Equipment reliability is a cornerstone of production stability and a primary driver of maintenance costs. "Reliability excellence" is the sustainable ability to manufacture products safely while meeting specifications and optimizing performance. Companies that successfully pursue reliability excellence can achieve remarkable improvements in their manufacturing performance. In maintenance alone, top performers’ costs are 10% to 15% lower than those of average performers – and 25% to 30% less than those of fourth-quartile performers. But, that’s just the tip of the value-creation iceberg. Even more importantly, highly reliable companies make better employers, better business partners and better community citizens.
Most companies in continuous process industries, however, do not recognize how crucial reliability is in gaining a competitive edge.Even when they do, few are able to capture its potential.The ones that do employ a holistic operating system that strengthens technical abilities, deploys disciplined management performance practices and establishes the right mindsets and behaviors from the executive suite through to the shop floor (Fig. 1). In addition, they aggressively pursue all three elements in an integrated way. These companies maximize equipment availability and optimize production levels. Their operating costs drop significantly because equipment failures are less frequent and worker productivity rises. Product quality improves because stabilized production operations eliminate the variations caused by frequent shutdowns and restarts. Increased stability also minimizes environmental problems such as air emissions and wastewater discharges. Plant safety performance also rises due to enhanced maintenance planning, coordination and execution that reduce unsafe, reactionary practices.
Furthermore, as these companies reach world-class reliability, their freedom in operating their facilities soars. This flexibility allows them to seize marketplace opportunities, increase revenues and further enhance their reputations. For example, a well-regarded and profitable European-based materials company uncovered hidden capacity across its network of facilities that equaled the production capacity of an entire plant. A global petrochemical producer optimized profitability by shipping its product to customers from its most cost-effective site.Not only that, its network’s reliability allowed this company to benefit from its competitor’s inflexibility. By providing products to the competitor’s customers when they needed them, the company enhanced its industry reputation as a preferred supplier.
Why we hear so few success stories
Some organizations never get beyond "fix it when it breaks"for their maintenance strategy. As a result, they become excellent firefighters–but they never develop the ability to eliminate defects based on root causes. One case in point: while a major North American pulp & paper manufacturer is adept at minimizing the length of unplanned downtime, it has never tried to reduce the frequent outages that drive that downtime. As a result, its maintenance costs remain substantially higher than best-in-class.
Another driver of this lack of success is that many companies still view maintenance as a "necessary evil."At a major European steel mill, this approach was partially responsible for decreases in upstream production performance. In just a few years, overall equipment effectiveness (OEE) dropped by more than five percentage points–falling from an industry average level to substandard performance. As OEE decreased, production levels dropped and maintenance efforts focused solely on repairs and quick fixes to manage costs. The result? A vicious cycle of decreasing stability in the production process doubled unplanned downtime, negatively affecting yields, quality and costs.
The offshore platform of a global oil company provides another sobering example of the damage this view can cause.When crude prices dropped–as did the company’s profits–the platform cut maintenance spending significantly. This resulted in lower routine maintenance levels and more emergency repairs the year after the cuts. These unplanned shutdowns wreaked havoc with production schedules and pipeline flows.Within three years, reliability levels had dropped substantially and maintenance costs had surpassed the original spend. Even worse, missed and late shipments had seriously damaged the company’s reputation as a supplier.
How a company goes about avoiding the previously mentioned risks, achieving reliability excellence and gaining that much-sought-after competitive edge depends on its starting point. Companies that need to stop a performance decline often rely heavily on quick, simple, technical improvements, supplemented with some changes in management processes and mindsets. Conversely, those seeking to institutionalize their best-practice performance usually focus on enhancing management practices and mindsets, while continuing to pursue technical improvements (Fig. 2). No matter the starting point, successful companies all adopt a broad perspective. They pursue the previously described integrated approach that strengthens technical capabilities, applies more effective management practices and changes mindsets and behaviors. This ensures that they capture the maximum value afforded by reliability excellence.
Strengthening technical capabilities
Successful organizations start by improving maintenance efficiency and then using the freed resources–personnel and operating savings–to increase effectiveness (Fig. 3). Successful companies improve efficiency by:
Applying disciplined management practices
Tailored organizational structures improve consistency, efficiency and capability.However, best practice companies also establish rigorous performance management practices that measure site reliability performance versus selective key targets, and motivate employees and contractors to meet these targets. They:
Establishing the right mindsets & behaviors
For performance improvements to last, employees must be owners of reliability—not mere participants. Achieving this takes time. It also takes company commitment to creating a culture of reliability excellence—whether through learning, leadership example or support for operations employees. Only then will improvements last and "us versus them"barriers between maintenance and production fall.
Although tactics differ, we find that bestpractice organizations share certain guiding principles:
Pacing yourself In summary, companies that aggressively pursue reliability excellence can achieve significant performance improvements, increasing uptime and flexibility while reducing maintenance and production costs.
Remember, though, that regardless of the starting point, reliability transformations take time—time to develop strong technical skills; time to create rigorous management practices; time to instill ownership for maintenance throughout operations. Therefore, continuous process operations need to pace themselves so they can tackle all three integrated elements discussed in this article (Fig. 4) and become top performers in their industries. MT