There are also other less tangible factors to consider. It is no secret that companies must find some way to offset the effects of an aging workforce, where many highly skilled and experienced people are moving toward retirement. How will organizations cope? With fewer and fewer trades people entering the market, who will step up to take the place of those stepping down?

Costs are sometimes obvious-labor costs, for example, and costs associated with procurement of parts or items-but some are less apparent. Hidden costs can be associated with changing parts that are still functioning within specifications or the cost of carrying inventory over a period of time. Of course, there are many more situations where cost issues surface. Here is an especially important one to consider: critical asset failure.

The costly aftermath of critical failure
An organization has just undergone a failure of an asset critical to the production process.Understandably, this failure has received considerable attention from management.

During a follow-up management meeting to discuss the issue, several potential strategies are identified to ensure that another such incident does not occur. It is decided that in order to prevent such a failure in the future, more conservative maintenance schedules need to be instituted for all critical assets. The justification for this is that if the maintenance strategy assumes worst-case failure rates and then compensates for this by applying a conservative scheduling buffer, failures will be eliminated. This is entirely correct.

However, there is a very high maintenance cost associated with this strategy. Labor costs increase as the frequency of maintenance increases. There is also an increase in parts procurement costs as more parts are replaced more often. Another hidden cost associated with this strategy is the cost of utilization. Replacement of parts that have not been utilized to the full extent of their remaining useful life can have a substantial cost impact.

Above all else, lost production matters most. This strategy for eliminating subsequent failures does not consider the impact to the production schedule; production may suffer worse damage over time than if a failure had occurred. The increased frequency of maintenance requires greater attention to planning and scheduling of not only the maintenance itself, but also of the production process. Companies are running so lean these days that any interruptions to their production have a significant impact on their financial statement.

Condition-based maintenance
As can be observed from this scenario, there are many opportunities for improvement to maintenance procedures. Thus, it's easy to make a business case for investing in technologies that maximize production while offsetting both hidden and direct maintenance costs.

One of the keys to improving maintenance is the proper and intelligent use of asset information that lies locked away within the minds of a retiring workforce and within the various control systems and data warehouses common in industry. Today, data is collected and stored for everything from critical process equipment, to mobile units, to facilities assets. This data typically resides at the Operations level of many organizations. To realize its full value, a bridge between Operations and Maintenance needs to be built. Only when this is achieved can maintenance activities be optimized and taken to the next level.

Organizations need to optimize current maintenance practices, decrease costs and try to begin mitigating the difficulties that might arise in our plants when, 10 short years from now,we're no longer able to call on our current highly skilled, experienced workforce. Industry-leading companies have recognized that one of the most effective ways to address these issues is to turn to proactive asset management methods. Their objective is to adopt a maintenance strategy that involves doing maintenance only when it is required, while sustaining or even improving overall reliability.

Doing maintenance based on objective evidence of need, or, in other words, based on the condition of an asset and not on historical worst-case failure rates, is the cornerstone of Condition-Based Maintenance (CBM).

The CBM philosophy has been around for decades, and has recently enjoyed renewed interest as companies look for ways to improve equipment effectiveness and capitalize on the full life cycle potential of the assets that are so important to their operations.

So why has the CBM approach to maintenance not been more widely adopted? Moreover, why do so many organizations continue to focus primarily on preventive maintenance?

The answer to these questions is based primarily on the fact that, until recently, the volume and resolution of data required to effectively support CBM at or near realtime has been largely unmanageable at the human level. Furthermore, gaining access to this information in a timely manner also has proven to be a challenge.

Advances in technology, however, now are making real-time CBM a reality. Integrating real-time asset data at the operations level with an Enterprise Asset Management (EAM) system at the business layer of an organization to support Condition Based Maintenance efforts offers measurable improvements in maintenance effectiveness and efficiency.

Making the most of real-time data
Process-based organizations are very familiar with real-time data. It is the lifeblood of any control system. Operations have been taking advantage of realtime information for years to support production and processing functions. Process data is collected, stored, analyzed, and presented in order to improve on and support decision-making at the operations level.

Within the context of maintenance, there is a similarly large amount of untapped information waiting to be utilized. Getting this information to the right people at the right time allows organizations to make fact-based decisions about how and when to do maintenance and to improve overall asset management strategies.

Making it happen
Most, if not all, critical assets are connected to an operation's control system architecture. These assets already talk to the control systems via a complex web of sensors and instrumentation. The trick is to listen in on those conversations to determine what the assets are telling us, in real-time. This can be achieved using the real-time asset approach shown in Fig. 1.

The first step is to identify those assets which can provide information. This information can then be categorized and a determination made about how it can be used to generate a failure signature for the asset being monitored (i.e., what tells us that the asset's health is deteriorating and could potentially fail, if health is not restored?).

Once the rules for determining failure signatures are detailed, the data is collected using data collection software standard to the process control industry. Commercially available off-the-shelf CBM applications can then combine the failure signatures and data to provide a system that integrates the operations asset data with the EAM system.

The result is an integrated solution that can determine the health of an asset in real-time and take action to correct the issue before a fault occurs.

This is what CBM is all about: taking advantage of real-time information to determine the condition of assets and perform maintenance at the optimal time. It is a philosophy of only doing maintenance when an impending fault or failure condition exists, or when there is objective evidence of need.

Preventive maintenance, the mainstay of many maintenance organizations, may be effective, but it's also overly conservative. Based on worst-case historical failure rates, this approach may mask incidental costs associated with changing parts that still have remaining useful life, and result in more maintenance being done than is actually necessary..

Consider your objective: a reduction in overall maintenance expenditures.Ways in which this can be achieved include eliminating reactive maintenance, streamlining and optimizing the use of preventive maintenance and focusing on a more strategic, predictive, and cost-effective maintenance strategy that takes advantage of real-time asset information.

The benefits are real
Automation of maintenance processes. . .
By freeing maintenance engineers from the mundane tasks of generating work orders and entering meter information manually, they are freed to focus on real value-added activities that improve and optimize maintenance.

Reduced maintenance costs. . .
Less time spent repairing healthy assets means more time spent managing assets and developing more proactive approaches to how maintenance is achieved.CBM has been shown to reduce maintenance costs by as much as 50%.

Fully utilized equipment lifecycles. . .
Doing maintenance where there is an objective, fact-based need rather than at scheduled intervals will not only ensure that critical failures are minimized or eliminated, but will also ensure equipment and parts are utilized through their full lifecycle. The result is a new level of availability and operational effectiveness that is hard to achieve using a maintenance strategy focused on corrective or preventive maintenance.

Improved production capacity. . .
By detecting potential failures before they become real failures, maintenance can be planned and scheduled in line with production requirements. The outcome is less unplanned downtime and fewer production disruptions as a result of asset failures.

Case in point
One case that highlights the benefits of real-time information in a maintenance context involves a global pulp and paper company. For most companies in this industry, sheet breaks during the rolling process are a potentially significant source of increased operational costs due to unplanned downtimes and maintenance activities. For this particular company, sheet breaks occurred on average twice a day and were contributing to an Overall Equipment Effectiveness (OEE) of 69% and daily downtimes of at least one hour.

By taking advantage of Equipment Condition Monitoring software, this pulp and paper company was able to reduce sheet breaks by 40% and improve production rates by 12% within 12 months.

As shown by this pulp & paper operation, a properly implemented integration of real-time asset information from operations with an EAM system at the business level allows assets to be maintained in a highly cost-effective manner. This results in reduced downtime, lower maintenance and inventory costs, and greater overall asset health and availability. MT

Jason Barath is a senior member of the Business Solutions group at Matrikon. His background includes six years of successful project management and implementations in various industries including Oil & Gas, Pharmaceuticals, Refining, Utilities and Facilities Maintenance. For more details on Matrikon's equipment monitoring solutions, contact Barath directly at: (780) 448-1010 ext. 4605; e-mail: jason.barath@matrikon.com; or visit: www.matrikon.com

Bob Williamson, Contributing Editor

Some measurement processes come and go, much like fog. I recall hearing this maxim years ago: "What gets measured gets done" (attributed to Peter Drucker, Tom Peters, Edwards Deming and Lord Kelvin among others).Why, though, is it that we so often get hung up on metrics and measuring things to the point that we sometimes actually lose track of measuring what really matters?

Many discussions about improving maintenance and reliability tend to center around what to measure, how to measure it, and how to calculate the metric.We discuss MTBF (mean time between failures) and MTTR (mean time to repair).We analyze OEE (overall equipment effectiveness) and Availability. We monitor Wrench Time and Schedule Compliance. It turns out that there is an ever-increasing number of "maintenance and reliability metrics" fueling the discussion as to what gets measured gets done. But, we should be very careful about that which we measure.

Albert Einstein is said to have had a sign on his office wall that stated: "Not everything that counts can be counted, and not everything that can be counted counts." Remember those words, since, when it's all said and done, we must make improvements—actual, tangible improvements—in our equipment and facility reliability and life cycle operating costs. Measurements and metrics alone will not do it.

So, where should we start our use of metrics and measures? The first step is to determine the important business priorities. As one plant manager succinctly explained: "On-time, lead time and cost are our top priorities." Everyone at his plant, from the executives down to the plant floor, knew what those improvement priorities were. Their organization's task was to make rapid and sustainable gains in: 1) on-time delivery; 2) lead time from receipt of order to shipment; 3) lower total cost to produce (i.e. what gets measured gets done).

They communicated their priorities like a mantra. They identified contributing factors. They set meaningful goals to achieve. They steadily improved their performance one machine, one cell, one area at a time until they reached the performance standards they set. They adopted new work standards. They measured their progress and posted the results for all to see. They learned from their failures… and from their successes. They designed and implemented focused improvement projects. They avoided "analysis paralysis" by monitoring performance, progress and the effects of their improvement efforts on their top business priorities. Sustainable gains and continuous improvement processes were the results of their efforts.

"Without a standard, there is no logical basis for making a decision or taking action." Joseph Juran was on to something when he said that. As we consider what to measure, we must have a standard or a goal to attain.We must measure current performance as compared to that standard and take intelligent, consistent actions (standardized work) to eliminate problems. What we measure, though, must be important to both the business and those who directly and indirectly influence what is being measured. Remember, when something is measured, if it isn't important, it probably won't get done. This speaks to sustainability. With so many business and maintenance and reliability-related metrics out there, it is easy to measure things that are not really that important to the organization's success.

Measure the wrong things and you will likely get the wrong behaviors. Improving performance, in most cases, means changing the behaviors of those who operate and maintain, those who budget and control, those who design and install our equipment and facilities.When we look at changing behaviors, we must always consider the people who must do things differently: Do they have the skills and ability to change? Do the rewards and recognition processes encourage and reinforce the desired behavior changes?

Noted leadership trainer John E. Jones said: "What gets measured gets done.What gets measured and fed back gets done well. What gets rewarded gets repeated." Again, that speaks to sustainable gains in performance improvement through behavior change.We should remember that "measuring things" is not about the numbers, but rather about guiding and monitoring improvement toward a measurable, observable goal. It's about understanding causes and effects of problematic performance, as well as successes, and then leading human performance improvement in our organizations. Keep this known fact in mind: Our equipment and facilities will deteriorate over time without proper, timely, and intelligent human intervention.

Lastly, most businesses have been under a cost cutting, cost reduction, cost control mission as a path to improving competitiveness. Some costs, however, are not in our direct control. According to the Herman Trend Alert (www.hermangroup.com), "non-wage manufacturing costs as a percentage of total costs are continuing to rise in the U.S." These non-wage costs include corporate taxes, higher energy, pollution abatement and insurance benefits.Moreover, don't forget the impact of the "skills shortage" and the significant investment required for training, or up-skilling, the workforce to handle advanced manufacturing practices (which include improvements in maintenance and reliability). The Herman Group warns that these costs "will continue to rise across the developed world." What gets measured gets done. In this case, "cost cutting" is "what" will get done. That's something that could defeat the entire purpose of whatever you were measuring. MT

E-mail: bwilliamson@atpnetwork.com

The Speed of Trust is a new business book, by Stephen Covey's son (also named Stephen Covey). Just as the elder Covey's remarkable best-seller The 7 Habits of Highly Successful People changed our working landscape for the better, The Speed of Trust will again tell us what we already know: distrust is destructive where we work.

The nature of trust
What makes trust? Yes, it's a character issue.AND, it's also an issue of competence.

There are some very competent people with whom I will never do business. They don't understand the winwin principle. They're always working their angle-and looking to take away yours.

At the same time, I know many people with whom I would trust my both wife and my money. They will always do the right thing. However, I wouldn't hire them, because they aren't competent at what we do.

So, trust is demonstrated. Its basis is simple:

1. doing all that we have said we will do; and
2. respecting other people and their property.

The dividend
Covey talks about the "tax" and "dividend" of trust, giving many examples. I have worked with companies where there was no trust, both because of character and competence. Things moved slowly, if at all. Bad decisions were made because people wouldn't listen to each other. These companies faded, lost money, were purchased and laid off people.

The dividend comes when everyone is good at their job and knows his/her role-and gets it done without interference. Here, mistakes are not punished, but rather serve as lessons to get better. Consider the following example.

More than five years ago, our organization hired a guy who was very strong in maintenance consulting.We put him in charge of assessments. This individual also was very proud of his beard. When we won work at a refinery, everyone wanted me to tell him he had to cut off that beard. I suggested that he do so, but he chose not to. Okay, I thought, let the consequences teach him.

You guessed it. The refinery manager wouldn't let our bearded associate on site.He learned the hard way, but he learned the lesson well.We've never had a problem again.

Working on trust
Over time, we at SAMI have worked on trust. Setting an example each day of integrity as our number one value.What's the right thing to do? Next, we develop our people.We hire competence-but status quo is never good enough. Everyone has a REAL development plan every year, and his bonus plan depends on the achievement of this plan.

The result for us has been a place where people want to work and where they are more successful than they've ever been before. They are confident, rewarded and valued by their peers. As Covey says, trust can be developed. It can lead you to a more satisfying life and career. Covey's book is a good one. You may want to read it. MT