Partner & Associate Director, Manufacturing
In recent years, global manufacturers have faced an array of challenges, from slow economic growth to an uncertain regulatory landscape and rising electricity prices. To compete effectively in a rapidly changing global marketplace, these companies must operate with greater efficiency and flexibility than they have in the past, responding quickly to changing market dynamics and grasping emerging opportunities. As part of this effort, they need to examine the costs and effectiveness of their maintenance and repair programs.
Across industries, maintenance is typically considered a service organization, rather than an integrated part of production. There are significant inconsistencies between a maintenance system’s goals and how people, processes, and tools are organized. Work process standards, for example, are often lower than production standards, and even when a company adopts more advanced processes, such as autonomous maintenance, these may not significantly improve operating efficiency.
To reduce downtime and extend the lifetime of equipment, manufacturing companies must make their maintenance function proactive instead of reactive. This, in turn, will reduce their annual expenses and parts inventories without compromising safety or quality.
BCG recently helped a major international cement company design and implement an ambitious maintenance excellence program to keep equipment performing at peak efficiency. Based on that experience, we have identified four key principles that other companies can use to design their own maintenance system, as well as a three-level process to ensure that a uniform system gets adopted throughout the organization.
To design a world-class maintenance system, any manufacturing company, regardless of size or geographic reach, should follow the following four principles:
A uniform maintenance system allows for consistent implementation across all plants and operations and ensures that the best practices developed in one plant are shared with others. In our work with the global cement maker, BCG developed a platform for continuous improvement by combining the company’s own internal practices with lessons from other industries. The system is built on three levels. (See Exhibit 1.)
Using this platform, the cement company collected existing maintenance procedures from each of its plants, reviewed them, and standardized them across all operations. This made the system easily adaptable to changes proposed by individual plants, because receiving recommendations, developing solutions, and implementing changes all proceeded according to a shared and uniform process. The standardized procedures conform to the logic of the maintenance process:
The maintenance organization, led by the maintenance manager, is divided into two key areas: one focused on the execution of maintenance tasks and the other on the management of resources and backlog—or on the work that needs to be done.
Once the company has designed its maintenance system, it should designate a project team to run the implementation and monitor and support cultural shifts across plant teams. For the implementation to be successful, maintenance leaders must take time at the beginning to explain the concept of the new system to the project team and its role throughout the three main phases of implementation. (See Exhibit 2.)
Preparation. Well-defined preparation, including setup and governance, is key to an efficient maintenance transformation. We recommend that companies establish a steering committee responsible for releasing technical specifications for maintenance procedures, making strategic decisions, and taking the initiative required to promote change at the plant level. The global cement company’s steering committee consisted of a project manager and many experienced maintenance engineers from different locations who disseminated maintenance standards to all the plants.
Maintaining consistent project management governance requires strict monitoring to ensure a rapid response to potential roadblocks. Members of the steering committee and the project and plant management teams should have regular meetings and produce reports on a weekly and monthly basis.
In addition to setup and governance, the preparation process should include creation of work teams by function and plant; development of a roadmap with timeline and milestones; development of top-down objectives and targets; development of a program scorecard with KPIs; development of a communications plan; analysis of maintenance information from representative plants; and alignment on the overall concept and structure of the maintenance program.
Development. For a new maintenance system to succeed, employees must accept it, which requires that they have input. Companies should therefore create a development team, composed of a significant number of maintenance workers who can contribute their hands-on expertise. The team may also consider other companies’ practices, input from maintenance experts, and external benchmarks. The development team works within the framework established by the steering committee to create manuals, adopt policies and key practices, and define maintenance requirements, resources, capabilities, and costs. This process should take about three months from the time the preparation phase is completed.
The development team should also consider creating a set of tools, such as templates for inspection practices and techniques, to support the implementation of the new system. The tools can be adopted gradually and adjusted based on feedback from maintenance teams on the plant floor.
In addition, companies should consider technological changes that can improve efficiency. For example, the global cement company adopted an automated reporting system to measure the maintenance backlog. This is critical because backlog is a reference point for all plant functions. The company also developed equipment specification coding, which allowed for better equipment tracking, document management, and technical and financial analysis.
Finally, the cement company adopted the highest global standards for risk-based autonomous and predictive maintenance, as well as Industry 4.0 innovations such as augmented reality (AR). Now still in their infancy, AR systems will eventually help maintenance workers select the proper spare parts and send real-time repair directions to their mobile devices. For example, a worker wearing AR glasses could receive instructions for replacing a particular part while actually looking at the system in need of repair.
Pilots and Rollout. Pilot plants allow the company to test maintenance systems, assess any necessary changes, and make adjustments. These plants should be designated by the development team, and all pilot site operations should follow a standardized process:
The development team should conduct meetings with pilot plant managers prior to the launch to assess the plant’s status, develop transparency about the changes, and share overall objectives. This will result in broader acceptance and support from plant workers.
At the cement company, pilot plants reported sustainable maintenance cost reductions of 5% to 8%, and their reliability increased by 2 percentage points in the first year. Their mean time between failures rose by 6.7% compared with the previous year, and the company saw a significant increase in its completion rate while reducing its administrative workload. For example, work orders in the pilot plants fell by about 65% on a weekly basis. Standardization has improved, responsibilities of the inspection team and other departments are more clearly defined, and collaboration between plants has increased.
While results will vary depending on the business and the nature of its maintenance operations, companies that wish to improve their maintenance systems should look beyond basic operational processes. World-class maintenance begins with a vision and a clear link to the business, incorporating best practices in operations and clear governance to define performance. Maintenance workers must have input into the system’s development to ensure their support. With the proper design, preparation, and implementation, companies can increase the efficiency and cost-effectiveness of their global maintenance system.