Professional Documents
Culture Documents
AMMJ October 2008
AMMJ October 2008
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COVER SHOT: Engineering: masters, graduate diploma and graduate
certificates.
The cover shot for this issue is provided
‘Our mill will save $US84,000 as an outcome from studying
by WorkSafe Victoria. The image created
just one Monash unit’. Perry Pearman, Ponderay Newsprint,
by the text shows a WorkSafe Inspector. Washington State.
The text used describes typical faults
Applications now open for commencement in 2009.
found during WorkSafe inspections.
How many times does “maintenance” or For details contact: mre@sci.monash.edu.au
“maintained” appear? call +61 3 5122 6431 fax +61 3 5122 6738
or visit www.gippsland.monash.edu/science/mre
Maintenance is a critical factor in
creating a safe workplace.
pm Optimisation &
Reliability Assurance
method Training Courses
LEARn HOW TO HALVE yOUR mAInTEnAnCE
dOWnTImE AT A pUbLIC COURSE In
mELbOURnE, SydnEy, AdELAIdE OR pERTH.
Three key principles in best practice maintenance planning will be introduced within this article – those
being “The Maintenance Planning Framework”; “The Shut Calendar”, and; “The Planners Plan”. These
three vital “tools” should be within any Maintenance Planners “toolbox”.
Introduction to Planning and Scheduling of Major Maintenance Activities
The most demanding call on maintenance resources comes when a plant or facility is shutdown for
an extended period of time for scheduled maintenance. Usually a large complement of work must be
scheduled into a relatively short period of time. Work schedules may have to be modified. Special
equipment may have to be rented. Contractors may have to be hired to fill additional labour requirements
and special needs.
Scheduled shutdowns provide unique opportunities to a maintenance department not normally available
during standard operation or even during short shutdown periods. Lost capacity can be restored to
an overtaxed facility during an extended shutdown. Major equipment overhauls can be performed to
help prevent future unscheduled shutdowns. Government mandated inspections and repairs can be
accomplished during a shutdown, bringing a plant into better state of compliance.
In order to achieve the above and ensure that the maintenance activities are completed efficiently and
effectively, maintenance planning needs to be well structured. Based on this, the main objectives and
functions of maintenance planning should be focussed on ensuring that:
• Proactive preventative maintenance tasks are adequately planned, scheduled and
implemented in accordance with Business Centred Maintenance.
• All maintenance activities that improve the reliability and availability of the operating
equipment are completed on time.
• All maintenance activities are undertaken in a planned and proactive manner which
increases / optimises the productivity of the maintenance personnel.
• All resources are readily available at the right time to allow maintenance to be completed
in accordance with the maintenance plan.
• All personnel are adequately informed about what maintenance tasks are to be completed,
when this is to occur and on what equipment.
• Information is appropriately captured and recorded to allow maintenance personnel to
make informed and accurate decisions about what maintenance needs to be performed,
and when to perform this so that the operating equipment meets the needs of the production
department in a timely and cost effective manner.
Alternatively, maintenance planning can be referred to as ensuring that the maintenance activities are
completed at the right time, in the right manner, with the right tools and the right skilled resources
– that is, it is all about ensuring that it is “done right the first time”. This can be further simplified
in terms of the role / function that must be provided / undertaken by the Maintenance Planner in
order to ensure that the maintenance activity / job is “done right the first time” (refer to Figure 1 ).
Right Right
The Maintenance Job
Procedure Timing
Follow-up
Analysis and Improvements
• Provides the Maintenance Technicians with known and agreed dates for which they can “baby sit” the
asset through to in order undertake the proper repair rather than the “band-aid” repair.
• Allows the inventory levels within the Engineering Stores to be optimised as improved inventory
requirements will be known in advance to the physical maintenance activity occurring.
Without such agreed asset shutdown periods, effective maintenance planning, scheduling and activity
completion is not possible within a proactive environment. If maintenance personnel do not know when
assets will be coming off-line they will continually operate within a state of reactive maintenance.
Figure 3 – The Shut Calendar
2008
January to June
XMAS XMAS
Vol 21 No 2 AMMJ
14 Best Practice Maintenance Planning
• Specifies what communication meetings have to occur, who is involved in these and when
they are to occur in order to ensure an accurate and realistic maintenance plan is
developed.
• Ensures the Maintenance Planner is capturing / aware of what maintenance activities have to
be completed, and when these should be completed.
The Planners Plan is a weekly time management plan / schedule that outlines the “week in the life”
of the Maintenance Planner. This detailed plan clearly outlines the tasks / activities / meetings that
have to be completed / undertaken in order for the Maintenance Planner to develop the maintenance
plan for issuing and implementing during the following week. An example of the “Planners Plan” is
shown in Figure 4.
In Conclusion
For a maintenance organisation to be an efficient and effective organisation which contributes to the bottom-
line performance of the business, it must develop and implement systems and processes that are based
around the principles of Business Centred Maintenance.
This discussion papers has introduced the concept of three key principles – those being the Maintenance
Planning Framework; the Shut Calendar, and; the Planners Plan. A maintenance organisation that implements
these three key principles and then combines these with a Maintenance Planner who is passionate about
maintenance planning, is business process focussed and who utilises the available information, facts and
figures, will be a considerable way along the path towards achieving a state of “Maintenance Excellence”.
Without such formal systems and processes, such a state will not be achievable. Or if it has been achieved,
it is unlikely that it will be sustainable. Therefore based on the content of this discussion paper, OpEx poses
these questions to all readers of this paper:
• How do your maintenance planning processes stack up?
• Is your maintenance planning effective?
• If not, do you have the above three key principles in place?
• If not and if you had these in place, would you be able to remove the barriers / eliminate
the issues that are preventing you from achieving effective maintenance planning?
On this note, OpEx leaves you with this parting thought from one of the worlds leading management experts,
Peter Drucker. Consider this thought with your current maintenance planning processes and then consider
how they “stack-up” with the content of this paper.
“There is nothing more wasteful than becoming highly efficient at doing the wrong thing.”
Email: mike.killick@opexgroup.biz Email: gary.thomas@opexgroup.biz
Well maintained plant, equipment, buildings and services contribute to improved OHS performance
– (eg. Fewer injuries/illnesses due to equipment failures)
Records must be kept and be easily accessible when required. Keeping them electronically is a way of
presenting data quickly and efficiently. If jobs that need to be done are not documented and logged they
only have lip service in the eyes of the law. You must have documented proof that work was carried out
on time and by a qualified person.
Monitoring what is happening in the workplace: Are staff tampering with safety equipment? Are
technicians patching up instead of fixing assets properly? We can record this type of work and keep
track of the call backs and repeat work.
If something was to occur, an equipment failure or an incident, who is the first person to be interviewed?
Why did the failure occur? And what steps are in place to prevent this from occurring again, and the
ability to keep the asset in safe working condition all at the same time as ensuring the correct qualified
person is doing the job.
Think about some of the cases that have occurred around Australia and the world for that matter.
Whenever an incident occurs resulting in an injury or death, State Work Safe Authorities will investigate,
the victim may sue and it all comes back to how accurate your records are when giving evidence in
defence.
An example occurred recently where someone was injured whilst at work. In this industry, ladders were
a very important item of equipment and the Safety Authority states clearly that this and other equipment
must be inspected regularly. He had fallen off a defective ladder and was awarded a large amount
of money. The company thought they did everything ok. The person carrying out the inspection was
a qualified person trained in this area, he had been accredited within the past 12 months after more
intensive training. The records clearly showed that he performed the inspection on a given date that was
within the required period for inspection and testing.
Records showed date, time and by who. The ruling was, as the “Instructions were not visible on the job”
he was awarded the payout. It was just a simple matter of putting a few lines on the job as to where he
could find the document relating to the necessary standard or procedure or even have them printed as
part of the job.
When using a CMMS it is easy to add these items into the templates that are used for these inspections
and services. Standards and frequency of inspections may change and by having them set-up in the
CMMS, updating and improving your future records is not a burden as it is centralised and easy to
access.
You should have the ability to quickly get to any information about the asset. You should be able to have
access to the jobs that have been completed and still outstanding, as well as all the details that go with
those jobs.
Reporting
Reporting is a very important part of using a CMMS. We want to get the information out as quickly and
accurately as possible. This is achieved by ensuring the data going in is correct and by having reports
that tell you what you need to see. The capability of filtering these reports is also important so not to
have too much information. Sometimes the one report that can be filtered different ways produces the
same information.
But Contractors Do It
This is an area that gets me going because it’s the old buck pass. It makes no difference if the contactor
does it or your own in-house staff; it is still a requirement to have this work recorded into a system that can
be referred to if and when required.
What would happen if the company that was performing the inspection of your assets went broke, or sold up?
You may not get your records apart from the service sheet that is signed by someone in the department and
then filed away in the filing cabinet. Having this work performed by an outside contract still requires it to be
logged and what better place than the CMMS. Have the contractor trained in the system and he can enter it in
directly. Let the CMMS generate the jobs/inspections and then hand it to them when they sign in for work.
You are still required to follow up and make sure this work is performed correctly. I was asked to set-up a
system in a 5 star hotel, they had just spent millions of dollars making the front of house look great, which it
did, only trouble is there was no way any of the air conditioning could have been serviced as there was no
access points to the Fan Coil Units. It was 18 months and the dust that had built up in the duct and filter in the
guest rooms was terrible. Another example was the kitchen exhaust ducts that need to be inspected every
3 months and cleaned when required. No use just doing what you see from the ground. We found fuse links
that had been broken and the shutters held open with 2x2. Having this recorded by the contracter will ensure
it is repaired and documented; having it followed up on is a must.
Budget Assistance
We use the CMMS to assist in the preparation of the next budget. Tracking the jobs, the costs etc: by asset
and the workers who carried out the work, we have at our finger tips the ability to put together a structure for
the budget. This helps in asset purchase requirements and resource requirements. Whether this be in-house
or contract labour, and the amount of inventory to stock. Keeping this to a minimum and ordering just in time
will see a savings in material.
MAINTENANCE MANAGEMENT
SOFTWARE
AMPRO
AMPRO helps you to devote more maintenance man-hours to preventive
maintenance or planned maintenance inspections rather than to
unplanned/breakdown work.
Does your company want to save money? By implementing AMPRO you WILL save money in
your maintenance activities both internal and external.
AMPRO will help you to prepare, document, and track your maintenance activities and costs.
AMPRO is an asset maintenance management solution that helps you to reduce downtime
and streamline your operations.
AMPRO helps you to cut costs while maximising the value of your investment in infrastructure
and people.
REDUCE DOWNTIME
What is a CMMS
It’s a Tool
• It is not your anchor to a desk, where you must continually update the system all day.
• A system structured correctly will not require a lot of attention by the manager.
• Having a small amount of good information is better than not having any.
Assists in Scheduling
• Having the jobs created in a system will allow for ease of scheduling.
• Save time and money by knowing what is happening where
• Easy to move jobs around or to assign to workers.
• Simple reports showing what’s due, who is doing it and when.
Recording Work
• Record the work that is being done.
• Record journals during the life of a job. If a job is extended over a period of
days/weeks then keeping up to date with this should be recorded.
• Who did it, when it was done and how long it took?
• What spare parts did they use?
Cost Capturing
• How much did the labour component cost?
• How much and how many inventory items?
• Total cost for the asset by a number of different methods
Inventory Control
• What parts do you stock?
• Current stock on hand and value
• Reorder points
• Preferred supplier and costs
Benefits
• A CMMS helps your business cut costs while maximising the value of your investments
in infrastructure and people.
• Improve competitiveness.
• Use a CMMS to help budget for maintenance and repair costs by analysing previous
period’s costs (actuals versus estimates) and projected costs (labour and materials) for
upcoming maintenance.
• Save time looking for spare parts and materials by setting up your inventory in a CMMS
maintenance software. A CMMS provides a quick reference for location, stock on hand
and other important information.
When these systems are implemented correctly, with procedures for staff to follow, they have an excellent
ROI. It is not about just buying the software where the cost is. The budget needs to include the data
collecting, data entry, maintenance procedure development and entering and then triggering so the system
will automatically activate jobs when due.
This can be accomplished by your in-house staff or the use of consultants that specialise in this area.
Normally the issue is finding the time to have your staff collect the data.
Then you will have a management system that will not only assist in everyday scheduling but save money
in the control of the work force and the management of inventory.
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20 Why Do We Need A CMMS
Choosing a CMMS
Selecting a CMMS is just as important as using any other tool that is required to do a job. If all you are
going to do is record history on assets then you do not need to spend hundreds of thousands of dollars
buying the system that links into the mainframe finance system, or any other of the features that these
systems can have.
It is important to select a system that will do what is required, but also will allow for growth as your
requirements grow.
Having the data available on PDA’s is important so when inspections are being performed they are
recorded directly into the device for upload either wirelessly or via a cradle. PDA applications come
in all sorts of configuration but the ability to cross reference modules, like in the main program, is
an advantage. By this I mean if when doing an inspection you notice that the asset is in need of
more repairs than you can perform yourself, then having the ability to create a Job manually in the
device without leaving the inspection module saves time and effort. It will also do away with the “I’ll
create it later” and then it is forgotten. There are PDA CMMS systems that allow the job to be created
automatically when the asset is in need of repair as you perform the inspection.
Having too many people involved in the process can over complicate things. Just stick to the key players.
The maintenance manager should be working with IT to ensure an adequate system is selected, and
sits well on the companies system. By this I mean we sometimes get tied up trying to find a system that
will do everything we need, and also what finance needs, and then we want to add other modules on
to it, ----- and so on. These are all legitimate areas of concern but all lead to spending too much time
looking for a CMMS when that could be used for data collecting and data entry.
Remember, if in the future your company goes to an enterprise system, then it is a simple process to
transfer your information into the enterprise system. But in the meantime sending reports and exporting
figures from within the CMMS is just as efficient because the system is normally easier to use and that
means it will be used.
Getting the package together for submitting to management is another area that can be a stumbling
block. The biggest problem I find when talking to different companies is the lack of staff, not enough
hours in the day or not allowed to spend money. What I also see is not enough investigation and
preparation being done when going into bat for this extra money to ensure the system is fully installed
as soon as possible after purchasing a system.
Management/Owners want facts and figures, like how many jobs need to be done to ensure your
site complies with state and Federal legislation? This can be done by preparing all the PM’s and
Inspections and assigning approximate durations to each. Then go through and prioritise them. Then
you go through them all again and confirm that these are absolutely required for say OHS and safe
working of the equipment.
• List out all jobs that need to be done. • Put durations and skill levels required to each job.
• Then priorities each job. (What must be done, and what can run to failure, etc.)
It is important to use accurate figures here, if you fudge them here and you get caught out then the
whole exercise is dead before it starts. Live in Utopia when doing this, everything will be perfect each
time a job is to be done. This will mean you assign 30 minutes if that is how long it takes. We all know
that when it comes time to do the work things go wrong or people get called away. This is an ongoing
problem and we should not budget for this but have an understanding that it does happen from time to
time. This will allow you to report to management that more staff are required or different trade groups
are needed etc.
When you have this list and you’re ready to start work; you like many others will probably say I don’t
have the time, money or people for this. Is this really your decision alone to make?
It is your responsibility to ensure they all know what is expected and what is achievable with the tools
you have. A CMMS will ensure that the scheduling and resourcing of these jobs is done quickly and
efficiently. If you are short of resources have management tell you not to do certain items and have
that in writing from them. You have stressed the importance to them of the planned activities, now it is
managements’ call to do it or not. Doing this yourself is a much bigger decision than just saying “Not
this week I’ll try and get it done next week”.
The IT department need to be happy with the way it is going to run on the network. Using a Microsoft
Access database for small to medium size systems is OK, if the number of concurrent users is low, <10.
Database choices range from Microsoft Access through to ORACLE and Microsoft SQL Server, all of which
add additional dollars onto the cost of the system. Microsoft SQL Server Desktop Engine (MSDE) is a
good option for larger system requirements without the need for SQL Server licensing. Working with the IT
department is important. They know your network better than anyone. Even if you plan to only run it on a
stand-alone PC ensuring back up procedures are in place is important.
Conclusion
Try going into finance and ask for $100 to go down to Knock and Kirby, Apart from jumping through hoops
and leaving samples, you have to have the documentation to support your purchase. It will be recorded into
their finance system. It is no different with maintenance; you need to know it is being done, that it is being
done by a qualified person and that it is recorded. A Job / Inspection is like an authorisation to work that is
given to the technician to perform a task.
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TPM - The ‘Pinch - Point’ Solution
for Lean Manufacturing
Peter Willmott,
Willmott Solutions peter@willmottsolutions.co.uk (UK)
In the Manufacturing sense, Lean Thinking is about striving to eliminate waste in all its forms in order to
maximise value–adding activity and hence the velocity of converting a customer’s order into money in
your bank account (Figure 1)
The drive and focus on most of our Manufacturing Processes is highlighting what we’ve probably always
known:- namely that the concept of Lean Manufacturing and therefore ‘Manufacturing Velocity’ is only
as good as the Reliability and Predictability of our strategic Manufacturing Assets. Low levels of Overall
Equipment Effectiveness (OEE) often results in those critical Manufacturing Assets becoming the Pinch-
Point in the Supply Chain. So, maybe adopting a TPM philosophy can relieve that Pinch-Point in your
business
But do we really understand what TPM - or indeed ‘Maintenance Best Practice’ - really looks like?
What is the right Maintenance Philosophy for your Operations, including the correct mix of the various
improvement tools, techniques and maintenance service providers? Is what you are currently doing
and pursuing the correct recipe anyway? And if not, then why not, and what should you be doing
differently?
Let’s address these perennial ‘hot potatoes’ by attempting to answer the following six questions:-
* How can we create the right Environment and generate the right Behaviours to Sustain the Gains?
Lean thinking, and hence lean manufacturing, is about the elimination of waste in all its forms - whether it is a
waste of time, effort, energy, material, capacity, money…. in order to maximise value added in all that we do.
It demands a continuous improvement mentality that recognises ‘what is good enough today will not be good
enough tomorrow’. Moreover Lean Manufacturing has to be sustainable as a way of life. Lean Manufacturing
will only work on four conditions:-
• It is positioned and seen as a top down strategic tool
• It results in levering profit through growth –and hence a bigger slice of a bigger cake
• You ‘value map’ both physical and information flows
• You transform the culture
Remember however, that physical and information transformation through lean is relatively easy - sustaining
it through changing the culture is difficult - and why is this the case ? Lean thinking is revolutionary to most
companies, but culture change is evolutionary, because resistance to change is both universal and a natural
human characteristic.
Your philosophy and approach therefore must centre on tapping into the potential of your people through
involvement. Fortunately TPM sets out to do precisely this by giving ownership to the new and improved
ways of working.
A useful definition of TPM is to think of it as ‘’unlocking your installed productive capacity by unlocking the
potential of your people’’
I make no excuse for reproducing these two diagrams (Figures 2 & 3) which I first used in a DTI sponsored
Maintenance study and publication 15 years ago because they have stood the test of time and they therefore
still hold true !!
TPM attacks the six classic equipment based losses and is about effective teamwork between Production
and Maintenance. This includes sharing the responsibility for developing and carrying out an effective
Maintenance and Asset Care regime comprising routine and regular front-line inspections and checks by the
Operator-the look (listen ,touch ,feel check and adjust actions). This is Under-pinned by regular and relevant
condition monitoring (Vibration monitoring, Oil debris analysis, Thermography etc ) and fixed interval pm’s
carried out by the Maintainer.
Vol 21 No 4 AMMJ
24 TPM - The Pinch Point Solution
Many companies bang the drum of ‘Operational Excellence’ as their Lean Driver or ‘World Class’
Manufacturing Vision - Well, I would sound a cautionary health warning here which simply says ….
..you cannot achieve ‘Operational Excellence’ without ‘Operational Basics ‘ in place!!
The 9 x step (figure 5) is very powerful and makes use of the usual tools and techniques including (where
appropriate) :-
Steps 1 & 2 - OEE Software
Step 3 - Brainstorming, Fishbone Analysis, SMED
Step 4 - The best parts of RCM (without disappearing into a ‘black-hole’!)
Steps 5& 6 - The application of common sense !!
Step 7 - 5S,Operator Asset Care, CBM techniques, CMM Systems
Step 8 - Standard (and Safe) Operating Procedures, Single Point Lessons, Training Matrices
Step 9 - Problem Solving Techniques like 5 Why’s, FMECA and P-M Analysis
Myth No 5 - We don’t need anymore output, so why raise the OEE - Management’s job is to maximise
the value generated from the Company’s assets. This includes business development. Accepting a
low OEE defies commercial common sense. If you are able to increase the OEE from say 60% to
80% by tackling the relevant 6 x Losses, you will have increased the productive capacity of that asset
by 33% - which means you can produce the same output in 2/3rds of the current time - or make 33%
more in the same time. Either way it gives you a choice of flexibility at 80% OEE that you do not enjoy
at 60%
Vol 21 No 4 AMMJ
26 TPM - The Pinch Point Solution
Myth No 6 - OEE is not useful because it doesn’t consider planned utilisation losses and,
for example labour co-ordination losses and material supply losses. OEE is one measure,
but not the only one used. Others will include productivity, cost, quality, delivery, safety,
morale and environment. Often these ‘Door to Door’ losses (as opposed to equipment
based ‘Floor to Floor’ losses) are vitally important. There is no ‘one size fits all’ approach to
OEE . The trick is to adapt OEE to your business (as opposed to blindly adopting it in the
classic sense). What you must not do however is corrupt it so it becomes unrecognisable
and doesn’t point you at the problems / opportunities
How do we Create the right Environment and Generate the right Behaviours for
Sustaining the Gains?
Fundamental to any Continuous Improvement programme driven by Lean Thinking is to have a clear
vision of the ‘End Game’ as a ‘Single Agenda for Change’ that all employees can visualise and ‘buy
into’. To do this without having to read and absorb thousands of joined-up words usually headed as
a ‘Mission Statement’. So I prefer to get folk to generate a single picture statement as shown in the
example (figure 6).
It is also vitally important to recognise that Lean Thinking is revolutionary, but that changing behaviours
and therefore culture ,is evolutionary. You can however speed up this process of change for the
better by involving your employees at the earliest moment and TPM sets out to do precisely this in
the sense of ‘’as an Operator or Maintainer” at the sharp end of the business, I will do something
different on 5 x conditions;-
You ask my opinion about the best way of doing this task
You include it in the future ways of working
You train and coach me in how to do it
You give me feedback of the result of doing it this way
You give me some dedicated Improvement time to fine tune it….
…..Because I know it will result in a ‘hassle free’ shift for me and my colleagues
If on the other hand you impose the ‘new working practices’ on me, I’ll tick a few boxes on your fancy log–sheet
but I won’t actually do the checks - In fact I’ll tick the boxes at the start of the shift , because I have no real
ownership.
Many years ago I was told a very powerful Chinese proverb which simply states the following:-
- Tell me something and I will forget
- Show me and I will start to believe
- Let me practice and I will actually understand
- Let me improve and I will take care
- Let me innovate and I will master
For me TPM is the best illustration (in the right hands) that I’ve come across to do precisely this, and as a result
your Pinch-Point may disappear.
2008 Listing of Special Maintenance Applications Software was compiled by Len Bradshaw, September 2008. The data given in this 2008
SMAS Listing is extracted, as received, from the respondents. The AMMJ does not therefore accept any liability for actions taken as a
result of information given in this Listing.
____________________________________________________________________________________________________________
RelCode
RelCode carries out reliability analysis of failure and successful performance data using the Weibull and bi-Weibull distributions.
Input: Failure and successful performance data, direct to screen or via spreadsheet. Outputs: Weibull distribution parameters and plots
indicating burn-in, random or wearout failure pattern (or combination), as an aid to determining root cause of failure. MTBF estimate
with confidence limits. Optimised preventive replacement interval. Spares requirements estimate. Inspection and monitoring interval
evaluation against availability and fault detection criteria . Outputs in tabular and graphical form to screen, printer, clipboard or file. Runs
on IBM-PC. Single user license cost AUD$1750. Current version 10.51. Developed continuously since 1975.
Isograph - FaultTree+
Isograph RAMS software suite has built its reputation on the efficiency, accuracy, stability and ruggedness of its FaultTree+ product. This
is why there are thousands of FaultTree+ installations world-wide that are currently being used on major projects in industries as varied
as aerospace, defence, automotive, nuclear, rail, chemical process plant, oil & gas and medical amongst many others. FaultTree+ can
Special Maintenance Application Software 29
efficiently solve fault trees of the order of 20,000 gates and 20,000 basic events, using world class analytical methods. It is the most
advanced, and flexible FaultTree application available on the market. FaultTree+ includes an event tree analysis option. The event
tree model may be created independently of the fault tree model or may use fault tree analysis gate results as the source of event tree
probabilities. FaultTree+ also allows the user to construct Markov models for use as the source of basic event data. The Markov models
may also be analysed independently of the fault tree analysis.
Isograph - RealityCharting
RealityCharting™, a program specifically designed to help conduct root cause analysis investigations using the Apollo Methodology.
RealityCharting™ offers the perfect platform for collating and reporting an Apollo Root Cause Analysis investigation. RealityCharting™ is a
tool that adds great value by expediting your analysis consistent with the rules of the Apollo method. When investigators use the same format,
it’s easier to add information to an analysis as well as communicate the results across the organization. RealityCharting™ guides the user
through each step in the Apollo process, helping to ensure that relevant information is captured in a consistent format. RealityCharting™ uses
drag and drop features that make creating and organizing the Apollo cause and effect chart extremely easy compared to other techniques.
It ensures that solutions are directly
attached to causes and provides a
final report that lists action items
and due dates.
Isograph - FRACAS
The Failure Reporting Analysis
and Corrective Action System
(FRACAS) can be used to collect
record and analyse system
failures. The failures are reviewed
and corrective actions identified
and verified. This powerful process
can be used to greatly improve
the through-life reliability of the
target system. The recording of
equipment or system failure is
broken down by site and functional
location in a hierarchical structure
that can be easily understood.
A major problem for many
organisations stems from the fact
that similar failures occur on many
sites and are recorded by many
individuals in many different ways.
The use of a FRACAS system will
solve this, as well as produce an
accurate and accessible failure and
corrective action history.
Isograph - Hazop+
The Hazard and Operability Study, known as Hazop, is a standard hazard analysis technique used in the preliminary safety assessment
of new systems or modifications to existing ones. The Hazop study is a detailed examination, by a group of specialists, of components
within a system to determine what would happen if that component were to operate outside its normal design mode. Hazop+ provides
a familiar visual environment in which to design and use the study and action forms that are the basis for entering Hazop information.
Extensive reporting facilities are available.
Isograph - NAP
The Network Availability Program (NAP) enables users to predict the availability and reliability of communication networks. The NAP
network availability model utilises an extended Reliability Block Diagram (RBD) methodology that addresses the specific characteristics
of network elements and their connections. In addition to predicting network availability, NAP also provides criticality rankings that identify
weak spots in the network. Complex or simple networks may be modelled using NAP. One of the important features of NAP is that it
allows the modelling of data flow in different directions along the same network path. This means that users need not be specific about the
direction of data flow in selected parts of the network. NAP will then automatically determine the allowable paths between a source and
target, and hence determine the minimal cut sets that determine the availability of the network.
Isograph - RiskVu
Fault and event tree analysis methods are widely applied to system availability and reliability problems in most engineering disciplines.
They may be used to predict the performance of a system at various stages of the design process and indicate reliability weak spots in the
design. RiskVu is designed to provide a high level interface to the FaultTree+ program. This allows it to be used as a ‘Living PSA’ (PSA
stands for Probabilistic Safety Assessment) tool or as a risk monitor. It may also be used as a management tool to allow users to try out
‘what-if’ scenarios without knowing anything about the underlying fault and event tree models created in FaultTree+.
Isograph - AttackTree+
Attack trees allow threats against system security to be modelled concisely in a graphical format. The effectiveness of internet security,
network security, banking system security, installation and personnel security may all be modelled using attack trees. With the increased
risk of terrorist attacks on homeland security, hacking attacks on computer systems and computer-based fraud on banking systems,
AttackTree+ is an invaluable tool to system designers and security personnel. AttackTree+ provides a method to model the threats against
a system in a graphical easy-to-understand manner. If we understand the ways in which a system can be attacked, we can develop
countermeasures to prevent those attacks achieving their goal.
acmPelorus
acmPelorus is a Decision Support System (DSS) that makes it easy to report, analyse, manage and improve the performance of your
maintenance function to increase availability and reduce costs. CMMS data is used directly and processed to display a graphical
representation of the maintenance workflow and clearly highlight maintenance function performance. The display includes a comprehensive
set of lead KPI measures and trends, including planning and scheduling backlog, work completion rate and breakdown occurrence.
Accommodates daily, weekly or monthly reporting requirements. Lead KPI are linked to business outcomes through lag KPI and measures
such as maintenance cost and plant availability.
RCS Toolkit
Leading edge technology to match spares holdings to maintenance and operational needs. The software reflects the reality of maintenance
spares holdings and considers commercial and maintenance requirements. The outputs are defensible justifications for the holding of key
‘insurance’ items in terms managers can understand. While best inventory management is achieved by using your RCM analysis outputs,
Special Maintenance Application Software 31
the RCS Toolkit can operate without RCM and provide quick and definitive engineering stocks holdings. Understand your inventory and
understand the risks. RCS Toolkit takes the guesswork out of deciding what to hold. The software is fully supported by application training
and technical support.
qRA Toolkit
For qualitative Risk Analysis in accordance with AS/NZS 4360, 3931 and MDG 1010. qRA Tookit enables management of risk in a
structured, defensible and informed manner. The software is fully supported by comprehensive training. The qRA Toolkit features a
common database for all risks and a powerful report generator which provides the complete risk analysis report plus:
• analysis systems and sub-systems
• hazards, effects and existing controls
• hazards requiring additional controls
• Relative risk calculations
• Additional controls, plus cost/benefit and action plans
• Risk sorting by consequence, person responsible and required date
sparesFinder Masterpiece
Engineering data cleaning software to clean ‘dirty’ data. Masterpiece automates data cleaning doing what others said could not be done
delivering a cost effective solution to poor quality data. The system has been designed to improve and then maintain data quality to a
common standard allowing the proper leverage of ERP software solutions. The system processes legacy data to produce a descriptive
output in the desired language and format. Masterpiece allows you to choose the cataloguing schemes which best suits your business
needs and enables each line of your data to be cleaned in the most cost effective way.
apmOptimizer
The apmOptimizer in an integrated strategic decision support tool for Enterprise Asset Management (EAM, CMMS, ERP) in Plant, Fleet
and Network Industries. It models the entire enterprise logistics for control and maintenance optimization. apmOptimizer recommends
the optimal assets management policy that maximizes performance and profits. The results are reduction in maintenance costs, and
improved asset performance, efficiency and quality. The apmOptimizer uses only analytics in its calculations; therefore it is very fast and
the recommendations are accurate.
32 Special Maintenance Application Software
eTaskMaker®
eTaskMaker® is a front end planning and estimating tool that generates customized, resource loaded project schedules according to user
defined parameters for export to leading project management software. eTaskMaker includes an extensive and customizable planning
library including over 150 modules for oil refinery and petrochemical plant maintenance. eTaskMaker is a flexible platform that standardizes
your best practices in planning and estimating across the enterprise. Video demonstrations of the system (and a free demo version of the
software) are available from the eTaskMaker product page on our website.
iSolutions International Pty Ltd Australia, North America, South America, Africa
Email: sales@isipl.com Web Page: www.isipl.com
AMT Modelling
AMT Modelling is a commercial grade first principle Life Cycle Costing (LCC) application for the mining industry. AMT is used by leading
companies such as BHP Billiton, Newmont and Gold Fields to model the life cycle costs, labour and other resources required to run
fleets of plant and equipment. AMT provides a rigorous and proven structure around life cycle models that allows users to model one or
thousands of assets as well as develop and compare multiple scenarios and different maintenance strategies quickly and easily. AMT
Modelling deployments are supported by iSolutions consulting services around Life Cycle cost modelling.
AMT Enterprise
AMT Enterprise is a life cycle management and budgeting solution for operating mines. AMT employs a life cycle management approach
to model the cost and resources required to operate plant and equipment. Transactional information from an ERP or CMMS such as SAP,
Ellipse, Maximo is then used to continually project the future expenditure and projected cost variance against the original LCC model.
This gives the Maintenance Manager a real time decision making tool. (Should I rebuild, repair or replace with new?) AMT can also be
integrated with Condition Monitoring tools to drive real time Condition Based Maintenance decision assistance.
E-Carbon
Contains plant equipment and components with energy usage and efficiency data. Creates process block diagrams of systems and overall
efficiencies. Identifies areas of highest consumption and lowest efficiencies. Integrates with RIMSys to allow formal investigation and action
items. Links with plant hardware to show instantaneous and accumulated energy consumption
PM Builder
PM Builder is a new, innovative, inexpensive software product designed to help organizations quickly establish a preventive maintenance
program. PM Builder is a package that is an alternative to PMO or RCM (reliability centered maintenance) for companies that do not have
the resources to commit to a full RCM or PMO analysis. It is ideal for companies wanting to create a program from scratch. This is a cut
down version of PMO2000™ software designed as a starter pack.
process. More than that, however, this software also enables multi user access to documents with real time updates on progress. This
unique software program provides the ‘follow through’ for implementation that most other systems ignore. POA. The package can be
installed with either SQL Server or MS Office environments. The Inventory Cash ReleaseTM Action and Implementation Program puts
the tools for successful implementation of inventory reduction at your fingertips.
Reliability Investigation Management System – RIMSys®
RIMSys® is a software program aimed at managing the investigation, resolution and elimination of reliability incidents. It is specifically
designed to record and manage the investigation of equipment failures or incidents which cause unexpected downtime or operational
loss and therefore require further investigation to prevent these failures from recurring. RIMSys® is low cost, network-based software that
defines a simple process of incident management - “Raise”, “Investigate”, “Recommend”, “Approve”, “Implement” and “Close”. Actions and
Responsibilities are distributed and tracked throughout the process. The system can be configured to interface with most modern CMMS
systems and interfaces with the PMO2000™ software. These functions allow for complete cycle management of incidents/investigations
for continuous improvement of operational efficiency.
EXAKT
EXAKT is a decision support tool for predicting reliability and optimizing condition based maintenance. It can predict equipment failure,
estimate remaining useful life of equipment and define the mix of preventive replacement & run to failure in order to:
- Optimize costs - Optimize reliability - Achieve the optimum risk/cost/reliability balance
Example results: - Maintenance cost reductions of 10 to 49% per failure mode - 84 to 99,9 % reduction in failures
- Consistently statistically significant confidence levels
AGE/CON
AGE/CON answers the question - replace the vehicle, or hang onto it? It is designed to assist operators of mobile equipment establish
the economic life of their assets, as well as assist in determining the optimal decision for difficult “repair versus replace” situations along
with monitoring an individual equipment to establish its optimal replacement time. The longer a vehicle is kept in service the lower is
its ownership cost, but there is a conflicting cost trend, that of an increasing operations and maintenance cost. The goal is to establish
unambiguously the year at which the total cost takes its lowest value.
PERDEC
PERDEC predicts the optimum time at which an equipment should be replaced. It balances the decreasing cost of ownership with the
increasing operations and maintenance cost and finds the lowest point on the cost curve, applies statistical analysis to fixed equipment
for the purposes of optimizing maintenance and replacement costs – production equipment, processing equipment, motors etc. Benefits
are: replace or repair decision support tool, improved decision making, reduced cost, shows the Equivalent Annual Cost curve (based on
purchase price, operations and maintenance costs), prompts the replacement decision at the lowest EAC
OREST
OREST is a decision support tool for analyzing reliability data and to define the optimum replacement policy based on the reliability data.
Benefits are: It provides trend analysis of failure data – improved decision making, reduced cost. It provides Weibull to show probability
of failure at any point in time. It shows optimal change-out time for equipment with age-degradation (decreasing performance with time).
OREST offers easy to use data entry screens, requires little training and has easy to read graphical output shows results at a glance.
OmegaPS
The world’s leading Logistics Support Analysis package conforming to global standards including: UK Def Stan 00-60, US Mil-Std-1388 2B,
and the Australian Defence Force DEF(AUST)5692. OmegaPS is utilised to reduce acquisition and in-service costs of capital equipment
through analysis of the support and operation aspects of systems thus defining effective maintenance policy. The total cost of ownership
is subsequently reduced whilst increasing operational availability. OmegaPS software is used by many major manufacturers: Australian
Aerospace, Boeing, BAE Systems, Thales, GIAT, Northrop, Lockheed Martin, Eurocopter, and government organizations UK MoD, Australian
Defence Force, Canadian DND and Royal Netherlands Navy & Army.
OmegaPS Analyzer
Analyzer comprises three integrated modelling techniques for optimising equipment costs: Level Of Repair Analysis, Spares Optimisation,
and Life Cycle Costing. Each technique may be used separately or combined for a fully optimised solution. Analyzer identifies effective
economic repair decisions and optimises spares holdings for equipment, translating into significant whole of life savings for the equipment.
Many customers have realised savings in excess of $13M through the use of Analyzer. Analyzer does not require extensive data inputs and
is easily mastered by those with engineering backgrounds. Analyzer originates from the Canadian Department of National Defence and is
utilised throughout the world.
Work Priority - The Relative
Ranking of Importance
By John Reeve
Technology Associates International Corporation planschd@yahoo.com
Work orders are the heart of any computerized maintenance management system. Sometimes more
work comes in than the maintenance staff can perform. Therefore work must go into the backlog and
wait for processing. One of the key code fields for marking these work orders in terms of significance is
the work priority. And remember, we want to manage the backlog, not just one work order.
As a CMMS consultant I have reviewed many maintenance systems. When it comes to work order
prioritization, the CMMS communities have historically bludgeoned the use of this field. Proper ranking
of the backlog is important when it comes to choosing work for the schedule. On occasion I will see a
priority system design that is based on deadlines, i.e. elapsed time past the reported date. This means
the work must be done by this time delta as management will be tracking this measurement (and your
performance). Using the chart below you can see a common design – which I call “deadline priorities”.
But is this really fair? What if an unusually large amount of work comes in across 4 straight weeks? Your
staffing level is fixed. By assigning a lot of priority 1 and 2 work, this assignment by itself, does not mean
it will get done any faster or in the designated time frame.
Some believe by assigning deadline priorities for all work you can “scare the maintenance staff into
working harder”. But this approach seldom works – if ever.
When using Deadline Priorities you typically end up with a bunch of lower priorities which results in a
disproportionately large spike of 3’s. Over time the database may also start to contain false priority 1-2
values and a lot of priority 3’s. The only remaining way to ‘rank’ this group (of priority 3’s) is by report
date (sometimes called FIFO (first in, first out)) - which also is not fair.
The good news about deadline management is that it helps the staff work off a prioritized list of reactionary
work. Some organizations only have a dispatch group and this is their preferred way of doing business.
Therein we can call this what it really is – reactive maintenance. Although necessary for some, it should
not be the primary goal of any maintenance organization.
Sometimes the maintenance staff receives work they can’t start (or complete) in the deadline period and
thereby places it “on hold”. This may also be called “deferring” the work. This coding change then alters
the category of the work so that it falls outside the (deadline) KPI measurement. And once this work
gets deferred it sometimes “gets lost in the backlog”. And once a work order with this assigned priority
goes beyond the deadline, it can sit there for years, and most importantly the assigned deadline priority
value becomes meaningless. At this point what is the real priority for the work order in relation to the
other work in the system?
The customer eventually figures out that this style of prioritization is not adding value to the process.
Most importantly there really isn’t any way to comparatively evaluate the whole list of open work and
determine what work is more important and what work is not so important.
Safety Work
Sometimes the management team wants to use the priority field to indicate safety or environmental type
work. Tracking safety items is always important but need not be inside the priority field. To that end, I would
add another field (or two) to show these important categories. Since a safety work order can also be any
priority it therefore needs its own code field to be mutually exclusive.
False Priorities
If the customer feels that the priority system isn’t working (for them) then they may start creating false
(high) priorities. In some cases they may submit work twice. This approach ends up confusing everyone
– and benefits no one.
In some cases the user community may request a new field be added to the (CMMS) work order screen for
“marking work as important”. In this case they have simply created a second priority field to run management
reports against. But it is still not clear which one has more weighting.
On the surface this type of design – using deadlines - sounds clever. But in reality, it is only meant for
controlling reactive maintenance. Not all incoming work should be labeled as reactive – or as work which
is “due within 30 days”. It is okay to have a backlog of work. It is also okay for this work to be properly
planned and scheduled. Many studies have shown that cost of maintenance is greatly reduced when the
maintenance backlog is properly planned and scheduled. And this can be called proactive maintenance.
In some cases there may be a call center like environment which receives incoming trouble calls. They may
block out 2-hour windows for a specific crew name. This rapid reaction force may even have a hand-held
solution for processing this priority work. But not all maintenance work should be done in this manner.
Reactive maintenance basically means the trades perform their own planning “as they go”. Note: once
a job is physically given to the worker, the concept of prioritization has no meaning – unless of course
someone is bird-dogging them. Also, because there is no planning, their overall “wrench time” is reduced.
They must assess the job scope, ascertain craft requirements, identify special tools, permitting, safety
precautions, review stock (parts) availability, or initiate a purchase request for non-stock items. And they
probably have other work they are juggling too.
This distributed work is now being managed in the locker room when it should be controlled by first-line
supervision. How did this happen? Sometimes maintenance supervision finds it is easier to just distribute
work as soon as it comes in. And even when there are no job planners in the organization I would ask the
supervisors (or leads) to do some form of rough planning.
Prioritizing work is only one portion of the planning/scheduling process – but it is an important one. With
deadline priorities management loses the ability to rank the backlog and implement advanced scheduling
techniques.
Each new work request should go through a gatekeeper who is familiar with work at the plant, and also,
the current backlog. In lieu of a gatekeeper position, this person could be a job planner or maintenance
supervisor/superintendent. This position would bring consistency of review and provide a normalized
ranking (priority). Therein he would be assigning a “relative ranking of importance” to all incoming work.
There could be a range of values, from 1 to 10 that he could choose from. The non-emergency work would
then have time to be properly planned and scheduled. Otherwise, high priority work would still be done per
the reactive mode process.
Every plant has some minimum amount of reactive maintenance – shown in red below. But it should not
be the predominate form (in terms of manhours).
Vol 21 No 4 AMMJ
40 Work Priority - The Relative Ranking of Importance
This person has been at the plant/facility for a long time and has control over this part of the process. He is
familiar with all aspects of maintenance and he has general knowledge of the open maintenance backlog.
Familiarity of the backlog is acquired through periodic CMMS reviews – a best practice in itself.
o Can perform a rough estimate up front which helps the management team make
quick judgments
o Since some companies cannot afford Job Planners, this single position can add
substantial value to the process, and improve overall CMMS accuracy
o The gatekeeper could also be involved in auditing the closeout process (i.e. making
sure correct asset is chose and problem codes entered)
In the process flow diagram above the reactive has a red arrow. The goal is not to have more
than 30% reactive. Proactive work (blue arrow) would get planned and considered for selection
each week the schedule is calculated.
With all work coming through a gatekeeper it is now possible to set up a priority system based on “relative
ranking”. This process is not an exact science but does add significant value to the process of work planning.
Again, this should be someone who is fairly familiar with the open maintenance backlog.
This system has no definition other than to say one number is higher than the other.
10 more important that Priority 9 etc.
For this design, the Priority 10 is highest. The benefit here is that if you ever need something HIGHER than
priority 10 you can still do so. During backlog reviews, priorities can be altered if appropriate.
Desired Distribution
Using this calculated priority we now have a way to fairly select the work for next week, i.e. weekly schedule.
Assumptions: The value of work order (or Location, or Asset) priority 10 would be the highest
Note: if we were using “deadline priorities” this design would not work.
Vol 21 No 4 AMMJ
42 Work Priority - The Relative Ranking of Importance
If the current client contract you are working under dictates “deadline priorities” then that action
must be performed. But there is nothing stating you couldn’t still add a new field called RROI to the
work order screen. Then, procedurally assign this entry to a person in the work process, such as a
gatekeeper or job planner.
For the most part the system administrators and maintenance supervisors have never performed
backlog reviews. Therein they do not have familiarity with the backlog. They never understood the
value of performing a backlog review. And if asked, they might say the following:
1. They are too busy to conduct CMMS reviews
2. No management procedure says to do this
3. The current (government) contract dictates we only do “deadline priorities” – so why bother
4. This is not my job
5. It is too hard to assign a “relative importance” value
6. The backlog is already inaccurate and therefore this technique would add no value
7. Fear – what happens if I guess wrong?
Yes, planning/scheduling process, takes time. But the benefits are greater work force productivity.
Poor backlog management however can also result in a CMMS which is inaccurate, mostly unplanned
and hard to manage. The maintenance backlog is the heart of any CMMS system and needs close
attention.
Note: when a work order is “Ready to Work” it is ready for scheduling and should have its own status
code synonym.
Once a month there should be a review of all open work orders. You may not get through the entire list so try to
review a different set each week – plus any new work (still open) since last meeting. In this meeting the following
questions could be asked:
1. Is the work planned? (KPI here is 90%)
2. Is the work still “open”?, i.e. someone failed to complete this job in the CMMS
3. Is the work still valid, i.e. was there a design change or plant regulation which
changed since this work was created?
4. Does it have the right priority?
5. Is the description meaningful?
6. Is this a duplicate work order?
If questions arise you can cancel the job, or place it on “Hold – Requiring more info from requestor”
Even though we now have a new priority system based on RROI it is still helpful for operations to communicate
succinctly on reactive maintenance needs. This communication is best performed using the CMMS “work
type” field.
Scenario: Operations needs to:
1. Quickly communicate emergency work (make phone call – enter work order later), or
2. Communicate work need to maintenance needing attention fairly soon, or
3. Communicate routine work which can be sent to the backlog – and be prioritized
by maintenance department – using the RROI method
To say this conversely, it is not necessary for Operations to provide a priority value. This value is best assigned
by the maintenance department which has the overall knowledge of the current backlog. The CMMS work type
field is more than adequate for meeting their needs. It is the Routine backlog work that we assign a priority value
to – using our “relative ranking of importance”.
In the picture shown opposite you can see where the gatekeeper position resides and the use of prioritization.
By definition, PM work does not require planning as this work has already been setup in terms of job steps, craft
requirements and needed parts. Plus the PM-work comes into the system as having specific Target Start dates.
The same concept should also apply to Shutdown work and Project jobs.
Daily Schedules
In the above design the daily schedule is created from the weekly schedule. Some CMMS clients only have a
daily schedule. But daily - without weekly schedule – is only another form of reactive maintenance.
Building Blocks
The purpose of planning – is scheduling. The prioritization of work is very important. But the real goal is
scheduling. And this gives us work force efficiency. See the article “The Elusive Weekly Maintenance Schedule”
in the July 08 issue of the AMMJ.
So what now?
Many clients have acquired processes which were in place from legacy systems. Many others believe “this
is how our peers did it so therefore it must be right”. In this particular case I would challenge the perception
that deadline priorities, or any design other than “relative rank of importance”, is a better practice. Proper work
prioritization enables you to successfully manage the backlog, make more informed decisions and perform
more advanced methods within the CMMS product, i.e. advanced scheduling techniques. The final result is
O&M organizations become more efficient. And efficiency brings cost savings.
Vol 21 No 4 AMMJ
What is Equipment Reliability and
How Do You Get It?
By Mike Sondalini and Howard Witt (Australia) www.lifetime-relability.com
High equipment reliability is a choice and not an accident of fortune. To a great extent you can
choose how long you want between equipment failures. You can deliver high equipment reliability
by ensuring the chance of incidents that cause failures of equipment parts are low. The secret to
remarkably long and trouble-free equipment lives is to keep parts and components at low stress,
within good local environmental conditions, so there is little risk they are unable to handle their
design duty. If there is nothing to cause a failure, the failure will not happen and your equipment
continues in service at full capacity and full availability.
For maintenance practitioners, it is the use of precision maintenance backed-up with condition
monitoring applied as a tool to prove maintenance work is done precisely, that provides the
foundation for exceptional equipment reliability.
Without getting into the mathematics, equipment reliability is a measure of the odds that an item of equipment
will last long enough to do its duty. It is a measure of the chance of remaining in-service to a point in time.
You measure the reliability of equipment by its trouble-free time. If it is meant to last for 10,000 hours (about
14 months of continuous operation), and does last that long, it is 100% reliable to 10,000 hours. But if after
10,000 hours there is an occasional failure, the reliability beyond 10,000 hours is less than 100%. When
we talk about reliability, we must also say what time period is involved. When equipment operates at duty
capacity for as long as expected, it is considered reliable. When the period between out-of-service episodes
is too short, it is unreliable.
Equipment reliability needs to be seen as more than just a chance time span. It is about building great
businesses that are world-class performers. High-reliability organizations expect equipment to last a long
time and are unhappy when it does not. Not only are they unhappy, but they take effective measures to learn
and improve from the failures.
You have to deeply want the production and profit benefits equipment reliability brings before you will do
what is necessary to get it. If you want plant and equipment to operate trouble-free for a long time, you
must do those activities that cause reliability, and do them well enough to deliver reliability. You get great
equipment reliability when you act to control happenstance across the life-cycle and replace it with masterly
precision. If you want high reliability with low cost, put into place the necessary engineering, purchasing,
storage, operating and maintenance regimes and practices that deliver the reliability and life-cycle costs you
want.
You may have limited opportunity to influence any of these regimes on your plant. In that case, start by
looking to get more value from the equipment you have. Improve those plant items with lower than desired
reliability - the ‘bad-actors’. You can do that by using operating practices that reduce equipment risk and by
improving machinery health. Use cross-functional teams of operators, trades people, condition monitoring
technicians and engineers tasked to understand the causes of a problem and to eliminate or reduce them.
Spot the onset of problems and take pre-emptive action. Have contingency plans to mitigate consequences.
Operate and maintain plant to precision standards. These risk reduction practices will deliver higher plant
reliability.
Measuring the Impact of Equipment Reliability on a Business
The standard definition of reliability leaves much unsaid about the effects of equipment failure on businesses
and people. You know when you have unreliable plant and equipment because people are angry that it
fails so often. In companies with equipment reliability problems people are busy ‘doing’, often repairing
failures over and over again. It never ends, and you go home each day knowing there will be more troubles
tomorrow. You also know when you have reliable equipment because it performs as its design intended without
failures. The business likely makes good profits with low operating costs controlled to a narrow, known range.
You have the time to do your work well. A place with reliable equipment is a happy and safe place.
Measuring equipment reliability is important if you want to improve it. Reliability is measured as the average
time between failures, known as ‘Mean Time Between Failure’ (MTBF). One drawback with only measuring
time is that there is no indication of the value of that level of reliability. If you do not know what reliability is worth,
you may spend lots of money on small improvements that have little impact on profitability. Or worst still, not
spend enough money on highly profitable improvements. Reliability measured only by expected time in service
is a poor business indicator. As Benjamin Franklin, the publisher of Poor Richard’s Almanack 1733, said,
“Time is money.” Reliability must also be measured by the money made or lost for the business. A measure of
improving reliability needs to show improving profitability.
For a company that measures production by weight a standard profitability indicator that reflects reliability is:
For a plant where little attention has been paid to reliability improvement it is possible to double MTBF (i.e. halve
the number of breakdowns) using failure elimination methods such as precision maintenance, and machinery
improvement projects aimed at defect removal. With focused efforts on better planning, improved maintainability
and skills upgrading, the MTTR (Mean Time To Repair) for maintenance work could be halved. Of the 5 plus
weeks lost we could expect to recover 3.8 weeks with the above strategy. That is an additional 507 hours per
year and represents an increase from 90% to above 97% Availability.
Under this simple example the effect on the Unit Cost of Production is to lift the Saleable Throughput by 7%
while driving costs down. In halving the breakdowns the direct maintenance component of the Operating
Cost (such as parts, manpower, and supervision) falls markedly. To this must be added the huge reductions
in indirect costs, plus the opportunity and knock-on costs no longer lost. Together these three cost categories
can easily be ten times the value of the direct maintenance saved. In such a case, for every $1,000 dollars
of direct maintenance cost reduction through improved reliability, you also gain back $10,000 in additional
profit previously lost. Improved reliability causes throughput to rise, lowers direct production cost and avoids
consequential business-wide losses. On a graph of the Unit Cost of Production over several periods you would
happily see a falling trend as the reliability growth strategy changes the place.
Unit Cost of Production provides a means to show the effect of reliability in real money and production. Higher
reliability reduces the unit cost in three ways - you get more time to make product, you get more product out, you
keep the earnings the business would have lost from failures. As reliability improves there is more production
time, throughput and ‘added’ profit. That is why every company wants more reliable equipment; there is a lot of
money to be made from plant reliability improvement.
Vol 21 No 4 AMMJ
46 What is Equipment Reliability
Of course there is a price to make the needed changes. Making plant access refinements, doing equipment
design upgrades and training tradesmen and operators in higher and better skills is added expense and
takes time. But when you can show people returns on investment measured in the hundreds of percent,
you will get the management support and capital you need.
We now have two measures to show the impact of equipment reliability improvements – increased
‘Hours between Duty Failures’ and reduced ‘Unit Cost of Production’ over a time period. These are all-
encompassing measures that include the effect of everything impacting the equipment’s reliability. To
actually improve equipment reliability we need to rip those measures apart and look inside them to find
what caused those results.
It is best if you know the costs spent on an item of equipment, exactly what they were spent on, and what
they were spent to do. If you do not have good records of equipment problems, with their associated costs
and changed conditions over the equipment life, it will probably be difficult identifying suitable maintenance
actions and preparing justifications to fix them. To get the detail needed to fully analyse the cause of your
reliability problems requires tracking the life and cost of your equipment down to the individual part level.
The secret to successful equipment reliability lies within the lives of your equipment’s parts.
Figure 4 is as Figure 3, except with a failed part. Without correct lubrication the series connection
has been lost and the assembly cannot survive in-service. If this assembly were in a piece of equipment,
the equipment would be failed. A sequence arrangement of parts only requires one item in the series to
fail and the whole assembly fails. When the assembly fails, the equipment stops.
Figure 3 – The Series Arrangements of Parts that Allow the Shaft to Turn in a Bearing Housing
Shaft
Seal
Lock
Nut
Shaft
Journal
Inner
Race
Roller
bearing
X Outer
race
Housing
Bore
Figure 4 – The Reliability of a Series Arrangement Depends on the Reliability of its Components
The intended message in Figures 3 and 4 is that the reliability of a piece of equipment is totally dependent on
the reliability of its individual parts. If one part fails the machine fails. If one part is in a bad condition the entire
equipment is at ever increasing risk of breakdown. We can calculate the reliability of a series system mathematically.
In Figure 5, each part has its own reliability – ‘R’.
R1 R2 R3 R4 R5 R6 R7 R8
Equation 1 is used to calculate the reliability of items in series. It is the multiplication of the reliabilities of the
individual items in the series. It makes more sense if we use numbers. For the sake of the example, say the
reliability of each item is 99% (usually written as 0.99), which means 99 parts out of 100 are failure-free for as long
as they should be.
Rseries= R1 x R2 x R3 x ...Rn Eq 1
Rseries = 0.99 x 0.99 x 0.99 x 0.99 x 0.99 x 0.99 x 0.99 x 0.99 = (0.99)8 = 0.92 (or 92%)
Once parts with reliability of 0.99 are in a series assembly of eight items, the reliability of the series falls to 0.92.
Only 92% of the assemblies will last to the time they should. As the number of parts in a series grows longer, its
reliability declines because there are more things to go wrong. Watch what happens to reliability when a part has
a serious problem. If the lubricant has a reliability of 0.5, where half of the time it never reaches its expected life,
the equation becomes:
Rseries = 0.99 x 0.99 x 0.99 x 0.99 x 0.99 x 0.5 x 0.99 x 0.99 = 0.47 (or 47%)
Now only 47% of the assemblies last their full life. It only takes one part in a series arrangement to be of low
reliability and it brings the entire machine down to below that reliability. We have now arrived at a most important
principle in equipment reliability:
An assembly of parts (i.e. a machine) can never be more reliable than its least reliable part!
You can never improve an equipment item’s reliability more than its least reliable part. Understanding this reliability
principle is important for everything you do in the field of maintenance and reliability improvement. If you want to
improve your machines’ and equipment reliability, you first must ensure each of their parts are even more highly
reliable.
(PART 2 – “Getting More Reliable Equipment” will be published in the February 2009 issue of the AMMJ)
Vol 21 No 4 AMMJ
A World Class Approach To Asset
Management
Parts 2 and 3
Rohit Banerji TATA Consultancy Services (UK)
This article is divided into three parts. Part 1, given in the July 08 issue of the AMMJ, discussed the
evolution and the philosophy of World Class Asset Management (WCAM) from the enterprise perspective.
Parts 2 & 3 are given in this issue. Part 2 focuses on the deployment of WCAM. Part 3 is dedicated to
the standard measures of the effects of WCAM deployment. Some performance measures are listed
with indicative industry benchmarks
Maintenance
Portfolio management logic can be extended to the management of assets. Stratifying assets based on
demand and the ability to create value will focus management effort on critical equipment and lead to
cost as well as effort optimization. Assets are classified according to criticality and the cost of repair. It
forms the basis of deploying resources for asset management (See figure 4 below). Broad strategies
are articulated to manage each of these asset classes. Managers can deploy available resources
commensurate with the asset’s criticality and importance, rather than political or traditional compulsions.
These reliability focussed decisions form the maintenance strategy for the asset.
FOCUS
HIGH IMPACT LOW COST
INVEST
HIGH IMPACT HIGH COST
x High maintenance
frequency x RCM Analysis
x High service level x Condition-based monitoring
x Asset redundancy x Predictive maintenance
x Invest in maintenance
x Monitor closely Reactors
technologies
Compressor
Business Turbine
Impact
Valves
Gearbox
Piping
REACT REVIEW
LOW IMPACT LOW COST LOW IMPACT HIGH COST
x Manage by exception Maintenance Cost x Rationalize maintenance
x Outsource frequency
x Maintain reactively x Take Risks
x Reduce failures
Inventory
The challenge to spares inventory optimization lies in assessing its business impact (criticality) and reviewing
thousands of individual stocking trends. The portfolio approach recommends segregation of inventory into
groups, in a way that spares in each group merit a common management strategy. Groups are profiled along
parameters such as business impact, lead-time, value of holdings, value of usage and the frequency of use.
A single person, managing 6000 spares, cannot devote more than ten minutes a year to analyze the stocking
pattern of each spare. The spares inventory of a medium sized plant can be well over 50,000. Information
technology tools manage inventory by exception, making optimization feasible even if the number of SKUs is
in hundreds of thousands.
Procurement
Vendor profiling for procurement management can be done by analysing areas like pricing, transaction costs,
payment terms, contracts, tender analysis, spend volume, supplier performance and supplier relationship (see
figure 5). Important vendors supplying critical spares can be partnered with, vendors supplying small volumes
of non-critical spares can be squeezed for margins and transaction costs can be reduced using e-commerce
with frequent suppliers. Similar appropriate strategies for other groups can be developed to improve vendor
performance and drive down procurement costs.
NurtureRelationship
Nurture Relationship Partner
Partner
Importance
NegotiateAggressively
Negotiate Aggressively Open tendering
Open tendering
Figure 5
Procurement Profile
Spend volumes
Haldia Petrochemicals Ltd (HPL) is a grass root petrochemicals company and the biggest of its kind in the
eastern India. The company owns and manages assets worth around $1billion. From the asset management
perspective, company production assets can broadly be segmented into three production sectors –
a) Mother plant – Naphtha Cracker unit
b) Downstream plants – Associated unit and Polymer units
c) Utility plants
HPL also boasts of having state of the art information technology assets. The company was an early adopter of
SAP R/3. It has accumulated huge volumes of business information in its data repository. The company is well
poised to leverage the repository for business analysis and management decision support. Such an analysis
will help Senior Managers identify gaps and focus their attention on priority areas.
The deployment of World Class Asset Management in the company needs a holistic view of the total life cycle
of all its assets. The goal of the WCAM is to provide sustained value addition with assets at the heart of
the strategy. The WCAM model should be deployed with support and commitment of the management. The
involvement of top management will gradually diminish as the system becomes self-sustaining.
The following section describes an indicative road map for WCAM deployment in HPL.
Set up
A key feature in organisational transformation is the active role of senior executives and line managers in all
phases of the change process. WCAM is a paradigm shift that requires the backing of top leadership for their
vision, developing new management practices and to allocate resources. The top management are at the heart
of the entire scheme of things in WCAM, and are facilitated by a dedicated Internal Solutions (IS) Group.
Vol 21 No 4 AMMJ
50 World Class Asset Management
Steering Committee
At the core of the change process is the steering committee comprising executives from top
management. The steering committee will review asset management policies, objectives and targets
in line with business goals. Management decisions on strategy, planning and resource allocation will
be taken by the steering committee.
The steering committee will draw on information provided by a dedicated internal solutions (IS) group
responsible for monitoring, measurement and analysis of progress on KPIs, project effectiveness, and
process compliance. The IS group will also function as the eyes and ears of the steering committee.
The group will have internal capabilities for project evaluation and asset management audits. They
will continuously look for new industry benchmarks, best practices, areas for improvement and
technologies in the asset management space.
Project Teams
Finally, executives responsible for the sub-unit being impacted will lead improvement initiatives.
These project teams will have members with skills commensurate with the initiative. The initiatives
will be implemented in the form of work packages or projects, each with their own objectives and
targets. Ideally the objective of the project should coincide with the performance objectives of the
leader and members. The returns on the project should be traceable to the leader and members for
at least 5-7 years.
Asset management strategies are developed to leverage HPL’s internal resources, capabilities and
core competencies to best accomplish its business goals. The business strategy of the organisation,
will impact its asset management strategy.
WCAM aims at delivering the lowest lifecycle cost of assets. Of course, losses or gains in asset
productivity form part of this valuation. A strategy that might contribute to such an objective might be
to convert an asset management department from a cost centre to a profit centre.
Organisations as large and asset intensive as HPL need a clear policy framework within which plans
can be made. The steering committee finalises subjects on which policies need to be framed. The IS
group does the groundwork of gathering information and forwarding draft policies for approval by the
steering committee. Some areas on which policies can be formed are:
1. Safety Standards.
2. Quality Standards.
3. Planning horizon for Capex, Opex, and renewal of static assets
like pipelines, pressure vessels.
4. Human Resource Management: Alignment of objectives, reporting
channels, incentive structure, mentoring, training.
5. Financial policies: Capex, Opex, ROI, project budgeting, review
frequency, financial powers.
6. Spares Inventory Management: Obsolescence management, virtual
pooling, stock taking frequency.
7. Maintenance Management: Departmental structure, resource pooling,
outsourcing.
8. Procurement: Vendor selection and management, competition,
procurement planning, procurement for Capex.
9. Asset renewal: Periodicity by asset type.
The IS group identifies a number of organisational Key Performance Indicators (KPIs) that are comprehensive
in their coverage yet exclusive. The scope of the KPI based measurement should be restricted to the fulfilment
of asset management objectives set forth by the steering committee. A separate set of KPIs will from part of
definitions of work packages or projects.
An attempt is made to identify benchmarks for each KPI, either internally using figures from a part of the
organisation, or from industry leaders or even from other industries known for excellence in a particular area.
Availability of internal operation data will give the company’s initial performance measures, which can be tallied
with the industry benchmark.
Initial Assessment
The IS group carries out an initial assessment of asset management within the organisation. The end deliverable
of the initial assessment is a list of Key Result Areas (KRAs) for review by the steering committee.
It is important to document the existing asset management process. Members of the IS group will interview
functional heads and senior executives, and conduct workshops with line managers and supervisors.
Suggestions from workers, especially specialists will be recorded. In the end of this exercise, main processes
of asset management are to be documented.
Vol 21 No 4 AMMJ
52 World Class Asset Management
Each process should generate some information and the information must be shared with the right
people. The IS team should investigate the information flows in and around processes. Key areas:
• Information interchange at the information touch points
• Data capture and information exchange with other processes
• Process circumvention
• Vertical and lateral information flows.
• Internal political/cultural barriers.
• Congruence of authority with responsibility
It is important that each asset management process must have clear measurable outputs. Data
gathered in a process should support the following:
• Identification and calculation of performance indicators: Adequacy,
relevance and visibility.
• Reporting of strategic information: Trends, patterns, benchmarks,
financial effects, and accountability.
• Availability of relevant information at decision points for decision support
Communication Management
During the initial assessment period, the IS team has to ensure that everyone gets the information
required to fulfill his or her role effectively, and yet not be inundated with unnecessary data. This
applies equally to stakeholders inside and outside the organisation. Communication effectiveness is
analysed on the basis of a tool designed by Dr. R A Platfoot – the Information Map.
Recipients
Releasers Maintenance Planner Mechanic
Day's tasks
Work orders and priority
Spares
Safety information
Permits
Maintenance Machine history
Planner Fault analysis
Trend reports
Inspection reports
Production schedule
Equipment availability
Tools availability
Production Detailed production schedule
Work order
Stores Availability of spares
Contract details
Safety Permits & procedures
Priorities
Maintenance Inspection reports
Manager
Authorization
Time Keeper Manpower availability
Trends
EAM Database History
Fault analysis
An information map is a two dimensional matrix (see table below) that identifies the flow of information
necessary for the organization to function effectively. Roles that receive information are listed in the top
row. Those who release information are listed in the first column. The information that needs to flow from
a releaser to a recipient is mentioned in the cells common to both. Gaps and unnecessary information are
identified and marked. New reports can be developed to bridge the gaps. Unnecessary information can be
eliminated from the flow.
The exercise can be done both at the departmental and organizational levels. Collaboration and
communication between stakeholders improves once the gaps are addressed. At the same time unnecessary
communication gets weeded out. Managers are spared the information overload that characterizes many
organisations.
Business Analysis
The information collected is analyzed to identify Key Result Areas (KRAs). The IS group makes
recommendations on each KRA. The steering committee evaluates the recommendations and gives
directions on which ones to pursue in the current planning cycle. Analysis involves activities such as:
• Identify gaps in the current processes
• Evaluate existing IT technologies
• Evaluate internal cultural issues
• Evaluate enabling technologies for better asset management
• Prepare Risk analysis and suggestions for mitigation
• Redesign important processes
• Guidelines for long term asset planning: Focus on strategies relevant to each stage
of life cycle – selection, installation, operation, refurbishment and discard.
Key Result Areas
The assessment process ends when key result areas for improvement are identified. The IS group makes
recommendations based on the improvement potential, core rigidities and interdependencies. A preventive
maintenance rationalization program can be a logical prelude to releasing resources for a predictive
maintenance initiative. A few typical KRAs are described below:
The greatest threat to the shutdown plan comes from factors outside the enterprise and therefore not
within the full control of the maintenance. Availability of the following has to be monitored closely:
• Spares, materials and equipment
• Contract labour
• Engineering services
• Hired equipment
• Regulatory and insurance inspectors
• Utility supplies (especially those that will be turned off)
• Agreement for work affecting neighbouring property, shared services, etc.
3. Spares Inventory Management and Cataloguing
Sustaining a high service level for spares inventories ensures that work can be executed as soon
as a request is generated. The effort to improve service levels even incrementally can raise the
inventory stock value exponentially. World-class inventory management takes in multiple inputs;
criticality, lead-time, frequency, shelf life and many more, to compute optimal levels.
Material data cleansing and cataloguing by developing comprehensive unique buying descriptions
and eradication of duplicates can result in long-term savings. Codification greatly reduces eCommerce
costs such as transaction costs, competitive margins and wrong deliveries.
4. Knowledge/Information Management
A knowledge management framework describes a learning cycle – before, during and after any
event. A community of practice – a group of people with common interests identify best practices and
post them on the company intranet. Turn around is a major area where BP has gained $10 million in
three refineries by implementing knowledge management for turn around in 1998.
Asset Information Management: CAD drawings, piping isometrics, instrumentation diagrams, vendor
manuals, asset performance history, asset fault history and warranty tracking are some kinds of
asset information that need to be maintained by an organisation. Establishing clear processes to do
so saves a lot of effort during the lifecycle of an asset. Data templates once prepared for different
types of assets ensure that on the one hand all important information about the asset is available,
whereas only the relevant information is captured, on the other. Asset information management can
save considerable data collection effort that may even involve extended communications with the
OEMs.
Competency planning gives managers a preview of future skill requirements. Skill requirements are
rolled up from the equipment level to a basket of skills at the organisational level.
As availability is mapped to requirements, a long-term plan emerges when. It may take years of
mentoring to build specialised competencies with high experiential content. The plan helps to mitigate
the risk of losing talent because of attrition. Expansion plans can be factored into the planning process
as well. An indicative planning matrix is shown in Tables 2 and 3.
6. Outsourcing
Plant Managers are looking to improve the effectiveness and efficiency of maintenance, not to
generate greater output, but to generate the same or less output at a reduced maintenance cost.
However, in addition to reduced cost of maintenance, many Plant Managers are recognizing that
there are a variety of other benefits to outsourcing equipment maintenance. These benefits include:
• Reduced total cost to produce
• Improved Management focus
• Minimized risks
• Overcoming internal resource limitations
• Institute a service level based process.
Execution
The IS group makes work packages to implement the directions of the steering committee. The work
packages are independent business objects, each with their own scope, schedule and measurement
metrics. Each work packages will include the following:
• Team structure
• Project plan
• KPIs
• Drivers and benefits (ROI)
• Structural changes
• Functional changes
• Process changes
• Skill enhancements
• Phases of the change process
The dominant focus of the group cyclically shifts from measurement to evaluation to work definition to
project management over a year. Control over project execution is enhanced through periodic reviews and
feedback to the steering committee.
Vol 21 No 4 AMMJ
56 World Class Asset Management
A measurement model provides a framework that can be used to set progressive targets year after
year. Targets such as 10% cut in maintenance cost may not always be in the best interests of the
company. Similarly there is an emerging realisation that there is no holy grail of target plant availability
– such as a 85% or 98% objective, in fact such a target might by wholly uneconomic. The challenge is
to select performance measures that maximise value for money.
One key theme that seems to be common to successful performance measurement is the recognition
that cost/benefit ratios are more important that either cost (budget compliance or cost reductions)
or benefits (production rates, service levels, availability etc.) This is the only way to avoid inherent
conflicts of interest and chasing diminishing returns. Goals such as ‘Zero Defects’, Just-In-Time’ and
‘100% Service Levels’ would be quite uneconomic were they at their logical extreme.
The fundamental problem of maintenance expenditures is that the link between what is spent and the
benefits that are achieved is long and tenuous. It can be many years before the effects of a change in
maintenance strategy become palpable. Tasks directed at extension of asset life such as painting, oil
change frequency, may need 10, 15, 20 or more years before effectiveness is measurable. A typical
‘time-lag’ of maintenance influence is 5-7 years.
Benchmarking
Targets tend to substitute internal benchmarks. External benchmarking between companies in similar
industries is of greater value as it forces competitor evaluation. In fact there is a strong case for
benchmarking between industries. Companies learn a great deal by comparing similar metrics to quite
different commercial circumstances. External audit and benchmarking assistance is useful and helps
to achieve some degree of standardisation or objectivity. A clear, logical structure of performance
indicators can greatly help in achieving the main aims, namely better internal control, problem/
opportunity identification and de-confliction of individual objectives.
2
Table 4. 19 0 . 8
3
18 0 . 6
4
An organisation can choose one or a 17
0 . 4
5
number of KPIs to measure its performance 0 . 2
Year Zero
on a single attribute. Benchmark figures are 16 0
6 Year 5
assigned to the highest level of excellence Year 10
15 7
and then suitably discounted up to the
lowest level. The levels, when plotted a web 14 8
(See Figure 6), provide a snapshot of asset 13 9
management excellence achieved by the 12 10
organisation against the benchmarks it set 11
for itself. The benchmarks and targets are Figure
Figure8 7
reviewed and changed periodically to Figure 6 A KPI “Web” Plot
represent realistic aspirations at that time.
Conclusion
Asset management practices are evolving constantly and rapidly in response to competitive pressures
and new technologies. Jargon like dynamic RCM, multisite collaborative asset management (CALM) and
asset information management (AIM) add to the maintenance manager’s anxiety. Lean organisations that
are designed for functional efficiency rarely have the bandwidth to take on improvement initiatives.
The present volatile business environment favours learning organisations that have internalised the
process of continuous adaptation. WCAM offers a practical approach to institutionalise a perpetual cycle
of measurement, analysis and execution. The portfolio approach is a logical extension of the 80:20 rule
that invariably guides management effort.
The WCAM model is a vision that remains relevant as the organisation revises the benchmarks year on
year. Policies are periodically put under the scanner. The three pillars of change are addressed in every
execution so that none of them become a limiting factor for progress. Institutionalisation of a continuous
improvement framework forms the foundation of the WCAM model. Information technologies make the
model work by taking on the vital task of collecting and analysing huge volumes of information.
A number of enterprise asset management (EAM) software products evolved from erstwhile Computerised
Maintenance Management Systems (CMMS) to fill the vacuum. Modern EAM solutions offer a wide range
of asset management and decision support functions that extend beyond the needs of one asset type or
department, and arm managers with the tools they need to effectively manage assets.
(This article was first published in the Maintenance and Asset Management Journal, UK)
Vol 21 No 4 AMMJ
Inventory Control Strategy
Study For Airlines
Supanee Arthasartsri and He Ren,
School of Aerospace, Mechanical Manufacturing Engineering RMIT University (Australia)
The airline industry, as a whole, sits on billions of dollars of excess capacity in parts. Excess inventory
and materials costs significantly increase the annual maintenance budgets of most airline companies
today. However it is also crucial for airlines to keep enough stocks in the system in order to maximize
availability of aircraft and minimize maintenance turn-around-time. A well planned supply chain
management strategy therefore is significant in every airlines maintenance management system. This
paper discusses the inventory control process and some examples of inventory control strategies for
an airline.
INTRODUCTION
It has been proven that for industries characterized by high hardware costs, and where high utilization is
vital for those industry’s sustainability, inventory management plays a pivotal role in the overall life-cycle
cost program through its significant impact on capital cost as well as capital velocity (such as turnover).
For each airline to achieve the optimal costs for spare part management, maintenance strategy and
system availability play major roles. In recent years, organizations have focused on reducing levels
of unplanned maintenance through preventive and predictive maintenance. It is well known that the
unavailability of spare parts may result in loss of revenue which is associated with an increase in
system downtime. On the other hand, having excess number of spares will lead to an increase in capital
investment and holding cost. This is shown in Figure 1.
Increasing levels of competition in the market creates an urgent need to reduce capital cost and
increase capital velocity (turnover) by carefully selecting assets and improving utilization. Higgins and
Morrow (1993) divide maintenance cost into: cost of maintenance operations, the cost of ownership of
maintenance equipment and spares, and the cost associated with unexpected system downtime. The
cost of acquiring spares and that associated with unexpected delays are particularly high in the airline
industry. It is essential for a successful airline to balance the cost of aircraft availability on one hand with
the cost associated with providing a certain level of support on the other.
Improving management of the supply chain involves improving performance of contradictory objectives.
The inventory level should be at a minimum while at the same time improving availability (hence high
service level). It is important that airlines find the right balance between the two contradictory objectives.
The cost of potential lost sales should balance with the cost of carrying inventory as much as possible.
To achieve the goal, the performance tracking must involve delivery performance, order-fulfillment lead
time and overall costs.
This paper describes the process of inventory control management which includes the provisioning and
the initial state of creating a model for simulation in order to achieve the optimum spare parts. Several
inventory control strategies for airline includes material management and supply chain synchronization and
outsourcing component management will also be discussed.
Inventory control is responsible for ensuring that all the necessary parts and supplies are on hand and
available at selected locations throughout M&E (maintenance and engineering). Its purpose is to support all
maintenance activities by maintaining proper stock levels in stores and by initiating reorders at appropriate
times. They are also responsible for adjusting the stock levels as changes in usage and fleet makeup
dictate. (Kinnison, 2005)
Prior to the start of a new project, airline will set up an initial provisioning process which sets initial stocks of
repairable spares and repair entry into service. Manufacturer, e.g. Airbus or Boeing, provide a Recommended
Spares Parts List (RSPL) to the airline. Airline then creates an inventory strategy based on the provided
RSPL. Examples of data required in designing the strategy include;
• Fleet size
• Average flight hours per aircraft day
• Average flight hours per flight leg
• Line-station to main base return time (days)
• Repair turnaround in days by shop code, for major and minor repairs (days)
To provide material support for maintenance and overhaul for such a variety of a whole inventory system,
the items are classified into 3 categories
• Class A, Rotable parts: serialized items which could be tracked for life control.
• Class B, Repairable Parts: items that are reconditioned back to original state by using
parts and known repair processed.
• Class C, Expendable Parts: items which are discarded and replaced as recommend by
manufacturers.
The distribution of the supplies is divided into two main channels for meeting airlines’ demand. A majority
of parts are maintained in inventory at its own distribution centre and supplied to the maintenance base
on demand. The second channel is based on vendor-managed inventories with the vendor shipping the
products to the distribution centre on the orders communicated to them through the organization. Figure 3
shows the order through to delivery process flow of the supply chain.
Vol 21 No 4 AMMJ
60 Inventory Control Strategy For Airlines
The process flow in figure 3 is the tool to ensure the validity of the order as well as the availability of
the parts to meet the demand. There are several ways to control the orders from airline to distribution
centre and suppliers:
• Distribution centre have enough inventory available which is required from airline,
the nearest centre then supplies straight to the airline maintenance base.
• Distribution centre does not have enough inventories available, the order will
be place on the backorder list and request for replacement is sent to the planning
division.
• If the parts in backorder list are under the existing contract, planning division then
creates a purchase order and forwards it to the supplier.
• If there is no contract existing in the backorder list, a request is sent to the
procurement department to set up a new contract then forward to the supplier and
make a purchase order.
INVENTORY MANAGEMENT TECHNIQUES
There are several different techniques that have been developed and proposed to improve the availability
of spare parts when necessary. For the aviation industry, the most common and efficient techniques
include reorder point evaluation (ROP) and Material Requirement Process (MRP). Failure to replenish
spare parts on time for an airline can cause the loss of revenue, violate regulatory requirements and
compromise the safety of workers.
Moncrief (2005) mentioned that the concept of using an order point, or reorder point, is the point in
the replenishment process that should trigger the normal ordering of a replacement stock keeping unit
(SKU). Availability of equipment and spare parts to sustain the production process is protected when
airlines have the proper ROP level. The key for ROP inputs are criticality of the parts, lead time to
replenish, issued in sets of and usage demand.
Concept of material requirement process (MRP) is based on the determination of the future time-phased
requirements for material and taking the necessary actions to insure the material is on-hand when
required. Critical path scheduling is often used to keep the project on schedule. The key to successful
MRP is the scheduling process, which determines when certain activities are going to happen. (Moncrief,
2005)
The airline industry combines four unique market characteristics include global need for parts, demand
unpredictability, traceability of parts for safety reasons, and high cost of not having a part. Most of
the airlines at present are using ROP techniques in their inventory control management. According
to the survey from Ghobbar and Friend, many airlines are now pursuing the MRP techniques since
MRP gives the possibility for accurately controlling inventory and for reducing stock for schedule airline
maintenance.
The optimum strategy for airline to select the inventory management technique is to combine ROP and
MRP techniques depending on the typr of inventory. ROP can be applied to the active inventories which
are regularly used and the future expected demand can be predicted with good accuracy. On the other
hand, expendable or class C inventory could be managed with MRP technique as it determines the
quantity and timing of the acquisition of dependent demand items needed to satisfy master schedule
requirements.
The nature of airline systems does not involve a single but multi echelon and multi indenture. For
repairable items, it is more complicated than other types as the question is not only how many spares
are needed at the operating base but also how many are needed at the supporting depot. The following
topics describe the multi-echelon and multi indenture optimization model.
The typical multi-echelon model is a two-level system composed of a number of bases being served
by a central depot, or depots. The bases are referred to as first echelon and the depots as second
echelon. Airlines are considered to be a multi-echelon supply system as they have line maintenance
Airlines
Orders Shipment
Received
Order Arrival
Airline Order
Validation
Material Yes
Availability
No
Place On Release
Backorder Backorder
Yes
No
Material
Procurement: Receipt
Set Up Contract Notification
Distribution
Planning: Send
Centres
Replenishment
Requests
Materials
Suppliers
bases at various locations as their first echelon, they also could have a major hub that is providing some
spare parts to the region as their second echelon, and finally the home base where they receive stocks
from major suppliers and vendors as the third etc. The demand for units occur when there are failures of
operating units at the base level. The failed unit will be placed into repair at the repair base. In the event
of sufficient stock not being available at the base-level, a backorder occurs and demand must be satisfied
from units at the depot-level, either from existing stock or from units completing the repair process. (Guide,
1997) The problem, in the simplest form, is the setting of repairable inventory levels at each of the bases
such that a pre-specified level of service is achieved, given repair rates and transportation times and budget
constraints.
As echelons describe how the supply system is organized, the indenture structure describes the engineering
parts hierarchy. A first-indenture item that is removed from the aircraft is called a lone-replaceable unit
(LRU). When the first-indenture item is taken apart in the maintenance shop, second-indenture items are
replaced and these are called shop-replaceable units (SRUs). There could be more indentures levels and a
good inventory policy should be concerned with the optimal stock level of all these levels as well.
Vol 21 No 4 AMMJ
62 Inventory Control Strategy For Airlines
Since an item at a particular indenture is composed of several lower indenture items, the cost of
each lower indenture item is less than that of its parent. Therefore it is a reasonable strategy to stock
the lower indenture items rather than the higher one. On the other hand, when an item fails, it takes
time and expertise to diagnose and replace the items that are responsible and this could affect the
downtime, for this reason, it is better to stock the higher-indenture items. The analysis of the optimum
level of indenture spares and allocation is best to be done by using a computer model which will not
be mentioned in this paper.
A key element in effectively managing airline maintenance operations is integrated supply chain
synchronization. In determining optimal maintenance plans and location schedules, proper
synchronization across the material management, warehousing and procurement organizations is a
must. The process includes:
• Spare Parts Demand Forecasting — for example the core availability, return, repair and rework of
a rotable is forecast to generate a repair versus buy (RVB) plan. The RVB plan achieves a balance
of inventory by considering two-way interchange ability substitution logic. It also uses advanced
statistical and probabilistic forecasting techniques. (Kinnison, 2005)
• Chaining and Superceding Parts — in planning the purchase of component parts, variables such
as parts improvements and mandated safety changes must be forecast. The ability to recognize parts
chains reduces excess inventory and scrap.
• Supply Chain Event Management and Visibility — applies time-phased event management
and critical path resolution to potential supply problems, before the problem occurs. Maintenance
personnel are alerted to capacity, parts, tools and materials demand and supply imbalances while
also being provided with options for resolving the problem.
In order to implement this strategy to airline inventory system, the optimization models assist the
planning manager in making the required decisions for optimum value for inventory and lead to
proper synchronization across the management system. This strategy could be applied to all types of
airline as it protects the best benefit within the organization.
It is logical for an airline to outsource the management of components when dealing with a small fleet
of aircraft. As an example for the Airbus A380, given the relatively small number of the giant aircraft
airline each had to their feet or at the beginning of the EIS. The inventory holding cost for carrying
the work-in-process (wip) inventory for airline includes the opportunity cost for the money tied up in
the inventory, plus storage costs, insurance, spoilage, and obsolescence costs. Usually, this cost is
computed as the product of the inventory value and an inventory carrying rate, which includes at least
the opportunity cost for money.
Consider the airline with small A380 fleet; it would not be worth holding and stocking the spare parts as
the inventory costs will affect the capital cost for the company. It may also be impossible for the airline
to order a small amount of spare parts just for the fleet that they have as there may be minimum order
amounts. With the outsourcing strategy, small fleets, as well as major carriers with type-specific fleet
segments, gain enormous economies of scale when participating in fully-integrated A380 component
support and parts pooling system. Such cost benefits are normally only achievable by large fleets of
the same aircraft type. Figure 4 shows the economics of scale for component associated cost per
flight hours versus number of fleet. To be a standalone airline, it faces the high figure of inventory
costs and the cost decreases as the number in the fleet increases. Therefore, with the airline like UAE airline,
it is not necessary for them to outsource their spare part management but vice versa, they could follow the
component inventory service and being the supplier in their components or within their alliance.
CONCLUSION
This paper presents the fundamental study for airline inventory control management. The main objective of
supply management is to achieve the optimum amount of inventory at the right time. There are several techniques
that help accomplishing the goal. Reorder Point (ROP) and Material Requirement Process (MRP) are two
main techniques airline employed to their management process to deal with different types of inventories. For
repairable items, the approach to the best results is the use of the multi-echelon and multi-indenture optimization
models. Finally, two of the possible inventory management strategies for airlines were discussed. This depends
on several factors including their fleet number, capitals and service types etc.
REFERENCES
• Anderson, J., Schroeder, R., Tupy S., White E. (1982), Materials Requirements Planning Systems:
The State-of-Art, Production and Inventory Management Journal 23, 51-67
• Blanchard, B.S (1986), Logistic Engineering and Management, New Jersy, Prentice-Hall. Inc.
• He Ren, Aircraft Maintenance Management, School of Aerospace Engineering, RMIT University
• Friend, C.H., 1992, Aircraft Maintenance Management, Harlow, Essex, England
• Gallimore, K. and R. Penlesky (1998), A Framework for Developing Maintenance Strategies, Production
and Inventory Management Journal, First Quarter: 16-22
• Ghobbar Adel A., Friend C.H. (2004), The Material Requirements Planning System for Aircraft Maintenance
and Inventory Control: A Note, Journal of Air Transport Management.
• Harry A. Kinnison, PhD.,2004, Aviation Maintenance Management, McGraw-Hill, New York
• Higgins, L.R. and L.C. Morrow (1993), Maintenance Engineering Handbook, New York, McGraw Hill
• Jain Sanjay (2004), Supply Chain Management Tradeoff Analysis, Proceeding of 2005 Winter Simulation
Conference
• John T. Mentzer, Matthew B. Myers, Theodore P. Stank (2007), Global Sypply Chain Management, Sage
Publication Inc.
• Moncrief E.C., Schroder R.M. (2005), Production Spare Part, Industrial Press, Inc., New York
• Muckstadt John A. (2004), Analysis and Algorithms for Service Parts Supply Chain, Springer, New York
• Sherbrooke Craig C., PhD, (2004), Optimal Inventory Modeling Of Systems, 2nd Edition, Kluwer’s International
Series
Vol 21 No 4 AMMJ
Maintenance News
oil analysis sensor measures the lubricating oil temperature every minute. At 15 minute-intervals, the average temperature
over the past 15 minutes is displayed on the unit’s digital readout, along with the recommended number of remaining oil
service life (in days). According to Schmidt, the DUO10A oil analysis sensor enables site engineers to accurately predict
and plan gear-unit maintenance. “The oil sensor can be configured to raise a ‘pre-alarm’ when a predetermined set-point is
reached, indicating that an oil change should be scheduled,” he said. “When the remaining oil service hours reaches zero,
another alarm is raised indicating that an immediate oil change is required. Alarms can also be configured to alert staff when
a particular oil temperature limit is exceeded.”
The DUO10A oil analysis sensor is extremely easy to use. Once installed directly on the gear unit, operators can select the
oil type using two on-board buttons. Additional oil types can be added to the sensor’s on-board library on request. Operation
is further enhanced thanks to the four-channel digital output that accommodates alarm output connectivity to supervisory
controllers. “The DUO10A oil sensor can be configured to alert key personnel of upcoming oil changes,” said Schmidt. “The
alarm can be transmitted to an on-site HMI, SCADA or PLC. The sensor can also be wired to a locally-mounted frequency
inverter, which eliminates the need to run a dedicated power cable for the sensor.” www.sew-eurodrive.com.au
New ISO standard for safe, long-lasting building, engineering and industrial structures
ISO has published a new standard to help engineers, builders and regulators to design structures that are safe and resistant
to failure due to environmental and mechanical stresses, and to material degradation. Buildings, civil engineering works,
industrial structures, etc. and their components should be conceived, constructed, inspected, maintained and repaired in
such a way that, under foreseeable environmental conditions, they maintain their required performance during their design
lives with sufficient reliability for the safety and comfort of users and the intended use of the structure. ISO 13823:2008
– General principles on the design of structures for durability specifies general principles and recommends procedures for
the verification of the durability of structures subject to known or foreseeable environmental actions, including mechanical
actions, causing material degradation leading to failure of performance. It will help to ensure reliability of performance
throughout the service life of the structure. www.iso.org/iso/pressrelease.htm?refid=Ref1146
This new book offers guidance on the Standard BS ISO 15686-5:2008 Buildings and constructed assets. Service life
planning. Life cycle costing. The publication will help you understand the practical application of the new British Standard. It
aims to help eliminate confusion over scoping and terminology and to address concerns over the uncertainty and risks that
are undermining confidence in life cycle costs used for construction procurement. www.bsigroup.com/bsiso15686-5
type of data, and parameters for specific users. With MicroMain for BlackBerry, users are able to download their assigned
work orders or any work orders available to any maintenance technician. This allows technicians to provide services for
multiple work requests in the field or on the plant floor, saving time and improving productivity. For example, when repairing
plumbing in an apartment building, office complex, hospital, or school, a technician can check the BlackBerry for any
new work requests in that area and immediately provide additional maintenance services.This software checks for new
work orders at user-specified intervals; in addition, automatic download options allow users to save time and effort. Using
MicroMain Mobile for BlackBerry also gives users options to create new work orders at the point of work performance.
Managers using MicroMain for BlackBerry can stay informed as to work requests throughout the day or shift. In addition to
improving communication, this enables managers to respond immediately to unexpected or emergency situations.
www.micromain.com
NEC announces additional features for low cost TH7700 and TH7716
NEC AVIO now supply their popular low cost thermal imagers TH7716 and TH7700
with many aditional useful functions.
- Auto Level/Sense. Level Sense auto-trace (L/S LINK): Push and hold “E”
button to automatically adjust best “Level” and “Sense” condition. - Level Trace
Temperature. The cross cursor traces a point temperature signal, and always keeps
the temperature level in the center of the colour bar. When the cross cursor is
not used, the temperature signal of the center (For TH7700, X=160, Y=120)(For
TH7716, X=80, Y=60) of the thermal image is traced. - Auto Gain Control (AGC).
It traces the temperature signal of the entire thermal image, and displays sensitivity
and temperature level at their optimal values. This can be cobined with the Level/
Sense linking mode of the range mode. - Maximum/Minimum Temperature. The
MAX or MIN temperature finder (hot spot and cold spot finder) along with the MAX
or MIN temperature at the cursor point. - Alarm. This function provides Text Alarm of
“OVER” or “UNDER” if measured temperature is above or below preset thresholds.
Prices start from $12,963 ex. GST.
www.applied-infrared.com.au/research-industrial/preventative-maintenance.html
The EXP Enterprise pilot was successful and proved that leveraging Ivara’s technology and practices would not just
implement RCM2 analysis results quickly, it would also support their emerging Operations and Maintenance Strategy (OMS)
initiative. Following an extensive evaluation of competitive offerings, ScottishPower selected Ivara EXP Enterprise asset
performance software. EXP Enterprise provides a cohesive and integrated platform to develop, implement and manage a
living equipment reliability program. EXP, supported by advanced reliability practices, enables Ivara’s renowned proactive
asset reliability process. The process is developed and sustained with the Ivara Work Smart™ delivery methodology, which
builds and implements asset reliability programs one asset at a time. EXP Enterprise will address several challenges at
ScottishPower. Currently the company’s equipment data resides in separate systems representing islands of data. EXP
will act as one of the main repositories of ScottishPower’s equipment data ensuring that it is visible to all and monitored
in real-time. In addition, EXP will capture the knowledge of their experienced maintenance and operations workforce to
ensure valuable equipment expertise is captured for the future benefit of the business.
Ivara EXP Enterprise integrates seamlessly with ScottishPower’s CMMS, the IBM Maximo Asset Management solution.
Ivara is an IBM Independent Software Vendor partner and the EXP Enterprise - Maximo interface has received IBM’s Ready
for Tivoli Software Validation. In addition, Ivara has achieved the Industry Optimized status within the IBM PartnerWorld
Industry Network Program for the energy and utilities industry.
While ScottishPower has conducted several RCM2 projects that have delivered significant benefits, they required a faster,
less resource intensive analysis approach that is suitable for less critical assets. To address this need, ScottishPower
will leverage Ivara’s Maintenance Task Analysis - a new reliability strategy development methodology that complements
RCM2. MTA draws from the strengths of RCM2 thinking, but provides a less rigorous approach ideal for rapid analysis of
less critical assets. www.ivara.com.
AMMJ Subscription Form
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VcYXdbeVXidc"WdVgYhnhiZbi]ViXdci^cjVaanbdc^idghi]ZXdcY^i^dcd[
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AMMJ
Prices are valid until 30th January 2009.
- Maintenance Books
All prices are Australian Dollars. Prices for Australia Include Postage and GST.
Prices for the rest of the World add the following shipping charges: One book add Aus$40; Each additional book add Aus$20.
23. HANDBOOK OF MECHANICAL IN-SERVICE INSPECTIONS – Pressure Vessels & Mechanical Plant
Clifford Matthews 2003 690pp $460
This comprehensive volume gives detailed coverage of pressure equipment and other mechanical plant such as cranes and rotating equipment.
There is a good deal of emphasis on the compliance [UK standards] aspects and the duty of care requirements placed on plant owners, operators,
and inspectors.
24. BENCHMARK BEST PRACTICES IN MAINTENANCE MANAGEMENT
Terry Wireman 2003 228pp $120
This book will provide users with all the necessary tools to be successful in benchmarking maintenance management. It presents a logical step-by-
step methodology that will enable a company to conduct a cost-effective benchmarking effort. It presents an overview of the benchmarking process,
a self analysis, and a database of the results of more than 100 companies that have used the analysis.
25. RCM - GATEWAY TO WORLD CLASS MAINTENANCE
A Smith & G Hinchcliffe 2003 337pp $130
Includes detailed instructions for implementing and sustaining an effective RCM program; Presents seven real-world successful case studies from
different industries that have profited from RCM; Provides essential information on how RCM focuses your maintenance organization to become a
recognized ‘center for profit’. It provides valuable insights into preventive maintenance practices and issues.
26. INDUSTRIAL MACHINERY REPAIR - Best Maintenance Practices Pocket Guide
R Smith, R K Mobley 2003 537pp $110
The new standard reference book for industrial and mechanical trades. Industrial Machinery Repair provides a practical reference for practicing
plant engineers, maintenance supervisors, physical plant supervisors and mechanical maintenance technicians. It focuses on the skills needed to
select, install and maintain electro-mechanical equipment in a typical industrial plant or facility.
27. AN INTRODUCTION TO PREDICTIVE MAINTENANCE 2nd Edition
Keith Mobley 2002 337pp $195
This second edition of An Introduction to Predictive Maintenance helps plant, process, maintenance and reliability managers and engineers to
develop and implement a comprehensive maintenance management program, providing proven strategies for regularly monitoring critical process
equipment and systems, predicting machine failures, and scheduling maintenance accordingly.
28. MAINTENANCE PLANNING, SCHEDULING & COORDINATION
Dan Nyman and Joel Levitt 2001 228pp $110
Planning, parts acquisition, work measurement, coordination, and scheduling. It also addresses maintenance management, performance, and
control; and it clarifies the scope, responsibilities, and contributions of the Planner/Scheduler function and the support of other functions to Job
Preparation, Execution, and Completion. This book tells the whole story of maintenance planning from beginning to end.
29. COMPUTER-MANAGED MAINTENANCE SYSTEMS 2nd Ed
Mobley and Cato 2001 200pp $150
A comprehensive, practical guide that covers selection, justification, and implementation of an effective CMMS in any facility. In this new edition, the
authors have added a chapter specifically on the latest technology, Application Service Providers [ASPs], that has revolutionized the way computer-
managed maintenance systems are used and the benefits they can offer to a business.
1. Consequences of Good or
Bad Maintenance
• The direct and indirect costs of Maintenance. The real cost of failures and cost of downtime.
What do you cost and what are you worth.
• Effect of too little or too much planned maintenance.
• The need to provide and prove due care of your assets.
• Do you identify/record real maintenance costs and how do you respond and control those costs.
2. Maintenance Activities
• The different activities performed in maintenance - emergency, corrective, preventive,
predictive, condition based,detective, proactive maintenance, and designing for maintenance.
• Possible problems associated with fixed time replacement of components.
• Understanding what are failures in maintenance.The different failure types and how
they affect what maintenance should be used.
• What maintenance is needed. Basic rules in setting inspection and PM frequencies.
• A brief introduction to maintenance planning,control and systems
Discussion 1: What techniques for repair, inspections & Condition Monitoring are used
in your plant. Are they successful? If not why not?
Discussion 1: The Planning and the CMMS/EAM/ERP in your organisation - its strengths & weaknesses.
3 . Maintenance Planning
and Planners
• An Example of how the best plan and their Maintenance Activities.
• Pro-active Maintenance Planning.
• Who should be the planner. Responsibilities/duties of the planner.
• Full time or part time planners. Planner to Maintenance Personnel ratio.
• Planner’s interaction with Supervisors, Technicians, etc.
• Value of effective planning and planners.
• Planning in different environments - failure response, team structures, etc.
4 . Maintenance Stores
• Store objectives. Introduction to stock control methods.
• Impact of maintenance type on stock requirements.
• Who owns the stores? Who owns the parts? User alliances. Consignment stock.
• Improving and monitoring service levels from your maintenance store.
• Location of the stores. • Maintenance of parts in the store.
Maintenance Management
and Asset Management
This seminar introduces the wide range of Maintenance Management activities and techniques
that may be applied within your organisation and the contribution Maintenance can make to
company profitability and competative advantage. Even if you are not directly involved in the use
of these techniques it is still important that you have at least an understanding of what can be done
and what can be achieved.
Cancellations: Should you (after having registered) be unable to attend, a substitute delegate is always welcome. Alternatively, a full refund will be made for cancellations
received in writing 14 days before the seminar starts . Cancellations 7 to 14 days prior to the seminar dates will be refunded 40% of the registration fee, in addition to receiving a set of
seminar notes. There will be no refund for cancellations within 7 days of the seminar dates. This registration form may be photocopied.
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