, maintenance is only one element, which contributes to effective operation during the life cycle of an item of equipment. Maintenance has a very important part to play, but must be co-ordinated with other disciplines such as training personnel in appropriate skills, maintaining motivation and effective people management. Taken together, this approach—aimed at achieving economic life-cycle cost for an item—has been called ‘terotechnology’, and defined by Wild as “the multidisciplinary approach to the specification, design, installation, commissioning, use and disposal of facilities, equipment and buildings, in pursuit of economic life-cycle costs” [1]. The formal definition of ‘terotechnology’ according to the British Standard, BS 3811:1984 is “a combination of management, financial, engineering, building and other practices applied to the physical assets in pursuit of economic life cycle costs” [2]. Williams, Davies and Drake go on to clarify this definition by stating that “‘terotechnology’ is concerned with the specification and design for reliability and maintainability of plant, machinery, equipment, buildings and structures, ∗ Corresponding author. E-mail addresses: [email protected] (C.D. O’Donoghue), [email protected] (J.G. Prendergast).

0924-0136/$ – see front matter © 2004 Elsevier B.V. All rights reserved. doi:10.1016/j.jmatprotec.2004.04.022

with their installation, commissioning, operation, maintenance, modification and replacement, and with feedback of information on design, performance and costs” [3]. Hodges simplifies these definitions by explaining ‘terotechnology’ as “the achievement of the best value for money using techniques which are many and various in their forms, approach and application” [4]. Life cycle costing (LCC) involves collecting all the cost information incurred during equipment life. Decisions made at an early stage in the design phase can have significant effects on the cost of running a particular machine throughout its life. There is evidence to show that the breakdown of lifecycle costs is as outlined in Table 1 [5]. The objective of maintenance is to try to maximise the performance of equipment by ensuring that, items of equipment function regularly and efficiently, by attempting to prevent breakdowns or failures, and by minimising the losses incurred by breakdowns or failures. In fact, it is the objective of the maintenance function to maintain or increase the reliability of the operating system taken as a whole. Sivalingam discusses the importance of maintenance within the broader area of industrial management. He states “an integrated maintenance management when properly implemented can lessen emergencies by 75%, cut purchasing by 25%, increase warehouse accuracy by 95% and improve preventative maintenance by 200%”. He goes on to say, with maintenance costs rising from 9% to 11% per annum, the potential for savings is very high in the short and long

C.D. O’Donoghue, J.G. Prendergast / Journal of Materials Processing Technology 153–154 (2004) 226–232 Table 1 Breakdown of lifecycle costs Preliminary design review

15–35% of the life cycle costs have been determined 25–40% of the life cycle costs have been determined 95% of the life cycle costs have been determined

Concept design review Critical design review

term. Good management of maintenance can reduce costs by as much as 35% [6]. Wild draws the familiar total cost curve as in Fig. 1 [1], which shows that increased effort in preventative maintenance should reduce the cost of repair. If it were possible to define both of these curves, then it would be a simple task to determine the minimum cost maintenance policy. However, it is not as clear-cut as this and therefore maintenance policy is much more difficult to formulate. The overall objective is to minimise the total cost of maintenance by minimising one or both of the costs that contribute to it. Reducing the cost of preventative maintenance (PM) by minimising the level of PM carried out in the manufacturing facility can increase downtime due to breakdowns and consequently necessitate the need for more repairs. On the other hand, increasing the level of PM to too high a level will introduce unnecessary extra maintenance cost without necessarily minimising the risk of breakdown. The overall objective is to obtain an optimum level of preventative maintenance so as to reduce total maintenance cost. Achieving this optimum delivers other benefits such as increased morale, reduction in random breakdowns, improved quality of product, increased equipment availability, reduced delivery times and of course increases in profitability. The strategies utilised successfully in the area of maintenance management optimisation include Reliability Centered Maintenance (RCM), Profit Centered Maintenance (PCM), Asset Management (AM), Condition Based Maintenance (CBM), Total Productive Maintenance (TPM) and World Class Manufacturing (WCM) through CMMS implementation. These management philosophies essentially comprise of different techniques and tools with varying emphasis on individual factors, but achieve a very similar final objective, the optimisation of maintenance. The goal is to obtain the maximum production output with the best

levels of product quality, and doing this at minimum cost to the facility providing the least risk of breakdown. Other important criteria of modern maintenance include such topics as safety to personnel, the environment and morale of employees. 1.1. Computer maintenance management systems Corder gives an insight into the scope of modern maintenance management, “maintenance management is very wide indeed, since almost all current engineering, management and accounting practices have some relevance to the subject” [7]. Greater demands are being imposed on the maintenance manager in order to improve the standard of maintenance and efficiency of work while at the same time reducing maintenance operational costs. Chapman states that CMMS software was seen first around 1976 [8]. Today it is widely used in manufacturing plants all over the world. Maintenance optimisation is greatly facilitated when companies adopt a World Class Manufacturing/Maintenance (WCM) philosophy or management strategy in conjunction with CMMS implementation. There are many factors, which influence management on installing CMMS software and using it within their plants. Trunk puts forward the following reasons for adopting CMMS software [9]: • Customers demand compliance with ISO 9000. • The FDA requires maintenance management systems for plants that handle pharmaceuticals. • Insurance companies demand to know cost and condition of material handling assets. Chapman states, “The tracking and control of plant maintenance and outage activities involves objectives and requirements which are different from the control of normal engineering and construction work. The integration of these requirements into a computerised management information and control system challenges the system designed. Maintenance and outage work is estimated, scheduled and controlled at a much greater level of detail than normally required on a typical engineering and construction project” [8]. The variety of tasks associated with the organisation of maintenance management lends itself to the utilisation of computer systems. It is in this area including planning,

Total Maintenance Cost = Cost of PM + Cost of Repairs Total cost Cost

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Cost of preventative maintenance Cost of repairs

Level of maintenance

Fig. 1. Maintenance costs [1].

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organisation and administration of maintenance management that Computer Maintenance Management Systems (CMMSs) have proved to be very beneficial. Lamendola emphasises the need to eliminate non-value added activities especially with respect to documentation of work within maintenance [10]. He states that “this philosophy has long been the essence of Computerised Maintenance Management Systems”. Travis and Casinger outline other difficulties associated with modern maintenance management [11]. In their paper they prioritise the top five problems encountered by maintenance managers and suggest that CMMS is the solution to these problems. The problems are outlined as follows: 1. Little or no support from management to implement world class maintenance practices, CMMS reports can highlight the levels of downtime and reduce costs. 2. Inventory problems, the need to reduce spares and still have parts on hand. Control of spares modules is part of most of the modern CMMS packages. 3. The problems associated with maintenance personnel excelling at some jobs and lacking skills in other craft areas. CMMS allows managers to review this information, what work has been done and by who over a period and assign work appropriately in a variety of craft areas in the future. 4. Not enough maintenance personnel to handle the workload. CMMS can generate reports on labour requirements for each work order totalling the information by craft and week, showing imbalances and requirements for additional personnel. 5. Machines breakdown just before preventative maintenance is due—CMMS can provide reports for each item of equipment, which can help pinpoint problem parts or requirements to reduce the preventative maintenance interval. Wireman is of the opinion that if Computer Maintenance Management Systems are to be properly examined it is important to have an understanding of the primary maintenance functions incorporating [12]: maintenance inspections and service, equipment installation, maintenance storekeeping, craft administration. He goes on to outline the objectives of CMMS covering: improved maintenance costs, reduced equipment downtime as a result of scheduled preventative maintenance, increased equipment life, ability to store historical records to assist in the planning and budgeting of maintenance, ability to generate maintenance reports. Most of CMMS systems have four modules or components catering for: (a) (b) (c) (d)

work order planning and scheduling, maintenance stores controls, preventative/predictive maintenance, maintenance reporting.

1.2. CMMS implementation Wireman discusses implementation of CMMS, by outlining the steps required up to and including implementation. These steps are [12]: (a) analysis of existing systems, (b) selection of a suitable system, (c) implementation. As part of the analysis process, the first decision for management to make is whether there is a requirement to implement a CMMS or not. To assist this process Wireman puts forward questions, which should be considered by management such as: (a) Are maintenance costs rising faster than operation costs? (b) How much more is being spent on maintenance compared to 5 years ago? (c) Does management know what it costs to maintain each item of equipment? (d) Do technicians spend most of their time waiting for work? (e) Are there storage bins full of spares that never seem to be used? (f) Does equipment seem to breakdown at the worst possible time with out any advance warning? (g) Does management have access to information required to properly plan for the future? (h) Is this information in a useable format? A committee should head the selection process according to Wireman with members from engineering, maintenance, stores, accounting and data processing. The objectives of these committees include: • Review of present record keeping systems and paper work flow, • Planning objectives of the system in the areas of: work order processing, maintenance stores, preventative maintenance, cost controls and required reports, • Identifying the types of computer systems that are needed, • Identifying the vendor packages that meet the objectives, • Evaluation of systems and vendors.

2. CMMS implementation case study The case study was based on a CMMS implementation in a textile manufacturing company in the south west of Ireland. The company had employee numbers of 110 persons at the time of CMMS implementation. There were a total of nine technicians and a maintenance manager making up the maintenance department. Existing maintenance within the company was a mixture of ‘repair’ type maintenance and planned maintenance across the various departments. There was anecdotal evidence to suggest that maintenance was conducted in the plant

C.D. O’Donoghue, J.G. Prendergast / Journal of Materials Processing Technology 153–154 (2004) 226–232

across all departments, records of which were not always documented, this being one of the major disadvantages associated with manual systems. Analysis of breakdown and cost was not frequently carried out. 2.1. Management organisation and levels of technology in the plant Maintenance policy was documented in the plant as part of the quality management system. The company was ISO9002 certified, and procedures documented in the quality manual addressed to some extent maintenance requirements for the plant. This policy was based on ensuring preventative maintenance was carried out in order to minimise machine break down and maximise product quality. Maintenance management had a vision of existing maintenance policy and were of the opinion that older manual based systems could be greatly improved. This could be achieved by automating non-value added administrative tasks, implementing systems which allowed analysis of maintenance performance and developing procedures and systems which would cater for control of spare parts. There were purchase requisition and approval procedures in place to cater for normal day to day expenditure within the maintenance department. Capital expenditure within the maintenance department was initiated by the maintenance or production manager and approved by the general manager. Larger scale capital expenditure required approval from management within the company group. The maintenance manager who was responsible for planning and scheduling maintenance and supervisory management of personnel headed the maintenance department. Other responsibilities incorporated in this job description included ensuring that there were adequate stocks of spares available for all departments, order initiation and purchasing of spares and liaison with machine manufacturers in relation to instal-

229

lation and commissioning of new machines or fault finding and repair of existing items of equipment. Compounded with this the manager was also involved with management of facilities as part of a recent plant upgrade and extension. All these non-value-added duties were extremely time consuming especially as there were no dedicated software systems on hand to assist in any of these areas. Levels of technology involved newer machines being computer controlled having reasonable levels of sensor technology built in to assist diagnosis and finding of faults. Technology was very dependent on pneumatic, hydraulic, electrical and mechanical actuator systems with high levels of computer and programmable logic control. Sensing and control were very dependent on analogue and digital electronics. Older machines were predominately mechanically controlled. 2.2. CMMS implementation procedures The first task prior to implementing a suitable CMMS was to establish an implementation team. The members of this team were the general manager, production manager, maintenance manager, the company accountant, an individual from maintenance (craft) and one from production as well as an external facilitator (consultant). The function of this team was to draw up an implementation plan and consequently implement a suitable Computer Maintenance Management System in the company. Crucial to this implementation was a review of existing systems; this was carried out in the form of a detailed audit. This audit evaluated systems practised within the plant and assisted in the decision making process enabling an organised implementation plan to be formulated. A summary of the major concerns and recommendations arising from this audit can be seen in Table 2.

Table 2 Major concerns and recommended solutions Areas of concern

Recommended solution

Scheduling of work is not always according to predetermined preventative maintenance schedules, breakdown maintenance is occurring more frequently No control on spare parts

Systems are required to streamline and automate the tasks of spare parts control, scheduling and planning of work and issue of work orders. Estimated man-hours: 800 It is crucial to have some control on spares in relation to quantities and locations in order to assure maintenance that there is enough of a particular spare and there is the ability to retrieve it from an assigned location within an acceptable time period. This could be incorporated into the spares manager in a CMMS. A separate stand alone stock control system to control spares would be difficult to integrate with other systems. It also happens that there is physical plant expansion being conducted presently and a total new stores area/workshop is incorporated into this planned expansion. Estimated man-hours: 200 (spares control) Readjust p.m. intervals and possibly look at condition monitoring for critical machine functions. This reinforces the need for CMMS implementation to automate the function of planning and scheduling by installing a CMMS. Estimated costs: £ 2500 in training It was recommended to use the report manager in a CMMS to produce various cost reports, which could be easily generated by the maintenance manager

Some machines were breaking down more frequently than others

Labour costs, production costs due to breakdown and costs of spares were difficult to analyse and report

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Average threads seamed per m/c hour 650 Thread pairs

600 550 500 450 400 350 JanuarFebrua March April

May

June July August Septe Octob NovemDecem Month Monthly production

Fig. 3. Annual production (2000).

2.3. System preparation The next stage of the implementation was to make preparations for the new system. This involved modifying existing practices within the maintenance department. Evaluating Computer Maintenance Management Systems software was an integral function of these preparations as well as purchasing and loading up the most suitable package. Several software packages were evaluated under the following criteria: purchasing functions, equipment record capabilities, inventory functions (spares), labour evaluation, reporting and analysis of maintenance, scheduling of maintenance, security of system, statistical predictive maintenance, tasks, work orders and associated functions, work requests and corresponding capabilities, cost of system (3 users) and add on capabilities. The package, which proved to be most suitable for the application in question was Datastream MP2 developed by Datastream. Included here also was a review of existing data and a total reorganisation of the spare parts stores, changing the stores to a new location and discarding of redundant spares. The initial hardware setup in the plant involved loading the software in a manner where it was networked and available on the maintenance manager’s PC, the production manager’s PC and a third terminal located in the workshop/stores area. It was preferable to have the facility to extend the software license to other terminals throughout the plant if the need arose in the future. The task for physically inputting data into the Datastream CMMS was given

Total costofspares (2000)

Cost (punt)

120000

2.4. CMMS implementation results Analysis and evaluation of the CMMS implementation was carried out after 7 months of successful operation of the system. Key indicators used to assess success of the implementation are represented in Figs. 2 and 3 and Tables 3 Table 3 Summary of investment analysis Installation cost Software Hardware Labour Training Consulting Support fees Total installation cost for CMMS implementation

100000 80000 60000 40000 20000 0

to two engineering undergraduates contracted for the summer period under the close supervision of the production manager and the maintenance manager. The implementation team worked in conjunction with in-house maintenance craft technicians to setup the system involving: loading the asset manager, loading the spares manager, loading the work control manager, employee information and codes. The final stage of the analysis was to test the new systems after a suitable operating duration. Several indicators were chosen for evaluation of performance and efficiency of the new maintenance management system. This evaluation was carried out using information such as spare parts costs and production reports. An investment analysis was carried out along with a bench marking exercise to compare the new systems with those, which are representative globally.

Jan-Jun

July-Dec Total per half year Cost of spares

Fig. 2. Annual cost of spares.

IR£ IR£ IR£ IR£ IR£ IR£

7000 15000 20000 15000 5000 60000

IR£ 122000.00

Annual maintenance costs Total labour cost Total inventory cost Downtime costs Shutdown costs Maintenance costs

IR£ IR£ IR£ IR£ IR£

Total savings per year Payback period in years

IR£ 266578 0.46

334620 190000 150000 36000 710620

C.D. O’Donoghue, J.G. Prendergast / Journal of Materials Processing Technology 153–154 (2004) 226–232

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Table 4 Benchmarking metrics comparison: composite maintenance benchmark metrics General cost ratios

Company ratios (%)

Representative range (%)

Maintenance cost/ERV Process Discrete

4

2–5 2.0–5.0

Total maintenance cost/total sales Process Discrete

10

1.5–5 0.6–2.2

Maintenance labour cost/total sales Process Discrete

4

0.6–2.1 0.4–1.1

3

0.8–2.4 0.2–1.1 £ 2.7–£ 6.3 £ 46–£ 210

Maintenance materials cost/total sales Process Discrete ERV (£ millions)/technician ERV (£ millions)/maintenance and reliability engineering Maintenance performance Work order coverage Process Discrete Schedule compliance (overall) Preventive maintenance Process Discrete Planned repairs Process Discrete Planned work (overall) Overall equipment effectiveness Uptime

£3 –

85 50

80–95 80–95 35–70

95

80–100 65–95

80

70–95 65–80 65–95 48–78 –

80

Availability Discrete Process PM + PdM by operators Maintenance labour cost/total maintenance cost Contractor cost/total maintenance cost

10 – –

78–91 85–95 10–25 20–45 10–40

Labor/human resources Injuries/200,000 h Technicians/supervisor Technicians/support person Technicians/planner Technicians/total workforce Maintenance craft classifications PM + PdM man-hours/total maintenance man-hours

<1 10 10 10 9 2 35

– 15–25 2–8 20–80 10–30 2–7 18–40

2 –

2–20 5–30 30–50

2.6 – – –

0.3–2.3 0.3–1.2 85–99 £ 295000–£ 506000

Emergency man-hours/total maintenance man-hours Process Discrete “Wrench time”/total maintenance man-hours Materials management Stores value/ERV Stores turnover Stores inventory accuracy Stores disbursements/stores personnel

90

Sources: Fluor Daniel, NAME Awards, McGladrey and Pullen/National Association of Manufacturers, A.T. Kearney, HSB Reliability Technologies.

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and 4. These demonstrate how all-major targets were achieved by a successful implementation of CMMS software. The cost of spares reduced while production increased substantially. It can also be seen from Table 3 that the payback period was relatively short (6 months) for a project investment of this type. The bench marking exercise carried out at this stage in operation of the system produced metrics which were globally representative for maintenance in the manufacturing sector.

very favourable for a project implementation of this type (Table 3). The investment proved to be very successful based on cost estimates and finally a bench marking exercise was carried out to evaluate company progress in relation to international practices (Table 4). This indicated representative comparison between the company and others globally as can be seen from the different indices calculated.

References 3. Concluding remarks Many benefits accrued from the CMMS implementation after 7 months in operation such as reduced cost of spares, uptime improvements, increased equipment availability, reducing lead times, increased morale, reduction in unscheduled maintenance and streamlining of work orders schedules. Evidence of these benefits was supported by several key performance indicators, which were evaluated. These consisted of reduced maintenance costs in the area of spare parts, the CMMS was in operation for most of the second half of the year showing a reduction of £ 17,494 in cost of spares in this half (Fig. 2). Sizeable increases in production output can be seen in the seaming department, where production was very dependent on maintenance activity due to the high levels of pneumatic, hydraulic and electrical technologies being utilised here. Increases in the region of 500–640 threads per hour could be seen in the latter half of the year (Fig. 3). This was the largest department in the plant with respect to quantity of machines and levels of personnel. Other costs such as labour costs, equipment downtime costs, plant shutdown costs and CMMS implementation costs were also evaluated in the form of a return of investment analysis. This analysis resulted in a 0.46-year payback period which was

[1] R. Wild, Production and Operations Management, 5th ed., Cassell Educational Ltd., London, 1995, pp. 307(1), 582(1), 651(2). [2] British Standard Glossary of Maintenance Management Terms in Terotechnology, BS 3811:1984, British Standards Institution, 1984. [3] J.H. Wiliams, A. Davies, P.R. Drake, Maintenance and Machine Diagnostics, Chapman & Hall, 1994, p. 1(2). [4] W. Hodges, Terotechnology, Maintenance, vol. 6, No. 4, 1991, p. 22(3). [5] http://www.wmeng.co.uk/wmeng/wmrem/rem.htm, 2001. [6] R. Sivalingam, Applying best practices to maintenance: a 12 step programme for moving down the road to recovery, Plant Engineering, vol. 51, No. 6, June 1997, p. 120(2). [7] A.S. Corder, Maintenance Management Techniques, McGraw-Hill Book Company (UK) Limited, 1976, p. ix preface. [8] S. Chapman, Proceedings of the 55th Annual Meeting of the American Power Conference on Computerisation of Maintenance Management Systems, April 1993. [9] C. Trunk, Material Handling Engineering, The Nuts and Bolts of CMMS, vol. 52, No. 10, Penton Publishing Inc., September 1997, p. 47(7). [10] M. Lamendola, Repair more, repair less: where to focus, EC & M Electrical Construction of Maintenance, vol. 98, No. 9, Intertec Publishing Corporation, 1998, p. 56(2). [11] D.E. Travis, L. Casinger, Five causes of—and remedies for—maintenance manager headaches, Plant Engineering, vol. 51, No. 13, Cahners Publishing Company, 1997, p. 144(2). [12] T. Wireman, Computerised Maintenance Management Systems, 2nd ed., Industrial Press, 1994, pp. 1(2), 61(2).