Case Study: Bringing It All Together
It can be difficult to move from benchmarking data to an
understanding of which "Best Practices" need to be strengthened. It
is just as difficult to select a focused set of "tracking"
performance measures that will concisely reflect whether progress
is being made. In a "real-life" benchmark analysis conducted
recently by Jones, a coauthor, a plant moved through the
benchmarking process, to strategic planning, then to reassessment of
its ongoing performance measures. What follows is a summary of that
A chemical plant in the Northeastern United States had recently been
through a detailed benchmark analysis—not just for the plant, but
for its seven business units as well. The comparison data was
collected for each of the units as well as for the total site. As
you might expect, the units shared a number of practices that needed
improvement. However, since each business unit was unique, their
respective strategic plans were all somewhat different.
The units' dilema: Do we all have to have separate measurement
systems as well as separate strategic plans? At that stage, a
site-wide network of unit representatives met to discuss and design
the performance measures. They emerged with a set of measures that
met the following design criteria:
• Measures are balanced: business and functional measures
• Measures are simple and credible
• Minimal additional measures. The plant already had 40 measures.
• Utilize capabilities of the Computerized Maintenance Management
The performance measures they selected are simple, practical, and
available. More importantly, they are well-aligned with the
practices they wanted to improve and strengthen. They now measure:
In the belief that the business impact of the maintenance function
is tied to equipment reliability and maintenance costs, the plant
measures and plots the following on two separate charts (the uptime
is plotted separately; the others on a single chart):
• Total cost of manufacturing
• Total maintenance cost
• Total product shipped (pounds, gallons, etc.)
• Unit "uptime"—a specific calculation of total equipment output
Planning and Scheduling:
• Planned hours worked/Total hours (%)
• Scheduled work compliance (%)
• Percent planned work by contractors
• Goals for percent planned and schedule compliance These are
measured and plotted on a single chart.
Preventive/Predictive Maintenance (PM):
• PM hours/Total hours (%)
• Overdue PM's (%)
• Goal PM hours (%)
• Mean time between non-PM work orders (Days)
• Labor/Material ratio
• Goals for both
• Overtime (%), as well as degree of fluctuation
Overtime is plotted separately. The others are plotted on a single
• Inventory/Replacement Investment ($) (%) » Inventory turnover
• Goals for each
These are plotted on a single chart.
• OSHA injury rate
The data are plotted monthly as a composite of all contractors. In
addition, each contractor's separate data are tracked, and a monthly
"Rogues Gallery" is posted prominently in the plant. This practice
has proven to deliver immediate results.
As a plant continues to execute its strategic plans, it has a simple
practical set of measures that constantly provide feedback on the
effectiveness of changes.
The goals of growing a garden and operating a business are the
same—to produce a profitable yield within specifications on
schedule at lowest cost. Maintenance and weeding the garden are
means to the end of getting results—not an end to themselves.
Maintenance is moving from being more than a "dirty" word,
liability, necessary evil, and fixed cost perception in business. To
support its rightful place as an executive-level function,
maintenance will require transformations at operational and
Performance management will require information for timely,
accurate, and profitable support and decisions. Performance measures
and benchmarking will provide the numbers to quantify performance
gaps, progress toward goals, and the degree of overall business
For balance of this article, click on the below link:
Lean Manufacturing Articles and go to Series 01
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