Auditing Maintenance Systems - Essay Example

Table of Contents Section Page 2 INTRODUCTION 4 2 Background 4 2.2 The Brief 4 2.3 Report Format. 5 3 OBJECTIVES AND SCOPE 6 3 Objectives6 3.2 Scope 7 4 METHODOLOGY 7 4.1 Structured Interviewing 7 4.2 Data Analysis 8 4.3 Benchmarking Data Comparison 8 4.4 Collation of Information / Rating Method / Recommendations 9 4.5 Presentation and Report Writing 9 5 RESULTS OF THE PERFORMANCE REVIEW 10 5.1 General 10 5.2 Strategy and Policy (Rating: 2.0 out of 5) 11 5.3 Organisation (Rating: 2.5 out of 5) 12 5.4 Communication and Employee Involvement (Ratings: 3.5 & 3.0 out of 5 respectively) 13 5.5 Workload Management (Rating: 2.5 out of 5) 14 5.6 Maintenance Regime (Rating: 3.0 out of 5) 15 5.7 Heath, Safety and Environment (Rating: 1.0 out of 5) 16 5.8 Materials Management (Rating: 1.0 out of 5) 17 5.9 Value Focus (Rating: 1.0 out of 5) 17 5.10 Performance Measures (Rating: 1.5 out of 5) 18 6 RECOMMENDATIONS 18 6.1 Proposed Performance Improvement Programme 18 7 CONCLUSIONS 19 8 TABLES AND FIGURES 20 9 Appendix A: Audit Scoring 21 8 TABLES AND FIGURES: Table 2 Bench Marking Data 200 9 Appendix A: Audit Scoring 21 1 EXECUTIVE SUMMARY The maintenance auditing programme of the H-Acid plant has identified strengths in the areas of communication, employment involvement and maintenance regime. It was below average in the areas of strategy and policy, organisation and workload management. Moreover, the company exhibited poor performance in the areas of materials management, value focus, measures of performance and health, safety and environment. An improvement programme requiring investments to be made in the materials management and measures of performance is recommended in order to improve operational performance of the H-Acid plant. This improvement programme consists of the following elements: Reliable computers should be installed. Replace the critical parts with high quality material so that the breakdown frequency and time could be reduced. Rule out the hazards to health and safety of the workers. The required parts should always be made available at the time of need. The management, professional engineering group and all the shift groups build a consensus on the issue of critical equipments and the spare parts. Proper performance measures should be adopted. Stocks should be efficiently managed. 2 INTRODUCTION 2.1 Background The chemical plant under our study for audit maintenance is in Scotland, UK and it manufactures dyestuffs which are used for colouring textile products. Nepthalene (moth balls) is the chemical that is used to initiate the production process of a complex organic acid: 4 amino 5 hydroxy 2, 7 Napthalene Disulphonic acid or H-Acid. Since H-Acid is the final product gained thus, this plant is referred as the H-Acid plant. If the plant works perfectly with out experiencing any breakdowns and equipments failures then H-Acid is produced in two weeks in 14 separate stages. The plant runs non-stop through out the year with the exception of statutory shut downs that are conducted in every 2 years. If the plant works to its full potential then the annual turnover obtained is estimated to be £16m that is £4000 per tonne (Market Value of H-Acid) x 4000 tonnes (annual ideal output of the plant). The downtime cost of the plant, as evaluated by the accountants is found to be £900 per hour which shows that the plant is not performing to its optimum level and thus, the income through the plant is decreased. This report deals with the maintenance auditing and benchmarking study of the H-Acid chemical plant. This study will identify the cause of the reduced output from the plant and thus, suggests the solution(s) for improving the output of the plant to the desired level. 2.2 The Brief The brief includes the following tasks to achieve for this study. Determine the maintenance requirements of the H-Acid chemical plant. Conduct audit to evaluate the cause behind the current low performance of the plant. Recommend solutions to the identified problems associated with the low performance of the plant in order to increase the output and the income generated through it. 2.3 Report Format. This report contains the description of the steps that were done in the process of maintenance auditing of the plant. It also provides recommendations to increase the output of the plant. The structure of the report is given below. Section 3 presents the objectives and scope of the study Section 4 states the methodology applied to determine the causes behind the low performance of the plant. Section 5 provides the results obtained through the maintenance auditing process. Section 6 recommends the measures for optimizing the performance of the chemical plant. Section 7 concludes the study 3 OBJECTIVES AND SCOPE 3.1 Objectives The main objective of conducting this audit is to identify and then eliminate the reasons behind the downtime of the plant activities in order to acquire further improvements in performance of the plants. The objective of the analysis is further divided in to the following precise notes. 1. Establish the key indicators for the current performance of the plant within the maintenance, operation and production departments. Determine how these key indicators affect the performance of the H-Acid plant. 2. Determine and measure the steps for viable increase in the production output of the chemical plant and plan out the methodologies and organisational structure through which this increase in the output from the plant could be achieved. The outlined steps are constrained by the strict environmental laws of United Kingdom which need to be taken care of for the sake of better environment and health. 3. Then outline an implementation approach towards the application and co-ordination of the improvement methodologies which will include different possible scenarios. Any practice of the improvement approaches should be in-line with the safety, compliance and environmental laws. 4. Special care should be given to the following: The structure of the management. Key performance indicators. Key performance management. Output or the work rate of the chemical plant. 3.2 Scope This study is primarily concerned with the evaluation of the cause behind the low income and the low productivity from the H-Acid plant. It includes an assessment of all vital elements of operation, maintenance and production activities as commencing at H-Acid chemical plant which further encompasses minor installations, statutory inspections, management of the work force and other practices. Interviews were taken from all the involved persons who include Plant Manager, Plant Engineer, Planner, Supervisor, Buyer, Operator and Electrician. The study took into consideration all the 14 stages involved in the manufacturing of the final product that is the H-Acid. This study also focuses on the quality of the parts used in the chemical plant. It also highlights the toxic and flammable nature of the chemicals used in the plant which have caused severe injuries and accidents. 4 METHODOLOGY The approach selected comprises of the 5 steps which are stated below: 4.1 Structured Interviewing Various personnel including Plant Manager, Plant Engineer, Planner, Supervisor, Buyer, Operator and Electrician who are involved in the chemical plant were interviewed in order to assess their point of views on the current output, problems faced by them in carrying out their work, etc. From the senior management to the technicians working in the chemical plant vicinity forming all levels of the organisation were sampled. Altogether, 90 interviews were conducted since 90 people in total are working in three shifts of 8 hours each at the chemical plant. These interviews helped in collecting the evidence and the views related to the organisation of work, the implementation of work and the issues encountered in the process of conducting work which has lowered the performance of the plant. The questions asked were picked from “A step by step guide to Maintenance Auditing” by “Paul Wheelhouse” which has been particularly written for the plant management. It is a very effective tool that has been successfully utilized in various industries. The information gained from these interviews was made use of to evaluate the different aspects of operation, production and maintenance activities. 4.2 Data Analysis This step takes in to account a detailed analysis of the data in the plant maintenance planning, strategy and implementation. The data set is checked for accuracy and completeness. The data set should be able to provide information on the effective planning, scheduling, monitoring and reporting on maintenance activities; staff’s understanding on application of the maintenance and operations systems; the easy usability of the system; etc. The resultant data obtained through interviews included plant break down rates; costs incurred on maintenance; uncompleted work; current performance measures; performance issues, proposed solutions towards performance improvement, etc. 4.3 Benchmarking Data Comparison This step requires correlating some of the performance characteristics and the working practices of the H-Acid plant with those of its counterparts belonging from all sectors, with the purpose of determining the reasons behind the ‘performance gaps’ and the loopholes in maintenance in relation to the successful and accomplished industry leaders. 4.4 Collation of Information / Rating Method / Recommendations The information collected on the basis of interviews, data analysis and benchmarking data comparison was used to appraise the performance of the H-Acid plant in relation to the following 10 areas: Strategy and Policy Maintenance Regime Organisation Health, Safety & the Environment Communication Materials Management Employee Involvement Value Focus Workload Management Measures of Performance The values for score were 0.5, 1.0, 1.5, 2.0, 2.5, 3.0, 3.5, 4.0, 4.5, and 5.0; where 5.0 is considered to be “outstanding” performance and 0.5-1.0 are regarded as “poor” performance. The audit result is shown in a graphical representation of a polygon with 10 sides which is referred as the “spider’s web”. Each side of the spider’s web represents one of the above ten areas of audit scoring. By considering and examining the scores obtained from the performance ratings and the benchmarking, the maintenance practices carried out by the H-Acid plant are evaluated to be below average, and the upper management of the plant then needs to take the necessary steps towards performance improvement. These steps are identified and recommended in this maintenance audit programme report with the support and co-operation of the working staff at the chemical plant. 4.5 Presentation and Report Writing The maintenance audit project of H-Acid plant was successfully completed and the final report regarding it has been produced in the form of this document. 5 RESULTS OF THE PERFORMANCE REVIEW 5.1 General The results established through the maintenance auditing of the H-Acid plant are shown below. An organisation that demonstrates best current performance would exhibit a score of five in all categories of maintenance auditing and thus, produce the footprint of the large regular decahedron (10-sided polygon) as shown in blue colour in the chart below. The footprint of the H-Acid plant is shown in the red colour line within the blue decahedron. H-Acid plant exhibits median performance of score 2.0-2.5 in terms of its strategy and policy, organisation and workload management. This is a below average performance resulting in the low productivity from the chemical plant. On analysing the information obtained through maintenance auditing project, H-Acid plant is found to be considerably better in performing in maintenance regime, employee involvement and communication. It performed poorly in safety, health and environment, materials management, value focus, and measure of performance. Moreover, the existing performance measures carrying out are unable to acquire maintenance effectiveness with respect to reliability and performance of parts and equipments. All of the ten assessment areas of H-Acid plant’s maintenance auditing are individually explained below. 5.2 Strategy and Policy (Rating: 2.0 out of 5) The current strategy of predictive and preventive maintenance is a very good and intelligent approach but following this strategy only is not sufficient enough for the improvement of the chemical plant. The proper strategy and policy are needed to be devised in to the operations and maintenance system of the H-Acid plant since various issues have been raised by the staff on the frequent breakdowns due to the lack of investment in the much needed up gradation process of the parts and equipments. It has been found that the needed parts for reactive maintenance work is often out of stock which results in prolonged breakdown of the plant and thus, reduces productivity. The planned maintenance work comprises of only 50% of the total maintenance work due to which the performance of the plant could not be increased as 50% of the time and resources are busy in bringing the system in to working condition rather than be engaged in improving the system for better performance. The required strategy and policy should address the following agendas. Identification of the most important maintenance tasks and prioritisation of their execution. Important and frequently required parts should be made available. Reliable computers should be installed. Recurring problems should be solved, predicted and prevented in future. If such a policy is not adopted soon then the plant will consistently show low performance and the company will bear greater loss in comparison to the cost that it will incur in buying parts and equipments for maintenance in accordance to this strategy. 5.3 Organisation (Rating: 2.5 out of 5) The H-Acid plant exhibits the average level of integration between operations and maintenance. Its medium score of 2.5 reflects this. The various organisational aspects identified are stated below. Area ownership. Planned maintenance work is often postponed due to the frequent reactive maintenance work. The employees are encouraged to provide new ideas for improvements by giving them half of the first year’s savings earned through the success of the suggested idea. Competent technical team. Important decisions regarding maintenance issues require immediate attention. Good teamwork exists amongst all technicians. Day to day meetings are well structured and organised, Developmental activities require attention. Professional engineering support is available. Efforts have been applied to make use of cross-skilling maintenance but still all of the technicians are always busy in the maintenance work due to the high frequency of reactive issues encountered. Technicians are often exposed which results in frequent injuries and accidents. Thus, it is required to further strengthen the professional engineering support structure. Operations and maintenance departments should co-operate with each other to solve the issues and thereby, improve the H-Acid plant’s performance. Development activities and planned maintenance work should be handled and completed. 5.4 Communication and Employee Involvement (Ratings: 3.5 & 3.0 out of 5 respectively) Determination and efforts are clearly observed in these two areas. Meetings are regularly conducted by the responsible personnel in order to find out the solutions for the maintenance issues encountered by every individual. The minutes of the meetings are noted and then communicated to the upper management to take further action accordingly. The employees are devoted and involved in the progress of the company. Good understanding amongst the employees of all levels exists due to proper communication. However, differences have been identified in between the engineering group and the management. The plant manager has alleged that the engineering group is unable to crack down some of the recurring maintenance issues whereas the engineering group complaint about the spare parts not had been made available by the management which causes delay in the maintenance work and thus, results in the breakdown of the system. Such differences amongst different departments of the company should be removed by means of developing understanding and support system through proper communication. The following various aspects of communication and employee involvement were observed in this maintenance auditing project of the H-Acid plant. Regular meetings. Computer tracking system for the spare parts is not intelligent enough to record the critical nature of the spare parts due to which they get out of stock when needed. Maintenance jobs are also tracked down through the computer system. Large planning board that is updated on daily basis. It is located just outside the control room so that every one on the plant can read it and thus, find out what is going on. Supervisors carry out audits on each other’s plant from time to time. Training. Difference of opinion on the issue of which part of the plant is the bottleneck, amongst different shift groups. The employees hang out together to celebrate their achievements and success. Staff development scheme. Company suggestion scheme. Area responsibility. The differences amongst management, professional engineering groups and shift groups should be removed and thereby, their issues of unavailability of spare parts should be sort out. 5.5 Workload Management (Rating: 2.5 out of 5) The workload management is not effectively handled as reflected by the pretty average rating of 2.5 in this area. There are several issues due to the high frequency of reactive maintenance work which replaces the planned maintenance work. Technicians are always busy in doing the reactive maintenance tasks. This area needs a lot of attention. The following aspects of workload management were identified in the maintenance auditing programme of the H-Acid plant. Critical spare parts and critical issues could not be reported in the computer tracking system. Besides this, there are also conflicts amongst different shifts groups on the identification of critical spare parts and critical maintenance jobs. The mainframe computer is used for ordering materials and for tracking down the maintenance jobs. The tradesmen access this system and then close the jobs by making comments about their findings related to the order and the action taken by them regarding it. The job status does not effectively help in the planning process. No regular review of planning performance at Work level takes place. The frequency of reactive work should be reduced by implanting the quality spare parts, making the spare parts available when required and by means of predictive and preventive maintenance work. Once the reactive maintenance work is under control then the planned maintenance work should be carried out as per the schedule to improve the H-Acid plant’s performance. 5.6 Maintenance Regime (Rating: 3.0 out of 5) The maintenance regime area of the audit scoring of the H-Acid plant exhibits good rating of 3.0. The various aspects of maintenance regime are listed below. In the presence of regular reactive maintenance assignments, the maintenance team and the management are still able to perform planned maintenance work up to the value of 50% of the total maintenance work which shows good maintenance regime and commitment of the employees to their work. The maintenance tasks are tracked down through the centred computer system. The contractor and supplier services are integrated through the computer system. Unavailability of the required spare parts. Critical jobs and parts identification conflict. Quality parts and equipments should be used to increase system reliability and to decrease system breakdowns. 5.7 Heath, Safety and Environment (Rating: 1.0 out of 5) The health, safety and environment condition at the H-Acid plant seems to be poor as indicated in the audit score of 1.0 out of 5. Due to the strict environmental laws of United Kingdom, the H-Acid plant’s management has not used the lead-lined vessels and components, which are corrosion resistant, to eradicate the issue of equipment breakdown in contrary to their Indian counterparts. But still the H-Acid plant is rated poorly due to the health and safety issues concerning its workers being exposed which has resulted in various accidents and injuries to the workers. The other positive aspects identified in the area of health, safety and environment are indicated below. Strategies and policies for health, safety and environment are in place. Compliance is achieved at good standard. Incidents are monitored according to the learnt health, safety and environment lessons. Toolbox talks are given on safety in meetings. Safety briefings are conducted on regular basis. Risks at sites are assessed and updated. Management conduct tours to monitor health, safety and environment measures. In spite of the above measures taken by the management to ensure health, safety and environment, the H-Acid plant is poorly rated in this area and thus, needs strict actions in terms of plant’s maintenance to assure worker’s safety. 5.8 Materials Management (Rating: 1.0 out of 5) The materials management is the big issue identified in the maintenance auditing project of the H-Acid plant and therefore, the plant is poorly rated in this area. Spare parts are often not found when they are demanded. The spare parts are used faster than the store can purchase them again. Stores do not use the bar coding system for the stocks. The computer can not identify where the part has been used in the past years, thus the engineers are being asked whether to stock in the part if it has not been used in the past 2 years but the engineers often say that the part is still required in order to safe it for the future requirement. The stores do not deliver the parts to the plant instead the parts needed have to be collected from the stores. Some positive aspects identified in the area of materials management are stated below. Framework for materials management has been established. Computer based tracking system for stores requests. Regular cycle counting is done for the stock. The parts accuracy is regularly around 97%. 5.9 Value Focus (Rating: 1.0 out of 5) The score of 1.0 in value focus demonstrates poor rating of the company in this area. This poor performance is due to regular breakdown of the chemical plant and of the equipments being replaced which results in high level of rework and temporary repair. Some of the positive aspects that were identified in the area of value focus of maintenance auditing programme of the H-Acid plant, are listed below. The necessity for involving management and professional engineering group in the early design of the plant has been identified. Different schemes for process optimisation are implanted. The value of professional engineering expertise. 5.10 Performance Measures (Rating: 1.5 out of 5) The score of 1.5 out of 5 portrays poor performance by the company in this area of audit scoring. The problems keep on recurring after maintenance. Regular breakdowns are observed. The computer fails even if the system is transferred immediately to standby in case of breakdowns which results in the loss of 4 hours of the output. No measures are adopted at the plant to isolate the problems so the workers can not focus on the planned tasks. 6 RECOMMENDATIONS 6.1 Proposed Performance Improvement Programme It is highly recommended that the management, professional engineering group and all the shift groups build a consensus on the issue of critical equipments and the spare parts. The required parts should always be made available at the time of need. Investment is required to rule out the hazards to health and safety of the workers. Investments should also be made to replace the critical parts with high quality material so that the breakdown frequency and time could be reduced. Reliable computers should be installed. Proper performance measures should be adopted. Stocks should be efficiently managed. 6.2 Cost and Benefits Analysis Table 1: Cost / Benefit Summary Initiative Benefits Internal costs Outside support Maintenance Budget Reduction in breakdowns 6 Man-months £2m (materials ½, contractors ¼, labour ¼) Investment in Health and Safety Less incidents at the site and less injuries to the workers 1 Man-month £3k (from the maintenance budget) New reliable computer installation Reduction in system failure 1 Man-week £5k (from the replacement budget) Performance Measures Increased output and reduced breakdowns by efficient working 2 Man-weeks Stocks Management Availability of parts when needed and stock out the parts that have not been used for 2 years. Thus, less breakdown time and money saved from not buying the unnecessary parts 1 Man-month The table above illustrates the costs and benefits associated with the recommended measures described in the section 6.1 7 CONCLUSIONS The maintenance auditing report of the H-Acid plant has confirmed that improvements are required in the practices of the company. Strengths are identified in the areas of communication, employment involvement and maintenance regime. The performance was below average in the areas of strategy and policy, organisation and workload management. Moreover, the company exhibited poor performance in the areas of materials management, value focus, measures of performance and health, safety and environment. An improvement programme requiring investments to be made in the materials management and measures of performance is recommended in order to improve operational performance of the H-Acid plant. The maintenance auditing of the H-Acid plant identified the root cause behind the low performance and income by the plant, to be excessive breakdowns due to the frequent reactive maintenance work. The reason for the high frequency reactive work is found to be the unavailability of the required spare parts and the low quality of the material of these required spare parts and equipments, if available. Various solutions are provided for the different issues in this report. The most important areas that require attention are identified to be materials management, value focus, performance measures, health, safety and environment. It is therefore, recommended to invest in the materials and in the performance measures since this investment will improve value focus, health, safety and environment. Moreover, it will result in the reduction of breakdowns which will finally, improve the output productivity of the H-Acid plant and thereby, generate more income for the company. 8 TABLES AND FIGURES Table 2: Benchmarking Data RESULTS SUMMARY TABLE Benchmark H-Acid     BEST Scores STRATEGY & POLICY 1 5.00 2.00 ORGANISATION 2 5.00 2.50 COMMUNICATION 3 5.00 3.50 EMPLOYEE INVOLVEMENT 4 5.00 3.00 WORKLOAD MANAGEMENT 5 5.00 2.50 MAINTENANCE REGIME 6 5.00 3.00 SAFETY HEALTH & ENVIRONMENT 7 5.00 1.00 MATERIALS MANAGEMENT 8 5.00 1.00 VALUE FOCUS 9 5.00 1.00 MEASURES OF PERFORMANCE 10 5.00 1.50 Average 5.00 2.10 9 Appendix A: Audit Scoring SCORING GUIDE SCORE CONDITION 0.5-1.0 Poor performance exhibited. Immediate action required for improvement. 1.5-2.0 Below average performance. The efforts applied are not effective. Improvement required. 2.5-3.0 Average performance shown. Several issues are encountered and identified. Issues should be resolved quickly for better performance. 3.5-4.0 Good performance. Problems are being regularly solved. Necessary improvements are either under planning or in progress. 4.5-5.0 Outstanding performance has been achieved. Current performance and further developments are continuously reviewed and monitored. BEST CURRENT PRACTICE ATTRIBUTES 1 STRATEGY AND POLICY 1. Culture of reactive maintenance. 2. Half of the total maintenance work comprises of planned maintenance jobs. 3. Issues and constraints have been identified and understood. 4. The strategy and policy are regularly analysed and updated in order to achieve the common objectives. 2 ORGANISATION 1. Responsibilities and accountabilities are clearly defined and fulfilled. 2. Multi-skilled technicians. 3. Sufficient training is given to the staff. 4. Performances are evaluated through the appraisal system. 5. Employees are rewarded for suggesting effective ideas. 3 COMMUNICATION 1. Computer tracking system for tracking maintenance jobs and requests for spare parts. 2. Message board system to provide visual feed back to everyone on the issues and works in progress. 3. Regular meetings between maintenance staff and professional engineering group. 4 EMPLOYEE INVOLVEMENT 1. Equipments and products are formally reported and checked. 2. Employees work as a team to solve problems and to achieve their shared goals. 3. Individual’s skills are identified and utilized for regularly improving the performance. 4. All information related to costs and responsibilities are available to everyone. 5. Skills of employees are developed and monitored through regular trainings and appraisals, respectively. 5 WORKLOAD MANAGEMENT 1. Maintenance jobs and requests for spare parts are formally reported with feedback system. 2. Maintenance concentrated on critical equipments and reactive work. 3. Supervisors and managers influence the repair priority. 6 MAINTENANCE REGIME 1. Planned work constitutes 50% of the total maintenance work. 2. Tasks are determined by centralised reliability maintenance system. 3. Contractor and supplier services are integrated. 4. Equipments are formally checked. 7 SAFETY HEALTH AND ENVIRONMENT 1. Safety, health and environment policy is in place. 2. Materials used comply with the UK’s environmental laws. 3. Statutory work is conducted as per the schedule. 4. Accidents are reported so that they can be avoided in future. 8 MATERIALS MANAGEMENT 1. Maintenance cost is regarded as the total cost to the business. 2. Spare parts are stored in secured and accessible stores. 3. Spare parts allocated upon request. 4. Unused components found in the store. 9 VALUE FOCUS 1. High level of temporary repair and rework. 2. High level of breakdowns due to critical equipments. 3. Limited time taken for maintenance jobs. 4. Tools, techniques, procedures, organisation, strategy, etc. are regularly monitored and updated. 5. Employees are encouraged by being rewarded for suggesting effective ideas. 10 MEASURES OF PERFORMANCE 1. Backlog of jobs is maintained regularly. 2. Causes of the problems are identified and best efforts are applied to remove them. 3. Percentages of breakdowns and downtimes are recorded by the production operators. Read More