TOR IDHAMMAR, IDCON, INC.
We’ve been working for a while with a building materials company that owns 12 plants in the US. Four years ago, the company began implementing Total Performance Maintenance (TPM) in one of its plants. TPM promotes a decentralized organization, where maintenance reports to operations. In short, TPM strives for:
• A smaller hourly maintenance staff, since some central roles can be removed
• Fewer supervisors and managers, which yields even more savings
• Giving maintenance personnel more ownership within specific work areas
• Improved collaborations between operations and maintenance
I have seen few successes when maintenance reports to operations. In those cases when it has worked, it was due to the plant having a high-performing maintenance organization in place before the organizational change was made. In those scenarios, the organization also had highly skilled hourly maintenance workers along with outstanding planning, scheduling, stores, and preventive maintenance systems. When maintenance was shifted to report to operations, these systems continued to work well because it was ingrained in the company culture; everyone knew and worked according to the institutionalized work processes.
Unfortunately, most of the time it doesn’t work to have maintenance report to operations. When maintenance is split up and responsibility is given to operations, it creates a reactive system. Here’s a chain of events I’ve seen develop:
1. The operations manager often does not have enough competence in maintenance. Some people argue that it is possible to manage maintenance without maintenance experience. It is possible to be a maintenance manager, of course—just not a good one, in my opinion. To successfully lead maintenance, a manager must, for example, know when oil needs to be filtrated, the importance of alignment, why axles are balanced before installation, etc. If a manager doesn’t understand these issues, he or she can’t/won’t drive their successful implementation. It’s very rare that an operations manager knows or understands all of that. Leading both operations and maintenance is simply too large of an area for one individual.
2. The operations manager typically doesn’t drive preventive maintenance (PM) and planning and scheduling because he/she doesn’t know how, or doesn’t understand the importance of it. Therefore, maintenance slowly slips into reactive mode. Operations people often find it handy to have maintenance personnel around, and will often begin to ask maintenance for unplanned, small, ”honey-do” jobs here and there. Suddenly, there’s no longer time to perform the PM that was once in place, and reliability takes a turn for the worse.
3. The use of work orders often becomes obsolete. It’s simply easier to just ask for help. Suddenly, the overview of the workload and future cost for maintenance is lost.
4. As maintenance becomes more reactive, it negatively impacts safety.
5. Due to the reactive environment, operations asks for more help; more maintenance personnel are put on shift to help keep up, which in turn generates more overtime. Since maintenance work is moved to shift, the demand for external contractors during the day goes up.
6. Planned shutdowns become harder to execute with employees, therefore even more contractors are hired.
7. Expert skills become diluted over time. In a centralized system, there are often hydraulic experts, PLC programmers, vibrations analysts, lubrication specialists and so on, but since they are all divided up into different areas and don’t use their specialized skills regularly, they will eventually become lost.
8. In some cases, maintenance managers (who report to the operations manager) are kept in the areas, but it doesn’t help much since they are often inexperienced and have no authority. Even if we succeed in finding competent personnel for these positions, they cannot run maintenance well since they have no influence on central functions such as spare parts, construction, documentation systems, and CMMS.
9. Spare parts use is not coordinated. This leads to additional and expensive stop time since critical parts are missing. Maintenance starts hoarding materials and parts, keeping their own satellite stores that are not registered in a central system. Of course, parts are impossible to find unless you know the area very well.
10. Last but not least: machine registers, blueprints, and technical documentation aren’t updated since there is no longer a centralized organization to collect and store such information.
As the final nail in the coffin, it is also common that the organization does not understand what happened or why, since the infrastructure is gone and there is no longer a key role (read: maintenance manager) who has an overview of current status.
THE REAL RESULT
So, what happened to that building materials company I mentioned?
Well, the company removed the central maintenance organization and many positions disappeared—the number of hourly maintenance workers was reduced by 14.3 percent. This, of course, was celebrated by some managers.
The real result? After one year, this plant had re-hired 6 percent of the staff, but the total amount of maintenance hours had gone up by 10.5 percent. After two years, the total maintenance cost had jumped by 29.2 percent, while the production volume was down 6 percent. If that wasn’t enough, the plant also lost some of its absolute best managers and many of its most skilled hourly maintenance workers.
The company is now investing to reinstate a central maintenance organization, keeping just a few positions decentralized, training managers, hourly workers, and working with IDCON to re-establish clear maintenance work processes.
Are you thinking about reorganizing by having maintenance report to operations? My advice to you is: “Bad idea.” Consider, instead, keeping your central maintenance organization and putting some of the hourly workers in specific work areas. IDCON’s philosophy promotes an equal partnership between operations and maintenance. If you decide to take a stab at a decentralized organization, make sure you have a solid maintenance culture in place before you do.