Upload
mark-cundiff
View
506
Download
1
Tags:
Embed Size (px)
DESCRIPTION
Citation preview
For the executive with plant productivity problemsWhy outsourcing maintenance changes the game
Magnus Pousette, Oct 21, 2011
Wouldn’t it be nice …
To make one single decision, which would cause massive change and put your safety, productivity and costs on top levels for years to come?
Have maintenance costs go from highly fluctuating to a fixed declining cost for years to come.
To improve your entire plants' culture
To have peace of mind, knowing that that the maintenance and reliability is provided by motivated first-class expertise having practices developed and optimized by relying on latest international knowledge.
To be able to focus on the most important aspects of your business: product development, production and marketing.
The reality is …
Maintenance is an unavoidable expense, but the amount spent varies depending on the environment and operating strategy
Maintenance costs are one of those rare production expenses a business can decisively influence
The return on maintenance investments are often uncertain and often not used effectively to improve productivity in the business
Most businesses don't even know where their biggest losses are in productivity and are loosing millions due to it
Most companies are wasting millions of dollars in energy costs
Many maintenance organizations have a poor track record in safety as firefighting and safety mindset is not very compatible
Most businesses don't even know their current situation in maintenance management and how they perform compared to leading businesses in their field
Big decisions and changes scare people. However in every aspect of your business, speed of implementation will determine how successful you are. If you lack a blueprint to success, don't expect much to happen! ?
Quiz Question
Do you have objective data showing how your maintenance department is performing compared to others in your industry?
a) Absolutely!
b) Some, but not adequate
c) No
d) Don’t know
?
The media says …
The U.S. has permanently lost its manufacturing competitiveness in many sectors to China and other countries. Manufacturing may never return to its linchpin of the U.S. economy and manufacturing capabilities could erode past the point of no return.
In March 2010 it was reported that nearly 70 percent of Chinese manufacturers had begun to upgrade purchasing and purchasing quality (up from 56% in 2008), 69 percent have taken steps to modernize manufacturing process technology (up from 64 %) and 62 percent (up from 47 %) were realigning their manufacturing footprint.
Top executives report that there are next to no problems recruiting manufacturing talent in China, one of six however report that they have problems doing so in North America.
U.S. manufacturing is still declining after years of offshoring and neglect and they are saying the output may fall by half, meeting less than 40 percent of the nation's demand. 5 out of 12 million jobs are at risk ?
Quiz Question
Are all your plants rapidly implementing plans that will increase your competitiveness to top levels in all critical areas?
a) Absolutely!
b) Some, but not adequate
c) No
d) Don’t know
?
Your pain is ours …
The foundation of ABB is power and automation. Without a strong North American manufacturing base, investments in power and automation will be limited.
This is what ABB can do for you …
ABB can help you understand how you are performing compared to the leading businesses in your field
ABB Full Service ® means a fixed price on your maintenance budget and we will even sign up for a year by year price reduction!
What about plant reliability? ABB Full Service ® is a true partnership where ABB’s profit is dependent on improving your plant’s productivity!
ABB also help you reduce your energy costs!
Together we will change the culture
Your control of the situation will increase. ABB ensures that information and the right data is available so you can see into the future and make better decisions
ABB Full Service ® proactively manage the risks involved from the very first day through a process tested at 100's of plants
We have helped many organization secure the long-term viability of their plants, by cutting costs and increasing reliability. Now we want to help you.
© ABB Group April 8, 2023 | Ver. 1.1 Slide 9
ABB Full Service®
What does this mean?
Maintenance Manager
© ABBMarch 11, | Slide 10
ABB takes full responsibility for your maintenance cost and plant performance
ABB Full Service® Typical Outsourcing Contract
ABB profits improve only as benefits are delivered
Sub-Contractor profits increase with customer cost increase
Long Term commitment and sharing of risks
Transactional with limitedsharing of risks
ABB commits to total maintenance costs and Plant Performance Improvement
Sub-Contractor commits to rates and resources only
Our business case is based on maintenance best practice
Not primarily concerned with driving good maintenance practices
People are valued individuals People are a commodity
Pay-for-performance attracts skilled, engaged trades people
Flat pay rate attracts low-skilled, unengaged trades people
Dedicated and motivated service team executing maintenance strategy
Service persons executing tasks as directed
Comprehensive life cycle focus from the installation and commissioning
Maintenance focus is action based and reactive
Maintenance value increases Maintenance value decreases
Lab
or
Co
stsM
aterials C
osts
Su
b-
Co
ntracto
r C
osts
G&A
Scope of Maintenance Services under the typical ABB Full Service® Agreement
© ABB Group April 8, 2023 | Ver. 1.1 Slide 11
Aren’t there a lot of risks?ABB’s implementation process has been proven 100’s of times
• Understand the Customer
• Present business concept
• Buy in from the organizations
• Complete Confidentiality Agreement
• Decide upon Feasibility Study
• Prepare the Feasibility Study
• Perform on-site assessment
• Analyze improvement potential
• Present Feasibility Study results and ABB Proposal (Improvement potentials ($))
• Establish Partnership Development team
• Build the solid foundation
• Finalize the Business case
• Develop Maintenance Management Master Plan (MMMP)
• Develop mobilization and communication plan
• Resolve legal issues
• Develop leadership for the launch.
• Build the unit organization, plan the functions and facilities.
• Develop and execute communication and support processes.
• Engage subcontractors and material suppliers.
• Prepare MMMP implementation
• Partnership Fulfillment
• Reliability Maintenance
• Maintenance Operations
• Plant Performance Improvement
• Leadership & Strategy
• HSE & Quality
• People Management
• Finance & Cost
• Materials & Contractors
• Information
ABB Full Service -ProcessPartnership
developmentFeasibilityScreening Mobilization Execution
Regional sales Project mgr Project mgr Start-up mgr Site mgr
Agree onFeasibility Study
Sign Letter of Intent (LOI)
Sign Maintenance Alliance Agreement
Take over responsibility
Renew the agreement
© ABB Group April 8, 2023 | Ver. 1.1 Slide 12
Reference SitesPulp & Paper
Amcor Packaging – Botany, Australia
Aracruz, Brazil
Carter Holt Harvey (CHH) – Kinleith, New Zealand
Carter Holt Harvey (CHH) – Tasman, New Zealand
Corenso United LTD Oy, Finland
Georgia Pacific, Finland
Huhtamäki, Finland
Myllykoski Paper Oy, Finland
Puhos Board, Finland
SAPPI Fine Papers North America, USA
Stora Enso (Efora), Finland 6 mills
Heinola, Imatra, Oulu, Uimaharju, Varkaus and Kemi Mills
Stora Enso Packaging (2), Finland
Stora Enso Packaging, Latvia
Stora Enso – Skutskär, Sweden
Uniboard – Moncure, USA
© ABB Group April 8, 2023 | Ver. 1.1 Slide 13
Reference SitesMetals
Boliden Harjavalta Oy, Finland
DMS Powders, South Africa
Norilsk Nickel Oy, Finland
Outokumpu – Degerfors, Sweden
Outokumpu Stainless TubularProducts – Jakobstad, Finland
Outokumpu Stainless Tubular Products AB – Torshälla, Sweden
Ovako Wire – Koverhar, Finland
Severstallat, Latvia
Wise Alloys, USA
© ABB Group April 8, 2023 | Ver. 1.1 Slide 14
Reference SitesMinerals & Mining
Anglo American / Xtrata, Chile
Codelco Chile División Andina, Chile
Codelco Chile División Codelco Norte – Calama, Chile (2)
Codelco Chile División El Teniente – Rancagua, Chile (2)
CSR Viridian – Alexandria, Australia
CSR Viridian – Dandenong, Australia
CSR Viridian – Ingleburn, Australia
Kunda Nordic Cement, Estonia
LODE, Latvia
maxit Estonia AS, Estonia
NordKalk Oyj – Tytyri, Finland
Voisey Bay Nickel Company, Canada
© ABB Group April 8, 2023 | Ver. 1.1 Slide 15
Reference SitesOil, Gas & Petrochemicals
Compania MEGA – Loma La Lata, Argentina
DOW EDN, Brazil
Exxon Mobil, Pan-European
SARPI SPA, Algeria
Shell Icolub, Brazil
Snam Rete Gas, Italy
© ABB Group April 8, 2023 | Ver. 1.1 Slide 16
Reference SitesDiscrete Manufacturing
ABB Electrical Machines, Italy
ABB Electrical Machines Factory, Estonia
ABB Electrical Machines Ltd, China
ABB Machines & ABB Control, Sweden
ABB Motor Factory, Poland
ABB MV Power Products, Italy
ABB Oy Bu Drives, Finland
ABB Oy Machines, Finland
ABB Power Products, Sweden
ABB Power Products (Plast), Sweden
Incap, Finland
Lindström, Estonia
Nokia, Hungary
Nokia, Finland
Philips Lighting, Brazil
Ruukki, Sweden
Sogefi Filtration S.p.A, Italy
Spiro Development AB, Sweden
Suominen Yhtymä, Sweden
Waco, Sweden
ABB Power Systems, Sweden
ABB Power Technologies, Sweden
ABB PP Division Transformers, Spain
ABB Turbo Systems AG, Switzerland
Alstom (Schweiz) AG, Switzerland
Biohit, Finland
Cooper Tire, USA
Draka Keila Cables, Estonia
Ford, Brazil
Hägglunds Drives, Sweden
© ABB Group April 8, 2023 | Ver. 1.1 Slide 17
Reference SitesChemicals
Ab Rani Plast Oy, Finland
Canexus – Nova Lima, Brazil
Golden Jomalina Food Industries Sdn Bhd, Malaysia
Hoechst Trevira GmbH - Bobingen, Germany
PolymerLatex, UK
Solvay – Bahia Blanca, Argentina
Solvay – Santo Andre, Brazil
Sun Chemical, Denmark
Tequimar, Brazil
© ABB Group April 8, 2023 | Ver. 1.1 Slide 18
Reference SitesFood & Beverage, Utilities, Crane & Harbor
Cadbury Schweppes, Australia
Chilectra, Chile
Cloetta AB, Sweden
Fazer Suklaa, Finland
Galbani SpA (3 sites) Italy
Käppalaförbundet, Sweden
LU Suomi, Finland
Northport, Malaysia
Premier Foods, UK
Raisio Skandinavia Oy, Finland
Ravintoraisio Oy, Finland
Valio Oy (2 sites), Finland
Viking Malt, Sweden
Vamy Oy, Finland
Pori Energia Oy, Finland
© ABB Group April 8, 2023 | Ver. 1.1 Slide 19
How does ABB implement? The Site Execution Model
© ABB Group April 8, 2023 | Ver. 1.1 Slide 19
Partnership Fulfillment
Maintenance Operations
Reliability Maintenance
Plant Performance Improvement
Leadership Policy & Strategy
HSE Quality
Finance and Cost
Supply Chain InformationPeopleManagement
Results
ClientValue
ABBValue
People Value
Energy Efficiency Improvement
How does ABB change the culture?Driving Overall Equipment Effectiveness
Common OEE target!
A
P
Q
x
x
= OEE
Maintenance Operations
?
Quiz Question
Does your company measure the plants’ culture?
a) Yes
b) No
c) Don’t know?
© ABB Group April 8, 2023 | Slide 22
Global Engineering CentersReliability Basics, Mexico
© ABB Group April 8, 2023 | Slide 22
Support start-ups of new sites and boost existing sites in Reliability Basics implementation
Deliverables
Compile equipment information from the field, construction of hierarchies, BOM, Criticality Analysis, Develop PM’s, Scheduling together with plant staff, Plant personnel training
Support Feasibility studies in Reliability area
Management of Benchmarking Database and support
Reliability Line (phone and e-mail) for any reliability questions
Other Services
Hosted preventive maintenance plans management
Hosting solution for ABB CMMS (PM30) and Maximo
General management/admin of any CMMS
Started Reliability Faculty at Monterrey Technical University in San Luis Potosi
Fully operational since 2009
© ABB Group April 8, 2023 | Slide 23
Global Engineering CentersPerformance Measurement, India
Implement Equipment Performance Measurement System (cpmPlus) at Full Service sites
Deliverables
Implementation of Overall Equipment Effectiveness (OEE) and Energy Efficiency measurement systems (ABB CPM+ software and hardware)
Start up of Plant Performance Improvement process basics
Transitioning in 2011, fully operational Q1-2012
© ABB Group April 8, 2023 | Slide 23
© ABB Group April 8, 2023 | Slide 24
Global Engineering CentersEnergy Efficiency, China
© ABB Group April 8, 2023 | Slide 24
Support Full Service sites delivering the Energy Efficiency part of the value proposal
Deliverables Support Business Development with Energy Efficiency studies &
Improvement potential calculations Support existing sites with energy efficiency projects implementation
(management of the projects)
Fully operational in 2011
© ABB Group April 8, 2023 | Slide 25
ABB High Level Action PlanStrategic Goal: Improve Plant Production Output
Start-up:
Q1 2011
OEE (%): baseTMC Savings: baseTMC Run Rate:
Achievement:
H1 2011
OEE (%): base +Savings: base +TMC Budget:
• Top 10 bad actor reporting in place
• Audit PM Execution & integrate train of technicians
• RCA training, Natural Team• Optimize CMMS with work
flows & ops training• Data clean/BOM started • Centralize storerooms• Start parts delivery program• 5S Kick Off • KPI’s well understood and
OEE measurement in place• Satisfaction surveys done• Individual Training plans in
place
Achievement:
H2 2011
OEE (%): base +Savings: base +TMC Budget:
• RCA with Natural Team intensified
• SMED Implementation• P&S Certification Complete • Comprehensive Inventory
Analysis completed• Start Vendor Stocking and
Vendor Managed Inventory.• Outside Contractor reviews• Establish preferred partner
program (consolidation of vendors)
• Pchsg. Classification project
• Optimize Shift Structure• Performance Management
Plan completed for everyone w/evaluation
Goal:
2012
OEE (%): base +Savings: base +TMC Budget:
• Predictive Maintenance Optimization
• Start FMEA Dvlpmt.• Criticality updated • Cont’d CMMS development• Black Belt Projects-
Continuous Improvement• Parts ”kitting” and delivery
stabilized• Career Development and
cross training process in place (longer term)
• Supervisor Certification program
• Review ”insurance” spares and inactive inventory
• Annual and 5yr PM program in place
• Satisfaction surveys done
• KISS Safety Program• Leadership Team/Structure
in place • Key employees
identified/retained• Workforce hired• Add Planners• Add Reliability Engineers• Labor position known• MMMP/MMOP jointly
developed• P&S Certification with
Natural Team Started• PM Optimization• Supply Management
Excellence Program started• Integrate CMMS/ERP
© ABB Group April 8, 2023 | Ver. 1.1 Slide 26
Mai
nte
nan
ce H
ou
rs
Preventive Maintenance
Condition-Based Maintenance
Reactive Maintenance
… with the right set up, plants do not have to “reinvent the wheel” and learn things the hard and expensive way …
Fixed Term Replacement
What will be different?Delivering reliability
Overall result is reduced maintenance volume
A professional combination of People, Processes, and Technology can reduce maintenance volume and costs dramatically …
Typical Objective
What kind of results can be achieved?Boliden (copper smelter & refinery)Harjavalta, Finland
Baseline Year 1 Year 2 Year 3 Year 4Continuous Improvement of planned & scheduled maintenance activities over 4 years
Planned maintenance (%) 35% 41% 48% 54% 60%Scheduled maintenance (%) 55% 61% 68% 74% 80%Continuous Improvement in asset availability over 4 yearsAvailability (%) 88% 89% 89% 90% 91%Continuous Improvement in asset reliability over 4 yearsOverall Equipment Effectiveness (Availability X Rate X Quality) 88.7% 89.5% 89% 90% 93%Continuous Improvement in cost reduction over 4 yearsTotal Maintenance Costs €19.9m €21.8m €18.4m €18.5m €17.5mHow the improvements were accomplished
Carter Holt Harvey (pulp & paper mill)Tokorua, New Zealand
Baseline Year 1 Year 2 Year 3 Year 4Continuous Improvement of planned & scheduled maintenance activities over 4 years
Planned maintenance (%) None No focus 55% 65% 70%Scheduled maintenance (%) None No focus 70% 80% 85%Continuous Improvement in asset availability over 4 years
Availability (%)* 70.5% 76.4% 78.4% 84.3% 87%Continuous Improvement in asset reliability over 4 years
Overall Equipment Effectiveness (Availability X Rate X Quality)* 67.5% 71.5% 76.5% 82.1% 85%Continuous Improvement in cost reduction over 4 years
Total Maintenance Costs NZD60.6m NZD51.5m NZD50.3m NZD48.5m NZD47.9mHow the improvements were accomplished
*Includes yearly & monthly shutdowns, a total of 17 days lost production. If shutdowns are excluded,then availability and OEE are ~6% higher.
Compania MEGA (natural gas plant)Loma La Lata, Neuquen, Argentina
Baseline Year 1 Year 2 Year 3 Year 4Continuous Improvement of planned & scheduled maintenance activities over 4 years
Planned maintenance (%) 80% 84% 88% 91% 93%Scheduled maintenance (%) 80% 91% 88% 89.63% 92.73%Continuous Improvement in asset availability over 4 years
Availability (%) 99.6% 99.6% 99.6% 99.6% 99%Continuous Improvement in asset reliability over 4 years
Overall Equipment Effectiveness (Availability X Rate X Quality) 80% 92.63% 87.96% 83% 85%Continuous Improvement in cost reduction over 4 years
Total Maintenance Costs / Replacement Asset Value 2% 1.8% 1.7% 1.7% 1.6%How the improvements were accomplished
© ABB Group April 8, 2023 | Slide 28
ABB Full Service® delivers record results in NA
Celebrated a fast ramp-up and achieved 90% of rated capacity for the mine concentrator in just three months at a Greenfield site
Grew OEE to exceed 90%, reduced nearly 100 maintenance and support personnel and significantly reduced maintenance costs at a tire plant
Drove a paper mill’s paper machine from worst to first, within the company globally
Helped a metal manufacturer to exceed product shipment targets by 7% and reduce cycle times in roll changing and roll grinding by 50% within the first six months of the Full Service agreement
Broken every single record ever recorded at Aluminium rolling facility
Quiz Question
Does your company have a proven blueprint for success in maintenance and reliability?
a) Absolutely!
b) Some, but not adequate
c) No
d) Don’t know
?
© ABB Group April 8, 2023 | Slide 30
Creating Value Together – Big Picture
10%
OEE %
5 years0
10%
TMC $
5 years0
5%
Energy Efficiency %
5 years0
© ABB Group April 8, 2023 | Slide 31
Typical OEE commitment
Contractual commitment
Bonus above the curve, 80/20% of value to Customer/ABB
Established in Feasibility Study, verified and agreed in Partnership Development Phase
Value normally exceeds total maintenance budget
+10%
OEE %
5 yearsStart Up
World Class
© ABB Group April 8, 2023 | Slide 32
Typical TMC commitment
Contractual commitment
Established in Feasibility Study, verified and agreed in Partnership Development Phase
Sub-contractors normally thru ABB books
If material thru customer books, cost deducted from fixed price
+10%
TMC
5 yearsStart Up
World Class
Actual TMC to ABB
© ABB Group April 8, 2023 | Slide 33
Typical Energy Effectiveness commitment
Contractual commitment
Bonus above base-line, 50/50% of value to Customer/ABB
Drafted in Feasibility Study, projects established and agreed in Partnership Development Phase
+5%
EE
5 yearsStart Up
World Class*
* Real World Class can only be achieved with capex – this is calculated using WC benchmark minus effect of capex projects
Base-line
Yes, ABB Full Service® can do all this!
All you need to do is to take one single decision, that will cause massive change and put your safety, productivity and costs on top levels for years to come
We will partner with you and make sure that maintenance costs go from highly fluctuating to a fixed declining cost for years to come.
We will partner with you and change your entire plant’s culture.
You will get a peace of mind, knowing that that maintenance and reliability is provided by motivated first-class expertise having practices developed and optimized by relying on latest international knowledge.
You will be able to focus on the most important aspects of your business: product development, production and marketing.
Big decisions and changes are scary, but ABB Full Service® comes with a blueprint for success!
© ABB Group April 8, 2023 | Ver. 1.1 Slide 35
Next Steps: Development of a value proposition for you
Follow the ABB Full Service® Process and conduct a Feasibility Study
Perform quantitative and qualitative benchmarking analyses
Define improvement potential in Plant Performance, energy and maintenance operations
Present a firm Value Proposition and Business Case;
Identified financial improvement potential
ABB tangible proposal for next steps
ABB commitment to the partnership
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
% C
han
ge
Year 5Year 1BeforeABB
Year 2 Year 3 Year 4
Plant Performance Improvement
Energy Cost
MaintenanceCost
“We begin the process with an offer of openness and an assumption that there is
significant common ground”