Critical Spares in Critical Times Using SOS Spares

Critical Spares in Critical Times Using SOS Spares Optimization System and RCMTurbo to Improve Reliability and Optimize Your Maintenance.

The Maintenance Dilemmas When do we do what we do? Why do we what we do? Have we got the stuff to do what we plan to do? How about having the stuff for what we DIDN’T plan to do? Did we do a good job? …what is a good job? Uncertainty.

– Margin of Victory – The Role of Maintenance. What Separated these Results?

Purpose of RCM Reliability Centered Maintenance (RCM) is a methodology used to determine The right maintenance tasks to ensure that any physical asset or system continues whatever its owners want it to do, in its present operating context RCM focuses on preserving the functions of equipment, not on preserving the equipment itself, keep the process running! 2 function categories primary functions: speed, output, product quality secondary functions: safety, comfort, environmental integrity RCM is more concerned with maintaining the system function, than individual component function

The RCM Approach. 1. What are the functions and associated performance standards of the assets in its present operating context? 2. In what ways does it fail to fulfill its function? 3. What causes each functional failure? 4. What happens when each failure occurs? 5. In what way does each failure matter 6. What can be done to predict or prevent each failure? 7. What should be done if a suitable proactive task cannot be found?

What is RCM and why should it be of interest. 1960 Boeing Builds 747 and FAA want to reduce crashes. 1966 Navy adopts for use in Aviation. 1978 Nolan & Heap come up with a philosophy called RCM. 1990 Mobrey applies these concepts to the process industry RCMII.

Not the tools… the attitudes. If I have everything I need I can keep things running. Maintenance just keeps things running. Our Maintenance department is not needed… things don’t break. All I need to do is keep one of each… they can wait.

Solution. For the fix. All need to come to a common understand what it is that maintenance does. Why does maintenance need spares? How do I add value to the bottom line?

Whoa… why do we care about this as MRO folks? We are responsible for having the right spare at the right time. What is the right spare? What is the right time? How does RCM fit into deciding stocking levels? Why do I care how… my job is to buy (sell) and stock spares. Let’s Illustrate.

How many spare tyres? For a Mercedes…

Focus on the ‘important’ stuff. So we keep the spares that can really affect us! Big Expensive Complex

For want of a part. The ’most’ critical?

So how does this effect MRO spares again? 100% $ Value and 100% Line items 20% More Then 4 Turns per Year 80% Less then 4 turns per Year 60% No Movement in last 4 years “Insurance” Obsolete (2% - 10%) 10% line items 90% line items 30% line items

Realities of doing business – Part 1. Holding Cost Interest Insurance Taxes Infrastructure Obsolescence Cash • • % § € Total 25 - 35% of Inventory Value per Year, common across Process Industries World Wide

Realities of doing business – Part 2. PO COST Cost of Downtime Desire Knee Jerk Emergency

Realities of doing business – Part 3. “Cut Spares by 20%” “Stop All New Purchases!” “Get rid of the ‘old’ stuff. ”

We need a Ref Need To: Improve Validity of Decision Remove the emotion from the debate. Document our Process Assist Spare Parts Decision Making Valid Decisions are based: “Local” Expert Knowledge Not just relying on Historical data Make proactive decision not reactive. Process – Maintenance – Management All have ownership in the spare part decision. An Expert System to make Expert Decisions.

Why Use An ’Expert System’? Typical ‘Human’ Decision Process: Limited # Of Variables Considered Inconsistent Process Subjective and Emotional Decisions Based On “Gut” Feel Or Experience Seldom (Being Kind) Documented Failure Pattern Price Lead Time Usage Rate

Expert Guidance Computerized Decision Support Process Yields Decisions That Are: Data / Reliability Price • More Valid – ALL inputs considered. • Easier To Make – Objective Decisions Probability • Faster – Software does the heavy lifting. • Documented - CYA History • Repeatable Common Usage Risk Criticality Source Down Time Planned Usage Predictability Alternatives Failure History Lead Time

Reliability Based Spares Analysis Maintainable Item Analyses Maintainable Item Criticality Questions 1. Legal Requirements 2. Are people or environment in danger 3. Probability of production losses 4. Repair costs 5. Failure probability 6. Failure predictability 7. Production losses 8. Sales losses 9. Temporarily fix 10. Start-up costs 11. Indirect costs Maintainable Item (e. g. pump) Maintainable Item Criticality Profile

Spare Analyses Part Criticality Questions 1. Part price classification 2. Estimated stock volume 3. Estimated usage 4. Use of spare 5. Designed life time 6. How can part fail 7. Will part fail during normal operation 8. Failure predictability 9. Temp fix 10. Can part be inspected 11. Availability Part 1. Current stocking level (MIN-MAX) 2. Statistics 2. 1 Current stock 2. 3 Price 2. 4 Delivery time 2. 5 Yearly usage 2. 6 etc. Price/Risk Spare Part Details 1. Common usage 2. Availability 3. Aging 4. Use in plant 5. Can part be repaired 6. Part of repair kit 7. Is part used for repair (e. g. pump or bearing) OPT Stocking - MIN - MAX Analyses

Business Based Decision • Criticality: • Determines MIN Stocking Level • Economics: • Determines MAX Stocking Level • Real World Results: • Connection and Linkage to CMMS.

Real ‘Measurable Results’ Of The Spares Reviewed: Recommended Changes To 50% Of The Items Supports and documents that you are doing the right thing. The other 50% need adjusting: 25% Increased to improve reliability. 75% Decreased to reduce inventory. This Produced a Consistent Reduction of Inventory Value and Improved Reliability

The Bottom Line Benefits. Reduction of Inventory and Risk Current Stocking Inventory Levels Risk OPTIMUM Inventory Levels Inventory $

But How do we Get Buy In? To get any meaningfully long term results for this entire process it is vital to get universal buy in. Maintenance Teach them to quantify their value to the company. Warehouse Help them be part of the team as opposed to just a store front. Process Maintenance is not in your way… it is your life support. Management $ - € - £ - KD

Benefits of this type of Analysis. • • Scientifically calculated Max / Mins Auditable, repeatable, consistent Objective Assessment / unemotional Business-based decisions Better, optimized spares mix Shortening of costly delayed re-starts. Eliminate Unnecessary Carrying Cost

Benefits to user! • • • Get the spares they NEED. Justify their previous decisions. Protect against ‘mandated reductions’. Opportunity to Demonstrate Leadership. Demonstrate their value to the company.

Be the hero. “…just for once I’m a hero…” …in all my years in maintenance I have never met a VP from corporate , much less got a letter of congratulations from one. It was thanking me for (my initiative in) renting and using SOS (we got it out of our training budget, but don’t tell anybody). We identified ‘a mountain of stuff’ we don’t need anymore and it actually allowed me to get some stuff I wanted to buy (which was what I originally rented it for anyway. ) It turned out good for everyone, now all they have to do is give me (us) a raise and not lay us off… We will see. Thanks guys for all your help. ” Maint. Manager Major Chemical Plant

FAQ (Frequently ‘Answered’ Questions. ) Q: Is this a very intrusive initiative? A: Quite the opposite. With a few hours instruction you can train several people to provide you with the necessary input to succeed. Even a few hours a week will provide significant success. Q: Is this just a spares reduction process? A: Though the initiative often does help us to identify and eliminate overstocked and over-ordered unnecessary spares the idea is to find the optimum level which often allows us to use savings found to purchase needed critical spares.

More Answers. Q: How do I get buy in from all the different departments? A: We have found that a small amount of education and enthusiastic cheerleading will demonstrate to the process owners how your new way of thinking and acting benefits them. Q: Do I have to do all my spares before realizing any benefits? A: While there are certainly spares all across your organizations that would benefit from a methodical approach to holding levels, the benefits are virtually instant and regularly the organization has seen a return on sales and training investment before the end of the first week.

Last Answers. Q: Can I use this to optimize manufacturers spares lists on brand-new equipment? A: Yes… because Reliability Centered Spares Holding is NOT reliant on historical information, it is the ONLY methodology on the market that can be used for new spares with no usage history. Q: Is it really worth it? A: Yes.

Questions?

Thank You. Alexander Willems EMEA Regional Director, Strategicorp +358 40 532 2863 alex. willems@strategicorp. com