01 Maintenance Organization
01 Maintenance Organization
01 Maintenance Organization
Preface
MAINTENANCE ENGINEERING AND MANAGEMENT covers topic such as maintenance
organization, maintenance strategies system, system approach to maintenance, maintenance
planning and scheduling and computerized maintenance management system (CMMS). This
course also includes knowledge regarding maintenance of facilities and equipment activities in a
good working condition and develops good management knowledge.
Editor
Dr. Choong Chee Guan
Table of Contents
CHAPTER 1: MAINTENANCE ORGANIZATION
1.1
1.2
1.3
1.4
Introduction
Role of Maintenance Organization
1.2.1 Objectives and benefits
1.2.2 Classifications
1.2.3 Types of responsibilities/roles
Maintenance Costs
1.3.1 Sources
1.3.2 Types
1.3.3 Cost analysis methods
Exercises
Maintenance
Organization
Learning Outcomes
Upon completion of this chapter, students should be able to:1. Determine the role of maintenance organization.
2. Understand types of maintenance cost.
1.1
Introduction
Organizing is the process of arranging resources (people, materials, technology etc.) together to
achieve the organizations strategies and goals. The way in which the various parts of an
organization are formally arranged is referred to as the organization structure. It is a system
involving the interaction of inputs and outputs. It is characterized by task assignments, workflow,
reporting relationships, and communication channels that link together the work of diverse
individuals and groups. Any structure must allocate tasks through a division of labor and
facilitate the coordination of the performance results.
Nevertheless, we have to admit that there is no one best structure that meets the needs of all
circumstances. Organization structures should be viewed as dynamic entities that continuously
evolve to respond to changes in technology, processes and environment, (Daft, 1989 and
Schermerhorn, 2007). Frederick W. Taylor introduced the concept of scientific management
(times study and division of labor), while Frank and Lilian Gilbreth founded the concept of
modern motion study techniques. The contributions of Taylor and the Gilbreths are considered as
the basis for modern organization management until the middle of the twentieth century
maintenance has been carried out in an unplanned reactive way and for a long time it has lagged
behind other areas of industrial management in the application of formal techniques and/or
information technology. With realization of the impact of poor maintenance on enterprises
profitability, many managers are revising the organization of maintenance and have developed
new approaches that foster effective maintenance organization.
organizations structure are presented. The issues are: capacity planning, centralization versus
decentralization and in-house versus outsourcing.
1.2.1.1 Maintenance Capacity Planning
Maintenance capacity planning determines the required resources for maintenance including the
required crafts, administration, equipment, tools and space to execute the maintenance load
efficiently and meet the objectives of the maintenance department. Critical aspects of
maintenance capacity are the numbers and skills of craftsmen required to execute the
maintenance load. It is difficult to determine the exact number of various types of craftsmen,
since the maintenance load is uncertain. Therefore accurate forecasts for the future maintenance
work demand are essential for determining the maintenance capacity. In order to have better
utilization of manpower, organizations tend to reduce the number of available craftsmen below
their expected need. This is likely to result in a backlog of uncompleted maintenance work. This
backlog can also be cleared when the maintenance load is less than the capacity. Making long
run estimations is one of the areas in maintenance capacity planning that is both critical and not
well developed in practice. Techniques for maintenance forecasting and capacity planning are
presented in a separate chapter in this handbook.
1.2.1.2 Centralization versus Decentralization
The decision to organize maintenance in a centralized, decentralized or a hybrid form depends to
a greater extent on the organization is philosophy, maintenance load, size of the plant and skills
of craftsmen. The advantages of centralization are:(i)
Provides more flexibility and improves utilization of resources such highly skilled crafts
and special equipment and therefore results in more efficiency;
(ii)
Allows more efficient line supervision;
(iii) Allows more effective on the job training; and
(iv)
Permits the purchasing of modern equipment.
However it has the following disadvantages:(i)
Less utilization of crafts since more time is required for getting to and from jobs;
(ii)
Supervision of crafts becomes more difficult and as such less maintenance control is
achieved;
(iii) Less specialization on complex hardware is achieved since different persons work on the
same hardware; and
(iv)
More costs of transportation are incurred due to remoteness of some of the maintenance
work.
In a decentralized maintenance organization, departments are assigned to specific areas or units.
This tends to reduce the flexibility of the maintenance system as a whole. The range of skills
available becomes reduced and manpower utilization is usually less efficient than in a centralized
maintenance. In some cases a compromise solution that combines centralization and
decentralization is better.
This type of hybrid is called a cascade system. The cascade system organizes maintenance in
areas and whatever exceeds the capacity of each area is challenged to a centralized unit. In this
fashion the advantages of both systems may be reaped. For more on the advantages and
disadvantages of centralization and de-centralization see Duffuaa et al. (1998) and Niebel
(1994).
1.2.1.3 In-house versus Outsourcing
At this level management considers the sources for building the maintenance capacity. The main
sources or options available are in-house by direct hiring, outsourcing, or a combination of inhouse and outsourcing. The criteria for selecting sources for building and maintaining
maintenance capacity include strategic considerations, technological and economic factors. The
following are criteria that can be employed to select among sources for maintenance capacity:(i)
Availability and dependability of the source on a long term basis;
(ii)
Capability of the source to achieve the objectives set for maintenance by the organization
and its ability to carry out the maintenance tasks;
(iii) Short term and long term costs;
(iv)
Organizational secrecy in some cases may be subjected to leakage;
(v)
Long term impact on maintenance personnel expertise; and
(vi)
Special agreement by manufacturer or regulatory bodies that set certain specifications for
maintenance and environmental emissions.
Examples of maintenance tasks which could be outsourced are:A. Work for which the skill of specialists is required on a routine basis and which is readily
available in the market on a competitive basis, e.g.:A1. Installation and periodic inspection and repair of automatic fire sprinkler systems;
A2. Inspection and repair of air conditioning systems;
A3. Inspection and repair of heating systems; and
A4. Inspection and repair of main frame computers etc.
B. When it is cheaper than recruiting your own staff and accessible at a short notice of time.
The issues and criteria presented in the above section may help organizations in designing or redesigning their maintenance organization. To provide consistently the capabilities listed above
we have to consider three types of organizational designs:-
1.2.2.2 Centralized
In a small factory where communication between the departments is freer, the centralized type of
maintenance organization is preferred, which is placed under a chief maintenance
engineer/manager. The total responsibility of the maintenance function for the entire factory lies
with the chief maintenance engineer. Under this type of organization, the responsibilities and
accountability of work must be properly specified for production as well as maintenance
personnel to successfully meet the project goals. If this is not taken care of, one department may
blame other for any shortfall.
1.2.2.3 Partially decentralized
The partially centralized organization, which is the modified form of a centralized type of
organization, is most suitable for projects that have units far away locations. Under this type of
maintenance organization, the maintenance personnel, attached to the production unit, carry out
work at unit level and look after day to day maintenance. All centralized work pertaining to
maintenance planning and documentation is done at the level of central maintenance workshop.
The above three types of maintenance organizations, however, are not strictly exclusive and
some adjustments can be made to suit the working environment and the need.
1.2.3 Types of responsibilities/roles
Unique though actual maintenance practice may be to a specific facility, a specific industry, and
a specific set of problems and traditions, it is still possible to group activities and responsibilities
into two general classifications: primary functions that demand daily work by the maintenance
function and secondary ones assigned to the function for reasons of expediency, know-how, or
precedent.
1.2.3.1 Primary Functions
(i)
Maintenance of Existing Plant Equipment.
This activity represents the physical reason for the existence of the maintenance professional.
Responsibility here is simply to make necessary repairs to production machinery quickly and
economically and to anticipate these repairs and employ preventive maintenance where possible
to prevent them. For this, a staff of skilled engineers, planners, and technicians who are capable
of performing the work must be trained, motivated, and constantly retained to assure that
adequate skills are available to perform effective maintenance.
(ii)
Maintenance of Existing Plant Buildings and Grounds.
The repairs to buildings and to the external property of any plantroads, railroad tracks, in-plant
sewer systems, and water supply facilities are among the duties generally assigned to the
maintenance engineering group. Additional aspects of buildings and grounds maintenance may
be included in this area of responsibility. Janitorial services may be separated and handled by
another section. A plant with an extensive office facility and a major building-maintenance
program may assign this coverage to a special team. In plants where many of the buildings are
dispersed, the care and maintenance of this large amount of land may warrant a special
organization.
Repairs and minor alterations to buildingsroofing, painting, glass replacement or the unique
craft skills required to service electrical or plumbing systems or the like are most logically the
purview of maintenance engineering personnel. Road repairs and the maintenance of tracks and
switches, fences, or outlying structures may also be so assigned. It is important to isolate cost
records for general cleanup from routine maintenance and repair so that management will have a
true picture of the true expense required to maintain the plant and its equipment.
(iii) Equipment Inspection and Lubrication.
Traditionally, all equipment inspections and lubrication has been assigned to the maintenance
organization or function. While inspections that require special tools or partial disassembly of
equipment must be retained within the maintenance function, the use of trained operators or
production personnel in this critical task will provide more effective use of plant personnel. The
same is true of lubrication. Because of their proximity to the production systems, operators are
ideally suited for routine lubrication tasks.
(iv)
Utilities Generation and Distribution.
In any plant generating its own electricity and providing its own process steam, the powerhouse
assumes the functions of a small public utilities company and may justify an operating
department of its own. However, this activity logically falls within the realm of maintenance
engineering. It can be administered either as a separate function or as part of some other
function, depending on management requirements.
(v)
Alterations and New Installations.
Three factors generally determine to what extent this area involves the maintenance department:
plant size, multi plant company size, company policy. In a small plant of a one-plant company,
this type of work may be handled by outside contractors. But its administration and that of the
maintenance force should be under the same management. In a small plant within a multi plant
company, the majority of new installations and major alterations may be performed by a
company-wide central engineering department. In a large plant a separate organization should
handle the major portion of this work.
Where installations and alterations are handled outside the maintenance engineering department,
the company must allow flexibility between corporate and plant engineering groups. It would be
self-defeating for all new work to be handled by an agency separated from maintenance policies
and management.
1.3
Maintenance Costs
The cost of maintenance is defined as costs that include lost opportunities in uptime, rate, yield,
and quality due to non-operating or unsatisfactorily operating equipment in addition to costs
involved with equipment-related degradation of the safety of people, property, and the
environment. However, often maintenance cost is simply described as the labor and materials
expense needed to maintain equipment/items in satisfactory operational state.
1.3.1 Sources
Maintenance cost can be a significant factor in an organizations profitability. Hence,
maintenance department should treat the matters that make a profit on the industry by take into
account the cost of maintenance. Consider the most basic definition of profit: Profit = Income
Expenses. This simple theory shows that it is important to reduce the maintenance expenses to
increase a profit by avoiding unnecessary expenditure. Among the factors associated with the
maintenance expenditure are:(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
Downtime
Idle equipment or personnel due to equipment breakdown
Missed delivery dates of equipment (including out of stock)
Transportation due to remoteness of some of the maintenance work
Overhead cost
Maintenance labor (i.e., operator expertise and experience)
Asset condition (i.e., age, type, and condition)
Losses due to inefficient operations of machines
Capital requirement for replacement of machines.
Standby cost
The total cost of operating and maintaining standby equipment needed to be put in
operation when primary facilities are either undergoing a maintenance activity or are
inoperable for some reason.
(c)
(d)
Degradation cost
Those costs occurring in deterioration in the life span of equipment resulting from
inadequate and/or inferior maintenance.
examines the effect on cost of alternative equipment designs. In other words, life cycle cost
analyses involve evaluating the total cost of a product or system over its entire life span. Life
cycle cost will consider the cost of developing or acquiring the asset, the cost of running,
operating and maintaining, and the cost of disposal. As life cycle cost is often significantly
affected by reliability issues such as frequency of failure and time to repair, it is often included as
part of the reliability engineering function. Life cycle costing plays an important role in
maintainability analysis, particularly with respect to operation and maintenance costs.
The aim of life cycle costing is to know the total cost of equipment accruing over its whole life
period, which may include all the costs starting from the specification cost. It is also observed
that reduction in one cost possibly will increase the other cost. The total cost has to be therefore
optimized by making trade-offs among all elements of it. Normally it is observed that cheap
items do not have sufficient economic life nor do they yield satisfactory performance over their
whole life. Therefore the quality of the product is the major importance.
The data to be input into a life cycle cost model include the purchase price of the product, mean
time between failures (MTBF), mean time to repair (MTTR), average material cost of a failure,
labor cost per preventive maintenance action, labor cost per corrective maintenance action,
installation costs, training costs, the warranty coverage period cost of carrying spares in
inventory, and shipment forecasts over the course of the product's useful life
When applying the life cycle cost analysis, several major advantages can be achieved:(a)
(b)
(c)
It may result in selection of equipment that has lower operating and maintenance costs
resulting in reduced cost of ownership;
The money saved can be used for some other works;
It is an excellent tool for comparing the cost of competing projects, controlling program
costs, selecting among competing contractors, making decisions associated with
equipment replacement, reducing total cost, and conducting planning and budgeting.
Nevertheless, in contrary life cycle cost also have a little disadvantage that is it is time
consuming and expensive, that collecting the data needed for analysis can be a trying task, and
that the data available is sometimes of doubtful accuracy.
1.4
Exercises
1.
Types of maintenance
Description
Corrective or
Breakdown maintenance
Scheduled maintenance
Preventive maintenance
2.
3.
4.
5.
List some sources for the data used in life cycle cost analysis.
References
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