8th Maintenance Forum Presentation Final

Lessons Learned from Reliability and
Maintenance Benchmarking
What Does World-Class Performance Look Like?
Presented by: Tom Svantesson

Senior RAM Consultant
Confidentiality Statement
This presentation is confidential and intended for the sole use of the client to
whom it is addressed. The information and methodologies outlined herein are
proprietary and their expression in this document is copyrighted, with all
rights reserved to HSB Solomon Associates LLC (Solomon). Copying or
distributing this material without permission is strictly prohibited.
M³ – Measure. Manage. Maximize.®, Comparative Performance Analysis™,

CPA™, NCM³®, Q1 Day 1™, EII®, CEI™, CWB™, Solomon Profile® II, etc. are
registered and proprietary trademarks of Solomon. The absence of any
indication as such does not constitute a waiver of any and all intellectual
property rights that Solomon has established.
Proprietary and Confidential

2 © 2012 HSB Solomon Associates LLC
www.SolomonOnline.com
Protecting Intellectual Property (IP)
Mutual Trust and Obligations
Company Annual
Methodology, Metrics Reports & Websites
& Database
Investment Community
Input Data Aggregated Industry
Results
Client IP
Taxing Authorities
Client Results
Solomon’s IP Consulting Firms
Non-Disclosure Agreement (NDA) Potential Third Parties
Written authorization required before sharing IP with a third party

Comparative Performance Analysis
• Solomon began its Comparative Performance Analysis

(CPA) approach to benchmarking in 1980
• Comparative Performance Analysis
 Fuel Study (>85% of global refining)
 Olefin Study (>67% of global manufacturing)
 RAM Study (>1,000 process industry plants)
 Power Study (power generation)
 Pipeline and Terminal Studies
 Other Specialty Studies

International Study of Plant Reliability
and Maintenance Effectiveness
• Solomon began benchmarking Reliability and
Maintenance (RAM) in 1996
• Process industry
 Chemical/petrochemical
 Refining
Developed Equivalent
Implemented in the Maintenance Complexity RAM Study redesign
(EMC) factor to enhance based on client feedback
1996 chemical process industry
using 17 process families data normalization 2011
covering >200 chemicals 2008
1995
2010
RAM Study developed in response to RAM Study database contains
a request from the Chemical >1,000 sites with >8,000
Manufacturers Association process units
2000 2012
Adapted for refining using Solomon Re-designed RAM Study launched
Fuels Study process families with increased value and
(e.g., CDU, FCC, etc.) decreased client effort

RAM Study Indices
• Reliability and Maintenance Effectiveness Index (RAM EI)

 Lost margin (due to RAM causes)
 Maintenance cost
• Maintenance Cost Index (MCI) – cost improvement
• Mechanical Availability – reliability
• Direct Maintenance Cost (craft labor and material)
• Indirect Maintenance Cost (supervision and staff)
• Routine and Turnaround Maintenance
• Company and Contractor
• Maintenance Expense and Maintenance Capital
What is Benchmarking?
• The process of comparing performance against others in

the same or similar industry to
 Confirm competitive position
 Gauge the opportunity for improvement
 Identify practices employed by best performers

What is Reliability Benchmarking?
• The measurement and comparison of downtime

(mechanical unavailability) attributable to RAM causes
• Downtime translates into lost margin that is often
overlooked while focusing on maintenance costs
• Margin loss should be monetized to gain an appreciation
for the value of lost production

What is Maintenance Benchmarking?
• The measurement and comparison of routine and

turnaround maintenance costs
 Includes direct and indirect costs for company and
contractors
 Also includes maintenance capital costs, which are often
ignored and can skew performance

RAM Benchmarking?
• Benchmarking is the use of actual operational

performance data to track performance trends, to
compare to others, and to identify best practices
• Benchmarks are fact-based and should not be confused
with opinion
• Benchmark thresholds are realistic, having already been
achieved by a subset of the total population

Why is RAM Benchmarking Valuable?
Historically, reliability and maintenance have not
been managed well, resulting in…
HIGH cost and

POOR reliability
Maintenance is the largest fixed (non-volume-related) cost

in a refinery or chemical/petrochemical plant
Maintenance is the third largest overall cost behind raw
materials and energy
• Every dollar of reduced maintenance spending goes to the

bottom line; consider how much sales would be needed!
• Every hour of increased uptime increases capacity without
capital investment – free capacity!

Benchmarking
Lessons Learned
Myths & Facts!

Reliability and Maintenance are
Inextricably Linked
Reliability
Cannot cost-cut your way
to improved reliability
Maintenance
Maintenance costs are
driven by reliability…or
the lack thereof
A 1% increase in mechanical availability can

translate into a 10% reduction in maintenance cost

Traditional Approach
Pressure Applied Here
Maintenance
Costs
Reliability
(Margin)

Initial Traditional Result
Pressure Applied Here
Lower
Lower Reliability
Maintenance (Margin)
Costs

Long-Term Traditional Result
Higher
Maintenance
Costs
Lower
Reliability
(Margin)

Progressive Approach
Maintenance
Costs
Reliability
(Margin)
Apply Pressure Here

Progressive Result
Higher
Reliability
(Margin)
Lower Apply Pressure Here

Maintenance
Costs

Impact of RAM on Replacement Capital
Quartile Average Maintenance

Performance Capital Spent, % of PRV
1 2.1
2 2.8
3 3.4
4 4.6
Conclusion: Better maintenance of existing assets results in lower

replacement capital cost requirements. Conversely, poor maintenance
of existing assets results in higher replacement capital cost
requirements.

Factors that Influence RAM Performance
>90% Confidence Level
• Reliability (failure avoidance)
• Direct costs (craft labor and repair materials)
• Maintenance support (e.g., foremen, planners)
• Turnarounds (frequency and duration)
• Unplanned failures

Factors that Influence RAM Performance
>90% Confidence Level
• Maintenance planning and scheduling
• Craft skills and experience
• Spare parts availability
• Operator engagement

Factors that Do Not Influence RAM
Performance >90% Confidence Level
• Plant or refinery age
• Site footprint (geographic size)
• Plant replacement value
• Labor rates

Factors that Do Not Influence RAM
Performance >90% Confidence Level
• Contract versus in-house maintenance
• Production rates
• Support costs (maintenance/reliability engineers)
• Management years of experience
• Union versus non-union

Path to First-Quartile (Q1)
RAM Performance
>98
Mechanical Availability, %
Industry Leaders Sustainable

97
Effectiveness
High Mechanical Availability

and Low Cost
96
Low Mechanical Availability
and High Cost
95 Not Sustainable
Facility
<94
1 1.4 >10
Maintenance Cost, % (US $/PRV)
Efficiency
24 Proprietary and Confidential

Do You Need to Benchmark Your
Reliability Performance?
Mechanical availability <96.7%
Unreliability (characterized by equipment

failures) is your largest downtime contributor
Equipment failures are driving maintenance behaviors
Total plant maintenance turnaround (shutdown)

occurs more frequently than once every 10 years
Increased uptime would provide much needed capacity
Breakdown maintenance is your normal

mode of operation

Do You Need to Benchmark Your
Maintenance Performance?
Maintenance costs are >1.4% of PRV
Maintenance costs are your highest fixed cost
Maintenance costs are not effectively controlled
Maintenance activities are predominantly

corrective in nature (something broke, now you
must repair it)
Corrective maintenance costs exceed preventive and

predictive maintenance costs
Reactive maintenance is your normal mode

of operation
RAM Effectiveness Index
Chemicals – Quartiles of Performance (Example)
12
10
RAM EI, % of PRV
0
Q1 Q2 Q3 Q4 Site 1 Site 2 Site 3
Quartiles of RAM EI
Value of Lost Production Total Maintenance Cost

RAM Opportunities, US $M
0
2
4
6
8
Equip Failure Prod Losses
10
RT - FP Matl Cost
RT - Indirects
RT - Wages
RT - IE Work Hours
RT - RE Work Hours
RT - FP Work Hours
RT - IE Matl Cost
T/A - Wages
T/A - RE Work Hours

RAM Study Deliverables
Rate Reductions
RT - RE Matl Cost
Ann T/A & Short OHs Prod Losses
T/A - RE Matl Cost
T/A - FP Work Hours

Site Detailed Opportunities Report (Example)
T/A - IE Work Hours

28
T/A - FP Matl Cost
T/A - IE Matl Cost
T/A - Indirects
Total Opportunities = US $40M
© 2012 HSB Solomon Associates LLC

MTBF – Pumps
By Quartiles of Pump MTBF (Example)
120
Meantime Between Failures, months
100
80
60
40
20
0
Q1 Q2 Q3 Q4 Site 1 Site 2 Site 3
Quartiles of Pump MTBF

Summary
• You are not a world-class performer if

 Maintenance costs are not below 1.4% of PRV
 Mechanical availability is not above 96.7%
• Best performers continue to get better while poor
performers continue to fall further behind
• Regrettably, for some, it is already too late
• The path to world-class performance begins with the first
step…what are you waiting for?

Thank You!

8th Maintenance Forum Presentation Final

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

8th Maintenance Forum Presentation Final

Transféré par

Droits d'auteur :

Formats disponibles

Lessons Learned from Reliability and

Presented by: Tom Svantesson

M³ – Measure. Manage. Maximize.®, Comparative Performance Analysis™,

Proprietary and Confidential

Solomon’s IP Consulting Firms

Non-Disclosure Agreement (NDA) Potential Third Parties

Written authorization required before sharing IP with a third party

• Solomon began its Comparative Performance Analysis

Proprietary and Confidential

Proprietary and Confidential

• Reliability and Maintenance Effectiveness Index (RAM EI)

• The process of comparing performance against others in

Proprietary and Confidential

• The measurement and comparison of downtime

Proprietary and Confidential

• The measurement and comparison of routine and

Proprietary and Confidential

• Benchmarking is the use of actual operational

Proprietary and Confidential

HIGH cost and

Maintenance is the largest fixed (non-volume-related) cost

• Every dollar of reduced maintenance spending goes to the

Proprietary and Confidential

Proprietary and Confidential

A 1% increase in mechanical availability can

Proprietary and Confidential

Pressure Applied Here

Proprietary and Confidential

Pressure Applied Here

Proprietary and Confidential

Proprietary and Confidential

Apply Pressure Here

Proprietary and Confidential

Lower Apply Pressure Here

Proprietary and Confidential

Quartile Average Maintenance

Conclusion: Better maintenance of existing assets results in lower

Proprietary and Confidential

Proprietary and Confidential

Proprietary and Confidential

Proprietary and Confidential

Proprietary and Confidential

Industry Leaders Sustainable

High Mechanical Availability

24 Proprietary and Confidential

Mechanical availability <96.7%

Unreliability (characterized by equipment

Equipment failures are driving maintenance behaviors

Total plant maintenance turnaround (shutdown)

Increased uptime would provide much needed capacity

Breakdown maintenance is your normal

Proprietary and Confidential

Maintenance costs are your highest fixed cost

Maintenance costs are not effectively controlled

Maintenance activities are predominantly

Corrective maintenance costs exceed preventive and

Reactive maintenance is your normal mode

Proprietary and Confidential

T/A - RE Work Hours

Ann T/A & Short OHs Prod Losses

T/A - RE Matl Cost

T/A - FP Work Hours

T/A - IE Work Hours

T/A - FP Matl Cost