Up Time Magazine - December 2008/January 2009 - (Page 34) maintenance mgmt upload Measuring Performance The Need for Metrics Standardization by Walter Nijsen, CMRP U nderstanding how our plants perform and how well we perform in relation to others often reveals opportunities for improvement, at least in principle. The key question first raised is often, “Are we comparing apples with apples?” If not (as in many cases), the whole exercise of comparison, and to some extent, measurement, becomes somewhat (or completely) meaningless. On top of this, there is another important, and mostly forgotten, or at least not identified, reason why we should measure: “To share success, which encourages changes and improvements”. To achieve reliability excellence many changes and improvements need to be made. Some are easy, and some are more difficult, but sharing success will help drive forward these changes. Benchmarking at a facility level, company level or industry level is a part of sharing those successes. On top of that, a question that really should be answered first is, “WHY should we measure?”, along with, “WHAT should be measured and HOW?” The measures we believe are truly important are often referred to as Key Performance Indicators (KPI’s), since, apparently, as the wording implies, those contain key information on performance. But does it, and if so, what precisely is it indicating? When measuring true performance, a number of questions and preliminary steps need to be taken first: • • • • • Which KPI’s are useful at what stage? Is this a leading or a lagging indicator? What is the correct definition? How will we interpret the results? How will you benchmark KPI’s? What Should We Measure? If the “Why should we measure question?” is clear and understood, the answer to “What should we measure?” is simple. Lets focus only on the maintenance and reliability process. At the end of the day, the financial results, product quality and availability will determine your profit and losses and your business growth. So KPI’s such as, OEE, maintenance cost as a percent of replacement asset value, quality index, on time delivery, production cost per unit produced need to be in place. However, these indicators are lagging indicators, or results indicators, which give a snapshot or update for the moment, but will not tell you what the future results will be, nor if these results are sustainable. Further, many persons or processes can influence these KPI’s. For example, maintenance cost is influenced by many things, e.g., amount of unplanned breakdowns, amount of pro-active work executed, quality of the executed work, efficiency of the executed work, etc. Therefore, it is important to also implement KPI’s, which tell you something about your potential performance in the future, or so-called leading or process indicators. These indicators are typically used to measure the process improvements that bring us to our new goals. The leading indicators should show us the direction of future results, or in other words, the leading indica- Why Should We Measure? Joseph Juran famously said, “If you don’t measure it, you can’t manage it.” Ron Moore said, “Your measurements should expose your weaknesses – those are your improvement opportunities.” When asking this question to several persons in an organization, you will typically get different answers. An operational leader or business leader could answer: “to measure our profit and losses, or to understand if we are achieving our goals”. A reliability improvement leader could answer: “to identify opportunities for improvement, or to measure the improvement progress”. Both answers are correct and make sense, depending on your role and interests, because you want to measure and trend the results or the improvements at your facility. “To compare and benchmark between industries or within the company” is also an expected answer. 34 december/january 2009
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