One of the challenges of building and maintaining an effective reliability and maintenance strategy for any manufacturing organization is the task of sifting through the many proposed measures of success to come up with a KPI matrix that is relevant, easy to understand and actually drives the behaviors and performance in the right direction.
Which ones do we focus on and why? How should we respond to changes in the KPI we are measuring? Can we control both long-term trends and short-term changes in culture and behavior?
Below are some practical steps to help facilitate a discussion on the right KPIs and approach for your organization
Everyone who has worked in a complex organizational structure like that required in manufacturing knows that there is a need to constantly fight against the tendency towards thinking in silos.
Every part of the organization is serving the same corporate goals and objectives even though each part is playing a vastly different role and carries different responsibilities. It is vital that each function and department links themselves to the overarching objective of the whole.
Sometimes this global goal is expressed in terms of profitability, sometimes in terms of revenue, sometimes in terms of production. These goals are determined by the individual organization.
One example of a corporate-level KPI is the measure of how well the manufacturing facility performs in terms of meeting the planned production that is laid out for it by the business.
A simple measure for this is Production Schedule Adherence, which can be measured as:
PSA = Actual Production / Planned Production
PSA can be calculated as a percentage and should be as close to 100% as possible. The value of having a global KPI like this in every department is that it reminds everyone of the collective responsibility for overall performance.
It is the big picture that all of our own individual contributions and department goals are helping to achieve.
Once we have the big picture firmly in the minds of every department and person in the organization, we can begin to monitor the general trends that show the effectiveness of our reliability and maintenance strategies.
The KPIs that we are looking for here are ones that measure trends over a longer time frame. Although we may be able to achieve step changes in the behavior of a maintenance and production team, the effect of these changes on the overall reliability and performance of the equipment can only be measured as a trend over time.
For example, a radical improvement in the management of lubricating oils for rotating equipment can be achieved with the introduction of a new system of sampling, testing, and flushing. However, the result of this change may only be noticeable in the reduction of failures over a period of weeks and months.
There are many KPIs that enable us to monitor the long-term trends in reliability and maintenance performance. These KPIs help us to determine if all the little day to day adjustments and changes are actually having the desired effect over time.
One of the main KPIs used in this category is called Mean Time Between Failure. MTBF is the average length of operating time between failures for a specific piece of equipment or component.
MTBF = average time between failures
If our maintenance and reliability strategies are effective and are solving the problems that cause failures in our equipment, this should show a continuous upward trend, which stabilizes at industry benchmark levels.
Another major trend indicator is the financial KPI of Maintenance Cost per unit Production.
MPU = dollars spent on maintenance / production achieved
MPU is a simple ratio which can be measured against benchmarks for each specific industry. A trend upwards in this ratio indicates that there is a problem in the maintenance and reliability performance, while a trend downwards indicates a positive trajectory.
However, it is possible to mask this indicator by cutting back on maintenance expenses in the short term only to incur major costs later when equipment starts to fail.
The last type of KPI that should be considered when building a reliability and maintenance program and measuring the performance is a KPI that measures immediate impact.
These KPIs can be used to directly influence the culture of an organization and direct action can often be taken in response to these indicators. Once these short-term indicators are under control, the long-term trends should move in the right direction too.
If this doesn’t happen, then the short-term KPIs should be reviewed to ensure that the right actions and behaviors are being measured and controlled and changes should be made as necessary.
A key short-term KPI is the measure of compliance with the maintenance plan – Maintenance Schedule Compliance:
MSC = Completed Work / Planned work
MSC can be calculated as a percentage and should be as close to 100% as possible. Major deviations in this KPI indicate that there are significant factors preventing the maintenance organization from functioning efficiently.
This could be due to things like breakdowns in equipment or a lack of availability of spares to execute the planned work. All of these factors can be immediately actioned in order to resolve the problem.
Investigations into the causes of failures can help prevent breakdowns. Reviews of the bill of materials for maintenance tasks can improve the planning data.
Another short-term KPI is the measure of completion of preventative maintenance tasks – Preventative Maintenance Schedule Compliance:
PMSC = Completed PM tasks / Planned PM tasks
PMSC can also be calculated as a percentage and should be as close to 100% as possible. As long the preventative maintenance tasks are properly defined and are truly beneficial to ensure that equipment does not fail prematurely, then the completion of these tasks as per the plan will cause the long-term reliability trends to show improvement.
An organization that insists on the completion of these day-to-day routines will, therefore, drive the overall performance upwards and will see the impact on the long-term trends and the achievement of the big picture KPIs.
It is important as a reliability and maintenance professional to focus daily attention on the short-term KPIs in order to drive the behavior and cultural change that is needed in an organization.
Monitoring the long-term trends will show whether these daily activities are having the desired effect on the performance and highlight where some tweaking is required.
Keeping an eye on the big picture will help to ensure that everyone is on the same page, knowing that the collective effort of every individual and department is leading to the achievement of the corporate business goals and performance.
Phil Kendon has an undergraduate degree in engineering along with a masters in vocational practice. He has ten years manufacturing experience in the Oil and Gas sector along with ten years experience with non profits.
Phil lives on the idyllic paradise island of Mauritius with his wife Leigh and 3 children Timothy, Hannah and Luke. Here he pursues his work with non profits as well as his passion for writing.