Vesta Partners Benchmarking Workshop
Vesta Partners Benchmarking Workshop
Vesta Partners Benchmarking Workshop
Workshop
LESSON OUTLINE
Defining Benchmarking
Defining Core Competencies
Types of Benchmarking
BENCHMARKING- Developing a Maintenance Strategy
BEST PRACTICES Conducting a Benchmarking Project
Terry Wireman
Vesta Partners, LLC
vestapartners.com
USA
+1 203 517 0400
CANADA
+1 289 337 1793
EUROPE
+31 0 70 220 9720
AUSTRALIA
+61 3 8676 0672
SOUTHEAST ASIA
+65 6622 5643
Real. World. Experience.
BENCHMARKING BENCHMARKING...
Xerox Corporation
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Benchmarking Benchmarking
a Definition
It is the process of continuously Benchmarking,compared with
competitive analysis, provides
comparing and measuring an organization
a DEEP understanding of the
with business leaders anywhere in the processes and skills that
create superior performance.
world to gain information that will
BENCHMARKING
Benchmarking
A Definition Benchmarking sources “Best Practices” to feed continuous
improvement
) The search for BEST Research findings show that major innovations in any sector
PRACTICES that will come from outside the industry sector
lead to superior
performance. The need to develop an external perspective has never been
more crucial
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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…unlikely to lead to or highlight significant breakthrough If the goal is only to meet some industry standard, then there is
opportunities that could change long entrenched paradigms of little to gain from investing to be superior...
the vertical market
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DOCUMENTATION... ENABLERS...
ENABLERS…
Enablers
These are behind the scenes or hidden factors (enablers..) that
allow the development or continuation of best practices.
Leadership – Motivated workforces – Management vision and focus
A broad set of activities or are examples of enablers.
conditions that help to enhance
the implementation of a best
practice
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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) NOTE:
Relative, not absolute
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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BENCHMARKING - BENCHMARKING -
CORE COMPETENCIES CORE COMPETENCIES
Core Competencies:
• Key Business outputs or processes through which an organization Key business processes represent core functional efforts and are
distinguishes itself positively usually characterized by transactions that directly or indirectly
• Distinctive - A strength that sets an organization apart from its influence the external customer’s perception of the company.
competition • Procure and Support Capital Equipment
• Examples are expert maintenance, low operating costs, and cross- • Manage and Support Facilities
trained labor
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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BENCHMARKING -
CORE COMPETENCIES
Benchmarking Focus
Core Competencies
Core Competency?
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Expenses Throughput/
Throughput/ Availability
Availability Expenses Labor Materials
• $2M per year • $4M per Year
• Reactive • No Controls
• Estimated 20% red. • Estimated 20% Red.
• Potential = $400K • Potential = $800K
FINANCIAL OPTIMIZATION -
SAMPLE ASSET MANAGEMENT SAVINGS
THE ULTIMATE ROI
Lost Production/
Increased Uptime Increased Efficiency Availability
• $38M lost production • Compressors
• Reduction Possible o 57% & 65%
o 50% • Lost Production
Savings = $19M o $5.4M / Yr..
•
X
• Overhaul cost $450K Maintenance
• Payback 21.8 Days Cost
• Verified by accounting
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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LESSON OUTLINE
Defining Benchmarking
SINCE... Defining Core Competencies
Types of Benchmarking
Developing a Maintenance Strategy
Conducting a Benchmarking Project
It is a CORE
Competency…..
Internal Internal
Interplant • Data collected easily
Divisional • Similar culture
Multinational • Similar organizations+
• Unlikely to result in major breakthroughs, but, should result in quick
Similar Industry
results and adequate ROI
Competitors • Can fuel the desire for more extensive benchmarking
Best Practice
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Process Benchmarking
Types of Benchmarking
Internal Studies
Compares similar operations
Competitive Benchmarking
for different units within an
Measures organizational performance organization
Focuses on Competitors
Select set of measures
Competitive Studies
Process Benchmarking
Compares specific processes
Measures discreet process performance used by direct competitors
Focuses on "Best of Best"
Uses "Best Practice" for process
Must Understand practice Functional or Industry Studies
Must adapt and apply to organization Compares similar processes
within the same broad industry
Generic Benchmarking
Compares similar processes
Real. World. Experience. Real. World. Experience.
independent of industry
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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BENCHMARKING EVOLUTION
Benchmarking
Step 1
• Practice with Internal Partners 4 Steps
Step 2 )
1. Plan the project
• Progress to “Better Practice” internal/external partners
Step 3 ) 2. Collect the Data
• Gradually move to benchmarking with the “Best”
) 3. Analyze the data for
performance gaps and
process enablers
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Society of Manufacturing
Engineers
Institute of Industrial
Engineers
Productivity Press
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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7 3
Supplier
Selection
Asset 8
Performance
Management
Project
4 Execution
6
MRO
Procurement 5
Asset
Real. World. Experience. Real. World. Experience. Maintenance
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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HQ
Plan
V.P. Operations
Maintenance Audit/
Retire
Engineering
Design/ Operations
Engineer
Acquire Maintain
Operate
Construct
Commission
Incurred
$447 B
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Equipment
Life Cycle
Phases ASSET MANAGEMENT LINE OF SIGHT
Production/ Elimination of
System/ Product
Construction Operations Equipment Specific
Management
Management Spares
Equipment
Product/ System Engineering and
Maintenance Retirement –
Design-Research Operations Analysis
Disposal
Manufacturing and
Engineering Design Spares and Regulatory
Construction
And Documentation Materials Requirements
Logistics
Documentation and
System/ Product Project Quality Final Documentation
Equipment Specific
Test and Evaluation Control And Storage
Training
Details
on start
What are
the up issues May 2011 Sep 2011 CD2 DIS
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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STRATEGY PYRAMID
Vision
Mission
Goals
Strategies
Tactics
Action Plans
Developing Performance Indicators for Managing Maintenance – 2cd ed.
DISCUSSION POINTS
VISION
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Vision:
• Vision is the big picture statement. It must be
powerful, summarized in one memorable or motivating Vision
sentence or phrase. It should be general in scope, not
Mission
restricting
Mission: Goals
• Mission is the answer to “What an I going to do about
my vision?” This is more general than specific. The Strategies
mission must inspire you and your customers. It
Tactics
points to the direction you are heading. It is not the
map, just the compass heading
Action Plans
Secrets of Power
Real. World. Experience. Marketing – George Torok Real. World. Experience.
65 66
BEST PRACTICES
WHAT ARE “BEST PRACTICES” IN MAINTENANCE? EVOLUTIONARY - NOT REVOLUTIONARY
Best Practices are critical success factors that enable a
company to achieve an optimum and effective Asset
Care Management process focusing on their Return on
Investment. Reactive
Preventive
Operator
Best Practices include, but are not limited to, areas such as Involved
Preventive Maintenance
Predictive
Inventory and Purchasing
Work Management T.P.M.
Predictive Technologies
Reliability Techniques
Total Productive Maintenance
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Total
Financial
Productive
Optimization
Maintenance
Reliability
Predictive Operations
Centered
Maintenance Involvement
Maintenance
Technical and
Stores and Work Flow
CMMS Interpersonal
Procurement System
Training
Preventive Maintenance
Preventive Maintenance
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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P.M. PROGRAMS
Preventive
Maintenance EFFECTIVE
is the heart of TPM
and the core of
every maintenance
strategy.
Preventive Maintenance
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Current Conditions
Best Practices
Poor Service Levels 95 - 97% Service Levels
100% accuracy of data
Results in “Hoarding & Pirating”
> 1 turn per year on inventory value
Inaccuracies in Stock Counts Elimination of non-moving spares
Delays in Work Execution
Reduction of slow moving spares
Controlled Access
No Tracking of Remote Stores Consignment arrangements
Results in excessive inventory Strategic Partnering with suppliers
NOT SATISFIED
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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160
140
120
100
% Utilization
80
60
20
Preventive Maintenance 0
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Without Data:
Everything is just
someone else’s
opinion.
Discussions are
when people have
facts.
Arguments are
when emotions
and opinions are
involved. ISO 15686
Technical and
Stores and Work Flow
CMMS Interpersonal
Procurement System
Training
Preventive Maintenance
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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80% of the skills of those With a good crew one would make
now working in technical the inspections; with a poor crew,
one would rather take a calculated
areas will be obsolete in risk of a failure up to a certain
three to five years. level of severity.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Technical and
Stores and Work Flow
CMMS Interpersonal
Procurement System
Training
Preventive Maintenance
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Preventive Maintenance
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Project
Inventory Management Engineering
TPM for America, Herb Stienbecker
Preventive Maintenance
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Total
Productive
Maintenance
Financial
Optimization
“Best is the
Reliability
Predictive
Maintenance
Operations
Involvement
Centered
Maintenance enemy of
Better”
Technical and
Stores and Work Flow
CMMS Interpersonal
Procurement System
Training
Preventive Maintenance
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
breakthroughs
Attitude? Approach #1
It appears that each refinery’s performance reflects Repair Focused Organizations
the collective attitude and spirit of the refinery
This organizational style embraces the
personnel more than any other single factor examined.
philosophy that equipment will fail and the
mission of the maintenance force is to
respond quickly to equipment in distress.
No opportunity to examine failure causes
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Conclusion
Develop the Business
Achieving “Best Practice” is being the best in your • Mission – Vision Statements
business. Organize to Execute the Business Plan
• Geographical and Reporting Structures
It is the ability to compete with any other company in
• Roles and Responsibilities
your business in product/service price, quality, and • Determine Staffing Levels
timeliness of service. Develop a Performance Management System
It is an attitude accompanied by business results. • Determine Linkage necessary to connect the maintenance and
reliability business to corporate business objectives (Profitability)
Maintenance is a big business –
Are you striving for “Best Practice” Status???
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
To properly enable an organization, all of the following must be Determining what the organization has for goals and objectives
understood:
• Business Objectives
• Organizational structures
• Roles and responsibilities
• Staffing levels
This methodology will insure an organization will be optimized
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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WHAT IS THE OBJECTIVE FOR THE MAINTENANCE/ WHAT IS THE OBJECTIVE FOR THE MAINTENANCE/
RELIABILITY BUSINESS? RELIABILITY BUSINESS?
2. Maintenance should be performed utilizing methodologies that 3. Reduce energy consumption to as low as level as possible.
make it as efficient and effective as possible.
• Lean
• Low Cost
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Directs maintenance work force providing on-site expertise Plans, Schedules and Coordinates corrective and preventive maintenance
activities by studying and managing work requests, analyzing job
Ensures work is accomplished in safe, efficient manner requirements, and determining materials, equipment and labor needs (i.e.
Coordinates work planning and scheduling with the planner blueprints, tools, parts, craftsmen) in order to complete maintenance
ensures quality assurance of work economically and efficiently.
Develops a weekly maintenance schedule and ASSISTS the Maintenance
Ensures equipment availability is adequate to meet profit plan
Foreman in determining job priorities. Makes changes and adjustments to the
Works with Plant/Production foreman to ensure first line maintenance is schedule and work plans after a review with the Foreman. Maintains a
being done by operators complete and current backlog of work orders.
Verifies the qualifications of hourly personnel and recommends training Assures CMMS software data files are complete and current by gathering
as needed equipment and associated stores information of the entire Plant/Lease and
developing standardized codes for equipment, stores, and task/craft
Enforces Environmental Convenant
assignments for all maintenance activities.
Focuses downward and is highly visible in the field Controls inventory by ordering, issuing, returning, adjusting, and receiving
Champions proactive maintenance verses reactive maintenance stores.
Administers the Union Collective Bargaining Agreement Identifies, analyzes, and reviews maintenance problems with Maintenance
Engineering and revises the maintenance management program as necessary
Monitors CMMS to improve and enhance plant and field operations. Assists in the education
Implements P.M. & P.D.M. Programs of maintenance management to operations personnel.
Real. World. Experience. Real. World. Experience.
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Silence gives consent Building a business ultimately must address the issue of number
of employees in the organization.
However, this is a later event - after the other decisions are
made….
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
MAINTENANCE STAFFING
TRAINING
OPTIONS
“Training less to save money is like stopping the clock to save time.”
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Out
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
In almost every industry, under the same rules and with the same
players, the successes of a few companies rebut the excuses of the
many.
LESSON OUTLINE
Benefiting from Benchmarking
Defining Benchmarking
Provides a measure for the
Defining Core Competencies
benchmarked process among the
Types of Benchmarking target organizations
Developing a Maintenance Strategy
Conducting a Benchmarking Project Describes the organization's
gap in performance as compared
to the measure
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Management S-M-A-R-T
) Specific
If) you don't measure it,
) Achievable
) Realistic
) Timeframed
Benchmark
Best-in-class performance
Real. World. Experience.
for a truly optimized process Real. World. Experience.
1
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Performance Performance
The parity goal is
Best Practice
Focused on achieving
Parity Goal
The level of performance
Benchmark Gap
They are currently achieving.
Your Performance
T-1 T-1 is the time to
Today Achieve this level of
Today
performance
Your Performance
Today
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Be Honest
Real. World. Experience. Real. World. Experience.
Follow through with commitments
Benchmarking Checklist
Competition
) Plan
) Search
) Just as water retains
no constant shape,
so in warfare there ) Observe
are no constant conditions.
) Analyze
The same applies in business
) Adapt
) Improve
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
CHECKLIST Plan
What is our maintenance mission?
This checklist is modified from a quality benchmarking checklist What is our maintenance process?
developed by Gregory Watson –
How do we measure it?
• Considered one of the original Benchmarking Gurus
This list is modified to reflect maintenance parameters in a How well is our maintenance
benchmarking project. performing today?
Observe
Search What is their maintenance
mission?
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Adapt
Analyze
How does the knowledge about
their maintenance process
What is the nature of
enable us to change our
the performance gap?
maintenance process?
What is the magnitude of
Should we redefine or reset
the performance gap?
our performance measures
based on this benchmark?
What characteristics distinguish
their process as superior?
What parts of their maintenance
process would have to be
What activities within our
changed or modified to be
process are candidates for change?
adapted into our business
Real. World. Experience. Real. World. Experience.
environment?
Traps to Benchmarking
Improve The fear of being seen
as copying
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
BENCHMARKING...
Benchmarking Projects
7 step procedural review
It is necessary to explore the tangible and intangible factors that
combine to produce a superior performance and to involve those
people most directly concerned in the activity being examined.
Expose management to the
concepts of benchmarking
Develop a project cost estimate
Conduct the project in a way
that insures its success – (planning)
Ensure the project follows
a disciplined process
Report interim and final results
to management
Facilitate the changes recommended by the
study
Monitor the results of the
implementation
SURVEY OVERVIEW
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
COMPARATIVE ANALYSIS
COMPARATIVE ANALYSIS
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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MAINTENANCE REPORTING
Strengths Weaknesses
• 35% distribute 90% of • While 51% reviewed
their reports on a timely equipment by downtime –
basis only 24% examined
equipment by Downtime LATEST ADDITIONS TO SURVEY
Cost
• Only 44% examined PM as
% of total Activities
• Less than 1/3 compared
actuals to plan
• Only 40% had an inventory
valuation report
• Only 14% had a Buyer
performance report
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
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DOCUMENT MANAGEMENT
Strengths Weaknesses
• 40% have their • 59% have less than ½
document of their drawings in
management system the system
interfaced with other • 21% have poor
systems version control
• 42% have established procedures
document control • Only 44% allow
procedures maintenance
technicians direct
access to the system
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Why is this important? The gap between present and Best Practice
What does it mean to your company?
promotes dissatisfaction and desire for change
Seeing, understanding, and learning from Best
Practice helps to identify what and how to
change
Witnessing Best Practice provides a realistic,
achievable picture of the desired future
CHANGE?? BENCHMARKING...
Why should “We have always done it this way” be a reason for It is necessary to explore the tangible and intangible factors that
continuing to do something? combine to produce a superior performance and to involve those
Annual objectives based on past performance plus or minus 10% people most directly concerned in the activity being examined.
are meaningless in a period of rapid change!!
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
A benchmark performance does not remain a standard for long Finding process improvements
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
MAINTENANCE/ ASSET
ASSET VALUE BASED BENCHMARKS
BENCHMARKS
The following are a series of maintenance and asset benchmarks.
These are not specific to an industry, but represent a cross-section
of industries.
These numbers should never be used as an end-goal, but are only Indicator Low Range High Range Best Practice
presented as a general guideline.
Maintenance
Cost/ ERV 2% 5% 2%
Stores
Investment/ ERV .8% 1.2% 1%
ERV/
Maintenance
Technician $4M $10M $7M
Real. World. Experience. Real. World. Experience.
Figure 12-1
Indicator Low Range High Range Best Practice Indicator Low Range High Range Best Practice
Total
Technicians to
Supervisor 8:1 15:1 10:1 Maintenance
Costs/Sales Cost 1% 5% 2%
Maintenance
Technicians to Labor
Planner 15:1 25:1 20:1 Costs/Sales
Costs .6% 2.5% 1%
ERV/
Maintenance Maintenance
Engineer $50M $250M $100M Stores Costs/
Sales Costs .4% 2.5% 1%
Figure 12-2
Real. World. Experience.
Figure 12-3
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
Best Best
Indicator Low Range High Range Practice Indicator Low Range High Range Practice
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
RELIABILITYWEB BENCHMARKS
EXTENSIVE ANALYSIS
http://www.reliabilityweb.com/excerpts/excerpts/maintenance_benc
hmarking.htm
vestapartners.com
USA
+1 203 517 0400
CANADA
+1 289 337 1793
EUROPE
+31 0 70 220 9720
AUSTRALIA
+61 3 8676 0672
SOUTHEAST ASIA
+65 6622 5643
Real. World. Experience.
P. Crosby “Let’s Talk Quality”
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Benchmarking Maintenance Management – SMRP Terry Wireman, CMRP Vesta Partners 10/8/2013
Workshop
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