JJ616 Maintenance Management

Chapter 1
Maintenance Organization

Miskiah Binti Wakijan

Department of Mechanical Engineering
Politeknik Sultan haji Ahmad Shah
Kuantan, Pahang
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Course Learning Outcomes

Students

should be able to point out

the concepts of maintenance
organization and strategies that
increases productivity by increase
availability and capacity at reduced
cost.
Topic outline :
Determine role of maintenance
management.
Understand types of maintenance cost.
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Introduction
Maintenance Organization
It

concerns in achieving an optimum balance between

plant availability and maintenance resource utilization.
A maintenance organization can be considered as being
made up three necessary and interdependent components.
Resources: men, spares and tools.
Administration: a hierarchy of authority and
responsibility for deciding what, when and how work
should be carried out.
Work Planning and Control System: a mechanism for
planning and scheduling the work and feeding back the
information that is needed for correctly directing the
maintenance effort towards defined objective.
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Definition
Maintenance

The term maintenance means to keep the equipment in

operational condition or repair it to its operational mode.
Work undertaken in order to keep or restore every
facility, i.e every part of a site, building and contents to
an acceptable standard. (British Standard BS3811)
All actions which have an objective to retain an item in,
or restore it to, a state in which it can perform the
required function. The actions include the combination of
all technical and corresponding administrative,
managerial, and supervision actions. (K.Venkataraman,
Maintenance engineering and Management)

Definition (cont.)
Maintenance Management
Maintenance

Management is an orderly and

systematic approach to planning, organizing,
monitoring and evaluating maintenance activities and
their costs.
A good maintenance management system
coupled with knowledgeable and capable
maintenance staff can prevent health and safety
problems and environmental damage; yield longer
asset life with fewer breakdowns; and result in
lower operating costs and a higher quality of life.
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IMPACT OF POOR MAINTENANCE

Maintenance operations include all efforts to keep
production facilities and equipment in an acceptable
operating condition. Failure or ml-functioning of machines
and equipment in manufacturing and service industries
have a direct impact on the following:
1. Production capacity:
Machines idled by breakdowns cannot produce, thus the
capacity of the system is reduced.
2. Customer satisfaction:
When production equipment break own, products often
can not be produced according to the master production
schedules, due to work stoppages. This will lead to
delayed deliveries of products to the customers.
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IMPACT OF POOR MAINTENANCE (cont.)

3. Product and service quality:

Poorly maintained equipment produce low quality products.
Equipment that have not been properly maintained have
frequent break downs and cannot provide adequate
service to customers. For example, air craft fleets of the
airline, railway and road transport services not maintained
well can result in poor service to customers.
4. Employee or customer safety:
Worn-out equipment is likely to fail at any moment and
these failures can cause injuries to the workers, working on
those equipment. Products such as two wheelers and
automobiles, if not serviced periodically, can break down
suddenly and cause injuries to the stress.
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IMPACT OF POOR MAINTENANCE (cont.)

5. Production costs:
Labor costs per unit rise because of idle labor
due to machine breakdowns. When machine
malfunctions result in scrap, unit labor and
material costs increase. Besides, cost of
maintenance which includes such costs as
costs of providing repair facilities, repair crews,
preventive maintenance inspections, spare
parts and stand by machines will increase as
machines break down frequently.

Objective of Maintenance Management

I. Minimizing the loss of productive time because of

equipment failure (minimizing idle time of
equipment due to break down).
II. Minimizing the repair time and repair cost.
III. Minimizing the loss due to production stoppages.
IV. Efficient use of maintenance personnel and
equipment.
V. Prolonging the life of capital assets by minimizing
the rate of wear and tear.
VI. To keep all productive assets in good working
conditions.
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Objective of Maintenance Management

VII. To maximize efficiency and economy in
production through optimum use of facilities.
VIII. To minimize accidents through regular
inspection and repair of safety devices.
IX. To minimize the total maintenance cost
which includes the cost of repair, cost of
preventive maintenance and inventory carrying
costs, due to spare parts inventory.
X. To improve the quality of products and to
improve productivity.

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Benefit of Maintenance Management

Manages

Control
Reduces Overtime
Improves Quality
Ensures Better Support & Service
Allows Easy Error Spotting
Reduces Resource Waste
Improves Safety
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Benefit (cont.)

Manages Control
One of the most significant advantages of maintenance
management is the management of control. Maintenance can
be planned and serves a pre-active instead of a reactive (be
put to action after an event has come to pass). Management
control ensures timely schedules, well-defined job descriptions
and the availability of standby equipment in times of disaster.
Reduces Overtime
Maintenance management reduces and even eliminates
overtime by reducing the chance of surprises. It ensures all
loose ends are tied and enough contingency planning is done
to manage operations in case of undesirable circumstances
and situations. Management defines tasks and allocates
resources effectively, ensuring that all objectives are met in a
timely and orderly fashion.
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Benefit (cont.)

Improves Quality
Effective maintenance management improves output and ensures
quality. It gives a small amount of leeway to tolerances but within
well established control limits. Employee productivity improves,
improving the overall productivity of individual and collective
processes. Investing in maintenance management pays off for a
company by increasing its revenues.
Ensures Better Support & Service
A well established and documented maintenance management
system provides ample support to production managers,
equipment operators, and other personnel and users. An effective
maintenance management program needs to be made public
(and/or published) for the benefit of everyone involved. End users
can benefit from a better level of support provided by maintenance
management. It allows for reliable, on time, and quality service.
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Benefit (cont.)

Allows Easy Error Spotting

Since maintenance management details the goals and objectives of
departments and employees, it make it easier for managers to spot
errors and deviations from established and desired outcomes.
Reduces Resource Waste
Maintenance management ensures that labor, materials and
equipment are well utilized, which reduces waste of allocated
resources. Utility costs are lowered and the production of
hazardous waste material is decreased with managed effort.
Improves Safety
Maintenance management promotes safety and health. It ensures
everyone involved knows safety procedures in case of a minor or
major disaster. A well-implemented management program
examines the risk of potential hazards and finds ways of addressing
them before they pose a risk. Regular house-keeping programs
promote fire prevention and safety measures.
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Types of Maintenance Organization

The

selection of a particular type of

system will largely depend upon the
main structure of an industry.
Maintenance organization can be of the
following types:
i. Decentralized
ii. Centralized
iii. Partially decentralized
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Decentralized

In large size plants located at different places, inter unit

communication is difficult. In such cases the decentralized type
of organization is best suited, which means that the
maintenance organization works under the direct control of a
chief engineer in-charge of production. Under this type of
organization, better coordination between production and
maintenance groups is possible because of a common head of
organization. The advantages of such type of organization are:
Speedy decisions due to better line of communication under
single control.
Maintenance and production people understand each others
problems better because of their common goals.
Interchangeability of workforce, even at the managerial level, is
also possible.
Better training at the workers level can be arranged.
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Centralized

In a small factory where communication between the

departments is freer, the centralized type of
maintenance organization is preferred, which is placed
under a chief maintenance engineer/manager. The
total responsibility of the maintenance function for the
entire factory lies with the chief maintenance engineer.
Under this type of organization, the responsibilities
and accountability of work must be properly specified
for production as well as maintenance personnel to
successfully meet the project goals. If this is not taken
care of, one department may blame other for any
shortfall.
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Partially decentralized

The partially centralized organization, which is the

modified form of a centralized type of organization, is
most suitable for projects that have units far away
locations. Under this type of maintenance organization,
the maintenance personnel, attached to the production
unit, carry out work at unit level and look after day to
day maintenance. All centralized work pertaining to
maintenance planning and documentation is done at
the level of central maintenance workshop.
The above three types of maintenance organizations,
however, are not strictly exclusive and some
adjustments can be made to suit the working
environment and the need.
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Responsibilities in Maintenance
Management Organization

The main functions of a maintenance department are as follows:

(i) Planning maintenance work on a long-term basis.
(ii) Issuing maintenance work orders.
(iii) Storing maintenance materials, e.g., tools, spare parts,
lubricants, etc.
(iv) Deciding inspection methods and routine.
(v) Developing and issuing standard instructions.
(vi) Measuring efficiency of maintenance.
(vii) Controlling maintenance personnel.
(viii) Maintaining maintenance records.
The main responsibilities of maintenance staff are given below :
(a) timely inspection and servicing of equipment;
(b) instructing proper use of equipment by workers;
(c) raising timely indent for replacement and! or spare parts;
(d) emergency repairing whenever necessary.
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Roles in Maintenance Management

Organization
Employee Involvement
Partnering with
maintenance personnel
Skill training
Reward system
Employee empowerment

Maintenance and Reliability

Procedures

Results
Reduced inventory
Improved quality
Improved capacity
Reputation for quality
Continuous improvement
Reduced variability

Clean and lubricate

Monitor and adjust
Make minor repair
Keep computerized records
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Sources of Maintenance Cost

Maintenance cost is in many instances influenced by the effectiveness

and efficiency in which maintenance is performed. Maintenance cost
and related indicators are therefore important measures of
maintenance performance. Maintenance effectiveness is
demonstrated by proactively identifying the right work and doing it at
the right time. This in turn eliminates chances of secondary damage,
safety and environmental consequences and thus minimizes the
maintenance cost. Maintenance efficiency in planning and scheduling
resources and manpower can potentially minimize the maintenance
cost. Some of the important cost performance indicators are
summarized as shown in Fig. 4. The cost and equipment performance
indicators are instrumental in doing performance analysis of the
maintenance function and identifying the performance gaps that would
trigger management actions. They provide a good basis of conducting
a root cause analysis for establishing the reasons for performance
gaps, which leads to learning and improvement of the main
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Types of Maintenance Cost

Maintenance cost :
Preventive maintenance costs
Breakdown maintenance costs
Cost to replace or repair
Losses of output
Delayed shipment
Scrap and rework
The

traditional view attempted to balance preventive and

breakdown maintenance costs
Typically this approach failed to consider the true total cost
of breakdowns
Inventory
Employee morale
Schedule unreliability
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Maintenance Cost (cont.)

Total
costs

Costs

Preventive
maintenance
costs
Breakdown
maintenance
costs

Optimal point (lowest

cost maintenance policy)

Maintenance commitment

Traditional View

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Maintenance Cost (cont.)

Total
costs

Costs

Full cost of
breakdowns

Preventive
maintenance
costs
Maintenance commitment
Optimal point (lowest
cost maintenance policy)
Full Cost View

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Cost Analysis

Costs are the values of all the resources (e.g., labor,

buildings, equipment, and supplies), tangible or intangible,
used to produce a good or a service.
Cost analysis is an economic evaluation technique that
involves the systematic collection, categorization, and
analysis of program or intervention costs, and cost of illness.
Cost analysis is currently a somewhat controversial set of
methods in program evaluation.
Cost analysis can be used as a stand-alone evaluation
method when
only one program is being assessed,
information about program effectiveness is not available, or
the interventions being assessed and compared are
equally effective.
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Cost Analysis Methods

Cost analysis can also be used
together with effectiveness
assessment techniques within the
framework of three types of economic
evaluation:
cost-effectiveness analysis,
cost-benefit analysis, or
cost-utility analysis / cost allocation.
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Cost Analysis Methods (cont.)

Cost-effectiveness analysis assumes that a certain

benefit or outcome is desired, and that there are several
alternative ways to achieve it. Cost-effectiveness analysis
is comparative,
Cost-benefit analysis usually considers only one
program at a time. Cost-benefit analysis always
compares the monetary costs and benefits of a program.
Another tool for comparison in cost-benefit analysis is the
net rate of return, which is basically total costs minus
the total value of benefits
Cost allocation basically means setting up budgeting
and accounting systems in a way that allows program
managers to determine a unit cost or cost per unit of
service.
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Cost and Budget Control System

A budgetary control system is a method of monitoring and

controlling income, and expenditure and for managing the
demands for cash, minimizing borrowings . It can be
applied in a business context or by an individual in relation
to his or her personal finances.
In a business environment it is most valuable as a tool to
control the flow of cash because a good system would
monitor cash inflow and flag-up any projected shortfalls so
that corrective action could be taken, for example if some
customers were habitually not paying promptly or there
was a sudden and unusual need for spending. Additionally,
such a system would also ensure that cash was always
available for essential business purposes like buying raw
materials.
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Developing Cost and Budgets Control

System

Common Steps (Kettner, et al., 1990):

1. Develop a line-item budget that shows all
expenditures. This is the minimal level of budgeting
and accounting that is required by many funders.
Some funders require a specific format, so that the
categories used are standard across the programs
that they fund.
2. Determine the agency's program structure. A
distinct program is a set of activities or services
designed to accomplish a specific set of agency goals
and objectives. Many agencies have several different
programs.
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Developing (cont.)

3. Identify all direct costs and indirect costs. Direct costs are
those that benefit only one program (for example, salaries of staff
who work only for one program, or supplies and equipment used
only for that program). Indirect costs or "overhead" costs are
those that benefit or are shared by more than one program (for
example, several programs in an agency might share the same
building, and be served by the same bookkeeping and secretarial
staff, utilities, or janitorial services).
4. Assign direct costs to the appropriate program or project.
This is usually fairly straightforward. If one county agent has fulltime responsibility for operating project, for example, then 100%
of salary and benefits would be assigned as an expense to that
project in the budget. If a staff member spends 50% of time on
the project and 50% on another assignment, then half of that
person's salary and benefits would be assigned to the project as a
direct cost.
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Developing (cont.)

5. Allocate indirect costs to programs. Deciding

how to divide up the indirect (shared) cost pool among
several programs in the agency can be much more
complicated and technical. The actual practice of
allocating or dividing up the indirect costs is usually
best left to an accountant. Cost allocation of indirect
costs can be a time-consuming step, it is considered
well worth doing because of the increased information
it provides about the real costs of providing services.
6. Determine total program costs. The total cost of
a particular program is the sum of the direct costs,
and the portion of indirect costs that is allocated to
that program.
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Analysis Effective or Non

Effective Maintenance
Maintenance

effectiveness is
demonstrated by proactively
identifying the right work and doing it
at the right time. This in turn
eliminates chances of secondary
damage, safety and environmental
consequences and thus minimizes the
maintenance cost.
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Analysis Maintenance

Risk and Opportunity Analysis of a Maintenance

Task

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Analysis Maintenance (cont.)

Economic Analysis of a Maintenance Task

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Maintenance Performance Analysis

Performance

analysis scope :
Organization effectiveness
Organization efficiency
Organization aspects
Management aspects
Industry benchmarking

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Maintenance Assessment

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Assessment Scope

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Maintenance Audit

The maintenance audit is a review of the maintenance

function from within the overall organization taking into
account all the various functions within the
organization.
The purpose of a Maintenance Audit is to derive a
maintenance strategy, which aims to deliver
improvements to the general maintenance function,
provide clearer communications and to develop a set of
Best Practices for the maintenance function.
Maintenance Audits can prove vital to your
organization. It is very important to measure the
performance of the maintenance function whether you
have an existing Maintenance strategy or not.
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Maintenance Audit (cont.)

Maintenance Audits can prove vital to your organization. It
is very important to measure the performance of the
maintenance function whether you have an existing
Maintenance strategy or not.
A dysfunctional maintenance function can adversely affect
the following:
Performance targets not being met due to breakdowns
Low morale of engineering personnel
Ratio of breakdown to planned maintenance very high
Over- purchasing and double-purchasing of
maintenance spares
Purchasing of incorrect maintenance spares
Unnecessary Planned Maintenance
Machinery over-maintained

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Maintenance Audit (cont.)

Maintenance audits can serve two purposes:
To measure performance of your maintenance function and
ascertain the need for a coherent maintenance strategy.
To measure performance of your maintenance function post
strategy implementation.
So what does a maintenance audit involve?
Interviews with key personnel.
Analysis of interview results.
Presentation of findings and recommendations to key management.
Such an audit enables the preparation of policy and strategy to
ensure that effective effort is directed as part of a successful
maintenance plan.

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Maintenance Plan Audit

The audit plan is essentially a work plan that documents what,
when, and how the audit will be done. It should incorporate any
changes based on pre audit contacts before being finalized.
The client and the auditee should receive the final audit plan
prior to the audit to ensure that all interested groups
understand and agree to what the auditors plan to do before
the audit begins.
The audit file for this project should be created before the audit.
Prior to the audit, this file should contain the audit plan, a
questionnaire for the interviews, a checklist for recording key
items, the letter to the auditee, the audit agenda, the pre audit
information supplied by the auditee, the auditors travel
arrangements, and any other information specific to the audit.
After the audit, notes, complete checklists, the closeout memo,
and all reports should be added to this file.

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Maintenance Plan Audit (cont.)

Other preparation :
May include preparing any special forms. Such samples must be
shipped in accordance with applicable regulations. Also, the
equipment to be used may require calibration.
A checklist should be prepared by the lead auditor based on
review of the QA Project Plan and other project documentation.
This checklist should be reviewed by the audit team and by
other appropriate individuals, such as the QA Manager, before
the audit begins.
All members of the audit team should have a clear
understanding of their individual responsibilities before the audit.
They should be aware that health and safety may be key factors
in some audits and that appropriate preparations to safeguard
the auditors health and safety should be made before visiting
the site.
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Maintenance Technical Audit

A technical audit or assessment is a systematic and

objective examination of a program or project to
determine whether environmental data collection
activities and related results comply with the projects
QA Project Plan and other planning documents, are
implemented effectively, and are suitable to achieve its
data quality goals.
Technical audits and assessments may also be used as
an investigative tool where problems may be
suspected.
A technical audit or assessment several types of
technical audits and related assessments can be used
to evaluate the effectiveness of project implementation,
as follows:
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Maintenance Technical Audit (cont.)

Readiness reviews are conducted before specific

technical activities (e.g., sample collection, field work, and
laboratory analysis) are initiated to assess whether
procedures, personnel, equipment, and facilities are ready
for environmental data to be collected according to the QA
Project Plan.
Technical systems audits (TSAs) qualitatively document
the degree to which the procedures and processes
specified in the approved QA Project Plan are being
implemented.
Surveillance is used to continuously or periodically
assess the real-time implementation of an activity or
activities to determine conformance to established
procedures and protocols.
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Maintenance Technical Audit (cont.)

Performance evaluations (PEs) quantitatively test the

ability of a measurement system to obtain acceptable
results.
Audits of data quality (ADQs) are conducted on
verified data to document the capability
of a projects data management system
(hardcopy and/or electronic) to collect,
analyze, interpret, and report data as
specified in the QA Project Plan.
Data quality assessments (DQAs) are scientific and
statistical evaluations of validated data
to determine if the data are of the right
type, quality, and quantity to support
their intended use.
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Key Performance Indicators (KPI)

What is a KPI?
KPIs track performance against established
key success factors.
KPIs are directly linked to the overall goals of the
company. Business Objectives are defined at
corporate, regional and site level.
These goals determine critical activities (Key Success
Factors that must be done well for a particular
operation to succeed.
KPIs are utilized to track or measure actual performance against
key success factors.
Key Success Factors (KSFs) only change if there is a
fundamental shift in business objectives.
Key Performance Indicators (KPIs) change as objectives are
met, or management focus shifts.
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KPI (cont.)
Objectives

Improve personnels understanding of KPIs and

what they indicate.

Improve personnels awareness of maintenance

performance.
47

KPI (cont.)

Every person on-site has an influence on certain

KPIs and business objectives.
Crew

Senior Foremen

LTIFR
Incidents
Property damage ($)
Cost / unit
Cost / hour
Cost of quality
Maintenance effectiveness
Maintenance efficiency
Mean time between failure
Mean time to repair

LTIFR
Incidents
Property damage ($)
Mean time to repair

LTIFR (Lost Time Injury Frequency Rate) - a measure of overall safety

performance, and indicates the frequency of Lost Time Injuries (LTIs).
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THANK YOU
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