September 19, 2019, 10:54 pm

Using Performance Measures to Drive Maintenance and Asset Management Performance Improvement

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Element 2 - Use a Small Number of Easily-Understood Performance Measures

When it comes to Performance Measures, less is definitely more!  Many organisations are buried in performance measures, for legacy and historical reasons, but the purpose behind these performance measures and reports is often forgotten.

The only valid, productive use for Performance Measures in any organisation is to motivate action which improves organisational performance.  Performance Measures are a means to an end – they are the means by which organisational performance, through effective action, can be improved. Yet, in many organisations, the production and analysis of performance measures acts as an end in its own right.

I suggest that you try the following, simple exercise at your work place. 

First, collect all of the daily, weekly, monthly, quarterly and annual reports that are produced on a regular basis.  Include shift logs and reports, shift production reports, cost reports, schedule performance reports – any report that records or explains performance that is produced by, issued by, or received by anyone in the Maintenance function – from tradesperson all the way up to manager.  If these are electronic in format, print them out.  I bet you will be surprised by the number and size of reports that are produced.  I am prepared to bet that the resulting pile of paper will be substantial!

Finally, consider how much time and effort has gone into collecting and calculating the data for these reports.  Think about how much time and effort has gone into the considered analysis and explanation of the results contained in these reports.  And then think about how much effective action has resulted from the issue of these reports.  Simply performing this exercise frequently identifies significant opportunities to either:

  • Eliminate reports completely, or
  • Significantly reduce the size of reports

Further, the more performance reports and performance indicators you have, the greater is the risk that two or more indicators reported in different reports will contradictory each other.  This can come about either because:

  • The same performance indicator is reported in two or more reports, but the definitions of these indicators are different, or they use different data sources, or
  • Similar performance indicators are used which present the same concept in a slightly different manner.

An example of the first situation is often the case when Equipment Reliability data (Mean Time Between Failures – MTBF) is reported from both the Maintenance Management System, and from a Process Control (Production) System.  Typically, the Maintenance Management system will only record a failure event for each unplanned event for which a work order has been raised within the CMMS.  However, the Process Control system will record a failure event for ALL unplanned stoppages due to maintenance, regardless of whether a Work Order was raised or not.  The result is different reported figures for MTBF. 

As a direct consequence of this, often a significant amount of time and effort is spent in trying to reconcile the two different figures, and in attempting to “solve” the problem of different data.  All of this time or effort is distracting decision makers from the main task of actually taking appropriate corrective action, if required, to bring performance back “on track”.

An example of the second case, that often applies in capital intensive industries, is where Maintenance costs are reported against budget both on a simple cost basis, and on a unit cost ($ per unit of output).  Frequently, in capital intensive industries, a large portion of costs are fixed on a monthly basis, regardless of the total production output of the plant.  As a result, when production is above budget for any particular month (usually not as a direct result of any maintenance action), then Unit Costs are below budget.  However because some costs typically DO vary directly with production output, then often Costs (in total $ terms) will be above budget for that particular month.  So, in this case, depending on which measure is used (Total Costs, or Unit Costs), the monthly cost performance in a high production month can be interpreted as being either better than, or poorer than, budget.  And of course the reverse is true in a low production month.

Once again, in this case, considerable time and effort can be wasted debating whether performance really is good or bad – diverting attention from other, more important matters.

Element 3 – A balanced set of measures is essential

Many of you have probably heard of the balanced scorecard, and some of you may well have a balanced scorecard in place at your organisation – but specifically how does this apply to maintenance?

The concept of the Balanced Scorecard was introduced by Kaplan and Norton in the mid 1990’s.  Specifically, they consider that an effective performance reporting system should focus on performance from four key perspectives:

  • The Owner/Shareholder’s view of your business
  • The Customer’s view of your business
  • Internal Processes
  • The Learning Organisation

This all makes sense from a total business point of view, but requires some further consideration when translating this concept into something practical at lower levels within the organisation – particularly when we consider, as we will in the next Element, that different performance indicators may be appropriate for different positions, job roles, and even individuals within the organisation.

In general terms, when considering these four elements with respect to maintenance, I have found it useful to conceptualise them as follows:

  • Owner/Shareholder’s view – consider performance indicators that relate to financial performance, or exposure to risk (safety performance, for example).  These are the areas of performance that those with a financial stake in the business are most likely to be interested in.
  • Customer’s view – if we consider “Production” to be “Maintenance’s” customer (a dangerous and one-sided view, in my opinion – but that is a topic for a future paper, not one that there is enough time to consider now), then we may consider measures that “Production” may be interested, such as equipment performance, on-time delivery of service, quality of workmanship etc.
  • Internal Processes – these are measures of the performance of the internal management processes within the “Maintenance” function.  They could include measures relating to the quality of the planning process, or the success in achieving the plan, or whatever internal maintenance management process is important to you.
  • Learning Organisation – Here I would consider that the focus is on measuring how well the organisation is improving.  From experience, the most effective improvements are achieved when the business is focusing on no more than a handful of fairly specific activities – and so the measures that you would put in place here would be specific to whatever improvement activities you are attempting to progress.  For example, if you were aiming to complete a large-scale RCM implementation program, then you may measure progress towards having completed and implemented RCM analyses on all the equipment items that have been selected for analysis.  If you were in the process of implementing TPM, then you may have some measures in place that determine the extent of Operator “TLC” – Tightening, Lubricating, Cleaning, or of the extent to which a Visual Workplace has been successfully implemented.

Clearly, there are a large number of performance measures that you could select from among these categories, but, with Element 2 in mind, it is important to select only a few performance measures.  I would suggest aiming for no more than 2-3 measures under each of the four categories above.

How should you select the most appropriate measures?  First, I would recommend starting by brainstorming a selection of measures under each of the categories above, for the position or department being considered. 

Then, second, assess the measures in terms of their:

  • Relevance – is there a key link between this measure and the organisation’s overall mission/vision/goals
  • Reliability – does the suggested performance measure accurately reflect performance in the selected area?
  • Understanding – how well is the performance measure understood by those whose performance is going to be measured?
  • Availability of Data – is the data required to calculate the measure readily available, or easily obtainable?
  • Timeliness – how quickly does the measure respond to changes or improvements that may have been made?  Is the measure a “leading” or a “lagging” measure of performance?
  • Controllability – to what extent can the person or group, to whom the measure is being reported, influence performance, as reported by the measure?

Of all of these factors, this last one is the most important – and so often ignored, in practice, that it is worthy of discussion separately, as our fourth key element of an effective performance management system.

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