Chapter 1 Introducing Best Practices in M&R

Chapter 1 :Introducing to Best Practices
1.1 Introduction: What Is a Best Practice?

Q1: “Best practice” is an idea which asserts that there is a technique, method, or process that is more
effective at delivering a desired outcome than any other technique, method, or process. The idea is
that with this technique, a project or an activity such as maintenance can be completed with fewer
problems and unforeseen complications. Simply, we can say that a technique, method, or process may
be deemed a “best practice” when it produces superior results. A best practice is typically a
documented practice used by the most respected, competitive, and profitable organizations. When
implemented appropriately, it should improve performance and efficiency in a specific area. To some it
may be a routine or a standard practice; but to others, it may be a best practice because a current
practice or method is not effective in producing the desired results. History is filled with examples of
people who were unwilling to accept or adopt the industry standard as the best way to do anything.
Q2: Implementing best practices in the area of maintenance and reliability can help an organization to:
• Increase output with the same set of assets
• Reduce the need for capital replacements
• Reduce maintenance cost per unit
• Reduce total cost per unit of output
• Improve performance — cost, productivity, and safety
• Increase competitiveness
• Increase market share
Q3: the three main barriers to adoption of a best practice are a lack of:
1. Knowledge about current best practices
2. Motivation to make changes for their adoption
3. Knowledge and skills required to do so
Q4: 1.2 Key Terms and Definitions
Asset
An electronic or mechanical hardware component or device, a software product, or a
manufacturing system or process.
Benchmark
Process of identifying, sharing, and using knowledge and best practices. It focuses on how to
improve any given business process by exploiting topnotch approaches rather than merely
measuring the best performance.
Best Practices
Technique, methods, or processes that are more effective at delivering a desired outcome than
any other techniques, methods, or processes. These are usually documented practices used by
the most respected, competitive, and profitable organizations.
Maintenance The act of maintaining, or the work of keeping an asset in proper operating
condition.
ReliabilityThe probability that an asset or item will perform its intended functions for a specific
period of time under stated conditions. It is usually expressed as a percentage and calculated
using Mean Time Between Failures (MTBF).
1.3 What Do Best Practices Have to Do with Maintenance and Reliability?
Q5: The objective of performing better maintenance and improving reliability of assets in an
organization is to ensure that the assets are available to perform required functions, when
needed, in a cost-effective manner. The performance of an asset is based on three factors
1. Inherent reliability — how it was designed?
2. Operating environment — how it will be operated?
3. Maintenance plan — how it will be maintained?
Q6: Usually assets are designed with a certain level of reliability. This designed-in (or built-in)
reliability is the result of individual components’ reliability and the way they are configured. This
level of reliability is called inherent reliability. We cannot change or improve the reliability of an
asset after it has been installed without replacing or modifying it with better and improved
components with the exception of redesigning it.
Q7: The second factor, the operating environment of the asset, considers operating conditions
under which the asset has to operate along with the operator’s skills. Several studies have
indicated that 40% or more failures are the result of operational errors. Organizations need
to ensure that operators are appropriately educated and trained in operating these assets
without causing operational errors that lead to failures. In fact, operators should be the first line
of defense in monitoring the asset’s performance and any abnormal conditions, and in initiating
timely corrective actions.
Q8: The third factor is a maintenance plan that defines how the asset will be maintained. The objective
Of a good maintenance plan is to sustain asset reliability and to improve its availability. The plan
Should include the necessary maintenance and service-type actions needed to detect potential failures
Before they lead to unscheduled downtime.
So what do best practices have to do with these principles of maintenance and reliability?
Throughout the many years of the maintenance and reliability industry, good and bad practices have
Been identified. These good and bad practices have been briefed at international conferences,
Discussed in person and over the airwaves, and written in magazines, books, websites, and blogs. The
Best of these practices are now becoming more accepted and published throughout local, national, and
International industries, becoming the benchmarks that companies seek to achieve.
1.4 Examples of Maintenance and Reliability Benchmarks
Q9: M&R best practices are practices that have been demonstrated by organizations who are leaders in
their industry. These companies are the quality producers with very competitive costs, usually the
lowest in their industry.
Q10: Maintenance Cost as a Percentage of Replacement Asset Value (RAV), is a maintenance
performance measure that is used extensively as a benchmark for evaluating best practices. We can
immediately identify the cost differences between companies that are Typical and World Class or Best in
Class. However, typical companies are likely to spend more to build-up their maintenance and reliability
program. Then, once they have achieved a desired level of reliability and availability, they should be able
to reduce the maintenance cost by continuing to
Apply the best practices.
1. Maintenance Cost as a percent of RAV: This measure is calculated as maintenance cost
divided by the replacement asset value. In this benchmark, two factors must be defined in order
to ensure a comparison is accurate:
a. Maintenance cost. This factor is the cost of maintenance for a plant or facility; it includes
maintenance labor, maintenance materials, contractors used to perform maintenance work, capital
maintenance, and the cost of all projects to replace worn out assets.
b. Replacement Asset Value (RAV). This number typically comes from the engineering or
company’s insurance carrier and not from accounting. It is not the book value considered for
accounting purposes. Instead, it is the current replacement cost of all assets for an industrial facility.
This measure should include the cost of removing old assets and the cost of installing new ones.
Q11: 2. Maintenance Material Cost as a Percent of RAV: This benchmark is very similar to the
previous measure and calculated simply as maintenance material cost divided by the replacement
asset value. In most organizations, the material cost is easier to obtain from the Computerized
Maintenance Management System (CMMS) or orga-nization’s financial system. To ensure a
comparison is accurate, we must ensure that the maintenance cost includes all maintenance
material purchased for all assets in a plant, including maintenance storeroom parts and material,
parts and material used by contractors on maintenance, and capital maintenance work.
For example, organization “A” typically has their Maintenance Material Cost as 2% of RAV
and organization “B,” which has applied best practices, typically has their Maintenance
Material Cost as 0.5% of RAV. This comparison indicates that organization “A” is spending
four times more for maintenance material when compared to organization “B.”
Caution: Organizations need to understand that neither maintenance cost nor maintenance material
cost can be reduced in a sustainable manner without the application of best practices. Many
organizations attempt to focus solely on maintenance cost reduction, but this approach is usually
misdirected until they have reviewed and improved their processes, and applied best practices.
Q12:
3. Schedule Compliance: This measure is the ratio of maintenance labor hours consumed for the
jobs or tasks completed (which were on an approved schedule) divided by the total maintenance
labor hours available during that period. Some organizations also track the number of jobs/tasks
completed which were on an approved schedule versus the total jobs/tasks on a schedule.
Maintenance Schedule. The maintenance schedule identifies jobs/tasks to be completed and
approved in the previous week or at least three days in advance. It should cover 100% of maintenance
labor.
When schedule compliance is high, we usually find that organizations also have high uptime and asset
utilization rates. There is a direct correlation between them.
Q13: 4. Percent of Planned Work: This measure calculates the percent of maintenance work orders
where all parts, material, specifications, procedures, tools, etc., have been defined prior to
scheduling the work. This best practice is a key to long-term success of any successful
maintenance organization.
Will typically have high uptime and asset utilization rate. Their maintenance costis also low because
unplanned work costs more to execute.
Q14: 5. Production/Operations Breakdowns Losses:
This number becomes small and insignificant best practices are applied and become a normal way of
life. One important issue which impacts this benchmark is that all personnel from the executive level to
production be responsible for the plant’s assets. The organization management must support the
excellence in implementing best practices. Operators must see assets as something
only way this transformation can occur is through education and empowerment.
Q15:
6. Parts Stock-out Rate: This measure is based on the number of
times a maintenance craft person visits the storeroom to get the parts needed versus when parts are
supposed to be in the storeroom, but is not available in stock.
Q16: benchmarking is not an easy

process, particularly when there are no standard definitions of terms to benchmark. For example,
RAV (replacement asset value) may not have same meaning to Organizations A and B. Both of them
may have different definitions. This problem has been a major challenge in M&R-related
benchmarking initiatives. The Society for Maintenance and Reliability Professionals (SMRP) has
taken the lead toward standardized maintenance and reliability terms, definitions, and metrics. The
When measuring performance against known benchmarks of best practices, we will find that all
benchmarks are interconnected and interdependent. This is why an organization must have a clearly
defined group of maintenance and reliability processes to implement best practices. Tailoring a best
practice to suit your needs and working environment is essential for its successful and effective
implementation.
Q17: Many maintenance and reliability practitioners have not been successful in implementing best
practices. It is usually due to a lack of or limited understanding of the best practices or not getting
adequate management support. Take the test on the following pages to assess your knowledge of
M&R best practices. This test will help you understand where you stand in your reliability journey.
Once you complete the test, go to the Appendix and score yourself appropriately. Try not to guess
when answering any of the questions. If you are uncertain, skip the question and review the text later;
otherwise, your results may give you a false sense of how well you know “best practices” when it
comes to maintenance and reliability.

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Chapter 1 :Introducing to Best Practices

1.1 Introduction: What Is a Best Practice?

Q16: benchmarking is not an easy

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