Content Research areas and research strategies in maintenance - - PDF document

Maintenance Performance Measurement and Management

Coimbra, 4th – 5th September, 2014

Some challenges in the mathematical and empirical research of the interdisciplinary dimensions of the maintenance function

• for discussion and future efforts

MPMM 2014 Conference, September 04-05, 2014 Coimbra, Portugal

Kari Komonen Promaint (Finnish Maintenance Society)

Maintenance Performance Measurement and Management

Coimbra, 4th – 5th September, 2014

Content

• Research areas and research strategies in maintenance
• Learning from the other disciplines
• Need for “grounded theory”
• Foundation
• Challenges in empirical research
• Empirical research at the plant level
• Empirical research at the production department level
• Identification of the best practices
• Asset management perspective
• Customer satisfaction
• Some tools

Kari Komonen 2014

Maintenance Performance Measurement and Management

Coimbra, 4th – 5th September, 2014

Research areas and research strategies in maintenance 1

• Some of the practitioners in the field state that industrial maintenance is

an engineering function. It is easy to agree with that opinion.

• However, industrial maintenance is also a managerial function. The

improvement and development of the maintenance activities require research projects in engineering, economics, organizational issues, commercial aspects, data management, decision making etc.

• Typical researchers in the field master well the methods in technological

research, which is natural, because they often have the background of the technical education. What can we say generally about research in the area of the managerial function.

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Research areas and research strategies in maintenance 2

Interdisciplinary research

• What about economics, behavioural sciences, consumer research,
• peration research, contracting etc.?
• Do we master the methods of those subjects matters?
• Do we know the challenges of the research processes in those areas?
• These methods have been developed during decades in the area of

management sciences, economics, sociology, psychology, contracting, ecology, biology etc.

• In order to get reliable and valid results and understand the results

correctly often sophisticated methodologies are needed.

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Learning from the other disciplines

• In order to carry out relevant and high quality scientific research, we

should carefully discuss with the scientist of the other fields.

• It seems that we often don’t do that carefully enough.
• In the area of maintenance research e.g. we meet seldom multivariate

statistical analysis which is a typical research method in the behavioural sciences, ecology, economics etc.

• This method is essential because of the nature of the phenomena. Often,

it is the only way to understand the phenomenon correctly.

• Another example regards various kinds of surveys

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Various research strategies

There exist several research strategies to employ

• e.g. conceptual research, explorative research, taxonomic research, case

studies, classical statistical testing, statistical multivariate research, positivistic research (such as positive economics), action research and constructive research

• Some of these strategies seem nowadays to be more popular than the
• thers, (e.g. action research, case studies, constructive research) but the

very important one is missing

• The theory of regularities and causal relationship between various

factors, variables and performance indicators is underdeveloped

• We don’t have the widely accepted theory and framework to understand

e.g. strategic, economic and organizational behaviour or modes of

• perations of the maintenance function

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Grounded theory

• We understand that in the area on industrial maintenance we need a grounded

theory based on mathematical reasoning and empirical verification or empirical findings in addition to the well-established engineering research

• Here, the grounded theory is not exactly the same concept as the original one
• We mean empirically tested qualitative and quantitative modelling which

explains e.g. the strategic, economic, structural, process design, organizational, customer relations and objective setting behaviour of the maintenance function

• Grounded theory offers support to researchers, consultants and internal

development experts to understand the message of various research, survey and status reports

• Grounded theory supports also benchmarking activities
• Grounded theory gives guidance to steer and implement development activities

to the right direction

• Grounded theory offers justified figures for world class maintenance

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Maintenance Performance Measurement and Management

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Examples of benefits of the grounded theory

• What is the influence of behavioural factors on the profitability or

efficiency of the maintenance function

• How can we improve the performance of the organization
• What is an appropriate proportion of preventive and planned

maintenance of the total

• What factors have greatest influence on customer satisfaction
• What is the world class performance and mode of operations in different

business and technological environment

• What are excellent levels of performance for selected factors (indicators)

in each case

• What are the correct benchmarking levels of performance in each case
• What questions we should investigate more

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An example for discussion from the economic and ecological discipline

Empirical exploratory research Theoretical exploratory research Modelling, reasoning and hypotheses Verification and determination

• f parameters

Empirical testing

• f the model

Modification of the model Utilization and updating Further empirical studies

Multivariate statistical analyses are widely used, because it is not possible to fix variables in order to study the impact of one variable at a time

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An example for discussion from the behavioural discipline

Empirical exploratory research Theoretical exploratory research Selection of research goal A modified and tested questionnaire Tentative research tool e.g. a questionnaire Empirical survey Utilization and updating Further empirical results and conclusions

Multivariate statistical analyses are widely used, because it is not possible to fix variables in order to study the impact of one variable at a time Multivariate statistical analyses e.g. a factor analysis are widely used, in order to create a new questionnaire with new independent questions

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Summary of challenges

• The grounded theory is mainly missing
• The required research process is only partly employed
• Mathematical modelling is widely employed in decision making

exercises, but not for grounded theory

• Multivariate statistical analysis is not sufficiently employed
• Economists and behavioural scientist are often not familiar with the

special features of the maintenance function

• Maintenance experts are often not familiar with the research methods in

economics and behavioural sciences

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Some examples to start to build up a grounded theory

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The foundation

• There is a number of external and internal influencing factors which are

not under the control of the decision makers in question (nowadays mentioned in a CEN standard: EN15341)

• E.g. in the case of maintenance manager such as a technology in use,

unit cost of the lost production per hour, other criticalities, size of the plant, operating rate, etc. are not under the control of the maintenance manager, they are given at least in the short run.

• If we try understand what is the level of the performance in the certain

production unit, we have to understand and be able to measure the impact of external factors.

• In order to compare the modes of operation with other production units,

we have to understand and measure the impact of external influencing factors

• In order to compare one’s present performance we have to understand

and measure the impact of external influencing factors

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External and internal influencing factors

Requirements for

• the maintenance function,
• Its modes of operations and
• Its performance

depend on external and internal influencing factors which result e.g. in

• perating conditions,
• perating constraints,
• perational modes,
• criticalities
• economic necessities,
• business environment and

which further affect greatly on key performance indicators

How to model this influence?

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A plant level example

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Influence of technology: the first step

• Let’s assume that we have production technology which is build up of b1

pieces of machine 1, b2 pieces of machine 2 and b3 pieces of machine 3 (e.g. 2 pumps, 3 valves and 6 pipelines)

• Let’ assume that the respective standard annual maintenance costs of

each machine are a1, a2 and a3

• Total annual costs are then a1b1 + a2b2 + a3b3
• Therefore, if we knew what is the standard cost of each component of

the production system, we could calculate the total cost of the system.

• However, the reality is not such simple. Although, the price of spare

parts were standard, there are many other cost types and influencing factors which are not easy to estimate (even the prices of spares are not independent of the production system).

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Technological factors and operating conditions

• Production environment e.g.
• Hard raw materials (iron, stone etc.)
• Soft raw materials (water)
• Rough climate (high humidity, sand storms etc.)
• Dependability characteristics
• Proportion of rotating machines, structures, etc.
• Maintainability characteristics of equipment
• Safety risks
• Environmental risks

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Influence of technology: Structure of production system /criticality (integration level)

Input Output = 100 Output = 100 Input

Highly critical structure Less critical structure CRITICALITY has a great influence on maintenance costs and availability of production system

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Other factors of criticality and operating modes and profiles

• Bottlenecks
• Operating rate of machines
• Economic criticality e.g.
• Low contribution margin >>>>higher criticality
• High contribution margin >>>>lower criticality
• Key success factors of the business unit
• Strategic role of the production unit

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There are two kinds of economics of scale in the area of industrial maintenance

• Technical economics of scale
• If you double e.g. the width of paper machine or pipeline, maintenance costs does

not double

• Technical economics of scale depends on the technology in use
• Often technical economics of scale can be modeled by the square root formula ( )
• Organizational economics of scale
• Because of uncertainty and indivisible resources, larger the plant, higher the

utilization rate of resources, less resources needed proportionally

• Organizational economics of scale can be modeled e.g. with queuing models
• Organizational economics of scale also depends on the technology in use: e.g. how

wide variety of competences is needed

Economics of scale 1

(

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Economics of scale 2

p or Cost/PRV Nbr of calls or PRV

p = utilization rate of resources PRV = plant replacement value

Cost Cost/PRV Cost/PRV p

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Theoretical / operational approach

• Although, it is quite easy to find factors which have a

significant impact on maintenance performance, it is more difficult to get empirical data on those factors

• Although, it is quite easy to model theoretically the

influence of these factors, it is more difficult to

• perationalize needed variables for empirical studies
• Organizations don’t define and model their operations in the

form required

• Organizations are not willing to give all the data required
• It is a too heavy task to study all the organizations in the

sample in such the detailed way.

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Operationalization I

• The structure of the production system can largely be measured

with the aid of INTEGRATION LEVEL

• Integration level: Plant replacement value (equipment) divided by

the number of front line day shift workers

• Integration level measures partly technological factors
• Integration level measures partly economics of scale
• Integration level measures also partly, indirectly, economic

criticality (lost production in money terms)

• The determination power of integration level is very significant
• Often this relationship is non-linear e.g. log X

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Economics of scale: interpretation 2

One consultant have stated that according to their study the size of production unit has no impact on the maintenance costs. That is possible if the size of the units in the sample has exceeded the critical threshold (which is the case within some branches) and the influence is so small that is difficult to notice in empirical studies (e.g. between lines in the figure). Economics of scale is usually non-linear e.g. logX

p or Cost/PRV Nbr of calls or PRV

p = utilization rate of resources PRV = plant replacement value

Cost Cost/PRV Cost/PRV p

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Examples of independent variables – external factors

In the case of maintenance costs in relation to equipment replacement the effect of exogenous factors can be the following:

• Integration level (-)
• scale (plant replacement value of production equipment ) (-)
• production volume / production equipment replacement value (+)
• shift work rate, operating rate (+)
• Industry –dummy variables (industry specific factors) (-, +)
• KWh / production equipment replacement value (+)
• Production volume / capacity (+)

Empirical impact depends on technology / on industrial branch

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The determination power of integration level on OEE in the chemical industry

Chemical industry Dependent variable: OEE Predicted Values . Observed Values .

. .

95% confidence

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The predicting power of multivariate statistical model on breakdown time in relation to replacement value

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Influence of operating rate at a plant level:

Shift work rate (1-5) 1-1.5 2-2.5 3-3.5 4-5 OEE % 67,5 72,7 68,4 80,7 Availability % 85,9 86,4 88,5 91,6 Planned and scheduled maintenance % 50,6 58,6 67,7 74,8 Preventive maintenance % 27,5 34,3 35,1 43,3

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"Capital intensity" (Plant turnover / plant replacement value) <0,55 0,55-1,1 >1,1

OEE % Availability % Planned and scheduled maintenance % Preventive maintenance % 68,7 75,1 77,7 86,0 90,6 91,7 61,4 63,0 68,4 30,7 36,1 39,1

Influence of technical capital intensity at a plant level

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Maintenance Performance Measurement and Management

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Modes of operations in the successful and less successful plants: Industrial sector A

Criteria: Cost efficiency Modes of operations in successful and less successful plants

Factor Average / the best plants % Average / the worst plants % Preventive maintenance 36,4 35,5 Improvement maintenance 9,2 14,4 Planned and scheduled maintenance 56 64,4 Immediate corrective maintenance 44 35,4 Condition monitoring

15,3 5,3

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Maintenance Performance Measurement and Management

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Modes of operations in the successful and less successful plants: Industrial sector A

Criteria: Availability Modes of operations in successful and less successful plants

Factor Average / the best plants % Average / the worst plants % Preventive maintenance 37,4 31,6 Improvement maintenance 15,7 9 Planned and scheduled maintenance 69,1 47,3 Immediate corrective maintenance 30,9 52,7

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An example from production departments or specific processes

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Maintenance Performance Measurement and Management

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Failure tendency Maintainability Needs for planned maintenance Opportunities for carrying out maintenance Environmental and safety risks Criticality

(risks for production loss, equipment or material)

Need for expertise Need for maintenance investments Specification of the production environment Effects of the production environment Different maintenance environments Modes of

• peration

Equipment condition Production process Equipment design Production arrangements Management

Background Framework Benchmarking Maintenance environment Maintenance practices Excel-tool

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Production departments: Influencing factors used in regression analysis

Maintenance cost in relation to replacement value of the production unit Unavailability time caused by maintenance activities

Replacement investments for the last five years Total waiting time until repair can be started or production can start up after repair work Department replacement value Value of lost production per hour Value of plant’s lost production per hour Threshold time before production losses (h) Department life-cycle phase Value of replacement investments during the last five years Safety as a business driver No failures as business driver Possibility to use idle time of equipment for maintenance activities Severity of the production process Value of mechanical equipment in relation to department replacement value Need for know-how from equipment supplier Number of equipment (functional locations) related to department replacement value Kari Komonen VTT, Susanna Kunttu VTT and Toni Ahonen VTT: In Search of the Best Practices in maintenance. Maintworld Congress 2011. Helsinki

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Learning from the best ones

Kari Komonen VTT, Susanna Kunttu VTT and Toni Ahonen VTT: In Search of the Best Practices in maintenance. Maintworld Congress 2011. Helsinki

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Kari Komonen VTT, Susanna Kunttu VTT and Toni Ahonen VTT: In Search of the Best Practices in maintenance. Maintworld Congress 2011. Helsinki Criticality of the department for the whole plant

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Maintenance practices

Dimensions of maintenance practices

1. Maintenance management 2. Proportion of planned maintenance 3. Spare parts management 4. Scheduling of maintenance shutdowns 5. Proportion of outsourced maintenance 6. Number of maintenance contractors, service providers 7. Organisation of maintenance work 8. Collaboration between various functions of the plant in question 9. Follow-up and control of performance

• 10. Utilization of historical data
• 11. Utilization of computerized maintenance management

systems

• 12. Utilization of analytical methods

Kari Komonen VTT, Susanna Kunttu VTT and Toni Ahonen VTT: In Search of the Best Practices in maintenance. Maintworld Congress 2011. Helsinki

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Maintenance Performance Measurement and Management

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Maintenance management Proportion of planned maintenance Spare part management Scheduling of maintenance shutdowns Proportion of outsourced maintenance Number of maintenance providers Organization of maintenance work Collaboration between various functions of plant Follow-up and control of performance Utilization of history data Utilization of CMMS Utilization of analyzing methods Best department 2nd best department 3rd best department Own department

An example of modes of operations

Kari Komonen VTT, Susanna Kunttu VTT and Toni Ahonen VTT: In Search of the Best Practices in maintenance. Maintworld Congress 2011. Helsinki

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Maintenance Performance Measurement and Management

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IDENTIFICATION OF THE BEST PRACTICES

0,5 1 1,5 2 2,5 3 3,5 4 4,5 5 Suunnittelematon vs. suunniteltu kupi Varaosien saatavuus Kupin tuloksellisuuden seuranta Yhteistyö eri henkilöstöryhmien välillä Seisokkien jaksotus Tietojen hyödyntäminen Analysointimenetelmien käytön kattavuus Kupin johtamisen suunnitelmallisuus Ostopalveluiden strategia Tietojärjestelmien käyttö Ostetun kupin keskittäminen

Toimintamallit Ympäristö X

Department maintenance costs/replacement value (2008)

1 2 3 4 5 6

Calculated/Predicted Values

1 2 3 4 5 6 7

Observed Values

0,95 Conf.Int.

Osaston kunnossapidon kustannukset / JHA 2008

Toteutuneet arvot Lasketut / ennustetut arvot

Kari Komonen VTT, Susanna Kunttu VTT and Toni Ahonen VTT: In Search of the Best Practices in maintenance. Maintworld Congress 2011. Helsinki

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An example from physical asset management

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Organizational context

41

Specific features e.g.

• Determine economic life time
• Short economic life-time
• LCP-approach required
• Increase flexibility
• New asset concepts

Specific features e.g.

• Determine economic and

technical life time

• Short economic life-time
• Short pay-back time required
• LCP-approach required
• Manage dynamics
• New asset concepts

Specific features e.g.

• Long economic life-time
• Long pay-back time
• Increase life time
• LCC-approach
• Continuous improvements

Specific features e.g.

• Short technical life-time
• Determine technical life time
• LCC-approach
• New asset concepts
• Improve technical performance

Market

Dynamic Stable

Technology

Stable Dynamic Long life cycle Short life cycle

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A map of industries in the stable-dynamic matrix

42

Location of various industries in the matrix Stable Dynamic

Business

Stable Dynamic

Technology

Dynamic Stable

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Comparison of stable and dynamic business and technological environments

43 8 Top management has financial responsibility for AM of existing equipment 10-12 Maintenance function has a stonger role in the investment process 14 Investment decisions are based more often on life- cycle costs or profits 15 OEE is applied at the deeper level of technical hierarchy 23 Working culture with asset management in more proactive 21 Events are more complitely registered in CMMS 34 Planning, allocation and management of resources is better organised 35 Respond to front line systems failures and incidents is better organised 45 Measuring, development and monitoring the

• rganisation’s asset management performance is

better taken care of 46 46. Developing and maintaining an adequate supply of suitably competent, motivated people is better organised Market Dynamic Stable

Technology Stable, long useful life Dynamic, short useful life

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Some key performance indicators for EAM

• Return on physical assets
• Turnover of physical assets (sales/physical assets)
• Quality index (quality cost related to physical assets)
• HSE index (related to physical assets)
• Life cycle costs of physical assets (estimated and actual)
• Life cycle profit related to physical assets (estimated and actual)
• Aggregate annual costs related to physical assets (e.g. unavailability costs,

replacement investments, maintenance costs, other costs related to physical assets)

• Annual investments minus annual technical depreciation (which might give

indication of degradation of the production equipment) / Physical assets

• OEE (Overall equipment effectiveness: availability x performance x quality rate)
• External criticality of physical assets and Internal criticality of equipment
• Availability of physical assets (production process)
• Reliability of physical assets (production process) and Reliability of deliveries
• Maintenance costs of physical assets

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An example from behavioural issues

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Factors behind customer satisfaction: results from regression analyses I

Explained variable was “overall efficient and well-functioning organization” and the factors from the factor analyses were used as explaining variables. Assessment of mode of operations (opinion of production staff)

R = .727, R2 = .529, Adjusted R2 = .520, N = 215 Beta t-value (209) P-value Constant 3,112 86,337 0,000 Feedback to customer 0,350 9,681 0,000 Maintenance quality and efficiency 0,335 9,263 0,000 Orderliness of maintenance 0,188 5,210 0,000 Crews’ professional skills and quality 0,187 5,159 0,000

Which factors explained high customer satisfaction

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Maintenance Performance Measurement and Management

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Factors behind customer satisfaction: results from regression analyses I

Explained variable was “overall efficient and well-functioning organization” and the factors from the factor analyses were used as explaining variables. Assessment of mode of operations ( opinion of maintenance managers)

R = .665, R2 = .443, Adjusted R2 = .424, N = 152 Beta t-value (146) P-value Constant 3,55 83,730 0,000 Communication, motivation and condition monitoring 0,301 7,091 0,000 Crews’ professional skills 0,265 6,237 0,000 Orderliness of maintenance 0,165 3,856 0,000 Quality and efficiency 0,114 2,668 0,009 Feedback to customer 0,094 2,223 0,028

Which factors explained high customer satisfaction

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Maintenance Performance Measurement and Management

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Factors behind customer satisfaction: results from regression analyses III

Explained variable was “overall efficient and well-functioning organization” and the factors from the factor analyses were used as explained variables. Assessment of mode of operations (opinion of maintenance operatives)

R = .639, R2 = .409, Adjusted R2 = .403, N = 448 Beta t-value (443) P-value Constant 3,480 114,150 0,000 Reliability and collaboration 0,407 13,416 0,000 Preventive maintenance works 0,266 8,766 0,000 Crews’ professional skills 0,172 5,576 0,000 Fault repairs 0,146 4,770 0,000

Which factors explained high customer satisfaction

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Some results to be continued

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Excel-tool: Front page

Background Framework Benchmarking Maintenance environment Maintenance practices Excel-tool

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Data input

Background Framework Benchmarking Maintenance environment Maintenance practices Excel-tool

Maintenance Performance Measurement and Management

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1 2 3 4 5 Failure tendency Maintainability Unit criticality for production Need for planned maintenance Maintenance

• pportunities

Risks for human and environment Skills of maintenance personnel Need for investments Profile 1 Plant A Department AB v 2010

Selecting the maintenance environment

Background Framework Benchmarking Maintenance environment Maintenance practices Excel-tool

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Comparison of maintenance practices

Background Framework Benchmarking Maintenance environment Maintenance practices Excel-tool

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A proposal

• Joint effort project
• Methods and approaches are developed and specified

together

• Regarding empirical studies each member focuses on its
• wn country
• VTT (Technical Research Centre of Finland) and Promaint (Finnish

Maintenance Society) provides earlier research results for

further development

• A target is to develop a grounded theory for the modes of
• perations and performance within the maintenance

function

• Contact helena.kortelainen@vtt.fi or kari.komonen@saunalahti.fi

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Thank you for your attention

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