Efficient Plant February 2018 - 8

column | implementations

Know
Your R&M
Quartile
Dr. Klaus M. Blache
Univ. of Tennessee Reliability and
Maintainability Center (RMC)

R&M Percentages by Quartile
Reactive
Maintenance
Maintenance
Cost/
Replacement
Asset Value

1st

2nd

3rd

4th

9%

19%

47%

64%

2.1%

3.6%

9.2%

13.3%

Results from the Univ. of Tennessee Reliability and Maintainability
Center study indicate the high
level of maintenance expense realized by companies that operate in
the 3rd and 4th quartiles.

8

| EFFICIENTPLANTMAG.COM

"

W

HY IS IT important
to know your R&M
(reliability and maintenance) quartile?" Just like all continuous-improvement efforts, you need
to understand your current status to
establish a baseline from which to
measure progress. Let's take a look at
Reactive Maintenance Percentage and
Maintenance Cost/Replacement Asset
Value as means of understanding the
impact of quartiles. The accompanying
table shows percentages, by quartile,
for those two measurements, based on
my 2016 study of more than 140 companies representing more than 3,000
facilities (all types of industries).
Companies in the 1st quartile are at
9% reactive maintenance and operations
in the 2nd quartile are at 19%. Historical
data shows that a reactive-maintenance
event is five to ten times more expensive
than a scheduled-maintenance event. If
you are in the 2nd quartile, that means
10% of your total maintenance budget
x average cost per maintenance event x
5 = your minimum savings if you are a
1st-quartile operation. If you are in the
3rd or 4th quartile, the savings become
even more eye opening.
The Maintenance Cost/Replacement
Asset Value numbers tell the rest of
the story. I've calculated values to less
than 1% (discrete manufacturing) and
exceeding 20% (mining operations),
with most between 2% and 9%. What's
unique about this universal metric is
that it's scalable for all types and sizes
of businesses. When I go into a facility,
I observe current practices to assess
how they are actually spending their
resources. This includes such things as
in-place lean-process elements, daily
maintenance processes, material flow

practices, and problem-solving/continuous-improvement robustness. It
doesn't take long to determine whether
these processes are in place, understood,
and being applied. By doing this, I can
determine whether daily practices are
driving improvements or costs are being
cut simply to improve the metrics.
Replacement Asset Value (RAV) is a
good indicator of how effectively you are
using financial resources to maintain assets. If you are at 20% of RAV, you spend
enough on maintenance each year to pay
for a new plant every five years. At 2.1%
(1st quartile) of RAV, it would take more
than 47 years for your maintenance expenditures to equal the cost of acquiring
a new plant.
Take time to collect necessary data
so you can have an informed discussion
and make fact-based decisions. Otherwise, you are only another person with
an opinion. Also, keep in mind that
everything is related. When looking at
industry overall, note that, for each quartile, there is about a 5:1 ratio of Reactive
Maintenance to Maintenance Cost/
RAV. This ratio can vary by industry
type. However, as you get to best-practice
numbers with either of these metrics, the
top-quartile values are similar for most
types of industries.
Know your current and target quartile for these metrics. If you don't know
where you are going, you may end up
where you are headed. EP

Based in Knoxville, Klaus M. Blache
is director of the Reliability &
Maintainability Center at the Univ. of
Tennessee, and a research professor
in the College of Engineering.
Contact him at kblache@utk.edu.

FEBRUARY 2018


http://www.EFFICIENTPLANTMAG.COM

Table of Contents for the Digital Edition of Efficient Plant February 2018

Maximize CMMS, EAM Use
Tribology Program Fills Skills Gap
Caring For Bearings In Extreme Environments
Press-Brake Safeguarding Matters
Oil Systems Need To Breathe
SAP: Kicking Bad Habits
Advice For Automated Substations
Good BOMs Boost Maintenance Efficiency
Smarten Up About Rotor Analysis
Heed These Signs of Inefficiency
Implementations
IIoT
Efficiency Insight
Editorial
On The Floor
Solution Focus
Products
Showcase
Efficient Plant February 2018 - Cover1
Efficient Plant February 2018 - Cover2
Efficient Plant February 2018 - 1
Efficient Plant February 2018 - 2
Efficient Plant February 2018 - 3
Efficient Plant February 2018 - 4
Efficient Plant February 2018 - 5
Efficient Plant February 2018 - Editorial
Efficient Plant February 2018 - 7
Efficient Plant February 2018 - Implementations
Efficient Plant February 2018 - 9
Efficient Plant February 2018 - Maximize CMMS, EAM Use
Efficient Plant February 2018 - 11
Efficient Plant February 2018 - 12
Efficient Plant February 2018 - 13
Efficient Plant February 2018 - Tribology Program Fills Skills Gap
Efficient Plant February 2018 - 15
Efficient Plant February 2018 - 16
Efficient Plant February 2018 - 19
Efficient Plant February 2018 - 20
Efficient Plant February 2018 - Caring For Bearings In Extreme Environments
Efficient Plant February 2018 - 22
Efficient Plant February 2018 - 17
Efficient Plant February 2018 - 18
Efficient Plant February 2018 - 19
Efficient Plant February 2018 - 20
Efficient Plant February 2018 - Caring For Bearings In Extreme Environments
Efficient Plant February 2018 - 22
Efficient Plant February 2018 - 23
Efficient Plant February 2018 - Press-Brake Safeguarding Matters
Efficient Plant February 2018 - 25
Efficient Plant February 2018 - 26
Efficient Plant February 2018 - 27
Efficient Plant February 2018 - Oil Systems Need To Breathe
Efficient Plant February 2018 - 29
Efficient Plant February 2018 - 30
Efficient Plant February 2018 - SAP: Kicking Bad Habits
Efficient Plant February 2018 - Advice For Automated Substations
Efficient Plant February 2018 - Good BOMs Boost Maintenance Efficiency
Efficient Plant February 2018 - Smarten Up About Rotor Analysis
Efficient Plant February 2018 - Heed These Signs of Inefficiency
Efficient Plant February 2018 - On The Floor
Efficient Plant February 2018 - 37
Efficient Plant February 2018 - IIoT
Efficient Plant February 2018 - Solution Focus
Efficient Plant February 2018 - 40
Efficient Plant February 2018 - Products
Efficient Plant February 2018 - 42
Efficient Plant February 2018 - 43
Efficient Plant February 2018 - 44
Efficient Plant February 2018 - Showcase
Efficient Plant February 2018 - 46
Efficient Plant February 2018 - 47
Efficient Plant February 2018 - Efficiency Insight
Efficient Plant February 2018 - Cover3
Efficient Plant February 2018 - Cover4
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