ENHANCING PROFITABILITY THROUGH PLANT MAINTENANCE STRATEGY

By

Hisham bin Jabar

4th Reliability, Asset Management & Safety (RAMS) Conference 2008

"RAMS Implementation and Practice"24 - 25 June 2008,  Hotel Istana, Kuala Lumpur, Malaysia

Abstract

Maintenance activities of plant systems and equipment can have asignificant impact in reducing the overall plant operational cost,while boosting the efficiency of the plant. Many managementpersonnel still regard plant maintenance as a cost and tend tominimize as much as possible the amount of expenditure frommaintenance activities. However in recent years more and morepeople have adopted a more positive approach in looking atmaintenance works as a profit center.

Maintenance philosophies and activities has evolved from a simplefixing of a malfunction equipment to a more complex and integratedapproach of reliability, availability, maintainability and safetyof the maintenance planning and process with introduction of suchmaintenance tools that can review the most likely ways thatequipment will fail, which has been a major concern in reliability-centered maintenance (RCM) to ensure that proactive, predictive andpreventive maintenance activities could be planned and carried out.Still, it is not common that maintenance department will adopt amore cautious approach of playing safe and relying on theconventional or usual method of equipment maintenance rather thantrying a non-proven method which has been yet to be tested to beefficient just to avoid any complicated matter arising from theprocess.

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Thus, the perspective of looking at maintenance function as notonly to maintain but also to enhance the process or the plantoperation system as a result of turnaround planning can be veryvital to ensure a successful maintenance activities. Thus ratherthan restoring or trying to restore the equipment to its originalperformance, planning a turnaround could better still aimed atenhancing the process and performance of a plant, equipment or anysystem with the goal of better productivity and efficiency from thesystem.

This paper will be looking at the maintenance function and as howto maximize the potential benefit of a maintenance activity. Theidea might be very different from the conventional philosophy ofmaintenance but this might be something that well worth a thoughtfor a new perspective in maintenance activities.

Introduction

Basically, the word maintenance can be defined as the work oractivities of keeping something in proper operating condition. Inan industrial term, the definition of maintenance often statedmaintenance as an activity carried out for any equipment or asystem to ensure its reliability to perform its functions.Maintenance to most people is any activity carried out on an assetin order to ensure that the asset continues to perform its intendedfunctions, or to repair any equipment that has failed, or to keepthe equipment running, or to restore to its favorable operatingcondition.

Over the years, many new strategies have been implemented asmaintenance strategies which are intended to overcome the problemswhich are related to equipment breakdown. Some of the commonmaintenance strategies are as follows:-

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1. Breakdown Maintenance

This must be the earliest maintenance programs being implemented inthe industry. The approach to maintenance is totally reactive andonly act when the equipment needs to be fixed. This strategy hasno routine maintenance task and also described as no scheduledmaintenance strategy. To rectify the problem, correctivemaintenance is performed onto the equipment. Thus, this activitymay consist of repairing, restoration or replacement of components.The strategy is to apply the corrective maintenance activity only,which is required to correct a failure that has occurred or is inthe process of occurring.

2. Preventive Maintenance

This is a time-based maintenance strategy where on a predeterminedperiodic basis, equipment is taken off-line, opened up andinspected. Based on visual inspection, repairs are made and theequipment is then put back on-line. Thus under this equipmentmaintenance strategy, replacing, overhauling or remanufacturing anitems is done at a fixed intervals regardless of its condition atthe time. Although this is a well-intended strategy, the processcan be very expensive as typically 95% of the time everything wasalright. Nevertheless, some preventive maintenance is necessary assome regulation such as DOSH regulation require that annual/bi-annual boiler inspection to be conducted.

3. Predictive Maintenance

Predictive maintenance is a more condition-based approach tomaintenance. The approach is based on measuring of the equipmentcondition in order to assess whether equipment will fail duringsome future period, and then taking action to avoid theconsequences of that failures. This is where predictivetechnologies (i.e. vibration analysis, infrared thermographs,ultrasonic detection, etc.) are utilized to determine the conditionof equipment, and to decide on any necessary repairs. Apart fromthe predictive technologies, statistical process controltechniques, equipment performance monitoring or human senses are

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also adapted to monitor the equipment condition. This approach ismore economically feasible strategy as labors, materials andproduction schedules are used much more efficiently.

4. Proactive Maintenance

Unlike the three type of maintenance strategies which have beendiscussed earlier, proactive maintenance can be considered asanother new approach to maintenance strategy. Dissimilar topreventive maintenance that based on time intervals or predictivemaintenance that based on condition monitoring, proactivemaintenance concentrate on the monitoring and correction of rootcauses to equipment failures. The proactive maintenance strategyis also designed to extend the useful age of the equipment to reachthe wear-out stage by adaptation a high mastery level of operatingprecision.

4. Dynamic Maintenance

Dynamic maintenance can be considered as an enhancement toproactive maintenance strategy. Dynamic maintenance not onlyconcentrates on the monitoring and correction of root causes toequipment failures, it also innovatively considers theupgradeability of the equipment or the system.

The dynamic maintenance strategy is also designed to not onlyextend the useful age of the equipment to reach the wear-out stageby adaptation a high mastery level of operating precision, but alsoits capability to be upgraded to improve its output and itsefficiency.

Tables 1 below summarize the five different strategy of maintenancewhich being commonly practiced in the industry.

Table 1- Type of Maintenance Strategy

Maintenance Maintenance Approach Signification

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Strategy

Breakdown

Maintenance

Fix-it when broke Large maintenance

budget

Preventive

Maintenance

Scheduled Maintenance Periodic component

replacement

Predictive

Maintenance

Condition-based

Monitoring

Maintenance decision

based on equipment

condition

Proactive

Maintenance

Detection of Sources of

Failures

Monitoring and

correcting failing

root causes

Dynamic

Maintenance

Enhancing reliability Upgradeability and

flexibility

Apart from these maintenance strategies, another common maintenanceissues are the maintenance processes. In the fast few years agrowing interest has emerged in the field of Reliability CenteredMaintenance (RCM). Being originally developed for the airline

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industry, RCM is a structured process to determine the equipmentmaintenance strategies required for any physical asset to ensure itcontinues to fulfill its intended functions in its presentoperating context. Therefore, the goal of RCM is to determine thecritically equipment in any process, and based on this information,designed a customized preventive/predictive maintenance strategyfor the organization. RCM initiatives however involve a tremendousamount of resources, time, and energy. Thus the process is anextremely time consuming and expensive too especially when doneaccording to the textbook.

Another strategy worth mentioning is the Root Cause FailureAnalysis (RCFA) which is based on failures that have occurred inthe past. RCFA takes corrective action past the component stageand into the system deficiency or latent root stage. Most costsassociated with conducting RCFA are in people’s time and resourcesto verify findings. Thus, RCFA can be proactive when acceptedchronic failures that comprise the maintenance budget areeliminated from recurring. Under RCFA, recommendations aregenerally non-capital expenditures that correct people’s decision-making skills and the information they receive.

The Changing Realm of Maintenance

Over the past years, maintenance has become more important in theindustry and the role of maintenance has grown into a much moreprominent purpose in the plant operation. From a simpleexpectation of keeping equipment running or restoring it to thedesired operating condition, management today saw a much moredifferent role of maintenance. Most management now sawmaintenance efficiency as a factor that can affect the all businesseffectiveness and risk-safety, environmental integrity, energyefficiency, product quality and customer service and not containedonly to plant availability and cost. Thus, as the climate of thedoing business changed so does the need for better maintenanceprogram. In general, the evolution of maintenance changes usuallyis categorized into 3 different generation, the period of 1930’s-

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1940’s which usually referred as the First Generation, between1950’s to 1970’s often recognized as the second generation, and the1980’s till recent which commonly accepted as the third generation.

The evolution in the maintenance process also rooted from thechanging complexity of the industry itself. The first generationis the earlier days of industrialization where mechanization islow. Most equipment in the factory is basic and repairing andrestoration process is done in a very short time. Thus, the termdowntime did not matter much and there was no need for managers toput maintenance as a high priority issue.

The second generation emerged as the results of growing complexityin equipment and plant design. This had led to increasemechanization and industry was beginning to depend on these complexmachines. Repairing and restoration has become more difficult andspecial skill and more time is needed to mend the machinery. Asthis dependence grew, downtime became more apparent a problem andgetting a sharper focus from the management. People are beginningto think that these failures should be prevented which led to theconcept of preventive maintenance. As maintenance cost started torise sharply relative to other operating cost, there is a risinginterest in the field of maintenance planning and control systems.

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Figure 1-Evolution in maintenance strategy and the growingexpectation of maintenance

Beginning in the 80’s, the growth of mechanization and automationhas becoming more complex and some small breakdowns in equipmentcould effect the operation of the whole plant. This has meant thatreliability and availability have become key issues since anyfailure can have serious consequences to the whole division.

Figure 1 summarized the evolution in maintenance strategy and thegrowing expectation of maintenance. From the figure, fundamentalamongst the differences between the second and third generation’smaintenance are; -

1. Focus is now not only concentrated on availability but alsoreliability

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2. There is a push towards zero downtime or zero in-servicebreakdowns, and

3. Improved maintenance tools such as RCM, Total ProductiveMaintenance (TPM), RCFA, Failure Modes and Effects Analysis(FMEA) and others are applied to achieve maintenanceobjectives.

Table 1: Summary of Maintenance Strategy

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Maintenance Era Maintenance Approach Expectation

FirstGeneration

Fix when broke Fix when broke

SecondGeneration

Scheduled overhauls

Systems for planning and controlling work

Low-tech computerization

Higher availability

Lower costs

Longer asset life

ThirdGeneration

Condition monitoring

Design for reliability and maintainability

Hazard studies

High-tech computers

Failure modes and effects analysis

Expert systems

Multiskilling and teamwork

Higher availability

Higher reliability

Greater safety

Better product quality

No damage to environment

Greater cost-

effectiveness

Longer asset life

FourthGeneration

Enhancement from3rd generation

Flexibility

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maintenance

Flexibility &upgradeability

Detailed accuracy

Upgradeability

Greater accuracy &

efficiency

Higher availability &

reliability

Greater safety

Better product quality

Environment Friendly

Greater cost-

effectiveness

Longer asset life

Under the third generation maintenance principles in manyorganizations have stated zero breakdowns/zero in-service failuresas their maintenance goals. However, since no amount ofmaintenance can guarantee the total elimination of failures (thereis always probability of failing-but may be very close to zero) isno longer a realistic objectives that is achievable, a morerealistic approach is to avoid, reduce or eliminating theconsequences of failures.

The Fourth Generation Maintenance. Due to the rapid changes in thedevelopment of equipment and process, accelerated with the help offaster computers, it is only a matter of time when the maintenancescenario entered its fourth generation. As being discussedearlier, third generation maintenance has undergone a shift offocus in maintenance to highlight those areas where the inherentdesign of the assets yields probabilities of failures that areunacceptable, and provide some guidance and motivation forimproving those assets. Hence, the basic principles of the fourthgeneration of maintenance although are expected to be based on theprevious three generations will have some signified feature;-

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Definite deliberation of risk, notably at higher levels oforganizations, when dealing with equipment design andmaintenance strategies

Coherence between functional demand, equipment design andmaintenance will be greater than the currently existingintegration, and

There will be swift development in information technology todetect, predict, diagnose and prevent equipment failures.

With these changes, maybe the focus of maintenance will change andperhaps the new mission of maintenance department is more towardsproviding an excellent support for their customers by reducing theneed for maintenance.

Another factor, which might have a very influential factor in thefourth generation trend of maintenance, is the increasing usage ofcomputer modeling in maintenance strategy. With the rapiddevelopment of computer technology especially in the area ofartificial intelligent and expert systems, computer simulations andmodeling may provide the predictive tools of the future. Not onlythat computer helps in collecting and storing data, it will alsohelp us to better understand the focal source of an equipmentfailure.

Maintenance Cost

In recent years, there is a growing concern on the subject ofhigher maintenance cost and maintenance productivity. According tosome company, maintenance is the largest single manageableexpenditure in the plant: in many companies, surpass their annualnet profit. Although many agrees that maintenance strategies suchas preventative and predictive maintenance program has been shownto produce saving of up to 25%, study have shown that still 1/3 ofthese maintenance cost can be saved. Typically, maintenance costcan be divided into two main groups. The first group referred as

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direct costs are easy to justify and to report. These direct costsconsist of items such as labor, materials, services, andmaintenance overhead cost are the cost tabulated and shown asmaintenance costs. The other group of maintenance costs is hiddencosts or indirect costs which are harder to measure. These hiddencosts of maintenance are classified as the six big losses:-

Breakdowns and unplanned plant shutdown losses

Excessive set-up, changeovers and adjustments losses

Idling and minor stoppages

Running at reduced speed

Startup losses and

Quality defects

Therefore, it is very important for companies to maximize theirmaintenance effectiveness and equipment uptime. According to astudy on maintenance productivity, most maintenance department isonly around 25% to 35% productive. This causes many companies toexperience difficulties with quality control, production levels andschedule adherence, since the equipment they are using is notproperly maintained. Table 2 shows some comparison between theeffect of effective and non-effective maintenance process.However, maintenance productivity can be drastically improved byplanning and scheduling of maintenance activities. For the past 20years, most manufacturers have only focusing on reducing costs inthe manufacturing processes to stay competitive as the low costproducer. This effort although yielded some measurableproductivity gain still retarded the opportunity for the additionalmaximum gain in the overall productivity since maintenance oftenwas excluded from these improvement plans. Clearly, it is alsoimportant to integrate maintenance program into these improvementagenda.

Another preference to increase the level of maintenanceproductivity is to outsourcing for maintenance partners.Associating with professional maintenance people give a company the

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advantage to address these issues with those experts who face andmeet these challenges on a daily basis. In addition, outsourcingsalso enable a company to gain greater control over maintenanceresults. However, it is important to note that the following keyelements have to be highlighted to achieve the optimum benefit fromthese outsourcing activities:-

Performance measurements are developed and clearly communicated

Planned maintenance is established as the focus of the operation

Maintenance becomes a competitive advantage

Both manufacturer and maintenance contractor desire a mutually

beneficial relationship

Maintenance best practice are established and tracked

In the maintenance partnership scenario, performance guarantees andcontinuous improvement goals provide greater control overmaintenance results and assure production goals are being achieved.Thus another question arises as to when we have to start ourmaintenance program? The traditional approach of capitalengineering and project organizations is measured on two keyobjectives – being on time and being on budget. Those measurementsinevitably drive the project teams to focus on total installedcost.

Contradict to this, maintenance and reliability group focuses theireffort on equipment that is up and running and their concern aremore on the machine availability, reliability and avoiding downtime. Hence, the selection of specific equipment might support theEPCC objectives of low installed cost but at the same time drivingup maintenance cost and downtime which is not favorable to theowner maintenance team.

Thus a better solution should be an integrated and aligned approachshould start when the facility is just a proposal, which is evenbefore the planning stage, and continues up until it is time to forthe facility to de-commissioning (Figure 2).

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Proposal

Construction Commissioning Operation Decommissioning

Figure 2- Integrated and aligns approach of maintenance program

The importance of effective maintenance thus as shown in table 3below will have a great impact on the overall accountability of acompany. By reducing the direct and indirect cost of equipmentfailure, the concept of productive, effective and profitable can beachieved from the maintenance program.

Return of Assets = Revenue -----------------------(1)

Asset Value

Revenue = Price X Volume-----------------------(2)

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MAINTENANCE PROGRAM

Volume = Max. Capacity X Overall Equipment Effectiveness-----------------------(3)

Effective maintenance has a positive effect on equation (1), (2)and (3). Improved maintenance helps to improve ROA by reducing theneed for expensive capital upgrades to increase output.

Effect of Maintenance

Effective Maintenance Non-effective Maintenance

Restore system productivity

Avoid any unnecessary

shutdown

Increase the efficiency of

equipment

Prolong the system life

Improve the overall plant

productivity

Essential to maintain product

quality

Increases plant profit

Increased maintenance cost

Reduced the system/equipment

life

Reduced the efficiency of

heat transfer

Induced the unwanted waste

Additional cost to clean the

system

Can effect product quality

Reduced the plant

productivity

Downgraded the system

effectiveness.

Decreased plant profit

Table 3- Effective maintenance Vs Non-effective Maintenance

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Concluding Remarks

The requirement for maintenance process has change drastically fromthe old concept of fix-it-when-it-broke to a more complex approach,which entailed adopted maintenance strategy of a more integratedapproach and alignment. Nowadays, management has become aware thatmaintenance will also be part of the investment decision-making,thus prompting managers to take into account the sources of fundingand the impact investment has on credit lines and taxes and notonly to focus on upfront cost and depreciation rates.

For any plant operation, unplanned downtime cause expensive lossesand for process industries, such as the oil and gas industry, andwith the bullish run of the oil prices, the losses can easilyexceeded the million dollar mark daily. An effective maintenancestrategy which can ensure the availability, reliability andefficiency of plant equipment is by far the most effective way ofreducing the risk of serious component failure and unscheduleddowntime.

Apart from the expensive losses, unplanned plant downtime can alsohave other serious consequences of environmental, health and safetyimplications. Hence, the management team nowadays must adopt adynamic proactive approach in plant maintenance strategy to ensurethat the availability, reliability and productivity of the plantwill not be compromised.

The goal of maintenance program is also changing and with the rapidtechnological development, improvement of equipment and technologywill be one of the key aspects of improved maintenance practicedfor better productivity, effectiveness and profitability.

REFERENCES CITED

Dale R. Blann, PE, PROACTIVE MAINTENANCE as a STRATEGIC BUSINESSADVANTAGE, Keynote Presentation Greater Chicago Plant MaintenanceShow and Conference

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Dunn, S (1998), Reinventing the Maintenance Process – Towards Zero Downtime, Queensland Maintenance Conference

Hisham Jabar, Plant Maintenance Strategy: Key for EnhancingProfitability, Maintenance Resources,http://www.maintenanceresources.com/referencelibrary/ezine/chemclean.htm, 2003Ledet, Winston J., “Engaging the Entire Organization in ImprovingReliability”, Paper, 1997.

Ledet, Winston P., “Proactive Operations as a Strategic BusinessAdvantage”, Paper, 1996.

Lowe, Paul G., “Maintenance: An Afterthought or a Contributor?”,SME Technical Paper (WIRETECH ’89), 1989

Monus, Paul, “Proactive Manufacturing at BP Oil Lima Refinery”,National Petroleum Refiners Association Proceeding, August 1991.Moubray JM, (2000), Maintenance Management – A New Paradigm, Maintenance Resources.ComRummler, Geary A., and Brache, Alan P., IMPROVING PERFORMANCE How toManage the White Space on the Organization Chart, Jossey-Bass, 1990

Schaffer, Rober H. The Breakthrough Strategy, Ballinger PublishingCompany, 1988.

Senge, Peter., The Fifth Discipline: The Art and Practice of the Learning Organization,Doubleday, 1990.Tesdahl, SA and Tomlingson PD, (1999), Breakthrough Maintenance Strategy for the 21st Century, Equipment Management

Williamson, RM (2000), Breakthrough Strategy for Changing Behaviors, Maintenance Resources.Com

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Speaker's Contact Details   

Name  : HISHAM JABARCompany  : SEGI PERKASA (M) SDN BHDTitle : Managing Director/R&D AdviserAddress  : No 46-3, Jalan Metro Perdana Timur 11,

: Kepong Entrepreneurs Park: 52000 Kuala Lumpur

Country  : MalaysiaTel : 03-62525797Fax  : 03-62525798 E-mail  : segip@tm.net.my

Educational Background  

Hisham Jabar received his Bachelor of Engineering Degree in MineralProcessing Engineering in 1993 and Master of Science in Materials andMineral Resources Engineering in 1995, both from the Science Universitiof Malaysia. He is a member of various professional bodies including theInstitute of Engineers Malaysia and Institute of Materials Malaysia.

Experience 

Hisham Jabar is currently working as the Managing Director of SegiPerkasa Sdn Bhd, a company which specialize in chemical cleaning works,wastewater treatment, hazardous waste management and other specializepre-commissioning jobs in the oil and gas and other related industry. Hehas been involved in many chemical cleaning works during pre-commissiongand plant turnaround and shutdown activities for many refineries,

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petrochemical plants, gas processing plants, offshore modules, FPSO,field development projects and other related projects.

Previously, he worked in the tin mining industries and the gold miningindustries and has had a few years working as Research Officer for theuniversities.

Hisham Jabar has presented more than 30 papers at various internationalconference and seminars discussing various technical and position issues.

Responsibilities   

Hisham Jabar is Segi Perkasa (M) Sdn Bhd Managing Director and alsoacting as the Research & Development Adviser of the company. Hisresponsibilities include apart from the day to day management andoperation of Segi Perkasa (M) Sdn Bhd to advise and guide the researchand development activities within the company which aim at finding theperfect solutions for the customer satisfaction. 

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