KEY PERFORMANCEINDICATORSMeasuring and Managing the MaintenanceFunctionNovember 2005Written by:Al WeberReliability Consultant, IvaraRon ThomasDirector of Reliability Practices, DofascoIVARA CORPORATION935 Sheldon Court,Burlington Ontario. Canada. L7L 5K6Confidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.
Copyright 2005 Ivara Corporation. All rights reserved.Information in this document is confidential.No part of this document may be reproduced, stored ina retrieval system or transmitted in any form or anymeans electronic or mechanical, includingphotocopying for any purpose other than as agreedwithout permission ofIvara Corporation.Ivara Corporation935 Sheldon CourtBurlington, OntarioCanada. L7L 5K6Toll free: 1-877-746-3787Tel: 905-632-8000Fax: 905-632-5129www.ivara.comConfidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.
Maintenance Key PerformanceIndicatorsIntroduction“It is not possible to manage what you cannotcontrol and you cannot control what you cannotmeasure!” (Peter Drucker)Performance measurement is a fundamentalprinciple of management. The measurementof performance is important because itidentifies current performance gaps betweencurrent and desired performance andprovides indication of progress towardsclosing the gaps. Carefully selected keyperformance indicators identify preciselywhere to take action to improveperformance.This paper deals with the identification ofkey performance indicators for themaintenance function, by first looking at theways that maintenance performance metricsrelate to manufacturing metrics.Sinceperformancemeasurementsformaintenance must include both resultsmetrics and metrics for the process thatproduces the results, this documentpresents a representation for the businessprocess for maintenance. The documentthen identifies typical business process andresults metrics that can be used as keyperformance indicators for the maintenancefunction.customer service, operating costs, safetyand environmental integrity.To achieve this performance there are threeinputs to be managed. The first requirementis Design Practices. Design practicesprovide capable equipment "by design"(inherentcapability),tomeetthemanufacturing performance requirements.The second requirement is OperatingPractices that make use of the inherentcapability of process equipment. Thedocumentation of standard operatingpractices assures the consistent and correctoperation of equipment to maximizeperformance.The third requirement is MaintenancePractices that maintain the inherentcapability of the equipment. Deteriorationbegins to take place as soon as equipmentis commissioned. In addition to normal wearand deterioration, other failures may alsooccur. This happens when equipment ispushed beyond the limitations of its designor operational errors occur. Degradation inequipment condition results in reducedequipment capability. Equipment downtime,quality problems or the potential foraccidents and/or environmental excursionsare the visible outcome. All of these cannegatively impact operating cost.Physical Asset ManagementThe purpose of most equipment inmanufacturing is to support the production ofproduct destined to downstream customers.Ultimately the focus is on meeting customerneeds. This is illustrated in Figure 1.Customer expectations are normally definedin terms of product quality, on-time deliveryand competitive pricing. By reviewing thecomposite requirements of all currentcustomers and potential customers in thosemarkets we wish to penetrate, theperformance requirements of our physicalassets can be defined. dwithquality,availability,Figure 1: Managing manufacturing performancerequirements to meet customer needsManufacturing key performance indicatorsprovide information on the current state ofmanufacturing. Asset capability, operatingConfidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 3 of 16
practices and the maintenance of assetcondition all contribute to the ability to meetthese performance requirements.Some typical key performance indicators formanufacturing include operating cost; assetavailability, lost time injuries, number ofenvironmental incidents, OEE and assetutilization.Consider asset utilization, as depicted inFigure 2. Asset utilization is a manufacturinglevel key performance indicator. It is afunction of many variables. For example,asset utilization is impacted by bothmaintenance and non-maintenance relateddowntime.Non-maintenancerelateddowntime may be attributed to lack ofdemand, an interruption in raw materialsupply or production scheduling delaysbeyond the control of the maintenancefunction. Asset utilization is also a functionof operating rate, quality and yield losses,etc. In each of these areas maintenancemay be a factor but it is not the onlycontributor. In order to maintain and improveperformanceeachfunctionintheorganization must focus on the portion of theindicators that they ance indicators are not only afunction of maintenance. They are affectedby causes beyond the control of themaintenance function. Asset capability,operating practices and the maintenance ofasset condition all contribute to the ability tomeet performance requirements. If amanufacturing level indicator is used tomeasuremaintenanceperformance,improved maintenance may not result in aproportionalimprovementinthemanufacturing metric. For instance, in theasset utilization example, cited above, themaintenance contributors may all be positiveand yet the resulting asset utilization maynot improve due to other causes.A key principle of performance managementis to measure what you can manage. Inordertomaintainandimprovemanufacturing performance each function inthe organization must focus on the portion oftheindicatorsthat theyinfluence.Maintenance performance contributes tomanufacturing performance. The keyperformance indicators for maintenance arechildrenofthemanufacturingkeyperformance indicators.Figure 2: Asset Utilization is an example of amanufacturing level key performance indicator.Key performance indicators for maintenanceare selected ensuring a direct correlationbetween the maintenance activity and thekey performance indicator measuring it.When defining a key performance indicatorfor maintenance a good test of the metricvalidity is to seek an affirmative response tothe question; “If the maintenance functiondoes ‘everything right’, will the suggestedmetric always reflect a result proportional tothe change; or are there other factors,external to maintenance, that could maskthe improvement?”This paper focuses on defining keyperformance indicators for the maintenancefunction, not the maintenance organization.Confidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 4 of 16
Figure 3: The Asset Reliability Process identifies what's required to manage the maintenance function.The maintenance function can involve otherdepartments beyond the maintenanceorganization. Similarly, the maintenancedepartment has added responsibilitiesbeyond the maintenance function and, assuch, will have additional key performanceindicators to report. The key performanceindicators for the maintenance organizationmay include key performance indicators forother areas of accountability such as healthandsafetyperformance,employeeperformance management, training anddevelopment, etc.The Asset Reliability ProcessThe management of physical assetperformance is integral to business success.What we manage are the businessprocesses required to produce results. Oneof these business processes is responsiblefor the maintenance of physical assetreliability. The Asset Reliability Process isshown in Figure 3. It is an integral part of amuch larger business process responsiblefor managing the total enterprise.A proactive Asset Reliability Process,represented by the seven (7) elements inthe model aims to deliver the performancerequired by the enterprise to meet all of itscorporate objectives. Each element withinthe maintenance process is in itself a subprocess. A brief description of each elementfollows:Business Focus, represented by the greenbox on the left, focuses the maintenance ofphysical asset reliability on the businessgoals of the company. The potentialcontribution of the asset base to these goalsis evaluated. The largest contributors arerecognized as critical assets and specificperformance targets identified.Work Identification, as a process,produces technically based Asset ReliabilityPrograms. Program activities identify andcontrol failure modes impacting on theequipment's ability to perform the intendedfunction at the required performance level.Activities are evaluated to judge if they areworth doing based on the consequences offailure.Confidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 5 of 16
Planning develops procedures and workorders for these work activities. Theprocedures identify resource requirements,safety precautions and special workinstructions required to execute the work.Scheduling evaluates the availability of allresources required for work "due" in aspecified time frame. Often this workrequires the equipment to be shut down. Areview of production schedules is required.Resources are attached to a specific workschedule. The use of resources is balancedout.In the Execution process, trained,competent personnel carry out the requiredwork.The Follow-up process responds toinformation collected in the executionprocess. Work order completion commentsoutline what was done and what was found.Actual time and manpower, to complete thejob, is documented. Job status is updated ascomplete or incomplete. Corrective workrequests, resulting from the analysis ofinspection data, are created. Requests aremade for changes to drawings andprocedures.The process of Performance Analysisevaluatesmaintenanceprogrameffectiveness. Gaps between actual processperformance and the required performanceare identified. Historical maintenance data iscomparedtothecurrentprocessperformance. Maintenance activity costs arereviewed. Significant performance gaps areaddressedbyrevisitingtheWorkIdentification function.Each element is important to provide aneffective maintenance strategy. Omitting anyelement will result in poor equipmentperformance, increased maintenance costsor both.Forexample,WorkIdentificationsystematically identifies the Right Work tobe performed at the Right Time. Withoutproper Work Identification, maintenanceresources may be wasted. Unnecessary orincorrect work will be planned. Onceexecuted, this work may not achieve thedesired performance results, despitesignificant maintenance costs. WithoutPlanning the correct and efficient executionof the work is left to chance. The PlannedMaintenanceProcessisacycle.Maintenance work is targeted to achieverequiredassetperformance.Itseffectiveness is reviewed and improvementopportunities identified. This e impacted by Maintenance.Within the Planned Maintenance Processtwointernalloopsexist.Planning,Scheduling, Execution and Follow Up makeup the first loop. Once maintenanceactivities are initially identified, an assetmaintenance program, based on currentknowledge and requirements, is initiated.The selected maintenance activities will beenacted upon at the designed frequency andmaintenance tolerance limits. The process isself-sustaining.The second loop consists of the WorkIdentification and Performance p.Actualassetperformance is monitored relative to therequired performance (driven by businessneeds). Performance gaps are identified.The ‘cause’ of these gaps is established andcorrective action recommended.Performance Metrics for the MaintenanceFunctionThe Asset Reliability Process represents thecollection of ‘all’ tasks required to supportthe maintenance function. The process is asupply chain. If a step in the process isskipped, or performed at a substandardlevel, the process creates defects known asfailures. The output of a healthy reliabilityprocess is optimal asset reliability at optimalcost.Asset Reliability Process measures areleading indicators. They monitor if the tasksare being performed that will ‘lead toresults’. For example a leading processindicator would monitor if the planningfunction was taking place. If people areConfidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 6 of 16
doing all the right things then the results willfollow. The leading ‘process’ indicators aremore immediate than results measures.Result measures monitor the products of theAsset Reliability Process. Result measuresinclude maintenance cost (as a contributorto total operating cost), asset downtime dueto planned and unplanned maintenance (asa contributor to availability) and number offailures on assets (the measure of reliability:this can then be translated into mean timebetween failures). Results measures lag.Failure is a good example. Typically thesame piece of equipment doesn’t fail dayafter day. Take a pump for example. Say thepump fails on average once every 8 months.If we improve its reliability by 50% it will nowfail every 12 months. You have to wait atleast 12 months to see the improvement.Key performance indicators for themaintenance function need to include bothleading (maintenance process) measuresand lagging (result) measures. This paperfocuses on identifying both leading ively,thesemeasurements are the key performanceindicators for the maintenance function.Reliability Process Key PerformanceIndicators – Leading MeasuresThe maintenance process is made up ofelements. All elements are required tocomplete the supply chain. Key performanceindicators of the maintenance process areprocess assurance measures. They answerthe question ‘how do I know that thismaintenance process element is beingperformed well?’ The day-to-day executionof maintenance is addressed through theseven elements of the Reliability Process;Business Focus, Work Identification, WorkPlanning,WorkScheduling,WorkExecution, Follow-up and PerformanceAnalysis. Key performance indicators foreach element are recommended.It should be noted that variations of thesemetrics may be defined or additionalperformance metrics may be used. Themetrics presented here provide a clearindication if the requirements of eachelement are being satisfied and, if not, whataction should be taken to correct the lack ofmaintenance process adherence.Work IdentificationThe function of work identification is toidentify the ‘right work at the right time.1. Work RequestsInitiating a work request is one method ofidentifying work. Once a work request issubmitted it must be reviewed, validated andapproved before it becomes an actual workorder ready to be planned. If the workrequest process is performing well, thevalidation and approval/rejection of workrequests should occur promptly.A suggested measure for the work requestprocess is: The percentage of work requestsremaining in “Request” status for lessthan 5 days, over a specified time period(for example the last 30 days). Theworld class maintenance expectation isthat most work ( 80%) requests wouldbe reviewed and validated within amaximum of 5 days.Work requests rely on the randomidentification of problems or potentialproblems and bringing them to the attentionof maintenance to address them. In a worldclass organization, work identification is notleft to chance.2. Proactive WorkThe ‘Asset Maintenance Program’ isdesigned to identify potential failureconditions, changes in state of hiddenfunctions and known age related failurecauses. The development of the AssetMaintenance Program defines the routinemaintenance tasks that must be executed toachieve the performance levels required tomeet business requirements. If the ‘AssetMaintenance Program’ is effective, it willsuccessfully identify and address mostmaintenance preventable causes of failure.Confidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 7 of 16
If the ‘Work Identification’ function is workingwell, the majority of work performed bymaintenance would consist of executing theAsset Maintenance Program (AMP) tasksand the corrective work originating from it. The key performance indicator for the workidentification element is: The percentage of available man-hoursused for proactive work (AMP AMPinitiated corrective work) over a specifiedtime period. The world class maintenancetarget for proactive work is 75 to 80%.Recognizing that 5 -10% of available manhours should be attributed to improvementwork (non-maintenance) this would leaveapproximately 10% - 15% reactive work.Work PlanningThe primary function of the Work Planningelement of the maintenance process is toprepare the work to achieve maximumefficiency in execution.5. Quality of PlanningThese key performance indicators forplanning do not reflect the quality of theplanning being done. A critical aspect ofplanning is estimating resources. The qualityof planning can be measured by monitoringthe accuracy of estimating. Labor andmaterial resources are the dominantresources specified on a work order.The accuracy of estimating labor can bemeasured by: 3. Amount of Planned WorkIn general terms, planning defines how to dothe job and identifies all the requiredresources and any special requirements toexecute the work. A properly planned workorder would include all this information.Maximizing maintenance efficiency requiresa high percentage of planned work.A measure of whether planning is takingplace is: The percentage of all work orders, overa specified time period, with all theplanning fields completed (ex. Laborassignments, task durations, workpriority, required by date, etc). The worldclass expectation is that 95% of all jobsshould be planned.4. Responsiveness of PlanningAnother key performance indicator forplanning is the time it takes a work order tobe planned. A suggested measure of this is:The percentage of work orders in‘planning status’ for less than 5 days,over a specified time period. A worldclass performance level of at least 80%of all work orders processed in 5 days orless should be possible. Some workorders will require more time to plan butattention must be paid to 'late finish orrequired by date'.The percentage of work orders withman-hour estimates within 10% ofactual over the specified time period.Estimating accuracy of greater than90% would be the expected level ofworld class maintenance performance.A second metric of planning quality,addressing material estimates, would be: The percentage of planned, scheduledand assigned work orders, whereexecution is delayed due to the need formaterials (spare parts) over thespecified time period. The world classmaintenance expectation is that lessthan 2% of all work assigned will have amaterialdeficiency(duetoplanning).Note: this assumes the jobshould not have been scheduled if thematerials were not available. Therefore,the problem is that the work order didnot account for all the requiredmaterials.Work SchedulingGood planning is a prerequisite toscheduling. The primary function ofscheduling is to coordinate the availability ofConfidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 8 of 16
the asset(s) to be maintained with all therequired resources; labor, material andservices creating a schedule to execute ‘theright work at the right time’. The schedule isa contract between operations andmaintenance. The ‘right work at the righttime’ implies that this work must beexecuted within the specified time period toachieve the desired level of performance.Failure to execute within the schedule periodwill increase the risk of failure.With good work identification, planning andscheduling in place, the weekly maintenanceschedule should be produced several daysin advance of the beginning of the scheduleperiod. There should be confidence that thisschedule reflects the work that will becompleted through the schedule period.6. Quality of SchedulingA key performancescheduling function is: fortheThe percentage of work orders, over thespecified time period, that have ascheduled date earlier or equal to the‘late finish or required by date’. A worldclass maintenance target of 95%should be expected in order to ensurethe majority of the work orders arecompleted before their 'late finish orrequired-by date.'A second measurescheduling is: indicatorofthequality The percentage of scheduled availableman-hours to total available man-hoursover the specified time period. A worldclass target of 80% of man-hoursshould be applied to scheduled work.It is not desirable to schedule 100% ofavailable man-hours within a scheduleperiod, because we recognize that additionalwork will arise after the schedule has beencast. This includes both emergency workand other schedule write-ins that must beaccommodated during the schedule period.Work ExecutionWork execution begins with the assignmentof work to the people responsible forexecuting it and ends when the individualscharged with responsibility for executionprovide feedback on the completed work.7. Schedule ComplianceWith a high quality of work identification,planning and scheduling, maintenanceresources should execute according to theplan and schedule. Therefore, a keyperformance indicator of execution isschedule compliance. Schedule complianceis defined as: ofThe percentage of work orders assigned“Delay” status due to unavailability ofmanpower,equipment,spaceorservices over the specified time period.Volume of Scheduled WorkThe scheduling of properly planned work isalso important to maximize maintenanceefficiency. We would anticipate that a highpercentage of the available maintenanceman-hours would be committed to aschedule. A second scheduling keyperformance indicator measures:The percentage of work orderscompleted during the schedule periodbefore the late finish or required by date.World class maintenance shouldachieve 90% schedule complianceduring execution.8. Quality of Work ExecutionWork execution quality is measured by: The percentage of rework. World classlevels of maintenance rework are lessthan 3%.9. Work Order CompletionThe purpose of identifying maintenanceprocess key performance indicators is tohelp manage the maintenance process. Theability to successfully monitor and managethe process and measure the results of theprocess is highly dependent on gatheringConfidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 9 of 16
correct information during work execution.The vehicle for collecting this information isthe work order. Work orders should accountfor ‘all’ work performed on assets. This isnecessary to gather accurate maintenancecost and history data, enabling themanagement of the physical asset throughits life cycle.A returned work order should indicate thestatus of the job (complete, incomplete), theactual labor and material consumed, anindication of what was done and/or whatwas found and recommendations foradditional work. In addition, informationabout process and equipment downtime andan indication of whether the maintenanceconducted was in response to a failureshould be provided.The idea that the job is not done until thework order is completed and returned is asignificant challenge to many organizations.For this reason it is also important to have akey performance indicator on work ordercompletion. This metric should look at: The percentage of work orders turned inwith all the data fields completed. Worldclassmaintenanceorganizationsachieve 95% compliance.should be reviewed and closed within 3days.Performance AnalysisThe performance analysis element of themaintenanceprocessevaluatesmaintenance effectiveness by focusing onkey performance indicators of maintenanceresults. Gaps between the actual andrequired performance of the maintainedasset are identified. Significant performancegaps are addressed by initiating workidentification improvement actions to closethe performance gap.11. Presence of Performance AnalysisOne indication that performance analysis isbeing executed is the existence of themaintenance result metrics described underthe next section of this paper entitled keyperformance indicators of maintenanceeffectiveness (result measures).12. Quality of Performance AnalysisFrom a maintenance process perspective itis important that these results are drivingaction. Therefore, a key performanceindicator for performance analysis is ameasure of:Follow-up In the Follow-up element of the maintenanceprocess, actions are initiated to address theinformation identified during execution.Some key follow-up tasks include reviewingwork order comments and closing outcompleted work orders, initiating correctivework and initiating part and proceduralupdates as required. The number of reliability improvementactions initiated through performanceanalysis during the specified period. Noabsolute number is correct but nonumber suggests inaction.A second measure is the number ofasset reliability actions resolved over thelast month. In other words, a measure ofhow successful the organization is inperformance gap closure.10. Work Order ClosureTimely follow-up and closure of completedwork orders is essential to maintenancesuccess. A key performance indicator forfollow-up is: The percentage of work orders closedwithin a maximum of 3 days, over thespecified time period. The expectation isthat 95% of all completed work ordersKey Performance Indicators ofMaintenance Effectiveness (ResultMeasures)The product of maintenance is reliability. Areliable asset is an asset that functions atthe level of performance that satisfies theneeds of the user. Reliability is assessed bymeasuring failure.Confidential information of Ivara Corporation. Ivara is a registered trademark of Ivara Corporation.Not to be copied, disclosed or electronically distributed without written permission from Ivara.Page 10 of 16
FailuresThe primary function of maintenance is toreduce or eliminate the consequences ofphysical asset failures. The definition offunctional failure is anytime that assetperformance falls below its requiredperformance. Therefore a key performanceindicator for maintenance effectiveness issome measurement of failure on theasset(s). If the maintenance function iseffective, failures on critical assets and thustheir consequences should be reduced oreliminated.Failure consequence impacts manufacturinglevel key performance indicators. Failureclassification by consequence identifies thecontribution of maintenance function tomanufacturing level performance.Failure consequences are classified into thefollowing categories:1. Hidden Consequence – there is nodirect consequence of a single pointfailure other than exposure to theincreased risk of a multiple failure (asecond failure has to occur toexperience a consequence).2. Safety Consequence – a single pointfailure results in a loss of function orother damage which could injure or killsomeone.3. Environmental Consequence –a singlepoint failure results in a loss of functionor other damage which breaches anyknown environmental standard orregulation;4. Operational Consequence – a singlepoint failure has a direct adverse effecton operational capability (output,product quality, customer service oroperating costs in addition to the directcost of repair).5. Non-Operational Consequence – asingle point failure involving only thecost of repair.Therefore, it is important to track: The number and frequency of assetfailures by area of consequence. Thereis no universal standard for this metricbecause of the diversity of industriesand even plants within industrysegments. It is however reasonable toexpect a downward trend and to setreduction targets based on currentperformance levels and business needs.Maintenance CostsMaintenance costs are another directmeasure of maintenance performance.Maintenance costs are impacted by bothmaintenanceeffectivenessandtheefficiency with which maintenance isperformed.Maintenance maximizes its effectiveness byensuring that it performs “The Right Work atthe Right Time”. Proactive maintenancemeans intervening before the failure eventoccurs.The impact of proactivemaintenance is not only to minimize thesafety, environmental and operationalconsequences of failure but also to reducethe cost of maintenance by reducingsecondary damage. For example, if thepotential failure of a pump bearing wasdetected proactively, the catastrophic failureof the bearing could be prevented. Thecatastrophic failure of the pump bearingwould likely result in damage to the casing,wear rings, impeller, mechanical seals, etc.The corrective repair would require anextensive pump rebuild. Utilizing a proactivetask such as vibration monitoring to
practices and the maintenance of asset condition all contribute to the ability to meet these performance requirements. Some typical key performance indicators for manufacturing include operating cost; asset availability, lost time injuries, number of environmental incidents, OEE and asset utilization. Consider asset utilization, as depicted in