Reliability and maintenance (RAM) are being leveraged
worldwide as competitive advantages in the hydrocarbon processing industry (HPI).
Yet, most manufacturing operations continue to struggle with
unreliability and subsequently high maintenance costs. The
change in the global business environment has driven RAM
performance to new levels, surpassing benchmarks that have been
quoted for decades.
A leading performance improvement company for the global
energy industry has collected and analyzed more than 30 years
of performance data through its International Study of Plant Reliability and Maintenance
Effectiveness (RAM Study).1 The data shows that
there are two distinct cultures in the RAM
communitytraditional and progressive.
The traditional culture believes that failures are
inevitable. Companies operating in a traditional culture view
equipment failure as normal, and they behave passively as if
they have no influence over the outcome. In contrast, companies
operating in a progressive culture strive for failure-free
operations; everyone is focused on defect elimination and
The focus in a traditional manufacturing environment has been on driving maintenance costs down. Rather than
eliminating the root cause of these costs, traditionalists
focus on optimizing their reactive environment, as shown in
Fig. 1. RAM
optimization with corresponding
Companies operating in this mode are plagued by perpetual
equipment failures, and constantly changing priorities and
maintenance schedules. Although there is a focus on driving
down maintenance expenses, these costs are primarily determined
by the volume of maintenance work, which is largely
Best performers in this environment have maintenance costs
that approach 2% of the plant replacement value (PRV). While
this figure was quoted for decades as world class, at best, it
is average performance in the present global environment.
Traditional maintenance cultures suffer from frequent
production interruptions, subsequent production limitations,
excessive offspec product generation, and, ultimately,
unsustainable margins that can quickly turn into operating
losses. Result: Capital replacement costs are
considerably higher, thus further eroding company profits.
Penny wise and pound foolish
The consequences of continuing to operate in a traditional
maintenance environment are many. A larger maintenance
organization must deal with excessive equipment repairs and
replacements that come with a larger workforce and higher
number of failures. Total direct costs in the form of craft
labor and repair materials are significantly higher in this
environment. The loss of valuable production capacity is often
overlooked in the traditional maintenance culture, where all
eyes are focused on maintenance costs.
The old adage penny wise and pound foolish is
applicable here. While trying to minimize maintenance costs
(penny wise), untold profits are lost (pound foolish) due to
maintenance-related downtime. Additionally, traditional
maintenance organizations lack discipline relative to
controlling turnaround scope. Everything imaginable gets loaded
into the turnaround, so their durations are longer even though
they occur more frequently.
The focus in the progressive manufacturing environment is on
driving up reliability. Progressives recognize that the root
cause of maintenance cost is equipment failure; consequently,
these companies focus on defect elimination.
Although these companies also streamline maintenance work
processes to optimize efficiency, they are not distracted by
continuous equipment failures. Such groups know that each 1%
increase in mechanical availability results in a 10% reduction
in maintenance cost.
The best performers have maintenance costs approaching 1% of
PRV. And mechanical availability in progressive maintenance environments is 97% or higher, with
the best performers approaching 99%, which includes annualized
downtime for turnarounds, as shown in Fig.
Minimal downtime for the progressives
The most significant benefit of a progressive culture is the
reduction in maintenance-related downtime caused largely by
corrective maintenance due to unplanned equipment failures.
Total maintenance downtime is also influenced by planned
downtime, such as turnarounds, as shown in Fig.
Fig. 3. Best
performers vs. others in planned
and unplanned maintenance activities
recorded downtime (equipment
Progressive maintenance organizations have reduced the
frequency of turnarounds to an average of five to seven years,
in comparison to traditional maintenance organizations that do
so every year. Progressive organizations have also controlled
the duration of their turnarounds by limiting the turnaround
scope to work that can only be done during a turnaround.
REACTIVE VS. PROACTIVE MAINTENANCE
The type of maintenance work performed by traditional
organizations is reactive in nature; something is broken, and
it must be repaired or replaced. By contrast, the majority of
work in a progressive environment is proactive, continuously
monitoring the condition of critical equipment so problems can
be resolved prior to failure. If you viewed the entire spectrum
of maintenance behaviors from totally reactive to totally
proactive, you would find a bell-shaped curve with a long tail
on the right side, representing the large number of traditional
maintenance organizations in transition, as shown in
Fig. 4. On the left side of Fig.
4, the curve is rather steep, as there is a limit as
to how good you can be. Every manufacturing site is somewhere
on that continuum, with most moving incrementally in the
proactive direction. Those at the far end of the reactive side
of the curve continue to shut down, as their operation is no
longer competitive, and it cannot be sustained.
Fig. 4. RAM
Risk averse vs. Risk minimization
Traditional maintenance organizations are largely risk
averse; fear of change drives their behavior. Progressive
maintenance organizations are constantly working to improve,
and do not accept the status quo. As a result, progressive
maintenance organizations continue to improve, while
traditional maintenance organizations fall further behind.
Manufacturing organizations are most vulnerable when shutting
down or starting up equipment. Being able to operate in
steady-state conditions within a progressive maintenance
culture enables companies to minimize exposure and subsequent
PATH TO WORLD-CLASS PERFORMANCE
World-class manufacturers achieve high reliability at lower
cost. These companies recognize the value of reliable
operations and focus on failure elimination. These best
performers build reliability into their corporate strategy and
compete effectively in the global marketplace.
From an operational perspective, a progressive maintenance
culture offers numerous advantages. The reduction in downtime
achieved through the increase in equipment reliability provides
additional (spare) capacity. Companies with this advantage
enjoy greater margins on their products as maintenance costs
are distributed across greater production.
In addition, superior product quality can be achieved and
sustained through uninterrupted operations, leading to a net
result of increased revenue and greater profitability. The
detrimental effects of operating in a traditional maintenance
culture can make the difference between staying in business and
being forced out. Because the majority of the competition
continues to suffer from reactive maintenance, progressive
organizations can afford to ship their products anywhere in the
world and undercut local producers.
However, the world is changing and becoming more dynamic.
While initial indications revealed that progressive
organizations were more likely found in developing regions,
established manufacturers are beginning to embrace reliability.
Soon, no one will be immune to global pressures. It takes years
to transition from a traditional maintenance environment to a progressive one.
Every day you delay puts your operation more at risk. The path
to world-class RAM performance begins with the first step. What
are you waiting for? HP
Solomon Associates is the leading performance
improvement company for the global energy industry and the
author of this study.
Al Poling is a project manager with
Solomon Associates, where he works with clients to
identify performance improvement opportunities
through participation in The International Study
of Plant Reliability and Maintenance
Effectiveness. He started his technical career
as a maintenance and reliability engineer, and has
held plant and corporate leadership roles in
maintenance and reliability with several companies.
Mr. Poling is a certified maintenance and reliability
professional (CMRP). He served as the technical
director for the Society for Maintenance and
Reliability Professionals (SMRP) from 2008 to 2010.
Mr. Poling has presented at numerous reliability and
maintenance conferences nationally and
internationally. Additionally, he has published
several white papers and articles on reliability, maintenance and related