1. Reducing Maintenance Costs in a Tough Economic Climate

2. About OMCS International Operations and Maintenance Consulting Services International consulting company Main Office in Altona Vic Licensees and JV partners across the world Known for PM Optimisation program – PMO2000® Have clients in almost every industry sector

3. This presentation is aimed at these costs Defining Maintenance Costs Labour Parts Materials Overhead Supervision Drafting, Reliability and support personnel Stores Systems Workshops and Other Facilities Opportunity costs of downtime Only where capacity constrains the sales

4. Some interesting concepts

5. There are only three options for evident failure modes: Condition based maintenance Fixed time replacement Operate to fail

6. The frequency of On-Condition tasks must be less than the P-F Interval. Resistance to Failure P-F Interval (months) Potential Failure Functional Failure Check at 1 monthly intervals Age Option 1..Condition Monitoring

7. Option 2…Fixed time replacement Safe Life The frequency of fixed time replacement must be before safe of economic life.

8. Option 3Operate to fail Where the rate of deterioration is sudden, and Where the failure pattern is random Or Where the cost of the preventive action is greater than the cost of repair

9. Maintenance Options for Evident Failure Modes… Age Related Failure Pattern Fixed Time Replacement only Random Gradual Sudden Rate of Deterioration

10. Maintenance Options for Evident Failure Modes… Condition Based Replacement only Age Related Failure Pattern Random Gradual Sudden Rate of Deterioration

11. Maintenance Options for Evident Failure Modes… Age Related Failure Pattern Fixed Time Replacement or Condition Based Replacement Random Gradual Sudden Rate of Deterioration

12. Maintenance Options for Evident Failure Modes… Failure will always be a breakdown Age Related Failure Pattern Random Gradual Sudden Rate of Deterioration

13. Maintenance Options for Evident Failure Modes… Age Related Failure Pattern Random Gradual Sudden Rate of Deterioration

14. Most maintenance programs are condition based Take your car for example. Of all the hundreds of failure modes, the only fixed time replacement items are these: Oil Some timing belts Filters Spark Plugs The rest of your car is operated to failure or managed “on condition”.

15. Expected Failure Inherent Capability Loss Planned Maintenance Maintenance Capability Loss Unexpected Failure Inherent Performance Level Available Time The concept of inherent capability... TotalTime

16. The cost conundrum

17. This graph makes no sense to me! $ Total Costs Breakdown Costs PM Costs More PM

18. What really happens is that at some point doing more PM only adds cost! $ Total Costs Breakdown Costs PM Costs More PM

19. The maintenance cost of operating an asset is determined by: The design and The operating context It is not determined by the accounting department It seems to me that we can work out the least cost approach for any design and operating context It is not the trade off curve many people think The concept of an Optima or sweet spot does not really exist! Maintenance should be considered a fixed cost

20. Case study – Aluminium Smelter

21. Changes to Green Carbon (total tasks = 1185) 21

22. Green Carbon - PM Maintenance hours before and after. 22

23. Changes to Carbon Bake (total tasks = 1259) 23

24. Carbon Bake – PM maintenance hours before and after

26. Changing from an inspection strategy to a more cost effective scheduled discard or diagnostic strategy (especially lubrication tasks),

27. Gaining a clear understanding of role tasks and documenting them,

28. Setting inspection frequencies to match rates of equipment function deterioration,

30. Review of vendor recommended program for underground mining equipment

31. Review of vendor recommended program for underground mining equipment Vendor maintenance program consumed 4% of total time This was reduced to just over 1% total time

32. Some suggestions on how to go about this

33. Ideas to reduce costs Eliminate duplication of effort between operators / control room and maintainers. Maximise Operator maintenance capabilities. Move to operating hours based servicing or the factor that drives the asset deterioration: Production volume, Operating hours, Distance Cycles

34. Ideas to reduce costs... cont Move to condition based maintenance program where appropriate Determine what is the most expensive maintenance and focus on that first: Often the most frequent interval Look for equipment types that you have lots of: Example – gas plant with 112 fin fans costing $200,000 in gearbox overhauls per year.

35. Ideas to reduce costs... cont Review electrical and instrument maintenance. Often this is done more frequently that needs to be, and performed to prevent evident, sudden and random failure modes

36. Do’s and Don’ts

37. The following does not make much sense... Extending intervals of maintenance without any analysis For CBM – either delete it completely or work out what the real PF is. For fixed time replacement tasks - undertake a condition assessment of the components removed on before extending the intervals

38. These factors are important.. Involve your operators and maintenance and work in a multi disciplined group if possible. Make sure the group understands the four quadrant approach to deciding options and what drives task frequency.

39. Questions and comments