KPIs Maintanance
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3/10/2015 Maintenance Online Maintenance Key Performance Indicators http://www.maintenanceonline.co.uk/article.asp?id=7569&typ=latestnews 1/6 Home About Us Contact Us 30/09/2013 Download Maintenance Key Performance Indicators Author : Paul Wheelhouse ABSTRACT A summary is provided of important considerations when designing key performance indicators as part of any performance management system. Technical, behavioural and psychological aspects are all touched upon. Important results from physics, statistics, information theory and control theory are all used to provide practical guidance. Key performance indicators providing a ‘window’ so that the success or otherwise of a strategy can be judged and any necessary actions taken are explored. The need is emphasised for SMART measures which can be influenced by the actions of those who are judged by them. Ensuring that the measures cover all areas in the form of a balanced scorecard, and are arranged in a hierarchy, is mentioned. Three different targetsetting approaches for key performance indicators are discussed, viz. trending, benchmarking and best of the best. How the organisational culture and psychology will influence target setting is discussed. Accuracy, error and uncertainty of measures are explored, together with the need to measure frequently enough to spot changes. The need to separate signals from noise, and only take actions when significant changes occur, is covered. Drawing on control theory, the need to consider the delay between cause and effect in order to ensure stability of the performance management system is discussed. Finally, a checklist guide for key performance indicator essentials is included. REASONS FOR INDICATORS Key performance indicators close the inputprocessoutput loop and link back to what was expected, and ultimately to the strategy. It is therefore only by monitoring key performance indicators that we can see if the strategy is actually working. Key performance indicators are there primarily to see whether the strategy is working and where changes might be required. It follows therefore that the indicators themselves need to relate to critical success factors in the strategy itself. In other words, if safety features heavily in our strategy, then we might expect to see indicators based on near misses, incidents, accidents and staff behaviours. Indicators can also be used as a feed to the continuous improvement programme and to help with a review of planned maintenance routines and for supplier appraisals. Indicators themselves must be part of a performance management system so that staff actually does what we want them to do in the most costeffective manner. Just measuring something affects behaviour. For example, some would say, ‘I like to do what I enjoy doing and also what my boss measures’. So there needs to be careful choice of measures to ensure the behaviours we want are encouraged. For example, in recent years, short term profit measures in the banks have encouraged excessive risk taking by staff. Measures should be linked to rewards for both staff and also key suppliers and service providers. Rewards themselves can be both financial and nonfinancial. No doubt we have all seen employee of the month awards when checking into hotels. Whoever is measured by a key performance indicator must have the means and the time to influence its value. The measures need to be SMART, i.e. • Specific/simple • Measureable • Achievable/acceptable/attainable Tweet 0 Be the first of your friends to like this. Like Share Maintenance & Engineering News & Editorial Ezine Maintenance Directory Other Search
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Indicators for maintenance KPI
Transcript of KPIs Maintanance
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3/10/2015 MaintenanceOnlineMaintenanceKeyPerformanceIndicators
http://www.maintenanceonline.co.uk/article.asp?id=7569&typ=latestnews 1/6
Home AboutUs ContactUs
30/09/2013Download
MaintenanceKeyPerformanceIndicatorsAuthor:PaulWheelhouse
ABSTRACT
Asummaryisprovidedofimportantconsiderationswhendesigningkey
performanceindicatorsaspartofanyperformancemanagementsystem.
Technical,behaviouralandpsychologicalaspectsarealltouchedupon.Important
resultsfromphysics,statistics,informationtheoryandcontroltheoryareallused
toprovidepracticalguidance.Keyperformanceindicatorsprovidingawindow
sothatthesuccessorotherwiseofastrategycanbejudgedandanynecessary
actionstakenareexplored.TheneedisemphasisedforSMARTmeasures
whichcanbeinfluencedbytheactionsofthosewhoarejudgedbythem.
Ensuringthatthemeasurescoverallareasintheformofabalancedscorecard,
andarearrangedinahierarchy,ismentioned.Threedifferenttargetsetting
approachesforkeyperformanceindicatorsarediscussed,viz.trending,
benchmarkingandbestofthebest.Howtheorganisationalcultureand
psychologywillinfluencetargetsettingisdiscussed.Accuracy,errorand
uncertaintyofmeasuresareexplored,togetherwiththeneedtomeasure
frequentlyenoughtospotchanges.Theneedtoseparatesignalsfromnoise,andonlytakeactionswhensignificantchangesoccur,is
covered.Drawingoncontroltheory,theneedtoconsiderthedelaybetweencauseandeffectinordertoensurestabilityofthe
performancemanagementsystemisdiscussed.Finally,achecklistguideforkeyperformanceindicatoressentialsisincluded.
REASONSFORINDICATORS
Keyperformanceindicatorsclosetheinputprocessoutputloopandlinkbacktowhatwasexpected,andultimatelytothestrategy.Itis
thereforeonlybymonitoringkeyperformanceindicatorsthatwecanseeifthestrategyisactuallyworking.
Keyperformanceindicatorsarethereprimarilytoseewhetherthestrategyisworkingandwherechangesmightberequired.Itfollows
thereforethattheindicatorsthemselvesneedtorelatetocriticalsuccessfactorsinthestrategyitself.Inotherwords,ifsafetyfeatures
heavilyinourstrategy,thenwemightexpecttoseeindicatorsbasedonnearmisses,incidents,accidentsandstaffbehaviours.
Indicatorscanalsobeusedasafeedtothecontinuousimprovementprogrammeandtohelpwithareviewofplannedmaintenance
routinesandforsupplierappraisals.
Indicatorsthemselvesmustbepartofaperformancemanagementsystemsothatstaffactuallydoeswhatwewantthemtodointhe
mostcosteffectivemanner.Justmeasuringsomethingaffectsbehaviour.Forexample,somewouldsay,IliketodowhatIenjoydoing
andalsowhatmybossmeasures.Sothereneedstobecarefulchoiceofmeasurestoensurethebehaviourswewantareencouraged.
Forexample,inrecentyears,shorttermprofitmeasuresinthebankshaveencouragedexcessiverisktakingbystaff.
Measuresshouldbelinkedtorewardsforbothstaffandalsokeysuppliersandserviceproviders.Rewardsthemselvescanbeboth
financialandnonfinancial.Nodoubtwehaveallseenemployeeofthemonthawardswhencheckingintohotels.
Whoeverismeasuredbyakeyperformanceindicatormusthavethemeansandthetimetoinfluenceitsvalue.Themeasuresneedtobe
SMART,i.e.
Specific/simple
Measureable
Achievable/acceptable/attainable
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Relevant/realistic
Timebound
COVERAGE
Anorganizationcarryingoutmaintenanceislikeamachineithasfunctionsandneedstobeviewedasasystem.Thecoverageof
indicatorsneedstobecomprehensivewithoutbeingexcessive.Withcomputersystems,itispossibletooverdoseonindicators.The
operativewordhereiskeyindicators,solookforfewerthantenratherhaving,say,forty.Weshouldthinkofourkeyperformance
indicatorslikefood:nottoomuch/manywithabalanceforgoodhealth.
Thebalanceforindicatorscomesfromablendof:
Financial(expenditure)andnonfinancial(numberofjobscompleted)
Inputs(money,methods/expertise,materials/spareparts),processes(carryingoutreactivejobs)andoutputs(performance/availability)
Leadingindicators(nearmisses)andlaggingindicators(accidents)
Productivity(reliability),service(backlog,responsetimes)andcosts(budgetsvalueofsparepartstock)
Typicalmaintenancemeasuresmightinclude:
Plantdowntime
Equipmentreliability
Percentageovertime
Annualmaintenancebudget/capitalcost
Percentageofplannedjobscompletedontime
Percentageofjobswhicharebreakdowns
Costsversusbudgets
Valueofspareparts
Responsetimes
Backlog
Hierarchyofmeasures
Theindicatorsneedtoformahierarchy.Thelowestleveloneswillbemeasureswhichfrontlinestaffcaninfluence.Thesecanthenbe
combinedtogivemeasuresforthenextmanagementlevel,andsoon.Thisisbestillustratedbyanexampletherearefivemeasures
whichthetechniciansandoperatorsonabottlingplantcaninfluence,viz.
Firsttimepassrateforquality
Customercomplaintsrelatingtounderfilling
Meantimebetweenfailures(MTBF)forthefillinghead
Meantimetorepair(MTTR)forthefillinghead
Numberofcasesproducedpershift
Productmix
Thefinalmeasure,theproductmix,cannotbeinfluencedbythefrontlinestaff.Thisisultimatelydeterminedbywhatthecustomersare
buying,butisalsogoingtobeaffectedbytheorganizationplanning,forecastingandlevelsofstockholdingaccuracies.Itneedstobe
includedthough,becausedifferentgradeshavedifferentmaximumproductionratesandtheseratesneedtobetakenintoaccounttogive
realistictargets.
Thesixbasemeasuresarecombinedintoquality,availabilityandrateofworkingindicesforeachbottlingplant,whicharethenrolledup
intoanoverallequipmenteffectivenessmeasure(OEE).TheOEEsforeachbottlingplantarethencombinedtogiveameasureof
productivityforthewholeorganization.
Thus,thefrontlinestaffsarejudgedonthebasemeasures.ThemanagementofeachbottlingplantisjudgedonitsOEEfigure,whichis
derivedfromthebasemeasures.Inturn,theorganizationexecutivesinheadofficearejudgedbythecombinedOEEfiguresforthewhole
organization.
TARGETSETTING
Havingdecidedonwhichindicatorstomonitor,thenextquestiontobeaskediswhatshouldbethetargetvalues?Shouldthetargets
simplybelastyearsonesshouldtheyberatchetedupalittleorshouldatoughtargetbesettoencourageimprovements?Theanswer
turnsouttobeamixtureofscience,organizationalcultureandpsychology.Letusdealwiththesciencefirst.
AveragesandTrending
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Ifourdowntimehasbeenvariablelastyear,buttheaverage(mean)figurehasbeen3%,wecouldsetthisasourtargetdowntimefornext
yearbecauseitisrepresentativeofourdowntimeresults.However,mostvariablesareevenlydistributedaroundthemeanvaluesonext
yearsdowntimeisjustaslikelytobelowerthanthisyearsfigureasitistobehigher.
Trendanalysisisoftenusedwheninterpretingconditionmonitoringdataortryingtopredictwhattheyearendexpendituremaybe.Itis
simplyplottingresultsonagraph,drawinginalineofbestfitandthenprojectingitforwardintothefuture.Thegreaterthescatterofdata
pointsandthelongerintothefuturetheprojectionismade,thenthegreatertheerrorintheprediction.Averagesandtrendingwilltendto
producerepresentativetargetswhicharenottoochallenging.
BestoftheBest
Ifweweretosetourtargetsonthebestvaluewhichhadeverbeenachievedtodate,thenthatwouldbemorechallengingthatusingsay
anaveragevalue.Butwecangomuchfurtherthanthiswecanusethebestofthebest.Toillustratetheprinciplebehindthisconsidera
golferwhoseresultsforfivehalfroundsofgolfareshowninFigure1,togetherwiththeparscoresforeachhole.
Figure1Golfscores
Anyonewhohaseverplayedgolfwillrecognisethevariationinscoresbetweenoneroundandthenextone!Thebestscoreachievedwas
36fromroundnumber4(circled)theworstwas43.
Thegolfercouldsetatargetof36forfuturerounds.Thiswouldbeatargetbasedonthebestresult.Amorechallengingtargetwouldbe
whatiscalledtheeclecticscore:therearenineholessowhatwouldbethetotalscoreifwecouldcombinethelowestscoreforeachhole
irrespectiveofwhichroundthatscorewasachieved?Theseeclecticscoresareconnectedbytheheavylinesshownintheabove
diagram.Addingthemtogetherwegetatotalof28.Thisislessthantheparvalueforthenineholesthataprofessionalgolfercouldbe
expectedtoachieve.
Thiseclecticscoreisanexampleofabestofthebestvalue.Thesameprinciplecould,ofcourse,beusedforexpenditure,availability,
tasklengths,etc.Bestofthebesttechniquesproduceverychallengingtargets,buttheindividualvalueshaveallbeenachieved,soit
couldbearguedthatthesetargetsareachievable.Stretchtargetssuchasthesecanthereforebeusedtoaccelerateimprovementsin
performance.
Benchmarking
Benchmarkinghasbeenwidelyusedtosettargets.Itcanbedoneinternallywithinasingleorganizationorexternallyacrossdifferent
organizations.Internalbenchmarkinghastheadvantagethateveryoneisusingthesameorganizationproceduresand,asconfidentiality
isnotanissue,itisstraightforward.Itsdisadvantagesarethatinternalpoliticscandistorttheresultstheinitiativecouldalsobeseenas
lowpriorityandtheopportunityforlearningsomethingentirelynewisrestricted.Externalbenchmarkinghastheadvantagethatsomething
entirelynewcouldbelearnedbylookingatanissuefromanentirelydifferentpointofview.However,confidentialitycouldbeaproblem
therecouldbelegalissuesifcompetitorsshareinformation,andapplyingnewproceduresfromanotherorganizationisnotwithoutrisk.
CombinationTechniques
Oneoftheabovetargetsettingtechniquescouldbeusedindependentlyorseveralcouldbeusedincombination.Forexample,consider
thetableofFigure2,wheredifferentaspectsofmaintenancehavebeenestablishedforfouridenticalfactories.
Figure2Annualtotalcostofmaintenanceinfourfactories
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ThebenchmarkfactoryintheabovegroupisFactory2.Itstotalcostofmaintenanceisthelowestat10.3millions.Thelowestcostsfor
eachitemmakingupthetotalcostofmaintenanceareshowninbold.Addingthesetogethergivesatotalcostof7.2millions.Thisvalue
wasderivedbybenchmarkingallfourfactoriesandthenapplyingthebestofthebestprinciple.
OrganizationalCultureandPsychology
Organizationshavepersonalitiesjustlikepeople:wecanthinkofeachorganizationhavingitsownculture.Oneaspectofcultureishow
theorganizationwillreactifakeyperformanceindicatordoesnotachieveitstarget.Ifpunitiveactionswouldresult,thenonewouldbe
advisedtoseteasilyachievabletargets!
Conversely,ifanorganizationencouragesthesettingofstretchtargetswithrewardforeffort,evenifaverytoughtargethasnotquite
beenachieved,thenthebestofthebestcouldbeusedasatargetsettingtechnique.Incidentally,organizationswhichsetstretchtargets
anddontachievethemareoftenbetteroffthanthosewhichalwaysplaysafebecauseIfyoureachforthestarsyoumaygettothe
moon.
Psychologyalsoappliestokeyperformanceindicators.Anincrementalincreaseinatargetwillnottriggeranydifferentbehaviouror
searchingforbettersolutionspeoplewilljusttendtocontinuetodothesamethings.However,aradicallydifferenttarget(suchashalving
plantdowntime)willtriggeroutoftheboxthinkinganddifferentwaysofviewingtheissues.
InthebookGoodtoGreat(2001)byJimCollinsgreatleaderswerefoundtouseambitioustargetsasawayofdrivingupperformance.
AftertheUSSRhadachievedearlysuccessesinspacePresidentKennedyannouncedthattheUSAwouldputamanonthemoonwithin
tenyears.Inthelate1960sBoeingdecidedtoproduceawidebodiedpassengeraircraft(the747)thatwouldbefarbiggerandmuchmore
complicatedthananythingavailableatthetime.
Thesetwoexamplesshowhowtoughtargetscanbeusedtomotivate.Thereisofcourse,afinebalancetobeachievedbetweenatough
targetwhichwillbedifficulttoachieveandonewhichstaffthinkisimpossible.Obviously,settingatargetwhicheveryoneviewsasbeing
impossiblewilljustactasademotivator.Highachieverstendtolikethechallengefromtryingtoachievesomethingwhichisviewedas
beingaround50%possible.
DETAILEDCONSIDERATIONS
Asfaraskeyperformanceindicatorsareconcerned,aswithmanythings,thedevilisinthedetail.Error,accuracy,anddynamicsneed
tobeconsideredinanyperformancemanagementsystem.
Accuracy,ErrorandUncertainty
Theaccuracyrequiredforourpurposesmustbeestablished.Forexample,failureratesaccuratetowithinafactoroftwomaybe
acceptableforreliabilitycalculations,whereasexpendituremustbetrackedtothenearestpenny.Allparametersareuncertaintodiffering
degrees,and,anysignalwillhavesomeformofassociatederrorandnoise.Thiserrorwillneedtobeassessedandtakenintoaccount
withintheperformancemanagementsystem.
Errorscanbebothsystematicandrandom.Supposeouroperatorsareaskedtorecorddowntime.Iftheyareinstructedtoignoreall
eventswhichresultinlessthanfiveminutesdowntime,thenthiswillresultinasystematicerrorandtherecordeddowntimewillalways
belessthanthetruefigure.Iftheyareinstructedtologdowntimeeventstothenearesthouronly,thiswillresultinrandomerrorsinthe
measurement.However,systematicandrandomerrorcanbeassessedbyacombinationofcalibrationandrepeatedmeasurements.
Statisticaltechniquescanbeusedtoassessifasignalisabovethelevelofexpectednoise.Clearlyweonlywanttotakeactionswhena
significantchangehasoccurred.Takingactionsbasedonnoisealoneisarecipefordisaster.
Oftentheparameteritselfcanallowustomakesomeinformedestimatesoflikelyerror.Supposethatsafetyperformanceisimportant
andthatwehavedecidedtomonitorthenumberofnearmisseseachyear.Lastyearsfigurewas4andthisyearitwas3.Isitpremature
tostartcongratulatingourselves?Measuresbasedonsmall,discrete,numberstendtofollowthePoissondistribution.Thestandard
deviationofthisdistributionisalwaysthesquarerootofthemeanvalue.Thesquarerootof4is2,sowemightexpectthataround70%
oftheannualfiguresforournearmisseswillbeintherange2to6.Therefore,thefigureof3nearmissesthisyearisnotsignificantly
differentfrom4lastyearandcongratulationswouldbepremature.
Itisimportanttobeabletospotagrosserrorwhichmightdistortourkeyperformanceindicators.Thisissometimesreferredtoasbeing
abletospotastranger.Supposeoneofourtechnicianshasloggedaseriesofvibrationmeasurementsasfollows:
Suspicionfallsonthevalue26.54becauseitissomuchlargerthantheothervaluesforexample,coulditbethatitwasactually2.65
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whichwaswronglyrecorded?
Thehighestnumberinthissetis26.54andthelowestis1.04,thereforetherangeis25.5.Ifweignorethesuspiciouslyhighnumberthen
thenewrangeis9.721.04or8.68.Theratioofthesetworangesis25.5/8.68orapproximately3.Ifthehighnumberweregenuine,then
thisratioshouldbenolargerthan2.Thereforethelargenumberisspuriousandweshouldeithertakethereadingagain,or,ifthatisnot
practical,thenignorethelargenumberandnotuseitbecauseitsinclusionwilldistortouranalysis.
FrequencyofMeasurement
Someofthekeyindicatorswillbeavailablecontinuously:motorelectriccurrentdrawnbyacriticalpieceofequipment,forinstance.
However,otherindicatorsperhapshavetobemeasuredperiodicallytherefore,wemustdecidehowoftenthisneedstobedone.Youmay
havenoticedinoldHollywoodcowboyfilmsthatthestagecoachwheelsseemtobemovingbackwards,eventhough,thestagecoachis
clearlymovingforward.Inoldernewsreportsthehelicopterrotorssometimesappeartobemovingerratically,insteadofsmoothly.Bothof
theseexamplesaretheresultoftheshutterspeedofthecamerabeingtooslowtoaccuratelyrecordthemovement.
Inordertorecordaparameterfaithfullyitmustbesampledatdoublethehighestfrequencyitexhibits.(SeeHartley/Tuller/Shannon
samplingtheorem,1948).Therefore,tofaithfullyrecordaudiosignalsonaCD,thedigitalsamplesarerecordedat38kHzsincethe
highestaudiofrequencypresentis19kHz.Ifweconsiderthatpumpperformancewilldeteriorateovera12weekperiod,thenwemust
checkitatleastevery6weeks.Thereisnoharminsamplingmoreoften,providedhighcostsarenotinvolved,asthesamplingtheorem
merelysayswhattheminimumneedstobe.
SystemResponse
Keyperformanceindicatorsarepartofamethodorsystem.Allsystemstaketimetorespondandthisresponsetimeneedstobetaken
intoaccount,otherwise,theresultwillbewildoscillationsinthemeasuredvalues.
Considerthisscenario.Igointomykitchenfirstthinginthemorningandturnonthehottap.Foraperiodoftimethewaterremainscold
asallofthestandingwaterinthepipebetweenthetapandthehotwatertankisdisplaced.Thenthewatertemperaturestartstorise,this
isnotimmediate,because,thehotwaterlosessomeenergyasitwarmsthepipeworkbetweenthehotwatertankandthetap.Eventually,
thehotwaterachievesasteadyvalue.AplotofhotwatertemperatureatthetapversustimewilllooklikethatinFigure3.
Figure3PlotofTemperaturevs.Time
ThebehaviourshowninFigure3adeadtimefollowedbyacharacteristicrisetimeisthesimplestresponseasystemcanexhibit.
Morecomplexsystemscanexhibitlongerdelaysandmorecomplicatedresponsecurves.Wheneverachangeismadetooursystem,it
willtaketimeforthekeyperformanceindicatortochangeitsvalue.Ifweexpectanimmediatechangeandkeepmakingchangesuntil
somethingeventuallyhappensthentheindicatorwilleventuallyovershootandfurtherchangeswillresultincontinuedoscillations.We
needtobepatientand,aftermakingachange,waituntilafteranydeadtimeperiodandcharacteristictimeconstant,toseewhatthetrue
effectthechangeshavehad.Thatway,theperformancemanagementsystemwillstayincontrol.
CONCLUSIONS
Maintenancekeyperformanceindicatorsprovideawindowonourstrategytheyletusseehowwellitisworking.Inordertoachievea
robustperformancemanagementsystemweneedtobecarefulinourchoiceofmeasures,toconsiderimperfectionsinthem,thedelay
betweencauseandeffectandhowtheywillinfluencebehaviours.
ChecklistofKeyPerformanceIndicatorsEssentials
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Simpleperformancemeasuresforservice,performanceandcost,linkedtotheorganizationsneeds,aredisplayed,understoodand
ownedbyall
Global,comprehensiveandaccurateequipmenthistorysystemwithastandardizedassetstructurefacilitatesinternalandexternal
benchmarkingactivities
Trendsinmaintenanceandreliabilityperformancearerecognisedandrootcausessought
Plantkeyperformanceindicatorsarebuiltintoahierarchywhichisusedbytheorganizationwideperformancemanagementsystem
Stretchtargetsareusedtoaccelerateimprovementsinperformance
THEAUTHOR
PaulWheelhouseisadirectorwiththeconsultancycompanyRedWheelSolutions,whichspecialisesinmaintenance,assetmanagementandreliabilityimprovement.(For
furtherdetailsseewww.redwhweelsolutions.com)HeisalsoavisitinglecturerwithManchesterUniversitywherehelecturesontheMaintenance&AssetManagementMSc
programme.TogetherwithStuartEmmett,hecoauthoredthebookcalledExcellenceinMaintenanceManagement,ISBN9781903499658.
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SpurGearPumpVibrationAssessment1comment2yearsago
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SauroRiccettiFrommanufacturingmanagers,maintenanceisoftenseenasadisturbancetotheproductionactivity.Lackofknowledgeandashort
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MaintenanceOneSteve,MarkHaarmanisdefinitelypresentingattheVDMMasterClass,takingplaceon23October.See
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MaintenanceOneISO55000AssetManagementOverview,principlesandterminology(launchedJanuary2014).Viewdetails
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SauroRiccetti ayearago
KeyPerformanceIndicatorsenable,amongtomanydifferentmanagementfunctions,tochallangeequipmentoperatorsthatareresponsibleoftheline/machine.TheregularanalysisofKPIshowsthetrendoftheline,enablecomparisonandcontrastwithhistoricalfigurestochallange,asresult,equipmentoperatorstodiscoverpotentialareasofimprovement.
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