Maintenace Strategy PDF
Maintenace Strategy PDF
Maintenace Strategy PDF
No. 100
FORMULATION OF MAINTENANCE
STRATEGIES
Antti Salonen
2009
ABSTRACT
SAMMANFATTNING
Det finns ett stort tryck p industrin att hja sin produktivitet idag. Trots detta r den
genomsnittliga utnyttjandegraden av svenska produktionssystem cirka 60%. En av de
viktigare faktorerna fr att hja utnyttjandegraden r effektivt underhll av produktionsutrustning.
Inom processindustrin r det vanligt att betrakta underhll som en strategisk aktivitet och
en vinstdrivande faktor. Traditionell stycketillverkande tillverkningsindustri dremot,
betraktar fortfarande allt fr ofta underhllet som en ren kostnadsdrivare. Med framvxten
av nya Toyota-inspirerade produktionsstt hller dock tillverkningsindustrin p att ndra
synen p underhll till en mer strategisk tillgng. Trots detta har ndock en stor andel
tillverkningsfretag inte ngon formulerad underhllsstrategi.
Syftet med forskningen, presenterad i denna licentiatuppsats, har varit att utveckla en
arbetsprocess fr formulering av effektiva underhllsstrategier i tillverkningsindustrin.
Genom en deskriptiv och tv preskriptiva fallstudier har en arbetsprocess utvecklats. Den
deskriptiva studien pvisade ngra skillnader mellan fretag med, respektive utan
underhllsstrategier. Vidare beskrevs hur ngra olika tillverkningsfretag sg p
underhllets bidrag till fretagens strategiska mlsttningar. Den frsta preskriptiva studien
visade hur fretag genom samverkan mellan underhllsverksamhetens intressenter kan
identifiera bra strategiska nyckeltal fr uppfljning av underhllet. Denna samverkan
skapar dessutom hgre acceptans fr den formulerade underhllsstrategin. Den andra
preskriptiva studien utgjordes av utvecklingen av arbetsprocessen fr formulering av
underhllsstrategier. Processen tar sin brjan i fretagets verordnade strategier och
beaktar produktionens strategiska mlsttningar. Vidare beaktar den ett antal identifierat
viktiga faktorer och dess inverkan p fretagets underhllsverksamheter. Den utvecklade
processen har testats och verifierats i tre fretag med olika frutsttningar och utmaningar.
Alla tre fretagen kommer att anvnda den framtagna underhllsstrategin som bas fr
utvecklingen av produktionsunderhllet.
II
ACKNOWLEDGEMENTS
III
IV
PUBLICATIONS
ADDITIONAL PUBLICATIONS
Salonen, A., The Importance of Maintenance Strategies when Making Correct Sourcing
Decisions, in the 20th International Congress and Exhibition COMADEM 2007, Faro,
Portugal.
VI
TABLE OF CONTENTS
Background
Problem Statement
Objective
Research Questions
Delimitations
Expected Results
Outline of the Thesis
RESEARCH METHODOLOGY
Research approach
Research strategies
Data collection
Documents
Interviews
Direct observations
Participant observations
Literature studies
Data analysis
3
3
3
4
4
4
8
8
8
9
9
9
10
11
FRAME OF REFERENCES
13
Maintenance
Maintenance types
Maintenance concepts
Maintenance management
13
Performance measurements
Maintenance performance measurements
22
Strategy
Strategy formulation
Functional strategies
26
15
19
20
23
28
28
VII
Maintenance strategy
Formulation of maintenance strategies
29
31
32
EMPIRICAL STUDIES
33
33
36
38
39
33
33
34
35
36
36
37
38
38
38
39
39
41
41
42
47
Conclusions
47
Fulfilment of objectives
48
Research Contributions
Scientific contribution
Industrial contribution
50
50
Future work
51
50
50
REFERENCES
53
VIII
CHAPTER 1
This chapter is intended to give the reader an understanding of why this thesis has been
written, why this research is relevant, both to industry and academia. Also the chapter
presents the objectives and expected results of the conducted research.
Background
With the competitive market of today, industry is forced to continuously increase its
production efficiency. One important aspect of this is to optimize the maintenance of
production equipment. Kelly expresses optimum maintenance as the ability: ...to achieve
the agreed plant operating pattern, availability and product quality within the accepted
plant condition (for longevity) and safety standards, and at minimum resource cost.
(Kelly, 2006, p.26). However, optimum maintenance comes at a price. Bevilacqua and
Braglia (2000) state that the maintenance department costs can represent from 15% to as
much as 70% of the total production cost.
According to Ahlmann (2002), the total cost of maintenance in Sweden constitutes 6.2%
of the industrys turnover, which is close to 200 billion SEK per year. However,
Wireman (1990) means that as much as one third of the maintenance cost is unnecessarily
spent due to bad planning, overtime costs, bad use of preventive maintenance, and so on.
Ahlmann (2002) showed in a study that the mean overall operational effectiveness in
Swedish industry is about 60%. Another study showed an average Overall Equipment
Effectiveness (OEE) level of 66%, although the results showed a rather high variation
between the studied companies (Kinnander & Almstrm, 2006). Ljungberg (1998)
presents a study of 23 machinery systems that have an average OEE of 55%. A similar
study of 10 companies is presented by Ericsson (1997), indicating that only 59% of the
production time was actually used for production. Of the remaining unproductive time,
39% was used for maintenance-related activities. Failures in production systems may
cause high losses, e.g. lost production time or volume, negative impact on the
environment, lost customers, warranty payments, etc. (Todinov, 2006). This clearly
Problem Statement
Maintenance strategies are not widely used in manufacturing industry today. Moreover,
there does not seem to be any clear picture of what areas of focus/content a maintenance
strategy could or should have. This means that in many companies, there is no obvious
connection between the maintenance activities and the fulfilment of the companies
strategic goals. With this in mind, the research presented in this licentiate thesis is
focused on how to formulate maintenance strategies in manufacturing organizations
characterized by serial production of discrete-items.
Objective
The main objective of this licentiate thesis is to develop a work-process for the
formulation of effective maintenance strategies for enterprises in the manufacturing
industry.
Research Questions
In order to develop a work-process for the formulation of effective maintenance
strategies, the following research questions have been formulated.
RQ1 What components should a maintenance strategy include?
Within current literature there is a wide variety of descriptions of what components a
maintenance strategy should include. There is probably no general definition that suits
every company; rather, various sets of strategic components that suits different kinds of
enterprises.
RQ2 How should a maintenance strategy that supports the companys over-all
business strategy be developed?
Many authors conclude that a maintenance strategy must support the business strategy.
For example, Javidan (1998) means that the aim of functional strategies is to ensure the
implementation of business strategies. Jonsson (1997) claims that if the maintenance
strategy is related to corporate and production strategies, it will act as a coordinating and
integrating mechanism.
RQ3 How may acceptance for a maintenance strategy among its stakeholders be
gained?
For a maintenance strategy to be successful, it has to be accepted by all stakeholders
within the organization. Management must allow the appropriate funds to be spent on
realizing the intended strategy. Also, maintenance personnel must accept the strategy in
order to change their work methods in a desired way. Therefore, it is interesting to
ascertain how acceptance and support for the maintenance strategy can be achieved
among all stakeholders.
Delimitations
The research presented in this thesis was performed in manufacturing organizations, with
serial production of discrete items, either by various types of machining and/or through
assembly operations. The focus is to study strategies for the maintenance of equipment
within the production system of these manufacturing organizations.
Expected Results
The research presented in this thesis intends to generate two kinds of results: scientific
and industrial.
The expected scientific results mainly concern how a work-process for formulation of
maintenance strategies should be structured in order to generate maintenance strategies
that contribute to the overall goals of the company.
There are two expected industrial results: a structure for maintenance strategies that
contributes to the competitiveness of the company and a feasible work-process for the
formulation of maintenance strategies The results are intended to be useful for
manufacturing companies with serial production of discrete items.
CHAPTER 2
RESEARCH METHODOLOGY
This chapter intends to present the scientific view of the author. Further, it presents the
research methodology used in the research work presented in this thesis.
The research, presented in this thesis is intended to generate results that are valid not only
for academia, but also for industry. As described by Fagerstrm (2004), the starting point
for a research process is influenced by various theoretical foundations as well as real
world problems (see Figure 1). As shown in Figure 1, the researcher moves continuously
between theoretical aspects and the real world during the research process. This
movement is essential in order to produce results that are valid both in industry and in the
scientific community.
Literature review
Theoretical prepositions
Theory
Objectives
Starting
point
Research/
Learning
Process
Research
Questions
Case
Studies
Methodological
Approach
New Scientific
knowledge
Goal
Vision
New Practical
knowledge
Real World
Collecting and analysing
Empirical data
Figure 1. Schematic view of the research process, adapted from Fagerstrm (2004).
Research approach
Research can be conducted using various methodological approaches. The method to use
depends largely on the researchers views regarding knowledge and the nature of the
research questions at hand. Lantz (1993) gives a brief overview of the differences
between the positivistic and the hermeneutic view.
The positivistic view is usually associated with natural science. It aims for the universally
applicable explanations. The ontological view of reality is objective. This leads the
positivists to have an epistemological view that true knowledge is achievable.
In the hermeneutical view, more related to social science, explanations depend on time,
culture, and individuals. Therefore, the ontological view of reality is subjective. The
epistemological view among hermeneutics is that there is no true knowledge.
The performed research deals with companies in different contexts regarding culture,
size, competition, and the like. Since these contexts differ from each other and vary over
time, the author tends to apply a more hermeneutic view rather than a positivistic view.
Arbnor and Bjerke (1994) distinguish between three different methodological
approaches:
The analytical approach presumes that reality is objective. The aim to explain
causal relations on isolated phenomena.
The systems approach presumes that the reality is objectively achievable. The
aim to find final relations in complex systems in which a component can not be
treated as isolated.
The research performed focuses on a complex, context-dependent system in which not all
relations are causal. The system is dependent on various driving forces, internal and
external. Therefore, a systems approach has been applied for the research.
Arbnor and Bjerke (1994) define two methods for developing knowledge. Induction is a
method where the researcher forms common laws from isolated cases. Deduction, on the
other hand, aims to predict an isolated event based on common laws. The systems
approach is mostly associated with induction since it is not as dependent on theories as
the analytical approach. A combination of induction and deduction has been used in the
research performed.
Research strategies
There are different research strategies described in literature. Yin (1994) gives the
following examples: Case studies, Experiments, Surveys, Histories, and Archival
analysis. According to Yin (1994), each strategy has its advantages and disadvantages,
which depend on: (a) the type of research question, (b) the investigators control over
actual behavioural events, and (c) the focus on contemporary as opposed to historical
phenomena. As a guideline, Yin (1994) proposes the following approach:
Experiments are best suited for how and why questions, focusing on
contemporary events in controlled environments.
Surveys are adequate for who, what, where, how many, and how
much questions focusing on contemporary events.
Archival analysis is suitable for who, what, where, how many, and
how much questions for both contemporary and historic events.
History is best suited for how and why questions, focusing on historic
events.
Case studies are suitable for how and why questions, focusing on
contemporary events.
However, Yin (1994) points out that what questions of exploratory nature may be
studied with any of the mentioned strategies. Also, Yin (1994) means that case studies
have a distinct advantage when attempting to answer how or why questions about
contemporary events, over which the investigator has little or no control. These
descriptions fit the research questions of this thesis very well; therefore, case studies have
been the chosen strategy.
Data collection
Yin (1994) presents six data sources for case studies: documents, archival records,
interviews, direct observation, participant-observation, and physical artefacts. The
empirical data collected in the case studies and presented in this thesis has been collected
through documents, interviews, direct observations and participant observations. A state
of the art-study has also been performed.
Documents
Yin (1994) finds that documents play an explicit role in any case study. When using
documents in research, it is of importance to verify that the documents used are relevant
to aspects of revisions, dates, and the like, and that they describe the reality of the
intended phenomena. In the research performed, different documents such as
maintenance strategies, OEE-charts, maintenance organisation charts, and others have
been studied. Relevant documents provide reliable data on the formal structures and real
outcomes of the system.
Interviews
According to Yin (1994), interviews are one of the most important data sources when
conducting case studies. When studying a system that depends on human opinions and
their resulting decisions, interviews of key people within the model is a valuable data
base. Lantz (1993) finds that there are four major types of interviews: the structured; the
semi-structured; the directed open; and the open interview. The first two forms are more
suitable for collecting objective data (and are therefore associated with positivistic
views). The latter two are more related to subjective data, and are therefore associated
with the hermeneutic view. The performed interviews have mainly been directed open,
but semi-structured questions do occur. For the most part, the respondents have been
maintenance managers, productions managers, and maintenance technicians.
Direct observations
Observations may be conducted casual or formal (Yin, 1994). According to Merriam
(1988), Kidder (1981) claims that for observations to be scientific, the following criteria
have to be fulfilled: (a) fulfilling a scientific aim, (b) planned, (c) systematically
registered, and (d) controlled with respect to validity and reliability. By observing the
studied system, the researcher may verify or dismiss data obtained through other sources
(for example, interviews and documents). The direct observations have mainly been
performed by observing the status of the workshops at the studied companies. Also, when
possible, observations of maintenance-related meetings have been observed regarding
perceived culture within the maintenance staff and management. Notes have been taken
during and after each visit to the case companies.
Participant observations
In the later stages of this research, participant observations have been performed by the
author and researcher. A proposed method for the formulation of maintenance strategies
has been tested in the participating companies. This test has been conducted with the
researcher participating in a project group in each company. The project groups have
formulated and evaluated a maintenance strategy based on the researchers previous
findings during the early case studies. By participating, the researcher has become a part
of the studied system, which provides data otherwise hard to obtain (Yin, 1994).
Literature studies
In order to obtain a picture of the state of the art within the chosen research area, a
literature study has been performed. The topics of the literature include maintenance
management, maintenance strategies, and general management and strategy theories. The
studied literature sources have been books and academic papers published in conference
proceedings and journals.
Data analysis
In order to draw conclusions from the collected data, it has to be analyzed. There are
many approaches for this described in literature. The following have been used in the
research described in this thesis.
Pattern-matching logic is one of the better analysis methods for case studies (Yin, 1994).
This technique is essentially about comparing empirically observed patterns with
predicted ones.
To search for the probable, is another method for analysis (Merriam, 1994). This is an
intuitive approach in which the researcher focuses on the conclusions that seem plausible
and logical.
Clustering is a method in which the researcher groups similar data in specific categories
(Merriam, 1994). An understanding of a phenomenon is developed, first by grouping and
later by conceptualizing things that show similar patterns or characteristics.
All techniques mentioned for data analysis are to some extent dependent on the preunderstanding of the researcher. The author of this thesis has 12 years of experience
working with production maintenance and maintenance development.
Basic means
Literature,
Analysis
Empirical data,
Analysis
Assumption,
Experience,
Synthesis
Empirical data,
Analysis
Stages
Research Clarification
Descriptive study 1
Outcomes
Initial reference model
Initial impact model
Initial criteria
Research plan
Reference model
Success criteria
Measurable criteria
Prescriptive study
Impact model
Support
Support evaluation
Initial evaluation plan
Descriptive study 2
Evaluation plan
Application evaluation
Success evaluation
Figure 2: Design research methodology (DRM) framework: stages, basic means, and
outcomes (Blessing & Chakrabati, 2007).
In relation to Blessing and Chakrabatis (2007) proposed model for the design research
process, described in Figure 2, the performed case studies and research questions may be
mapped as shown in Figure 3.
To clarify the scope of the performed research, a literature review has been performed. It
establishes how different authors define maintenance strategy and what components such
a strategy should contain.
10
Research
clarification
Descriptive
study 1
Prescriptive
study
Descriptive
study 2
RQ1 What
components should a
maintenance strategy
include?
Review
Case A
Case C
---
Case A
Review
Case C
---
Review
Case A
Case B
---
Internal validity refers to the logical connections between a study and the
existing theories within the field.
External validity describes the extent to which the obtained results may be
applied outside the research area.
11
For the systems approach, Arbnor and Bjerke (1994) find that definitions do not have to
concur with existing theories or be operational. It is more important that they are
perceived as substantial and correct by the researcher as well as other participants in the
real system.
To strengthen the validity of the research, observation notes were taken during visits to
the production and maintenance departments of the companies. Also, documentation
relating to maintenance strategies and maintenance sourcing was collected and used in
the analysis. The use of various methods for data collection makes it possible to
triangulate, thereby strengthening the internal validity of the research (Merriam, 1994). A
pattern matching logic was used in order to analyze the collected data. Matching an
empirically-based pattern with a predicted one may further strengthen the validity of the
findings (Yin, 1994). Also, searching for the probable was used for analysis of the
collected data. This approach is of course influenced by the experiences of the researcher;
however this does not necessarily have to be of a negative nature. In case study A,
clustering was used for analyzing the interviews. The combination of these methods
further strengthens the validity of the performed research.
Reliability refers to the repeatability with which a study measures the intended
phenomena. The systems approach is not very quantitatively oriented; hence, the
measurements are not very precise (Arbnor and Bjerke, 1994). Therefore, reliability may
be hard to estimate when applying a systems perspective. However, given that the same
questionnaire was used with the same respondents, it is plausible that similar results
would be achieved.
12
CHAPTER 3
FRAME OF REFERENCES
This chapter presents the theoretical frame of references on which this thesis rests. As a
starting point for the research, a literature review was conducted. Mainly, maintenancerelated literature was studied. Literature on strategy in general was also examined and
theories relating to functional strategies and formulation of such strategies as well.
In addition to relevant books, scientific articles were also reviewed in the study. The
articles were found through searches on the Internet, mainly by using the Mlardalen
University library database collections. The search engine, primarily used for this study,
was ELIN@mlardalen which simultaneously searches several databases 1. Finally, some
articles were found in proceedings from conferences attended by the author.
Maintenance
Swedish standard, SS-EN 13306, defines the term maintenance as a Combination of all
technical, administrative and managerial actions during the life cycle of an item intended
to retain it in, or restore it to, a state in which it can perform the required function.
Industrial maintenance supports the production process in which input, in form of
material and manpower, for example, is transformed into output (i.e. finished products)
(Gits, 1994). Maintenance is a secondary process that contributes to the achievement of
production (see Figure 4).
ABI/Inform, ACS, Blackwell Synergy, EBSCO, Emerald, IEEE Xplore, JSTOR, MUSE, Oxford University
Press, Sage Premier, Science Direct, Springer LINK, Wiley Interscience
13
Primary
production
input
Production
Potential
production
capacity
Primary
production
output
Maintenance
demand
Maintenance
14
Maintenance types
A common overview of maintenance types and their relations is illustrated in the standard
SS-EN 13306 (see Figure 5).
Before a detected fault
Preventive
Maintenance
Condition based
Maintenance
Scheduled,
continuous, or
on request
Maintenance
Corrective
Maintenance
Predetermined
Maintenance
Scheduled
Deferred
Immediate
Maintenance costs
15
Starr (1997) means that corrective maintenance is only suited for non-critical areas with
low capital costs, slight consequences of failures, no safety risk, the quick identification
of failures, and fast repairs.
Preventive maintenance
One definition of Preventive maintenance is: Maintenance carried out at predetermined
intervals or according to prescribed criteria and intended to reduce the probability of
failure or the degradation of the functioning of an item. (SS-EN 13306, 2001, p.14).
Another, similar definition is given by Wireman (1990, p.98), who defines preventive
maintenance as ...any planned maintenance activity that is designed to improve
equipment life and avoid any unplanned maintenance activity.
According to Wireman (1990), the following types of preventive maintenance may serve
as a progressive method of implementing a comprehensive preventive maintenance
program:
16
Increased automation
Just-in-time manufacturing
Cell dependencies
For starting a preventive maintenance program, Wireman (1990) proposes the following
steps:
1.
2.
3.
4.
5.
Also, Wireman states that No preventive maintenance program will be truly successful
without strong support from upper management of the plant or facility. (Wireman, 1990,
p.102)
17
Condition
Good
Audible noise:
P-F Interval 1-4 weeks
P
P1
P2
Heat (by touch):
P-F Interval 1-5 days
P3
P4
Functional
failure
Poor
Time
Figure 6: The potential failure to failure curve of a ball bearing (Moubray, 1997).
18
Maintenance concepts
In order to increase the effectiveness of maintenance and to focus the maintenance
activities various concepts have been developed, e.g. Reliability centered maintenance
(RCM), Total Productive Maintenance (TPM), Tero technology, Lean maintenance, and
Value Driven Maintenance (VDM). Below, the ideas behind RCM and TPM, (the two
most common of these concepts) are briefly described.
RCM
Reliability Centered Maintenance, (RCM), is a maintenance concept developed in the
aviation industry. Moubray defines RCM as a process used to determine what must be
done to ensure that any physical asset continues to do what its user want it to do in its
present operating context (Moubray, 1997, p.7). RCM is applied by asking seven basic
questions about the asset or system reviewed:
What are the functions and associated performance standards of the asset in its
present operating context?
TPM
Total Productive Maintenance, TPM, is a Japanese concept for maintenance, developed
from the American concept Preventive Maintenance. According to Nakajima (1988),
TPM may be defined as productive maintenance involving total participation
(Nakajima, 1988, p.10). Further, Nakajima gives five elements for the TPM definition:
1.
2.
TPM establishes a thorough system of PM for the equipments entire life span.
3.
4.
TPM involves every single employee, from top management to workers on the
floor.
5.
19
Maintenance management
Kelly gives the following generic expression for the maintenance objective: ...to achieve
the agreed plant operating pattern, availability and product quality within the accepted
plant condition (for longevity) and safety standards, and at minimum resource cost.
(Kelly, 2006, p.26)
Crespo Marquez and Gupta (2006) claim that maintenance management must align with
business activities at strategic, tactical, and operational levels (see Figure 7).
Strategic level
Unscheduled
Corrective
Scheduled
Preventive
Systematic:
Inspection
Replacement
Lubrication
Condition
based
Support to
other
departments
WORK ORDERS
Work
Requirements
planning and
scheduling
Long term
planning:
Maintenance
assessment
Tactical level
W.O. Completion
Work order
execution policy
Historic records
Expert systems
Knowledge basis
Management info.
20
Coetzee (1999) proposes another model for explaining the inner processes of a typical
maintenance system (see Figure 8).
Policy
Procedures
Objectives
Business plan
Management planning
Maintenance
plan
Long term
strategic
management
Short term
operational
management
Maintenance
operations
Operational
information
Maintenance
history
Management Measurement
Maintenance audit
Performance measurement
21
Performance measurements
Neely et al. (1995) give the three following definitions, relating to performance
measurements:
Wisner and Fawcett (1991) point out the following properties for performance criteria in
order to be capable of guiding a company into realizing its strategic objectives. They
have to be; flexible, easy to implement, timely, clearly defined at all management levels,
and derived from the firms strategic objectives. According to Wisner and Fawcett
(1991), apart from traditional financial measures, an effective performance measurement
system should contain tactical performance criteria in order to be able to assess the firms
current level of competitiveness. A set of performance criteria, consistent with its
particular characteristics and strategic objectives should be developed in each functional
area. Wisner and Fawcett (1991) suggest the following method for developing effective
performance measurement systems:
1.
2.
Identify the firms strategic objectives using the mission statement as a guide
(profitability, market share, quality, cost, flexibility, dependability and
innovation).
3.
4.
5.
6.
7.
8.
22
9.
2.
The role the organizations stakeholders play as the organization pursues its
primary objectives which defines a second level of objectives which we will
call secondary objectives,
3.
4.
It is an exception rather than the norm that the maintenance organization uses a
structured process to identify measures of its performance. Management is
typically not aware of the part the measurement system can play in achieving the
vertical alignment of goals and horizontal integration of activities across
organizational units.
The performance measures are primarily used for operational control purposes.
The commonly used measures are financial indicators such as operational and
maintenance (O&M) costs, and equipment-based or process-oriented measures
such as equipment availability, labour productivity, and the number of incidents
caused by in-service failures.
23
Kutucuoglu et al. (2001) have identified the following key design features for a
qualitative performance measurement system for maintenance:
Employee involvement.
Cross-functional structure.
Alsyouf (2006) points out that the maintenance actions affect not only the maintenance
department itself but also other parts of the organization. Therefore, Alsyouf (2006)
argues, there is a need for a holistic performance measurement system that can:
Examples of measures
There is a huge amount of maintenance-related performance measures described in
literature. The following are intended to be used for benchmarking within European
industry (EFNMS, 2002):
24
25
Strategy
Mintzberg et al. (1999) state that there is no single definition for the term strategy.
However, they choose to use the following definition in their book: A strategy is the
pattern or plan that integrates an organizations major goals, policies and action
sequences into a cohesive whole. A well-formulated strategy helps to marshal and
allocate an organizations resources into a unique and viable posture based on its
relative internal competencies and shortcomings, anticipated changes in the environment
and contingent moves by intelligent opponents. (Mintzberg et al. 1999, p.5).
Mintzberg et al. (1999) describe four basic dimensions of formal strategies:
1.
2.
Effective strategies develop around a few key concepts and thrusts, which give
them cohesion, balance and focus.
3.
Strategy deals not only with the unpredictable but also with the unknowable.
4.
Further, Mintzberg et al. (1999) present the following criteria for effective strategies:
Concentration
Flexibility
Surprise
Security
Hill (2000) defines four levels of strategy present within a firms context and its
environment:
26
Porter (2004) states that competitive strategy is a combination of the goals for which the
firm is striving and the means by which it tries to get there (see Figure 9).
Product line
Finance and
control
Research and
development
Target markets
GOALS
Definition of
how the
business is
going to
compete
Marketing
Objectives for
profitability
growth, market
share, social
responsiveness,
etc.
Purchasing
Sales
Distribution
Manufacturing
Labor
27
Strategy formulation
When formulating a competitive strategy, Porter (2004) finds that four key factors have
to be considered:
1.
2.
3.
4.
The first two factors are internal to the company, while the latter two are external.
Atkinson (1998) argues that the stakeholders of an organization have two characteristics.
They affect the ability of an organization to achieve its objectives, and they also require
something in return for helping the organization to achieve its objectives.
By strategic planning exercises, organization planners may evaluate the efficacy of
alternative strategies (Atkinson, 1998). Each tested strategy will have its own set of costs
and benefits. The organization planner chooses the strategic plan that seems best among
those that are tested and meet the organizations primary objectives.
Functional strategies
As examples of functional strategies, Bowman (1998) mentions marketing strategies,
manufacturing strategies, and finance strategies. Bowman (1998) means that business
strategies are implemented through appropriate functional strategies. In other words, the
functional strategies have to be derived from the business strategy.
A set of formal and informal contracts can be set up between the organization and its
stakeholders from the chosen strategic plan (Atkinson, 1998). These contracts specify the
exchange between the organization and its stakeholders needed to fulfil the primary
objectives of the organization. The exchanges between the organization and the
stakeholders (other than its owners) are the organizations secondary objectives. The
importance of the secondary objectives depends on their perceived impact on the primary
objectives. Atkinson (1998) points out that the secondary objectives are important since
they are the variables used by the employees to promote success. The secondary
objectives act as drivers for the fulfilment of performance goals for the primary
objectives.
Atkinson (1998) suggests that secondary objectives should be considered on several
levels. As an example, the first level of secondary objectives might be customer
satisfaction, employee satisfaction, supplier satisfaction, or community satisfaction. Since
28
any measure for these objectives is too aggregate to manage, they might be decomposed
on a second level (for example, product quality, customer turnover, or order cycle time).
Maintenance strategy
Maintenance strategy is not well-defined in literature. Some authors define it as the
choice between corrective, preventive and condition based maintenance. Others, like
Gallimore and Penlesky (1988) argue that maintenance strategy is formulated through the
combination of (1) reactive maintenance, (2) regularly scheduled preventative
maintenance, (3) inspection, (4) backup equipment, and (5) equipment upgrades. The mix
of these elements is specific to each facility, the nature of the facility or equipment to be
maintained depending on the goals of the maintenance, and the work environment.
Swanson (2001) distinguishes between three different types of maintenance strategies;
Reactive (CM), Proactive (PM and PdM), and Aggressive (TPM).
Based on a model by Visser (1998), Tsang identifies four strategic dimensions of
maintenance (Tsang, 2002):
Organization of the maintenance function and the way maintenance tasks are
structured.
Crespo Marquez and Gupta (2006) state that maintenance strategies are a means to
transform business priorities into maintenance priorities. By addressing current or
potential gaps in maintenance performance, a generic maintenance plan will be
developed.
Maintenance strategies are needed because plant and building performance influences
quality, costs, and customer needs, and thereby has a direct input to the bottom line.
(Wilson, 1999, p.i)
Jonsson (1997) points out the importance of goals and strategies to develop a
maintenance management framework. These goals and strategies should support the
corporate strategy and business drivers considered critical success factors by the
company. Maintenance strategies co-ordinate and integrate when related to corporate and
production strategies and maintenance knowledge. Further management and personnel
should support them. The fact that many companies have no clear goals for their
maintenance activities is serious, since goals and strategies are the driving forces for
increasing the maintenance effectiveness (Jonsson, 1997).
29
Wilson (1999) stresses that it is of primary importance that the maintenance objectives
and strategy align with the business goals. As such, they should reflect:
What the customers need in terms of the business targets for plant performance,
quality, production demands, cost savings, and so on.
What the functions capabilities, and the people involved, aspire to. Can they
deliver?
What changes the maintenance function must make and how quickly they can be
implemented.
Maintenance capacity
Maintenance facilities
Maintenance technology
Vertical integration
Maintenance organization
Human resources
Maintenance modifications
30
In their paper, Pinjala et al. (2006) show indications of a relationship between business
and maintenance strategies.
Production objective
Maintenance
objective
Failure characteristics
Safety requirements
Maintenance
control
Life plans
Longevity requirements
asset aquisition policy
The strategic
thought process
Personnel
policy
Plant structure
Administrative
structure
Stores
policy
Preventive
schedule
Work
Planning system
Production
requirements
Workload
Resource
structure
Budget forecast
Plant layout
Unions
Contract labor availability
31
Maintenance resources
(men, spares, tools,
inf ormation)
Maintenance
objective
32
CHAPTER 4
EMPIRICAL STUDIES
This chapter presents the conducted case studies on which this thesis is based. Each case
is described in terms of objectives, methodologies, findings, and conclusions.
Methodology
The case study was performed as an embedded, single case design (Yin, 1994). It
involved six companies, selected to get a broad diversity in company size as well as
maintenance excellence. The study was conducted through semi-structured interviews
with people responsible for maintenance at each company. The interviews, each taking
between one and two hours, were conducted in secluded environments at the companies,
and between one and three respondents were interviewed at each company. The questions
were divided into domains relating to maintenance organization, maintenance strategy,
management and control of maintenance, and sourcing of maintenance.
33
To strengthen the validity of the study, observation notes were taken during visits to the
companies production and maintenance departments. Also, documentation relating to
maintenance strategies and maintenance sourcing was collected and used in the analysis.
Findings
The findings from this case were diverse. One major finding involved which factors the
respondents considered to be strategically important for their maintenance activities.
Another finding was how the perceived status of the maintenance activities coincided
with the use of strategies and performance measures in the participating companies.
Strategic factors
In total, 16 factors were identified by the respondents in the interviews. Of these, seven
were considered important by all six respondents (see Table 1).
Table 1: Factors, considered strategically important (Appended Paper II).
Company
Factor
Sourcing
A
X
B
X
C
X
D
X
E
X
F
X
Concepts
Technology level
Maintenance organization
Control/Information systems
Policies
Financial considerations
Workforce size
Workforce availability
Technological skills
Organizational availability
Focus areas
X
X
Measurements
Communication
Usage of strategies
Four of the companies (A, B, C, and D) had no maintenance strategy, nor did they use
relevant measures for controlling their maintenance. Even though companies B, C, and D
34
were using maintenance performance measures, the measures were not evidently tied to
any strategic goals of the company. In companies A and B, production managers with
scarce knowledge of maintenance managed the maintenance. At these companies, the
maintenance is at a low level and not developing. In company D, with outsourced
maintenance, the maintenance supplier has no manager on site. There is no evidence of
development for the maintenance activities here either.
Companies E and F have both been awarded for their maintenance excellence. They use
written maintenance strategies well-aligned with the overall goals of the companies. In
the case of company F, they let their maintenance supplier formulate the maintenance
strategy, but through a dialog with the customer. Both companies use performance
measures for control on strategic as well as tactical and operational levels. In both
companies, the maintenance standard is continuously increases because of strategic
development programs.
35
The strategy should be well-aligned with the overall business strategy of the
company, as well as with the strategic goals of the production department.
Maintenance managers should have time, not only to manage the maintenance
department but also to develop it.
Methodology
Case study B is based on qualitative data, collected through document studies and
interviews. The scope of the document studies and the interviews was to find out which
maintenance performance indicators were used by the company and, further, which
measures might be interesting for the various stakeholders to follow. The interviews
contained question areas like the respondents insight into what is being measured today,
how they are measured and followed up, suggestions on additional indicators to measure,
and examples and suggestions on other improvement potential possible in the area of
performance indicators.
36
Findings
The study indicated that by stakeholder involvement and via company strategies and key
result areas, a set of maintenance performance measurements could be suggested for use
in the company (see Table 2).
Table 2: Maintenance-related measures at the case company, presented in no order
of importance. CM is an abbreviation for corrective maintenance, while PM is
preventive maintenance, and M(PM) is Mean Preventive Maintenance Time (from
Paper III).
Hierarchical
Efficiency
Criteria
Maintenance
Strategic Tactical
Ratio
between CM
and PM (%)
Number of
performed
PM versus
planned
Ratio
between
CM and PM
Number of
performed
PM versus
planned
Maintenance
cost per
component
(SEK/comp.)
Production
Operational/
Functional
Strategic
Ratio between
CM and PM (%)
Number of performed
PM versus planned
Number of
performed PM
versus planned
Expected
maintenancerelated costs
(SEK)
Tactical
Expected
maintenance-related
costs (SEK)
Spare part costs
(SEK)
Effectiveness
Number of
breakdowns
Availability
(%)
Number of
Number of
breakdowns breakdowns
Number of
breakdowns
Number of
breakdowns
MTTR (h)
MTTR (h)
M(PM) (h)
MTTR (h)
Availability
(%)
Availability (%)
OEE (%)
Availability (%)
OEE (%)
MDT (h)
Number of operation
disturbances
MTBF (h)
Machine and
equipment vibration
levels
37
OEE (%)
Methodology
The study was performed as action research over a period of six months. During this
period, the three case companies worked together, with the researcher acting as a
participating observer. The companies adopted a work-process for strategy formulation
suggested by the researcher. All the participants discussed different steps in the
formulation process in workshops. After each workshop, the discussed steps of the
process were tested in the company settings. The next workshop always started by
assessing the different companies experiences of the performed steps.
38
Findings
The study led to a process for the formulation of maintenance strategies feasible for
manufacturing enterprises. All three participating companies provided input to the
shaping of the process. Still, the resulting model seemed to work for all three companies.
39
40
CHAPTER 5
Implementation
Aim
Goal
Components
Responsibilities
Etcetera
Tactical/Operational level
Aim
Action plan
Organization - roles
Contracts
Etcetera
Overall
business
strategy
Production
strategy
Evaluation
Control
KPI
Benchmarking
Audit
Etcetera
Aim
Measures
Knowledge feedback
Re-use of
experiences
Etcetera
Figure 12: The strategic maintenance development loop (Appended Paper IV).
41
The research presented in this thesis has focused on the left part of the model in Figure
12. This part describes the formulation of maintenance strategies based on the current
situation. The right part of the model is concerned with the implementation of the
formulated maintenance strategy, which constitutes the practical development of the
maintenance standards.
Company
vision and
mission
Companys
strategic goals
Strategic
goals of
maintenance
Strategic
performance
indicators
Overall
Gap-analysis
S.W.O.T.
Strategic
development
plan
Maintenance
strategy
42
department has to be competitive in terms of cost effectiveness. These goals reflect the
efficiency of the maintenance department.
For the strategic goals, relevant performance measures may be identified. The measures
should of course reflect the strategic goals of the maintenance department. One way to
identify these measures is to involve all stakeholders. This approach will also increase the
acceptance of the strategy among the stakeholders.
COMPANY
Mission
Vision
Goals
MAINTENANCE
PRODUCTION
Goals that affect
maintenance
Goals, relating to
production
Goals, relating to
management
Reliability
Ef f ectiveness
Ef f iciency
Measures of
effectiveness
Measures of
efficiency
Figure 14: The relationship between goals and measures, used by the maintenance
and production departments, and the companys overall goals (adapted from
Appended Paper III).
The measures used by the company have to be well-defined. Some common maintenance
performance measures are very loosely defined. Examples include OEE and Availability.
Therefore, to avoid misinterpretations, the use of different definitions at different
departments, or drifting definitions, the definitions have to be clarified. Also data sources,
data collection methods, and responsibilities may be defined in a strategy formulation.
Once the measures are defined, the current status of the measures may be defined.
Table 3 illustrates the matrix used in case study B to identify and categorize performance
measures for the maintenance activities. While authors like Parida (2006), Alsyouf
(2006), and Kutucuoglu et al. (2001) suggest multiple criteria for the measurement
system, this model uses only two: Efficiency and Effectiveness. Further, in the matrix,
measures are categorized as Strategic, Tactical, and Operational.
43
Maintenance
Strategic
Criteria
Tactical
Production
Operational/
Functional
Strategic
Tactical
Operational/
Functional
Efficiency
Effectiveness
By defining the gap between the current and the desired level for the strategic measures, a
sense of direction is achieved. Next, the organization has to identify which factors that
may potentially minimize the gap between current and desired levels. In the proposed
process, this is achieved through SWOT-analysis 2. Which factors to consider strategically
important for the production maintenance may vary between companies according to
size, branch etc. For this purpose, a set of factors has been identified during case study A.
The factors have further been categorized according to man, technology, and
organization, MTO 3, see figure 15.
Man
Technology
Competence
Information systems
Sourcing
Specialists
Maintenance technology
Organization
Material resources
Work force
Maintenance policies
Work hours
Maintenance concepts
Culture
Organization
44
Once the SWOT is performed, a set of strategic factors for the maintenance activities is
identified. Now a maintenance strategy may be formulated. A proposed structure of such
a document is specified below:
Strategic alignment
Man
Technology
Organization
When the maintenance strategy is formulated, the document should be approved by the
Board of the company. This is essential, as the strategic plan may include investments
and other costs. In addition, the strategy may require production time to be set off for
planned maintenance activities.
45
46
CHAPTER 6
This chapter presents the overall conclusions drawn from the research presented in this
thesis. Later, the contribution and fulfilment of the research goals are discussed. Finally,
some future research topics are proposed.
Conclusions
The main objective with this research is to suggest a work-process for the formulation of
maintenance strategies for manufacturing organizations. To achieve this, a literature
review has been performed in order to set the theoretical framework for the performed
research. Further, one descriptive case study and two prescriptive case studies have been
performed to further investigate both how industry currently works with maintenance
strategies, and how they may work with a structured process for formulating their
maintenance strategies.
The literature review showed the current academic view on maintenance strategy. The
most important conclusion was that the term maintenance strategy lacks a unanimous
definition among researchers. Another conclusion from the literature review was that
there are few proposed processes for the formulation of maintenance strategies. Also, in
the cases where formulation processes are suggested, they are quite complex and resource
demanding, indicating that the processes are mainly developed for large organizations.
Case A explored some companies views on maintenance and maintenance strategies.
Among the authors conclusions was the sense that there seems to be a lack of
competence in maintenance management among smaller organizations. Further, there
seems to be a consensus among the studied companies as to which factors they consider
strategically important for their maintenance operations. For companies that want their
47
Maintenance managers should have time, not only to manage the maintenance
department but also to develop it.
Case B was performed in order to test stakeholder involvement in the process of the
identification of relevant maintenance performance measures. The main conclusion from
the study was that the involvement of the stakeholders increased their enthusiasm for the
agenda of the maintenance department. Another important conclusion was that
stakeholder involvement may lead to a consensus among the stakeholders on the expected
deliveries from the maintenance department to its customer (the production department).
Case C was a joint effort with three manufacturing companies working together with the
researcher in their efforts to formulate maintenance strategies. In case C, a possible
process for the formulation of maintenance strategies has been tested in three industrial
settings with their respective contextual demands. The three case companies have had
quite varying preconditions to deal with the proposed work-process. For example, one of
the companies has to negotiate all their proposed changes with an external maintenance
organization. Another company has to consider the varying situations at five factories
with individual needs and capabilities. Despite these different demands, all companies
have confirmed that the model fit their needs. However, the formulated strategies are not
yet implemented and hence not tested.
Fulfilment of objectives
As stated in Section 1.3, the main objective with this thesis is to propose a process for the
formulation of maintenance strategies. Based on the results and conclusions from the
three case studies, a process for the formulation of maintenance strategies has been
48
proposed. The process, described in Chapter 5, has been tested in, and verified by three
manufacturing organizations.
Further, the research questions, stated in section 1.4, have been answered.
RQ1 What should a maintenance strategy include?
The question is based on the fact that there is no unanimous view in academia regarding
which factors to consider when developing a maintenance strategy. From case studies A
and C, the conclusion was drawn that the factors to consider when developing a
maintenance strategy are context-dependent. Different companies need to consider
different factors depending on the companys size, competitive environment, product
types, among other things. Having a standard set of factors to choose from probably
makes it easier to consider the proper factors for a given organization. A first, basic
version of such a set has been identified through the performed research (also, see Figure
15).
RQ2 How should a maintenance strategy that supports the companys over-all
business strategy be developed?
The question has been answered through both the literature study and the case studies.
First and foremost, a company has to consider its overall strategy when formulating a
maintenance strategy. Second, the strategic goals of the company have to be translated to
strategic goals for the maintenance department. These goals must be related to both
effectiveness and efficiency. Finally, the strategic goals of the production department
have to be identified in order to determine the effectiveness goals of the maintenance
department,.
RQ3 How may acceptance for a maintenance strategy among its stakeholders be
gained?
The answer to this question is derived from all parts of the performed research. One key
factor for the acceptance of maintenance strategies in general is the insight that
maintenance may contribute to the competitiveness of a manufacturing organization.
Another factor, which relates to the first one, is that the strategic goals for the
maintenance department truly align with the overall goals of the company. To achieve
this, relevant performance measures have to be defined so that all stakeholders can
identify how the maintenance department meets their interests. One way to achieve this
may be to involve the stakeholders in the identification of maintenance performance
measures as described in case B. Also, the structure of the strategy document is
important. When requesting approval of the formulated maintenance strategy, it is
important that the stakeholders see how the suggested strategy may contribute to the
achievement of the companies overall strategic goals.
49
Research Contributions
As applied scientific research, this research is intended to contribute not only to the
scientific community, but also to industry. This section presents the main contribution to
the scientific community and to industry.
Scientific contribution
Organizational and managerial aspects of maintenance are often studied in large
organizations and/or in the process industry, and may therefore not always be applied on
small and medium-sized, discrete item manufacturing organizations. The research
presented in this licentiate thesis focuses on discrete item manufacturing companies.
Case study A has given the view of six different manufacturing companies on
maintenance from a strategic perspective. This view contributes to the understanding of
current standards for maintenance management in manufacturing industry.
Industrial contribution
The scope of this research is well-appreciated in the industry. The participating
companies, as well as other companies in the region have been very keen to contribute to
the performed research, as well as to getting information regarding the research results.
The results are intended to be useful for discrete item manufacturing companies in
general.
The research has generated a work-process for the formulation of maintenance strategies.
Three companies with different needs and capabilities have tried the work-process and
approved of it as a means to formulate feasible maintenance strategies. Although the
research focus has been on the serial production of discrete items, the results may very
well apply to the process industry. However, this has not been tested; hence, the results
should currently be considered applicable in traditional manufacturing settings alone.
50
practices. The intent was to study different challenges in different contexts, all in order to
increase the external validity.
It may be possible to criticize the fact that case study A involved only six companies,
case study B one, and case study C three. However, when gathering qualitative data
through interviews and case studies, it is difficult to include large amounts of data
sources. Nevertheless, have three different manufacturing companies with different
challenges tested and verified the work-process for the formulation of maintenance
strategies. Further, all three companies intend to use the resulting maintenance strategies
in their forthcoming maintenance development.
Future work
This thesis is the first summary of a PhD students journey towards becoming a
researcher. In the future, the following areas will be further studied.
Implementation of maintenance strategies
A maintenance strategy is of no practical use unless it is put into operational use in the
company. However, as with all forms of organizational change, there are obstacles to
overcome in order to succeed with the intentions of the changes. Studies of TPM
implementations have shown both obstacles and driving forces in the implementation
process. Similar obstacles and driving forces may be identified in the implementation of
maintenance strategies. By identifying these obstacles and driving forces, guidelines for
facilitating and maximizing the success of the implementation of maintenance strategies
may be developed.
Cost of poor maintenance
According to Alsyouf (2004), 70% of Swedish industry regards maintenance as a cost
center. One reason is that the financial impact of maintenance often is measured, by
considering only direct maintenance costs (i.e. labor and materials costs). By the
structured measuring of the indirect maintenance costs (i.e. the cost of poor maintenance)
a truer view of the financial impact of the maintenance activities may be achieved.
Finally, such a measurement may contribute to a view among management that
maintenance contributes to the competitiveness of the company.
51
52
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