City of Mississauga experience provides guidance for manufacturers.
Whether you are starting from square one or looking to upgrade a current strategy, creating or improving a maintenance system can be a huge undertaking with which many asset managers struggle. Keeping costs down and increasing profitability are challenges that can be costly without a solid maintenance structure.
But it’s never too late to improve. Susan Lubell, president of the Plant Engineering and Maintenance Association of Canada (PEMAC), says a reliability and maintenance strategic plan guides continuous improvement that’s aligned with bottom line expectations for plant assets.
You can also add re-engineered reliability-centred maintenance (RCM-R) to the mix. It provides standard-based guidance for determining failure modes, and RCM-R employs quantitative reliability methods, tailoring evidence-based decision-making whenever historical failure data is available.
During a technical presentation at PEMAC’s 2017 MainTrain maintenance conference in Saskatoon, Nigel D’Souza, manager of asset and maintenance management for City of Mississauga in Ontario, noted most plants have implemented processes and tools for the collection of data to facilitate informed decision-making.
Often they will seek best practices and measures to assist in decision-making or rely on technology to guide them. However, a gap in tactical deployment affects the connection to pre-emptive or follow-up actions needed to derive true efficiency from equipment.
In his presentation, An Asset Decision Framework for Optimal Value, D’Souza, also PEMAC’s Ontario chair, reviewed processes for establishing a system of alignment and the setting of priorities setting, drawing from the techniques employed for resiliency and risk management.
City services are delivered through facilities such as recreation centres, libraries, works and maintenance yards, civic and heritage buildings, and transit terminals.
Like any manufacturing operation, a municipality is expected to balance all revenue sources with expenses, which include overhead, maintenance and capital projects for renewals and expansion. Some decisions include whether to repair equipment rather than seek capital replacement.
But business units with varying goals are rewarded differently. The planning group must have accurate project scoping and budget; the construction team is accountable for executing and completing a project within scope, time and budget; maintenance is responsible for routine checks, tune-ups and repairs, with the only unifying goal being accountability to the ratepayers and city council.
Although there is a systematic process to identify and execute work, much falls to the wayside as political desires rather than needs are satisfied.
Driving proper alignment is achieved by engaging all stakeholders – starting with the leadership – in identifying sensitivities that influence decisions. Criteria include building occupancy, service impacts, failures and regulatory requirements. Applying a risk matrix to this decision framework provides justification of recommendations. When the organization is aligned, how tactics are applied and decisions made becomes clearer.
Decision-making in a business is typically rooted in financial performance, which is what stakeholders and investors value the most. However, there is much value in cost avoidance through efficiencies and other measures, brand strength, customer loyalty or perception, and employee retention. So define what your organization is sensitive to or what would cause a business reaction. In municipal government, positive perception from the citizens and elected officials is a fundamental criteria.
Next up is determining how to measure or account for these sensitivities. The decision framework starts with organizing the asset portfolio in a manner that permits obtaining needed information. The City of Mississauga established each service area, followed by the significance of the area, the specific facility and the assets. This allowed the review of information summarized at the top level.
Some organizations are extremely data-focussed, collecting as much information as possible on everything imaginable, while others adopt a more humble approach. There is an immense difference between data and information: data is recorded, stored and monitored; information is interpreted and used to make decisions. When identifying what information to collect, determine how it will be used, and does this help to achieve goals and align with objectives?’
Data confidence has a significant impact on decision-making. Mississauga found capital prioritization relied on a static software-driven model established almost 15 years ago. Most of the considerations were either not relevant or no longer existed.
To evaluate the best option for asset investment, the city chose Net Present Value (NPV) to compare anticipated outcomes and evaluate some concise scenarios for considering options. They include repair, replacement-in-kind and replacement with new technology that considers the total life cycle cost of each option in today’s dollars. Life cycle costs are purchase/design, installation/commissioning and operational/maintenance costs.
Identifying lifetime operating and maintenance requirements are extrapolated through existing information. This includes reviewing and identifying the preventive maintenance schedule and all associated costs, including internal labour rates and materials.
Renewal costs are obtained through historical records or through verification of current budgetary pricing with service providers. Decommissioning and disposal costs are estimated with assistance from the service provider.
Establishing this framework was key to forming governance and in aligning the organization; it also provided a common baseline for interpreting information being communicated to all teams. Now the City of Mississauga has a better way of transparently identifying and prioritizing projects. Empirical data allows for better decision-making and a better understanding of the impacts of those decisions.
Steve Gahbauer is an engineer, a Toronto-based business writer and a regular contributing editor. E-mail email@example.com.
This article appeared in the November-December 2018 print issue of PLANT.