After implementing an EAM or CMMS1 system, many companies are disappointed to discover that the system provides hardly any useful management information. However, if you ask the same companies what information or performance indicators they exactly need to fulfil and track their maintenance strategy, many of them cannot provide a clear answer.
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Some of the well known maintenance methodologies also fail to provide the right guidance. Total Productive Maintenance (TPM, ) proved to be successful in the automotive economy of the 60’s and 70’s, when every car built could be sold immediately. But nowadays there is significant overcapacity in the market place. Zero defects is not always the best goal to aim for anymore. Reliability-Centered Maintenance (RCM, ) showed the world how to engineer a good preventive maintenance program covering all possible risks. But if not applied in a practical way, it can easily become a ‘Resource Consuming Monster’ without bringing the performance results hoped for. So how does one decide how much effort to put into a RCM project, in order to achieve the set goals?
New trends (or hypes?), derived from World Class Manufacturing or Lean Manufacturing (), surprisingly don’t give the full answer either. Of course it sounds challenging to aim for the World Class Maintenance (WCM, or World Class Reliability, WCR) level, but this level has not yet been defined properly anywhere. In the majority of cases, qualitative statements are used like: a WCM organisation delivers consistent uptime week to week, minimises impact on production, delivers it work as planned, has ‘spot on’ budgeting, etc... Although it is very positive that this will stimulate a much more professional attitude towards the maintenance process, we still don’t know how far we are from this level and when it will ever be reached. What is the business (economic) impact of a consistent, but 3% too low equipment uptime? How much cheaper would our maintenance be if we accept a 90% weekly schedule compliance instead of aiming for 100%? Even a highly rewarded quantitative method like Six Sigma hasn’t brought breakthrough results in the Maintenance arena, mainly because maintenance data is too poor to apply these kind of statistical techniques. What about Lean Maintenance, which has been getting a lot of publicity lately due to some good results of Lean Manufacturing? Well, it must be all about eliminating waste, so distinguishing between value adding and non-value adding maintenance activities. But in contradiction to the detailed description in Lean Manufacturing of how to eliminate non-value adding production activities, in Lean Maintenance there is no definition yet which activities to eliminate and which not.
But the answer indeed is in exploring the (added) value potential. To be honest, the word value has been misused often in maintenance literatures lately. That shouldn’t be the case, because the value (potential) of maintenance has been clearly described in Value Driven Maintenance® (VDM, ), see figure 1. VDM is the first, and so far only, methodology that shows a maintenance organization how to reveal its value potential, set clear and realistic improvement targets, give focus and embed continuous value creation (or continuous improvement) in the organization. It focuses on dynamic measuring of value creation opportunities, selection of the most appropriate steps/techniques to go after the potential instead of advocating one best technique for all situations.
Being able to show the actual added value of maintenance in a business perspective has helped to put the topic of Maintenance on the agenda of the Board. But VDM is more than just a set of financial (Net Present Value) formulas or a new language to ‘impress’ the Board. It gives the modern Maintenance Manager a practical ‘Planning & Control’ framework (Plan – Do – Check – Act), the ability to prioritise between breakthrough measures and nice to have initiatives and an intuitive selection of relevant best (or just better) practices. Based on what has been achieved before in the same industry, based on validated benchmark information. So VDM makes your maintenance strategy definitely SMART.
The basics of the VDM value calculations have been described in-depth in the book ‘VDM, new faith in maintenance’ . In short, VDM shows that there are 4 relevant value drivers in maintenance, the value potential of each driver will be determined by the market dynamics and the performance gap (current performance compared to industry peers). For this, the VDM benchmarking service has been available for main industries since 2004 and the use of maintenance benchmarking information will only be accelerated by current EFNMS Benchmarking initiatives. Once you know where the biggest value potential is, attention shifts to how to realize it in an effective and efficient way.
Probably the most important model in VDM, the VDM Competence Model (see figure 2), provides a coherent control framework for maintenance decision making. This model has been translated (without modifications) to many languages and industries already, but in all cases proved to be an excellent means to communicate the current state of affairs, the biggest bottlenecks and challenges, the desired future state and the logical highlights of the improvement agenda to get there. Especially because the VDM Competence Model combines the qualitative ways of working and the quantitative metrics in one framework. This alone makes it a more powerful steering model than for example the Balance Scorecard . With the entrance to reliable maintenance benchmark data and priority setting based on economic cash flows, VDM also supports meaningful multi-year target setting.
Therefore, the planning & control framework to finally get grip on your maintenance performance is here. So are the tools! Leading EAM/CMMS software suppliers like ‘IBM MRO Software’ (Maximo), ‘Infor ’ (Datastream7i) and ‘SAP’ (SAP EAM) have already adopted the VDM framework into their management reporting modules. Users of these VDM reporting modules are able to see at a glance which indicators are in control and which ones are not and start an analysis from there to drill down to the actual (set of) EAM/CMMS work order(s) that caused the deviation. That’s true Management by Exception.
But the real benefit of a VDM implementation is not just a state of the art IT solution. It provides guidance for the maintenance organisation on why they need to improve, where they need to improve and how to improve. Not ideological, but in a way that creates tangible cash flows for the company. Not based on a ten year journey, but with realistic milestones year after year, achieving a true continuous improvement mindset. And above all: focus, focus, focus. There are no shortages of good ideas out there, but very few of the companies understand the value of having a structured implementation.
VDM will provide you the necessary insight to work on the right improvement measures in the right sequence, at the right pace. Should, for example, the VDM Audit reveal that the maintenance organisation can create the most value by focusing on the value driver Cost Control, this overall focus should be translated into specific targets for the pilot projects. Say, 10% cost reduction without jeopardizing current performance on Asset Utilisation and SHEQ Compliance. A dedicated team could undertake a focused APMC  analysis on the top-3 cost killing equipments within a few weeks lead time, proving the potential being actually there. One could refer to this technique as ‘value driven RCM’. Instead of focusing on all possible risks and all possible failure modes, you define which failure mode effects (in terms of impact on VDM value drivers and thus cash flows) you want to ‘attack’ with which level of detail. The APMC tool then will present only the non-acceptable failure modes to work on. With the simulation feature of the APMC tool the team can monitor whether the new preventive maintenance plan will deliver the targeted 10% cost reduction. Usually, the team establishes that 80% of the potential benefits can be realized in 20% of the time needed from a classical RCM approach.
With the analysis done, it is relatively easy to then transfer the new plan into an Asset Based Budget [1, Chapter 8]. This is also the ideal starting point to review stock policy for the spare parts of this (pilot) equipment, because now the real criticality of the equipment component function, that you would need the spare part for, is documented.
And if the company should not focus on Cost Control but Asset Utilisation instead, the goals may be different but the toolset and techniques are the same. With proper training and coaching it is possible, even in a busy and hectic maintenance environments, to roll out the pilot approach and results to other critical equipments in the plant, making continuous improvement not only an ideology but also a proven capability of the organisation. More and more companies are starting to discover that this improvement function, often referred to as Reliability Engineering, is the true accelerator of any maintenance performance improvement.
The revised, or optimised preventive maintenance plan, must be implemented in the EAM/CMMS system. We strongly encourage tool developments like SAP-RCMO , making it possible to do and document the FMECA/RCM-analysis ‘almost’ inside the SAP EAM system, establishing a transparent link between failure modes and actual PM tasks in the system. Using the same Failure Mode codes (as derived from the FMEA analysis) in EAM/CMMS breakdown reporting gives vital feedback on the MTBF estimates used in the FMEA analysis. This actually is a big step in transferring knowledge from the heads of our people (only) into a validated knowledgebase.
Implementing a VDM based maintenance strategy often means closing the improvement loops (Plan, Do, Check, Act). The VDM Control Panel monitors the actual progress of your improvement activities and identifies new opportunities. The most problematic equipment, if properly ‘attacked’, will eventually fall from the top-N list but, as always in real-life, new problem equipments will show up. One of the powerful analysis features of the VDM Control Panel is to correlate bunches of relevant data into a logical action strategy. For example, figure 6 shows a correlation between number of failures and number of inspections per (main equipment). It shows at a glance the effectiveness of the current inspection policy. For example, the matrix quadrant ‘frequent inspection, hardly any repair from inspection of breakdown’ indicates it is worth to analyze to lower the inspection frequency or eliminate the inspection task in full. The quadrant ‘frequent breakdowns, no inspections’ obviously indicates a new equipment failure mode that hasn’t been tackled in the PM plan before. The VDM Control Panel is an excellent starting point for any focused problem solving and decision making (PSDM  or techniques like root cause analysis, 5 Why’s, etc).
So, how much value can a maintenance improvement initiative actually generate? Here are some typical examples: -
• DSM realised a sustainable 30% cost reduction by implementing gatekeeping, no change mentality, asset based budgeting, standardized work processes [see lecture of Jos Groffils, DSM, Wednesday April 9]
• DAF Trucks realized an uptime improvement of 27%, meaning 14.000 extra produced trucks yearly, by systematically reducing the lead-time of the weekly scheduled cleaning stop [see lecture of Ad Sleenhoff, DAF Trucks, April 10]
• IFF Tilburg managed to deliver the production volumes of originally 3 plants into only 2, by improved line availability of the remaining two
• Smurfit Kappa Packaging Nieuweschans improved equipment output with a 8 OEE percentage points, resulting in lower stoppages and defects, reducing maintenance costs by 25%. The cash flow result of more output at lower costs equals to a 15% improvement of the companies EBITDA.
• Cement Australia applied an MRO segmentation strategy to optimise the stock levels throughout their production plants and reduced the inventory value by 40%.
Value Driven Maintenance is a start to finish approach. It is a platform to collect, describe and exchange internal and external best practices. It delivers a full maintenance planning & control framework supported by modern tools like the EAM/CMMS VDM Control Panel. Welcome to the next generation in maintenance management…
 Nakajima, ‘Introduction to TPM’, Productivity Press, 1988
 Moubray, ‘Reliability Centered Maintenance’, Industrial Press Inc., 1997
 Liker, ‘The Toyota Way’, McGraw-Hill, 2004
 Delahay & Haarman, ‘Value Driven Maintenance, new faith in Maintenance’, Mainnovation, 2003
 Kaplan & Norton, ‘The Balance Scorecard, translating strategy into action’, 1996.
 Please visit www.kepner-tregoe.com for more information on Asset Performance Management Concept (APMC), Problem Solving & Decision Making, Lean Manufacturing and Six Sigma.
 Please visit www.rcmo.com for more info on SAP-RCMO ® a product of Meridium.