Developing Enterprise Asset Management KPI, Maintenance KPI and Reliability KPI

You will have no real ‘grass-roots’ support, nor lasting success, until the people in each production plant are involved in setting their own performance improvement measures and the associated key performance indicators.

 


Hello Mike,

I would be thankful if you guide me to a proven list of reliability KPI’s. We would like to measure performance on individual plant and corporate levels.

We have 120 plants for various products: metals, chemicals, petrochemicals, fertilizers.

We are not currently using unified measures, i.e. every plant is going in its own direction, and we now are looking to unify reliability across the corporation by introducing a reliability solution to create a scientific maintenance strategy. Part of our strategy is to introduce specific KPIs which have to be followed by all plants.

 


 

Dear Friend,

You and your team have a very sizable and exciting task ahead of you.

It is impossible to give you truly sensible advice by email, but I can give you an idea of what I would do in your situation.

Most importantly how and when is the plant production management to be involved in setting KPI’s for their operations? My experience is that you will have no real ‘grass-roots’ support, nor lasting success, until each production plant is involved in setting its own performance improvement and associated measures.

The measures are the easy part. First decide what level of financial performance you want to achieve from each plant and develop a costed plan and timetable to lift productivity to that level. Then it is clear what the KPIs need to be.

If you only want a list of reliability performance measures to discuss within your corporation, then a search of the Internet will give you many articles from which you can create lists of KPIs. There are even books you can buy that tell you the manufacturing, maintenance and reliability KPIs available to you.

If however you are charged with instituting a productivity improvement program throughout the corporation, then that is a very different requirement. Simply giving people a KPI number to hit without getting them to develop an achievable, costed plan to do so will cause resentment and confusion.

The basic process is to investigate why your productivity is what it currently is, and what can be done to improve it. You know the current production rates. You will know the rated equipment performance from its design data or best historical continuous 3-shift result. Addressing why production is not continuously at that level of performance will form the basis for each plant’s improvement plans and budgets.

The difference between current and rated (or best) performance will give you an indication of the profits you can generate from the existing plant and equipment. Knowing the potential profit, you know how much money you can invest in improving the operations. It is a simple investment decision based on the return received from the moneys invested in improving productivity. The beauty if this investment is that it is virtually a guaranteed return because you know exactly what profits you are missing out on.

Knowing what the plant performance potential should be, you can then ask each business unit and production manager what they need to do to deliver design rate plant performance. The process of analysing and costing their options will help them buy-in and become energised to achieve the required rise in productivity.

Everything revolves around knowing the designed production rate and the least expected production costs associated with that throughput. You then ask why the throughput and costs are not being met and what needs to be done about it.

I hope that the information in this email helps you and your company go forward.

 

My best regards to you,

Mike Sondalini
Managing Director
Lifetime Reliability Solutions HQ

 

P.S. If you require advice on industrial asset management, industrial equipment maintenance strategy, defect elimination and failure prevention or plant and equipment maintenance and reliability, please feel free to contact me by email at info@lifetime-reliability.com