November 5, 2008
by Steve Gahbauer
A CMMS will help you maximize plant assets, but getting there starts with a properly defined strategy.
Photo: Stock Image
Computerized maintenance management systems (CMMS) are important contributors to asset, labour, supply chain and financial performance. Various tools optimize the maintenance function, while strategy provides the overall context and service level agreements define expectations.
David Berger, a CMMS expert and principal of Western Management Consultants in Toronto, believes the road to total maintenance performance starts with a well-defined strategy. “Performance measurement ensures you know when you’re there, various tools help you develop a trouble-free route, and service level agreements manage expectations along the way.”
He offers the following four key measures for achieving total performance:
• Asset performance. Maximize machine availability, throughput, reliability, equipment efficiency, utilization and quality of output. Go for minimum waste and minimize equipment life cycle cost.
• Labour performance. Measure use (productive versus non-value-added time and wait time); actual performance (percentage of standard versus plan); and effectiveness (percentage of contracted time, overtime and training).
• Supply chain performance. Check vendor performance, supplier pricing, obsolescence and procurement costs (rush orders, blanket purchase orders, e-procurement).
• Financial performance. Track cost per unit produced, planned versus budget versus actual cost, performance to schedule, cycle time, response time, backlog and compliance, service levels and cash conversion cycle.
A starting point for these measurements represents a balanced approach to planned maintenance that takes into account failure-, user- and condition-based machine maintenance and shop floor data collection. Through the integration of data collection devices and CMMS, condition-based maintenance captures a wealth of data, such as product (quality measures), process (feeds and speeds), environment (temperatures, pressures) and asset status (wear and downtime).
The purpose of service level agreements (SLAs) is to manage expectations, which has to be a two-way street or it won’t work. Operations has to define what it wants and maintenance has to deliver what operations needs. Clear communication is essential. Both parties must have the same interpretation and understanding of what an SLA means and how to implement and measure it.
An SLA is defined as an agreement between parties for the provision and receipt of service. It’s intended to offer a means of managing expectations and dealing with conflicts, but it’s also a tool for monitoring service effectiveness, a forum for building a good relationship between maintenance and operations and a basis for understanding the trade-off between service level and the cost of its provision.
Each party must understand and manage expectations around quality and performance standards, standard procedures, required skills and training, risk and business impact. You get what you pay for, so carefully measure the cost versus the level of service. Be realistic. Never write an SLA that exceeds realistic expectations. There’s nothing wrong with a “stretch goal” but Berger says major improvements are controlled through projects and formal project management, not through SLAs.