RSA Reliability and Maintenance Consultancy Firm
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Issue No. 31 -  November 2009

Text Box: Cost Reduction - The Wrong Way to Save Maintenance Costs

     Since establishing this website last May of 2007, I have made many efforts to improve this site and provide some useful insights about our common link which is all about improving our equipment reliability and the way we do maintenance. 

    

     Finally should you be interested to contribute to our articles section or share any feedback, I encourage you to email me Click here to email me.  If for any reason you wish to unsubscribe from our newsletter, kindly send my a blank email with unsubscribe as the heading and we shall remove you from our mailing lists.  Once again welcome to our November 2009 Edition of our Monthly Reliability Newsletter for this year 2009 and I hope that you enjoy reading and sharing with your people.

 

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     You are receiving this newsletter and email because at some point in time you opted to be included in our Monthly Reliability Newsletter mailing list from our site.

 

     Our newsletter will be sent out ones a month and provide you with quality issues and resources on our most common link which is all about reliability and maintenance, as well as regular updates about our site. I would like to personally invite you to regularly visit our website  and check out updates on our articles and training courses.

Every maintenance should focus on improving reliability and not on reducing cost “WHY?” because if reliability starts to improve then cost will definitely go down,  it cannot be the other way around.  Remember that there will be times that focusing on reducing cost will hurt reliability, a lesson we should reflect upon. Having a low maintenance cost is always a consequence of good maintenance practice  . . . .

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Inspired by change

Text Box: Change answers why industries cannot remain the same in the future . . . . .

by Rolly Angeles

 

If we conduct a survey, ask each and every reliability and maintenance manager on every industry on which of these two items is more important, reducing costs or improving reliability, almost everyone will agree that improving reliability is more important than reducing costs simply because if reliability on the equipment starts to improve then cost will definitely go down, however, it is not the other way around. In fact there are a lot of cases that reducing costs on maintenance will create problems on reliability.  But if we conduct an actual survey in the real world on what most organizations and industries are focusing, I think it is more on cost cutting or having some form of cost reduction program.  This is the name of the game most industries play. Maintenance often realize a cut or slash in their maintenance budget by 10, 20%, and the figures increase every year. Headcounts are reduced as a result of a study on man to machine ratio. And what happens to those people who are affected or classified as excess, sad to note that most of these good people will be laid-off. There are cases when old maintenance people are forced to retire and industries replaced them with a new breed of younger generation of people with less experience on the asset being maintained.  Spares budgets have to be cut and some of them needs to be localized to cope up with the plant’s cost reduction program. Purchasing people are busy looking on the yellow pages or sourcing the internet for vendors that can provide the lowest possible cost of the part.  Maintenance people are always in a never ending battle against production people in getting the equipment for a scheduled PM work. Budget on maintenance training is often cut-short and maintenance can barely attend to training. In short maintenance is left in a never ending war against being reactive with sudden breakdowns all around. Maintenance is definitely going to loose this war.  Pressure is building on the maintenance side and as pressure increase, maintenance people are in a state of confusion and when maintenance are confuse, it only boils down to one thing, “CHAOS” and that is the life of a maintenance guy. It doesn’t have to be this way since there is always a better way.  If you are dead serious in saving costs on maintenance why don’t you consider the following.

 

Take a Look and Study Your Spare Parts Management

 

Instead of laying off people in your maintenance organization why not let 2 to 3 people work on improving your stock room and organize a Spare Parts Management System in your plant.  Most industries have a stockroom to stock parts but not all have a Spare Parts Management in their plant.  Let me just give you some hint.  If you have a form of computerization for your spare parts, does the physical quantity always match the system’s quantity in the computer?  If they don’t match then you got a big problem. Just imagine going to your stock room to get some parts you needed for a repair only to realize that the part  has no more physical quantity left even if the system says that there are at least a dozen more of them.  How would you feel? What do you do with the spare parts whose equipment had already been decommissioned or in the process of decommissioning? What do you do with those parts that are classified as obsolete? Or how about the same parts with different part numbers because they came from different vendors and is used by different departments, how do you control them?  These are just some of the questions that can be raised in your stock room.  I am pretty much sure that if we can utilize these people to improve your spare parts, the savings they can generate will far out weight the time they spend in improving their stock room. Remember that the goal of the Spare Parts Management Team is to provide the right part at the right time when maintenance needs it most. Remember that the longer the time the spare part is acquired from the storeroom the longer the downtime on the equipment can be realized.

 

Consider the Study of Life Cycle Costs of your Spares and Equipment

 

For industries, there is always a temptation to purchase equipment or spares based from the lowest or cheapest source.  This might not be such a good idea since purchasing based on the initial costs only tells us one side of the story. The true costs can be seen based on its performance.  In my experience, this is the problem with most procurement and purchasing departments since they make decision to purchase parts based on the lowest bidder or lowest possible costs.  The savings these departments claim are insignificant since both operations and maintenance can encounter many failures as a result of this. They always look at the initial cost of the part and not the cost of problems the part may give the user in the long run. This is the problem with cheaper parts and equipment that fails everyday day and will likely yield a much larger amount of cost in a period of time compared to slightly higher equipment. The true cost of the equipment can be felt during the time the equipment was commission to the plant until the time it is decommission or disposed. 

Let me give you an  example of two oil filters, one is rated as nominal filter with a Beta Rating of 2.  This filter has an efficiency of 50% while the other filter is absolute and has a Beta Rating of 1000.  The  efficiency of this oil filter is 99.9%.  The efficiency of the filter refers to the number of solid particles or contaminants that the filter element can remove.  Let us say that we have a 5 micron size filter with an efficiency of 50%, this means that if there are around 100,000 contaminants which will pass through the upstream of the filter of 5 microns, the filter can only capture 50% of the contaminants or around 50,000 out of 100,000.  The remaining half will travel downstream of the filter together with the oil and back again in your system.  On the other hand if you have an absolute filter of 5 microns and a rating of 99.9%, this means that the filter is guaranteed to trap all five micron size contaminants and larger.  This means that 99,500 out of 100,000 will be trapped by the filter.  Obviously, the filter that can trap more contaminants will provide you more reliability and smooth operation compared with a nominal rating of filter.

 

Now you must be wondering about the cost of this high efficient filter.  If I told you that the cost of both filters is 450.  Definitely you would like to purchase the blue filter, isn’t it? But there is one big difference on the costs, although both filters costs 450, the blue one cost 450 USD while the white filter costs 450 Pesos ( 1 USD = 46 Pesos) This means that the costs of the white filter is actually 10.65 USD compared to the blue filter which is 450 USD.  But if you can compare the other costs which includes downtime costs, replacement costs, spare parts costs, overtime costs and other costs, the white filter cost much more compared to the blue filter in the long run.  Again if we ask the maintenance people which filter they prefer, I am pretty much sure that they will choose the oil filter with higher efficiency rating but perhaps the sentiments of your procurement or purchasing people will be different since they will select the white oil filter because it is much cheaper in costs with respect to the initial or tag price. Although they will saved around 430 USD (if they buy the white filter), they left the maintenance people to suffer.  See what I mean.  (Kindly note that the blue oil filter is an example of a by-pass filter and cannot be used to retrofit or to substitute the original filter since oil starvation might occur, the use of these types of filters will be explained in our future newsletter, so just read on.)

 

Establish a Lubrication Strategy in your Plant

 

Most of the time lubricants are just taken for granted.  Oil is just oil, if the level is low then we add oil or grease in our equipment.  If there are just too many equipments around, then maintenance decides which equipment gets oil.  That is all we do because on the maintenance point of view that is all they know.  Putting too much lubricant or less lubricant will not be good for your equipment, so the question raised here is how much quantity of lubricant is sufficient enough to be placed on each and every piece of equipment. If we are greasing a bearing on the motor for instance,  does maintenance know what type of grease is place in the bearing, how much quantity is required, how do they know that the grease is reaching the raceway of the bearing, what type of grease gun to use and all that sort of stuff.  These are some of the important questions that should define an answer because in most PM activities,  the level of information is insufficient.  Most PM checklists state what equipment is to be re-greased, how frequent and who should be responsible but as to what type of grease, the correct amount in grams, type of grease gun to be used, special accessories such as high pressure digital meters and hearing aid is not explicitly known.  

 

There are many more ways to reduce your maintenance costs and listed above are only a few of them.  Hence, instead of laying off maintenance people in your industry, why not utilize them in improvement projects or used them permanently to improve your spare parts, life-cycle management, lubrication strategy, oil contamination control,  predictive maintenance just to name a few of them. 

 

Another important aspect to consider in your Lubrication Strategy is about Oil Contamination Control, how is your lubricants being stored.  Dispensing methods, methods of transferring oil to equipment, disposal, oil analysis test performed, addressing oil leaks and so on. The smaller the contaminant the more abrasive it can turn out to be.  These tiny contaminants often invincible to the naked eye are the main cause of problems that affect our equipment and it can be controlled if we know the ways and means to address them.

 

Address the Basics in your Equipment

 

If there is one thing I believe, big problems, catastrophic failures are just an accumulation of small things often times neglected.  The process of addressing the basic equipment condition simply means keeping the equipment clean, applying the correct lubrication, and tightening of bolts.  These are very simple tasks to perform yet the impact will be felt on having lesser failures occurring on the equipment. It is useless to conduct a vibration monitoring on the equipment if the equipment lacks bolts, nuts and fasteners.  Remember that it will only take one loose or missing bolt to create a chain of destruction and havoc in our equipment.

 

So the next time that your industry is going to lay-off some maintenance people in your organization for cost reduction reasons, why not convince the decision makers in your organization to place some of your maintenance people permanently on areas that will improve your maintenance most.  This is a good deal, the savings generated will far out weight their salaries.  Some of them are explained above.  Maintenance is not only a department, it is just more than an activity.  These are your very own people that look upon the welfare of your assets and equipment.  Maintenance is a business and in any business there is always an investment.  Maintenance is more than a repair function but sad to note that this is what most industries perceive maintenance to be.  Worst are industries who don’t value their maintenance people because they are inclined to think that these people can be replaced anytime.  I tend to agree to some extent but kindly take note that the skills, knowledge, experience, camaraderie will take a much longer time to replace.  All I would like to share in this newsletter is that try to value your maintenance people, provide them with the right tools, right knowledge, training, skills and most especially the respect they deserve and I am pretty much sure that these people will deliver with all humility. 

 

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Our Reliability Newsletter will be provided once a month to our valued subscribers. It provides highlights as well as issues and lessons regarding our most common link which is all about  improving the      reliability of equipment.

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Text Box: This portion is dedicated not only to the greatest performer of all times but also to the greatest humanitarian the world had ever known, Michael Jackson. We bid you goodbye and we shall never forget you. In behalf of my family and my small firm RSA Reliability we salute you.  Your music and your message lives on.