December 17, 2018, 11:43 pm

Using Performance Measures to Drive Maintenance and Asset Management Performance Improvement

Article Index

Element 4 – Performance Measures are most powerful in the hands of those who can influence the outcomes

Let’s take our substantial pile of reports that we talked about earlier, and perform one further analysis step.  For each of the reports in the pile, identify who receives the report, and for each individual receiving the report, consider the extent to which the actions and decisions of the individual receiving the report will influence the results of the reported data.  Frequently, you will find that the individual has very little capability to influence the outcomes.  In this situation, providing this data cannot motivate the individual to action.

Frequently, I visit operations where a range of data is reported to shopfloor personnel.  This frequently includes high level Performance Indicators, such as costs/tonne etc.  The question that I ask is, in any large organisation, such as an alumina refinery, or a large minesite, what is the capability of an individual tradesperson to significantly influence the cost/tonne of the entire operation.  The answer is, almost none.  So reporting this information to shopfloor personnel does not influence the decisions and actions of that individual.  It does not motivate him to reduce costs, simply because there are too many other things, which are outside his span of influence, which will have a far greater effect on the outcome of this measure.  If we wish to use performance measures to motivate people to make effective decisions, then we must, instead, focus on selecting performance measures for which they can influence the outcome.

Another example is the reporting of Overall Equipment Effectiveness (OEE).  Kodak makes a difference between Overall Equipment Effectiveness (which is a measure of the "effective" utilisation of equipment within its scheduled runtime) and Total Effectiveness Equipment Performance (TEEP), which is a measure of the "effective" utilisation of equipment assuming continuous 24 hour/day, 365 day/year operation. Drawing this distinction can be very useful, as Maintenance and Operational personnel often have little control over the scheduled runtime of equipment (these often being determined by such factors as overall market demand, and senior management capital allocation decisions), and so OEE is a more effective measure at this level. On the other hand, senior management should be concerned more with total return on assets employed, and so TEEP is a more effective measure at this level.

This leads us to the realisation that the performance measures that should be reported will be different at different levels within the organisation, and will also, more than likely, be different for different job roles within the organisation.  It would not be hard to imagine a pyramid of performance measures that may apply.

 kpi3

Figure 1 - Hierarchy of KPIs

 

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