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14
Corporate Indicators
These indicators are the long-term strategic indicators that upper management utilizes for business planning. The window of planning is typically for the three-to-five-year strategic plan.
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Copyright 2005, Industrial Press, Inc., New York, NY
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Return on Net Assets (RONA)
This indicator measures the profit earned compared to the net value of the company assets. The impact that maintenance has on profits is a major factor in calculating the return. This will be highlighted in the financial indicators.
Financial Indicators
These indicators are used to insure that the departments in a company are meeting the financial goals set in the strategic plan. These indicators are monitored annually. If the annual figures are not in compliance with the forecast, then the analysis would start at the next level in the hierarchy. Some of the indicators that are used to financially monitor the maintenance department are listed below. No organization will use all of these indicators, but will choose the ones that support the selected corporate indicators.
Maintenance Cost per Estimated Replacement Value of the Plant or Facility Assets
This indicator is becoming standard. It is an accurate measure for plants and facilities because the cost is usually fixed. This aspect also makes the indicator easy to use to trend any increases over time. If the percentage of maintenance costs increase, then the efficiency and effectiveness indicators should show which maintenance area caused the increase.
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cost is usually fixed. The indicator is easy to use to trend any increases over time. If the value of the asset maintained decreases, then the efficiency and effectiveness indicators should show which maintenance area caused the decrease.
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indicators should show which maintenance area caused the increase.
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efficiency and effectiveness of maintenance. No organization will use all of these indicators, but will choose the ones that support the selected financial indicators. Indicators marked with one asterisk * are expressed as a percentage; those with two asterisks ** are expressed as ratios.
Preventive Maintenance
Downtime Caused By Breakdowns* Total Downtime Manhours Spent on Emergency Jobs* Total Manhours Worked Direct Cost of Breakdown Repairs* Total Direct Cost of Maintenance Desired Equipment Uptime Downtime* Desired Equipment Uptime Hours Worked as Overtime* Total Hours Worked Maintenance Work Orders on Hold Awaiting Parts* Total Number of Maintenance Work Orders
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Maintenance Rework Due to Lack of Knowledge or Skills* Total Maintenance Work
Operational Involvement
Maintenance-Related Equipment Downtime (current period)* Maintenance-Related Equipment Downtime (previous year same period) Actual Equipment Throughput (current period)* Actual Equipment Throughput (previous year same period) Current Maintenance Costs* Maintenance Costs Prior to Predictive Program
Reliability-Centered Maintenance
Savings Attributed to the RCM Program Equipment Uptime Equipment Capacity Maintenance Labor Resources OSHA Citations/Notices per Inspection (Current Year)* Citations/Notices per Inspection (Previous Year) EPA Citations/Notices per Inspection (Current Year)* Citations/Notices per Inspection (Previous Year) ISO-9000 Notices of Non-conformance per Inspection (Current Year)* Notices of Non-conformance per Inspection (Previous Year)
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Performance Efficiency = Design Output for Scheduled Time (should be at least 95%)
Preventive Maintenance
Preventive Maintenance Tasks Completed* Preventive Maintenance Tasks Scheduled Breakdowns Caused by Items that Should Have Been Inspected, Serviced, or a Part of the PM Program* Total Number of Breakdowns
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Inventory and Procurement
Total Annual Dollar Amount of Stores Usage** (expressed as a decimal) Total Inventory Valuation Total Number of Orders Not Filled on Demand* Total Number of Orders Requested Total Number of Items Filled on Demand* Total Number of Items Requested Total Number of Rush Purchase Orders* Total Number of Purchase Orders
Developing Performance Indicators Total Maintenance Material Costs in CMMS/EAM System Total Maintenance Material Costs from Accounting Total Maintenance Contracting Costs in CMMS/EAM System* Total Maintenance Contracting Costs from Accounting
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Total Maintenance Costs Charged to Individual Equipment Items* Total Maintenance Costs from Accounting
Operational Involvement
Hours of Preventive Maintenance Performed by Operators* Total Preventive Maintenance Hours
Hours of Maintenance Activites Performed by Operators (current period)* Hours of Maintenance Activities Performed by Operators (previous year same period)
Reliability-Centered Maintenance
Number of Equipment Breakdowns** Total Hours in Time Period Number of Repetitive Equipment Failures* Total Number of Equipment Failures
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Work Flow Systems Operational Involvement Predictive Maintenance Technical and Interpersonal Training Continuous Improvement Statistical Financial Optimization Reliability-Centered Maintenance (RCM) Total Productive Maintenance (TPM) Computerized Maintenance Management Systems (CMMS) and Enterprise The following functional indicators, mentioned previously in this book, show how well the parts of the function are doing in supporting the tactical issues. No organization will use all of these indicators, but will choose the ones that support the selected tactical indicators.
Preventive Maintenance
Number of PMs Overdue* Total Number of PMs Outstanding Estimated PM Task Cost* Actual PM Task Cost Total Number of Work Orders Generated from PM Inspections* Total Number of Work Orders Generated
Developing Performance Indicators Maintenance Material Costs Charged to a Credit Card* Total Maintenance Materials Costs
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Total Number of Part Items in CMMS/EAM System* Total Number of Part Items in the Plant Total Number of Preventive Maintenance Tasks* Total Number of Equipment Items in the Plant X 3 Number of Maintenance Employees or Full-Time Equivalents** Number of Supervisors or Coaches Number of Maintenance Employees or Full-Time Equivalents** Number of Maintenance Planners Total Number of Maintenance Overhead Personnel** Total Hourly Maintenance Personnel
Predictive Maintenance
For Hours Hours of Predictive Maintenance Activities* Total Maintenance
Developing Performance Indicators For Costs Predictive Maintenance Costs* Total Maintenance Costs
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The corporate mandate is to keep the costs low while insuring the longterm viability of the company assets. Each company function that contributes to production costs must be as efficient and effective as possible. The tactical
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focus is one of insuring optimization of the overall maintenance costs on a quarterly basis. The functional support focuses on the optimization of each component of the maintenance process. Figure 14-1 illustrates the relationship among these different levels of indicators.
Corporate Indicators Financial Performance Indicators Efficiency and Effectiveness Performance Indicators Tactical Performance Indicators Functional Performance Indicators
The scenario is as follows.: The corporate cost-to-produce indicators begin to increase. The factors making up these indicators are examined. These include the individual financial indicators for each of the factors making up the cost-to-produce indicators. Upon examination, one particular financial indicator, Maintenance Costs as a Percentage of Total Manufacturing Costs, is checked and was found to have increased over the last quarter. The efficiency and effectiveness indicators for maintenance are examined next. Upon examination, the Desired Equipment Uptime indicator has declined and is below an acceptable level. The tactical indicators impacting the Desired Uptime indicator are now examined. As the indicators are checked, the Preventive Maintenance Compliance indicator is found to be lower than acceptable and trending downward. Next, the functional indicators for the Preventive Maintenance program are examined. The PM Tasks Overdue indicator is high and trending even higher. Upon reviewing the indicator factors, it is found that the equipment is not being released by production for preventive maintenance. Here is the task
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that is hindering the execution of the preventive maintenance services. This, in turn, is leading to increased equipment breakdowns, which lower the uptime, which raises the maintenance costs, which impacts the cost-to-produce indicator. This example shows how the performance indicators are linked. If the indicators are not linked to performance at either a higher level or a lower level on the indicator pyramid, then the wrong indicators are being used. Remember: No one uses all of the indicators. Use only the ones that connect to the corporate indicators. The use of non-connected indicators will obscure the real problems and the solutions required. When this happens, organizations flounder, never making the correct improvements or changes.