A HEALTHY aggregate industry is essential for economic growth of any country today. 80% to 90% of asphalt pavement and concrete driveways and sidewalks are comprised of aggregate materials. The aggregate industry is currently facing many challenges, including elevated transportation and energy costs, a depressed construction market, and a reduction in government spending for public construction projects. Add to this the fact that the top ten U.S.-owned aggregate companies only make up 30% of the overall market share and it is easy to understand why business leaders are in survival mode.

This article highlights how an aggregate business took charge of its own destiny and excelled through a programme called Operational Reliability. In two years, it increased its margins more than 5% by driving down operating costs through targeted maintenance and reliability programmes and implementing strategies to raise plant availability and enhance productivity. During a period of time when aggregate prices were plummeting by +40%, this company grew its business. At a time when its competitors were selling out and curtailing, this company became more profitable and did so without tying up additional precious capital resources.

We will refer to this aggregate company as “The Mine”. The Mine is a large, multimillion-dollar operation and million- ton plus a year producer of stone and sand products. The Mine is not constrained by raw material resources as it currently sits on top of a large limestone reserve nestled within a harsh and remote environment.

Strategic Alignment of Operational Reliability

Operational Reliability is a strategic part of The Mine’s business plan. The Mine set out to reduce operating costs and increase plant availability to above 90%. The focus of the reliability and maintenance improvement efforts was to first establish a mature work execution management process by which the maintenance organization could efficiently manage plant assets without relying on supplemental contract labour. Next, The Mine would turn its attention towards eliminating “bad actors” that were contributing to downtime within the primary and secondary crushing plants. At the onset of the initiative, The Mine suffered from more than 30% downtime, which proved to be an opportunity worth in excess of $10M USD.

Culturally, the initiative was to be a significant challenge for The Mine. Leadership knew that, despite their unified vision, supervision and hourly employees would be expected to change their day-to-day practices and habits and this would be difficult to overcome. Most employees of The Mine were seasoned aggregate veterans who had no doubt proven their abilities through the school of hard knocks. Change would not come easily to those who did not see a real need for that change.

The Improvement Process

The timeline for the improvement process was three years. In the first year, The Mine applied its energy and resources towards building the foundational elements necessary for effective maintenance and reliability management. As a first step, The Mine performed a thorough evaluation of plant assets, beginning with the development of asset hierarchies and a formal criticality analysis at both the system and asset level. From here, both the Maintenance Manager and Assistant Plant Manager led focus teams through RCM Blitz® - an approach to designing and implementing a failure modes driven reliability strategy, returning results in a fraction of the time of traditional RCM methods - in order to identify the failure modes associated with critical assets and prioritize Preventive and Predictive Maintenance (PM/PdM) programme development. The Mine selected and deployed five condition-monitoring technologies: vibration analysis, electrical and mechanical infrared thermography, ultrasound, motor circuit analysis, and oil analysis.

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During the fourth quarter of year one, and into year two, The Mine targeted the work execution management process by implementing a Computerized Maintenance Management System (CMMS) and developing formal business processes, which today govern how work is identified, approved and prioritized, planned and scheduled, and executed in the field. Initially, The Mine created a single Planner position to support all of the maintenance craft persons responsible for keeping the plant running. This proved to be a challenge as the newly defined PM tasks were scheduled and implemented due to the enormous increase in proactive corrective work that needed to be planned and coordinated. Today, because of its success, The Mine has added a dedicated maintenance Scheduler and a second Planner/Scheduler to continually improve the organization’s ability to improve craft labour utilization and reduce contract labour costs.

In its third year of the programme, The Mine steered improvement efforts towards reliability engineering and optimizing MRO (Maintenance, Repair, and Operating supplies) inventories.

Although a formal kitting and staging process was implemented early on, The Mine was not properly staffed to manage the demand for parts coming from a maturing, proactive work execution management process. Additionally, The Mine did not have a firm grasp on the types and volumes of spares that needed to be maintained in the warehouse. This effort is ongoing with the recent addition of two Storeroom Clerks and a focused effort to begin compiling equipment bills of materials.

To enable a dedicated reliability engineering programme to take hold, The Mine separated the role of Maintenance Manager and Reliability Manager. Once the Maintenance Manager’s position was filled, the Reliability Manager transitioned away from facilitating the work management process and centred his attention on resolving problems impacting primary and secondary crushing plant availability. Through weekly reviews of plant Overall Equipment Effectiveness (OEE) and bad actor reports generated by the CMMS, the Reliability Manager continues to facilitate root cause analysis and works hand-in-hand with the Maintenance Manager and Plant Manager to identify economical solutions to repetitive problems.

To address the culture change challenges, The Mine created three sponsors and aligned its improvement efforts with a project charter. Throughout the three-year journey, the Reliability Manager served as the champion for Operational Reliability. His dedication to the programme did not waiver since he remained consistently engaged in all aspects of the programme’s development, often taking the lead to analyze asset criticality or develop PM procedures. No job was too big or small for him to actively participate in the improvement process. The Plant Manager has served as the primary sponsor for Operational Reliability, clarifying expectations as the needs of the business changed, removing roadblocks, such as resource issues, to ensure that the programme did not stall, and monitoring performance of the project to verify that solutions developed under the watchful eye of both the Assistant Plant Manager and the Reliability Manager were indeed benefiting the organization and maintaining alignment with the overall goal of driving plant availability above 90%.

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Results

Today, the biggest result that is recognizable throughout The Mine is advancement in cultural maturity. Maintainers and Operators are more aware of their actions and how they might impact plant performance. Supervisors have institutionalized behaviours within the new work execution management process in order to ensure a focus on proactive maintenance vs. reactive maintenance. Leadership has also matured. With their sights set on maintaining visibility of a 4-6 week maintenance backlog and being keenly aware of changes in Overall Equipment Effectiveness (OEE), plant management is leading, not just sponsoring, the Operational Reliability programme.

Did the initiative deliver on the business case? It absolutely did, and then some. By the end of the second year, The Mine had recognized over a 5% increase in operating margin and was sustaining a plant availability of 86%, up 12% from the previous year. Maintenance costs were down more than 10 cents per ton, and tons per man-hour improved from the low thirties into the forties. Sure, there are still some touch-and-go moments when the plant is not performing as desired, but the organization as a whole is capable and confident in its ability to manage these anomalies before the bottom line is unrecoverable. By mid-way through year three, The Mine had increased headcount by three, as discussed, but was able to sustain the maintenance cost savings by continuing to reduce contract labour costs. Plant availability also continues to improve.

The future of The Mine looks bright. The corporation has approved additional full-time equivalent headcount increases, which is a triumph in itself, due to the success of the Operational Reliability programme. These resources will continue to enable The Mine’s reliability efforts and aid in its ability to shed nearly $2M USD worth of contract labour costs over the next three years. As for plant availability, the Plant Manager continues to set expectations for 95%. With local projects starting to emerge for The Mine, the additional capacity that will be delivered through the Operational Reliability programme will be a victory celebrated by The Mine and its parent corporation.

About the Author: Shon Isenhour, Allied Reliability Group, Principal Consultant

Shon is a Certified Maintenance and Reliability Professional (CMRP), a Past National Chairman of the board for the Society for Maintenance and Reliability Professionals (SMRP), a board member for the Global Forum on Maintenance and Asset Management (GFMAM), and a Vice President of Membership for the Midlands Chapter of the American Society of Training and Development (ASTD). He has experience helping companies implement maintenance, reliability, and leadership best practices in over 20 countries through both consulting and education. Shon is also the author of the blog at www.ReliabilityNow.com, where you can find many more topics and tips for improving your reliability and maintenance.

New Publisher for the MaintWorld Magazine

THE FINNISH Maintenance Society Promaint has outsourced the publishing responsibility of the MaintWorld magazine to Omnipress Oy, one of the major publishing corporations in Finland.

MaintWorld is one of the most professional magazines in Europe specializing in maintenance and physical asset management issues. It is distributed all over the maintenance related community globally. It has also been the mouthpiece for the organization of the European Federation of the National Maintenance Societies (EFNMS) and its National Maintenance Society (NMS) members, located in 22 European countries. The target is that each member of the National Maintenance Societies should receive his own copy of the magazine and hereby get the latest news about maintenance and asset management.

Omnipress is part of Suomen Lehtiyhtymä Oy, which is one of the major Finnish publishing corporations, founded in 1871.

Omnipress is responsible for 17 regularly published customer and stakeholder magazines. The professional media house expertise and resources of Omnipress will ensure that both MaintWorld magazine and its web services will meet the challenges of the future.

Promaint will still be the owner of the trademark of MaintWorld and all the old cooperation activities, which have been valid between MaintWorld and EFNMS, as well as the National Maintenance Societies, will continue as previously. Omnipress will, as in the past, publish four yearly issues of the Maint- World magazines.

The staff of MaintWorld continues as old employees with Omnipress. Editor-in-Chief is Martti Hakonen, who has been successfully, for several years, also the responsible editorin- chief for the Finnish maintenance Magazine Promaint.

During the last years MaintWorld has been growing steadily and now is a good time to take the next development step. To succeed, a magazine like MaintWorld, needs a professional editorial staff, professional copywriters, art directors, marketing staff and financial stability. I strongly believe that MaintWorld magazine is in good professional hands with Omnipress.

In addition, being a Pan-European professional maintenance magazine, MaintWorld will continue to develop strongly gaining new numbers of writers, readers and subsribers among the European National Maintenance Society members, but our challenge is also to tempt all the maintenance professionals globally to become family members of MaintWorld.

For further information: Göran Westerholm, President, The Finnish Maintenance Society - Promaint goran.westerholm@kunnossapito.fi Mobile +358 (0) 400 876 096