year, U.S. industry spends well over $300 billion on plant maintenance and operations. An
estimated 80% of these dollars are expended to correct chronic failures of machines,
systems, and people that occur daily, even hourly, in plants across the country.
Based on my experiences and observations over 40 years in hundreds of
plant situations, eliminating these chronic failures can reduce maintenance costs between
40% and 60%. And that savings to industry of up to $115 billion annually can be realized
without major restructuring, employee layoffs, or sacrifice of product quality. However,
it does require changes in existing mindsets about how to maintain and operate facilities
on a day-to-day basis.
Despite American industrys attempts to reinvent the
workplace through a long list of fashionable management techniques, millions of employees
still go to work every day and perform the same tasks the same way they did last week and
These men and women are keeping our plants operating.
Their jobs are vital to efficiency and productivity, yet they spend much of their time
correcting deviations in normal plant processes and fixing routine breakdowns. Often, they
spend hours conforming to outmoded, time-consuming administrative rules and procedures.
This drain on corporate assets is caused, in large
measure, by mindset that accepts these failures as routine and normal. It is a
self-limiting paradigm that says machinery breaks, people make mistakes, and systems fail.
However, by challenging this belief and taking steps to eliminate unnecessary failures,
managers can increase productivity, reduce downtime, and increase profit dramatically.
The issue is not the once-in-a-corporate-lifetime
catastrophe. Although dramatic and costly, such failures are sporadic. When they occur,
there is a dedicated effort to discover the causes. Investigations are conducted to
uncover the root causes of the failure. The outcome may be design improvements, enhanced
safeguards, or more disciplined procedures to ensure the event does not recur.
Because they occur infrequently, the high cost of
catastrophic failures can be amortized over many years. On the other hand, chronic
failures are characterized by low cost and high frequency. They are small and often
invisible, but they occur repeatedly and are far more costly than a catastrophe.
Sporadic failures are dramatic deviations from operating
norms. When they occur, they are readily apparent. When repaired, they restore the norm.
Solving sporadic failures restores the status quo. Chronic failure and delays represent
the status quo. Reducing chronic failures raises the status quo to a higher level of
Once the inevitability of failure is rejected, what
actions can be taken to bring about productive change? The first step is to identify
opportunities for improvement. Where are failures occurring and which represent the
greatest potential for reducing costs?
Here, the well-know 80/20 principle comes into play;
typically, a relatively few problems account for 80% of a facilitys losses. These
are best identified and solved by trained analysts. The remaining 20% can be resolved by
Failure occurs on three levels. First are physical root
causes. What components are failing? More importantly, why? Second are human errors or
inappropriate interventions. Finally, management systems to address chronic failures may
be poor or nonexistent. Analyzing management systems may well be the most important
activity because it frequently uncovers paradigms that impede a plants ability to
Too often, managers are more concerned with a rapid
return to operations than with identifying the causes of chronic problems. "How
soon" is asked more often than "why". Under this pressure, supervisors and
workers are inclined to apply Band-Aid fixes. Quality thinking, craftsmanship, and
analysis are sacrificed for speed. A manager that asks for speed gets it. A manager that
seeks thoughtful solutions is generally rewarded with higher quality and lower long-term
We have found the need for maintenance can be reduced 40%
to 60% for those who have the courage and drive to pursue this goal. For example, a large,
mid-Atlantic producer of polymers doubled its output over a 10-year period while reducing
Before it expanded, the operation employed 300 mechanics.
Two years, later, it had 200 mechanics. Then years later, the plant still had less than
200 mechanics even though it had doubled its capacity. This achievement resulted from
vigorously investigating and eliminating chronic failures.
A west coast refinery recognized that a 2 year mean time
between failures (MTBF) for pumps was unacceptable. It put in place a policy to perform a
failure analysis on any pump with an MTBF of less than 2 years. As a result, the MTBF has
increased to 6 year saving approximately $2 million a year.
These examples illustrate
the opportunities that are available. Returns of as much as 800% are reasonable with
proper training processes in place. Of course, there is the question of what happens to
workers made vulnerable by these improvements. In the examples here, no one was laid off.
If anyone had been, the facilities would have lost the sincere involvement of the
remaining mechanical staff.
Staff can be reassigned to perform work that ensures
production continuity, which is the greatest revenue generator when markets are demanding
product. Such workers perform advanced problem solving, participate in root cause failure
analysis, and improve the precision of repairs and installations - activities that are
beginning to be the center of attention in todays manufacturing facilities.
From the standpoint of job security, what executive is
not going to direct financial resources to the areas that provide the greatest potential
for return? Such action spells growth. As productivity gains are realized from solving
chronic failures, producers will again invest in America. And such enhanced growth means
employment security for the nation as a whole. -
Charles J. Latino, president
& founder of Reliability Center, Inc., was a chemical engineer with a background in
psychology and human factors engineering. He is a leader in the development of an
integrated approach to achieving greater reliability in manufacturing and industrial
systems and processes. He has served as consultant to many companies in the United States
and abroad. He is the author of Strive For Excellence...The Reliability Approach.
Unfortunately he passed away in 2007.
1996 Plant Engineering Magazine
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