Dimensions of

maintenance
management
7
Journal of Quality in Maintenance
Engineering,
Vol. 8 No. 1, 2002, pp. 7-39.
# MCB UP Limited, 1355-2511
DOI 10.1108/13552510210420577
Strategic dimensions of
maintenance management
Albert H.C. Tsang
The Hong Kong Polytechnic University, Hong Kong
Keywords Service delivery system, Maintenance, Strategy
Abstract The contemporary business environment has raised the strategic importance of the
maintenance function in organizations which have significant investment in physical assets. Four
strategic dimensions of maintenance management are identified, namely service-delivery options,
organization and work structuring, maintenance methodology and support systems. The
alternatives available are reviewed: the guidelines for selection of these alternatives, the key
decision areas in each of the four dimensions, as well as the critical success factors for the
transformation process are discussed. The two factors that permeate in these strategic dimensions
are human factors and information flow; the latter can be made more efficient by embracing the
e-maintenance model.
Practical implications
Maintenance is often regarded as a necessary expense that belongs to the
operating budget. It is a common item on the hit list of cost-reduction
programs. With asset availability and reliability becoming critical issues
in capital-intensive operations, the strategic importance of maintenance in
such businesses should be recognized. This paper identifies four strategic
dimensions of maintenance management. Making the right decisions that
relate to these dimensions will enable organizations to rise to the challenge
of the new business imperative. The thorough review of options and detailed
discussion of key decision areas offer managerial insights into ways for
achieving business success through excellence in maintenance operations.
Introduction
Turbulence is the hallmark of the contemporary business environment. In such
a trying time, organizations are hard pressed to enhance continuously their
capability to create value to customers and improve the cost effectiveness of
their operations. Maintenance, as an important support function in businesses
with significant investments in physical assets, plays an important role in
meeting this tall order. It has been found that in the UK manufacturing
industry, maintenance spending is between 12-23 per cent of the total factory
operating costs (Cross, 1988). In refineries, the maintenance and operations
departments are often the largest and each may comprise of about 30 per cent
of total staffing (Dekker, 1996). Acquiring the right mix of physical assets and
making the best use of those already in place to meet business needs are the
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Part of this paper is based on the thesis submitted by the author for his PhD degree awarded by
the University of Toronto.
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ways maintenance can contribute to improving competitiveness of capital-
intensive organizations.
The developments that have made the performance demanded of
maintenance ever more challenging are:
.
Emerging trends of operation strategies. The conventional wisdom
embracing the concept of ``economy of scale is losing followers. An
increasing number of organizations have switched to ``lean
manufacturing, ``just-in-time production and ``six-sigma programs.
These trends highlight a shift of emphasis from volume to quick
response, elimination of waste and defect prevention. With the
elimination of buffers in such demanding environments, breakdowns,
speed loss and erratic process yields will create immediate problems for
the timely supply of products and services to customers. Obviously,
installing the right equipment and facilities, optimizing the maintenance
of these assets and effective deployment of manpower to perform the
maintenance activities are crucial factors to support these emerging
trends of operation strategies.
.
Toughening societal expectations. There is widespread acceptance of the
need to protect the environment and safeguard peoples safety and
health. In the developed countries, a wide range of regulations has been
enacted to control industrial pollution and prevent accidents in the
workplace. Scrap, defects, and inefficient use of materials and energy are
sources of pollution. They are often the result of operating plant and
facilities under less than optimal conditions. Machine breakdowns
interrupt production. In chemical production processes, a common cause
of pollution is the waste material produced during the start-up period
after production interruptions. Apart from producing waste material,
catastrophic failures of operating plant and machinery are also the
major cause of industrial accidents and health hazards. Keeping
facilities in optimal conditions and preventing failures are an effective
means to meet the ever more demanding societal challenge of pollution
control and accident prevention. These are parts of the core functions of
maintenance.
.
Technological changes. Technology has always been a major driver of
change in diverse fields. It has been changing at a breathtaking rate in
recent decades, with no signs of slowing down in the foreseeable future.
Maintenance is no exception in being under the influence of rapid
technological changes. Non-destructive testing, transducers, vibration
measurement, thermography, ferrography and spectroscopy make it
possible to perform non-intrusive inspection. By applying these
technologies, the condition of equipment can be monitored continuously
or intermittently while it is in operation. This gave birth to condition-
based maintenance, an alternative to the classical, time-driven approach
of preventive maintenance (Tsang, 1995).
Dimensions of
maintenance
management
9
Power electronics, programmable logic controllers (PLCs), computer
controls, transponders and telecommunications systems are
increasingly being introduced to substitute electro-mechanical systems.
They offer the benefits of improved reliability, flexibility, compactness,
light weight or low cost. Fly-by-wire technology, utilizing software-
controlled electronic systems, has become a design standard for the
current generation of aircraft. Flexible manufacturing cells and
computer-integrated manufacturing systems are gaining acceptance in
the manufacturing industry. Contactless smartcards (CSC) are being
introduced in public transport services as a convenient means of fare
collection. In the electric utility industry, automation systems are being
installed to identify and deal with faults in the transmission and
distribution network remotely.
The deployment of these new technologies is instrumental to
enhancing system availability, improving cost effectiveness of
operations and delivering better or innovative services to customers.
The move presents new challenges to maintenance. New knowledge has
to be acquired to specify and design the new systems, taking advantage
of these emerging technologies. New capability has to be developed to
commission, operate and maintain such new systems. During the
phase-in period, interfacing old and new plant and equipment is another
challenge to be handled by maintenance.
.
Changes in the people and organizational systems. The doctrine that
focuses primarily on efficiency in industrial management worked well
to produce exemplary performance in past eras of stable business
environments. Companies were busy producing standard goods and
services to satisfy the insatiable demand of their customers, and these
companies were protected from the onslaught of outside competition
through regulation or imposition of trade barriers in their home market.
Product life cycle was long due to slow technological change and
tolerance of accommodating customers who would take what was
available on the market. On the human dimension, people perceived
work merely as a means to earning a living. All these have changed in
todays turbulent environment. People at work the individuals who
make things happen in organizations have undergone significant
transformation.
There is a growing body of knowledge about people at work, about
organizations and about management with new attitudes towards work.
In an affluent society, people have a desire to improve the quality of life
at work. Furthermore, the social and demographic changes that have
taken place in the current era affect how we regard and define work.
Two examples of these changes are improvements in education and
increased faith in the ability of individuals to manage themselves.
In the face of the new reality, progressive organizations are exploring
new directions in their labour-management agreements. This leads
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to the appearance of a variety of innovative and highly successful
organizational forms, such as horizontal structures, network
organizations, self-managing work teams, virtual organizations and
strategic alliances. Some of these could be the appropriate options for
meeting todays challenge of providing excellent maintenance services
to organizations.
Visser (1998) models maintenance as a transformation process encapsulated in
an enterprise system. In the input-output model, the resources deployed to
maintenance include labour, materials, spares, tools, information and money.
The way maintenance is performed will influence the availability of production
facilities, the volume, quality and cost of production, as well as safety of the
operation. These, in turn will determine the profitability of the enterprise. Since
the use of external service providers has always been an option in maintenance
decisions, the inputs to the maintenance process should also include these
external resources (see Figure 1).
From the above input-output model, four strategic dimensions of
maintenance, as listed below, can be identified. The first relates to the inputs,
the next two are concerned with the design of the maintenance process itself,
and the fourth one is about the support systems:
(1) Service-delivery options: the choice between in-house capability and
outsourced service.
(2) Organization of the maintenance function and the way maintenance
tasks are structured.
(3) Maintenance methodology: the selection of maintenance policies.
(4) Design of the infrastructure that supports maintenance.
These dimensions are discussed in the following sections.
Figure 1 .
Input-output model for
the enterprise system
Dimensions of
maintenance
management
11
Service- delivery options
In the past, when the merits of vertical integration were emphasized in
management thinking, maintenance activities were typically performed by
internal suppliers. External suppliers were used only under the following
situations:
.
The in-house maintenance service provider did not have sufficient
capacity to meet peak demand. In such cases, short-term outsourcing
would be used to fill the shortfall.
.
The expected volume of maintenance work was too small and the
variety of maintenance-related specialist skills too wide to justify a
specialist on standby.
.
The organization did not have the expertise and specialized facilities to
perform the maintenance work; the cost of developing such capabilities
and assets in-house would be prohibitive while there were established
suppliers in the market to provide the required services.
In recent years, a new trend has emerged that subscribes to the concept that
unprecedented business performance can be achieved if the skills and resources
are leveraged to focus on a set of core competencies a bundle of skills and
technologies that enables an organization to provide a particular benefit to
customers (Hamel and Prahalad, 1994). Thus, maintenance activities for which
the company has neither a strategic need nor a special capability are prime
candidates to be outsourced. The maintenance services typically outsourced
include the maintenance and repair of generic and common equipment,
electronics, environmental equipment, mobile fleets, buildings and grounds,
projects and improvements, as well as plant overhauls (Campbell, 1995).
The selection of maintenance service-delivery options should not be
regarded as a purely tactical matter. The decision should be made in the
context of the companys overall business strategy. When companies consider
outsourcing of their maintenance activities as a strategic option, they need to
answer three key questions:
(1) What should not be outsourced?
(2) What type of relationship with the external service supplier should be
adopted?
(3) Howshould the risks of outsourcing be managed?
What should not be outsourced
There are two key strategic issues that determine the option between
outsourced and internally provided services (Quinn and Hilmer, 1994). The first
factor is the potential for achieving a sustainable competitive edge by
performing the work internally. If management perceives that excellence in
performing certain maintenance services done cheaper, better or in a more
timely manner will enhance the companys competitiveness, such services
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should be carried out internally. The second factor is the degree of strategic
vulnerability if the work is outsourced. If there is insufficient depth in the
market, an overly powerful supplier can hold the company hostage. On the
other hand, if the individual suppliers are too weak, they may not be able to
supply quality and innovative services as good as the buyer could by
performing the work internally. Knowledge is another important dimension
that affects vulnerability. It is extremely risky to outsource work when the
company does not have the competence either to assess or monitor suppliers, or
when it lacks the expertise to negotiate a sound contract.
The caveat that companies should not outsource those activities that are
crucial elements of their core competencies is often not heeded when
outsourcing decisions are driven by cost-cutting and headcount-reduction
criteria. As a result, control of activities critical to establishing the companys
competitive advantage can be unwittingly ceded to suppliers. Another common
fallacy in making outsourcing decisions is to regard ``core competencies as
``things that we do best. This misconception is damaging as it encourages
management to outsource activities with which it is having problems. If the
company has difficulty in managing an internal supplier, it probably cannot
communicate its requirements adequately to the external supplier. Thus,
internal problems are traded with more sticky problems of dealing with
external suppliers. It will be even more devastating if the problematic activity
over which the company relinquishes control is a critical link in its current or
future value-creation process.
When an external supplier offers a significant cost-saving deal on the
companys core activities, management should refrain from outsourcing them.
Instead, the internal service provider should be challenged to improve its cost-
effectiveness, using the suppliers offer as a benchmark of performance.
Furthermore, one should not rule out the possibility that the supplier may be
using a ``loss-leader tactic in making the favourable offer to the client the
price differential could well be the suppliers investment in controlling and
developing such strategic capabilities (Lonsdale and Cox, 1997).
Not all the ``things that we do best would qualify as the organizations core
competencies. Venkatesan (1992) argues that these capabilities are core to the
organization only if they:
.
have a high impact on what customers perceive as the most important
service attributes;
.
require highly specialized knowledge and skills and specialized assets,
all of which are in short supply; and
.
involve technology that is still fluid, and a clear technological lead is the
likely prize of being the successful pioneer in applying that technology.
When a maintenance service, which can be one of the ``things that we do best,
has been classified as a non-core activity, it can be considered to be outsourced.
However, the decision depends on the relative costs of in-house and external
Dimensions of
maintenance
management
13
provision of that service. Apart from the direct costs involved, the relevant
transaction costs in the two options are:
(1) Internal provision: continuing R&D, personnel development and
infrastructure investment that at least match those of the best supplier
to maintain a competitive edge; overhead for managing the in-sourced
activities.
(2) Outsourcing: the costs of searching, contracting and controlling the
outsourced activities.
If it is found to be more cost-effective to keep an exemplary but non-core
capability, the company should explore the possibility of commercializing the
expertise to serve the needs of non-competitors. For example, a railway
company may have developed a high-speed, in-process inspection system to
monitor the wear on brake plates while the train car is being cleaned in the car-
wash. Since the automated system is not a key element of the companys
competitive edge, it can be made available to other railway companies or
maintenance service providers to generate extra revenue.
Choosing the type of contractual relationships
The potential benefits of outsourcing maintenance activities include less hassle,
reduced total-system costs, better and faster work done, exposure to outside
specialists, greater flexibility to adopt new technologies and more focus on
strategic asset management issues (Watson, 1998; Campbell, 1995). However,
these are seldom realized because the contracts tend to be task oriented rather
than performance focused, the relationships between the client (user) and the
contractors are adversarial rather than partnering. This phenomenon is caused
by the problem that the profit motives of the parties involved in the
relationship are not shared the contractor wishes to maximize returns, whilst
the clients major goals are to minimize costs. As a result, competitive bidding
is the preferred mechanism for selecting contractors. In response to the lack of
long-term commitment from the client, the supplier makes minimal investment
in staff development, plant, equipment and new technologies. This short-term
tactic adopted by the contractor, in turn, often causes the client to replace one
adversary with another, thereby setting a vicious circle in motion.
The type of maintenance contract in use is an important factor that
determines the relationship between the outsourcing company and its service
suppliers. Martin (1997) classifies maintenance contracts into three types,
namely work-package contracts, performance contracts and facilitator
contracts (see Figure 2). Brief discussions of these contracts follow.
Work-package contracts are the most basic form of maintenance contracts.
Design of the maintenance concepts, planning and control logic, as well as
spare-parts management are performed by the client, who tells the contractors
when they are needed to do what maintenance activities. Evidently, this mode
of contracting is task oriented, and the contractors are engaged as mere
providers of skilled manpower and tools to execute well-defined work specified
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by the client. A variant of this type of maintenance contract is management
consultancy, in which a consultant is hired to provide management-only
services specifying the ``what, ``how and ``when of a wide range of
maintenance services. These services are delivered by independent service
providers, sourced and managed by the consultant on behalf of the client
(Rafter, 1998).
Performance contracts are also known as performance-specified
maintenance contracts (PSMC). This mode of contracting applies to cases
where a comprehensive range of maintenance services are awarded to a single
contractor. Instead of specifying what and when maintenance activities are to
be performed, the contract stipulates the desired performance on key outputs,
such as failure rates, availability, response time and time for restoration of
system interruption. It requires the contractor to inspect, measure, decide on
priorities, design and implement the work. Furthermore, the supplier also has
to monitor and make adjustments to the implementation to meet the required
outputs. By allowing flexibility in achieving the desired outputs and providing
performance-linked incentives, this approach encourages the supplier to invest
in new technology and innovation to seek continuous improvement (Watson,
1998).
Facilitator contracts are also known as term-lease contracts. In this mode of
contracting, the client is only the user of the physical assets owned and
maintained by contractors. A long-term partnership relationship needs to be in
place if the contractor has to provide assets constructed to meet the specific
operational needs of the client.
The arms-length relationship of work package contracting is appropriate for
short-term outsourcing, designed as a supplement of the clients in-house
capability during periods of peak demand. If it is applied as a policy for
long-term outsourcing, the practice is prone to wastage, inefficiency and
duplicated effort. On the other hand, the approach of engaging a management
contractor under a fixed management fee while absorbing all other costs
Figure 2 .
Types of
maintenance contract
Dimensions of
maintenance
management
15
associated with service delivery does not motivate the external service
providers to apply innovative practices and make continuous improvement.
PSMC is the preferred contracting policy for strategic outsourcing because
of its potential of leveraging the contractors knowledge and creativity to
deliver optimal maintenance service. The experience of government agencies
and state-owned organizations in Australia which had outsourced their
maintenance activities showed that more value can be obtained from this type
of contract by incorporating the following features (Pyman, 1998; Watson,
1998):
.
specify performance measures linked to the clients business plan and
regulatory requirements;
.
the suppliers management staff and field technicians dedicated to the
contract are located at the clients premises the integration provides
the benefits of an in-house workforce such as instant communication,
minimal disputes, ownership of work and system knowledge;
.
contractor and client use the same maintenance management system
for processing of both job and financial transactions; and
.
reward performance with contract extension penalise persistent non-
performance with termination of contract.
The co-operative relationship engendered in this approach can significantly
reduce the transaction costs of receiving maintenance services and information.
This is because contracts focusing on demand-side requirements (the desired
maintenance performance), joint rewards and information sharing are more
flexible, less complex and less expensive to execute.
Term-lease contracting offers the benefits of PSMC at a higher cost by
taking the burden of capital investment off the outsourcing company. For
assets already owned by the company, transferring the ownership of these
items to the maintenance contractor provides a source of cash infusion to the
company.
Frey and Schlosser (1993) specify the proper focus of strategic outsourcing.
In the case of outsourcing maintenance services, companies should focus more
on enhancing business-critical performance parameters rather than on
reducing headcount, more on minimizing total cost than on minimizing
elemental costs, more on capturing asset-management knowledge than on
buying maintenance services, more on developing meaningful relationships
with a fewsuppliers than on enlarging the supplier base.
Managing the risks of outsourcing
While outsourcing a whole range of maintenance services has the potential for
significant benefits, it also exposes the company to the following risks (Quinn
and Hilmer, 1994; Campbell, 1995):
.
Loss of critical skills. The company can quickly lose its critical
maintenance skills after the related services have been outsourced. It
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will be devastating if it is subsequently found that the contractor does
not have the capability or commitment to perform up to expectations
and a promising replacement cannot be identified promptly.
.
Loss of cross-functional communication. When complete or partial
maintenance activities are outsourced, contacts between maintenance
and other functions that interact with it tend to reduce, especially when
the contractor is operating away from the companys site. The
contractors staff are seldom as prepared as in-house colleagues to go
beyond their immediate remit and take the time to work out innovative
solutions to problems encountered.
.
Loss of control over a supplier. A contractor, after building up its
expertise with the outsourcing companys support, may decide to offer
the acquired knowledge to competitors.
Apart from the above risks, there are other factors that render the expected
benefits of outsourcing unattainable. These include:
.
Shifts in the balance of power during the contract period. While managers
are alert to the risks of outsourcing into a supply market with only one,
or very few, feasible suppliers, they often overlook the possibility that
the balance of power may change during the period of a contract even in
broader supply markets. Companies that have lost their maintenance
skills will be at the mercy of their service suppliers when the contractual
relationships are adversarial. Signals that demonstrate a contractors
dominance over the relationship include a decline in responsiveness to
requests, a decline in the quality of the work provided, and the
replacement of the original contract team with one of an inferior grade.
.
Employee morale. Most employees perceive outsourcing as a negative
development. They have to face the uncertainties of radical changes
such as new roles, new skills or, if they also consider the option of
moving to an external service supplier, new organizations. Employee
morale will suffer if these anxieties are not addressed by management in
the early stage of the move (Lonsdale and Cox, 1997).
.
Hidden costs. Companies often underestimate the set-up costs of
outsourcing, including staff-redeployment costs and longer-than-
expected hand-off or parallel running costs, as well as the costs of
contract management (Earl, 1996). Excess charges are another form of
hidden costs. They arise due to incomplete coverage of a contract.
Certain aspects of maintenance work are mistakenly believed to have
been covered in the scope of the contract.
.
Access to external talents. Contrary to common belief, access to external
talents can be limited. First, the outsourced work is often supported by
the companys previous technical staff. Second, contractors often siphon
Dimensions of
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17
talented employees to woo other accounts, and they prefer specific
directions and rarely initiate newstrategies (Lacity et al., 1993).
To avoid these risks, companies may adopt the measures listed below:
.
Take care of the affected employees. The company should inform its
maintenance staff of the outsourcing decision as soon as possible and
provide them with outplacement service if necessary. Typically, the
contractor will hire some of the displaced employees on a trial basis to
ensure continuity of service and knowledge in the transition period.
.
Avoid outsourcing contracts that are set in concrete. Incorporating
variation clauses in the contract and specifying annual contract reviews
are not foolproof and optimal approaches to dealing with uncertainties.
A more effective way to hedge against uncertainty and change in
outsourcing arrangements is to create a process of conflict resolution
and problem solution for the inevitable uncertainties (Earl, 1996).
.
Split maintenance requirements between two or more suppliers to
establish a threat of competition (Lacity et al., 1995). The competition
will be aggressive when the multiple contractors are roughly equally
efficient. In case only one supplier seeks a contract, the company can still
encourage competition by maintaining an option to perform some or all
of the maintenance activities in-house (McMillan, 1990). The potential
contract covering those activities currently withheld from being
outsourced serves as a carrot for good performance.
.
Insist the supplier use a stable team for service delivery. If the
company knows a trusted candidate, specify that person as the
suppliers account manager in the contract. In addition, the
suggested features of a performance-specified maintenance contract
(PSMC) mentioned earlier, as well as frequent and close contact
with contract employees all help to build partnering relationships
with suppliers.
.
Use three specialist teams in the contracting process. First is a contract-
negotiation team consisting of in-house technical experts with a deep
understanding of the companys maintenance requirements. Second is a
contract management team established to get the most out of
maintenance contracts. The specialists on this team should be
knowledgeable in the hired service providers, the users and the
contracts. They challenge suppliers when they are not meeting the terms
of the contract, deal with disputes over the contracts interpretation and
determine penalties. The team also decides when users are asking too
much or too little of suppliers. The third team consists of technical
experts whose job is to monitor changing technology, changing business
needs and the changing capabilities of available maintenance
contractors (Lacity et al., 1995).
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Organization and work structuring
The strategic decisions involved in the organizational design and structuring
of maintenance work include: plant specialization, workforce location, and
composition and flexibility of workforce. These decisions are made by
considering factors such as workload characteristics, plant location, cost of
unavailability, skills and knowledge required, production policy and human
resource policy.
In traditional organizations, the structure is hierarchical and highly
functionalized: engineering is responsible for the design and procurement of
new plant as well as modification of existing ones, production is responsible for
operating the plant, and maintenance for maintaining it. Furthermore, the
maintenance tradeforce is organized into highly specialized trades. This type of
organizational design has the following problems that can result in poor
operational efficiency:
.
Low utilization of resources, because of the many small, single-trade or
single-shift maintenance and production groups often manned up to
the peak of a variable workload.
.
The vertical and horizontal polarization within the structure is not
conducive to organizational learning. For example, it becomes difficult
to feed back maintenance information to aid the specification of new
plant.
.
It does not foster a sense of ownership of assets.
.
The fine-grained demarcation of trades and skill levels creates an
inflexibility which causes inefficiency in the planning and execution of
those maintenance works that involve multi-trade tasks.
.
High management cost due to a large number of hierarchical layers and
functional positions.
The type of maintenance work to be performed is an important factor affecting
the design of maintenance organizations. Maintenance work can be classified
by its planning and scheduling characteristics as follows (Kelly, 1997):
(1) First-line work. This type of work is performed on a daily basis. It
consists mainly of the emergency corrective work, jobs that have to be
carried out immediately or with minimum delay due to safety or
economic imperatives. Since these jobs occur randomly, they cannot be
scheduled in advance. Simple deferred corrective jobs and frequent
preventive routines, such as minor replacements, inspection and
lubrication, are also included as first-line work to smooth out the
fluctuating emergency workload.
(2) Second-line work. This consists of deferred corrective work involving
jobs that usually take less than two days to complete and require
relatively few tradesmen. Also included are minor reconditioning work
as well as short or medium periodicity services and preventive work.
Dimensions of
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This type of work can be prioritized, planned and scheduled in the long
term.
(3) Third-line work. It comprises major shutdown, plant overhaul, capital
projects and modifications. It creates peak loads at medium to long-term
intervals.
Clamp (1996) proposes an alternative way to categorize maintenance work:
(1) Level 1 maintenance is performed to keep the plant running. It covers
activities such as minor repairs, process testing, production scheduling
and environmental control the immediate support required by the
production plant. These fall in the first-line work in Kellys
classification.
(2) Level 2 maintenance covers those activities that produce significant
changes to the condition of the plant, such as major component
replacement and detailed inspection. It is in-situ work executed
intermittently.
(3) Level 3 maintenance requires very special skills and facilities. It covers
activities such as overhauls, reconditioning and plant modifications.
This is third-line work in Kellys categorization.
The pertinent organizational design issues for maintenance are discussed
below.
Plant specialization
This can range from a plant-flexible tradesman who is responsible for work on
all plants to a plant-specialized one who only works in a specified area or on a
particular type of plant. The advantages of plant specialization include
improved work quality and faster response due to greater plant knowledge and
sense of ownership. A stronger spirit of teamwork with the plant operators can
also be developed. However, this mode of organization will face a major
problem when the workload varies considerably from one plant-specialized
group to another. In such cases, labour utilization will be lower because the
workload cannot be balanced by exploiting labour mobility.
Workforce location
Should the maintenance workshop be centralized or dispersed? Plant-flexible
trade groups are usually located centrally or close to their designated area.
When a particular type of equipment is used in widely scattered locations, such
as compressors in a large oil field, roving trade groups may be employed to
maintain such plants. The plant-specialized trade groups will obviously be
located close to the plant they maintain. The main problem with decentralized
plant-specialized groups is that it is difficult to achieve flexible labour
movement between trade groups.
Location of the tradeforce also depends on the type of maintenance work it
performs. If fast response and deep knowledge of the plant are imperative, the
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responsibilities for first-line (level 1) work, and for the necessary resources, are
best shouldered locally, within each plant. Due to its specialized nature, third-
line (level 3) work is usually performed by a centralized unit located away from
the plant.
The knowledge and skills involved is another factor that determines howthe
maintenance function is organized. If the work requires a new capability to be
developed by the service provider, as in the case when power electronics is first
introduced to replace electro-mechanical controls in a railway system, it is best
done by a centralized unit. Apart from simplifying the management of the
learning process, the requisite expertise can be built up more quickly when all
such work is channeled to the central unit. After ample experience and deep
knowledge of the work have been acquired, deploying decentralized units to
provide the maintenance service becomes a feasible option.
The degree of centralization of the maintenance function can also be a
function of asset life cycle. Consider a railway system, during the initial stage;
most of the activities are project oriented. Accordingly, only a small and
centralized maintenance team would be required. When the system gradually
entered into full operation, both the level of activities and the tradeforce of the
maintenance function would increase, thereby driving the need for
decentralization. As the system matures and the organization becomes more
decentralized, effective communication and synergy will suffer. Through
automation, some dispersed activities can be performed centrally to improve
performance.
Workforce specialization
Trade specialization is a characteristic of traditional maintenance
organizations, the drawbacks of which have been highlighted earlier. Where
the work requires special skills and where the workload can be made relatively
smooth, it is appropriate to adopt trade specialization. This situation can exist
in the second-line reconditioning workshop. However, it is more usual to find
maintenance work that requires a range of skills, although one skill is usually
predominant. In such cases, inter-trade flexibility is of paramount importance.
This can be achieved by developing a multi-skilled tradeforce. However,
making the transition from a highly specialized structure to a flexible one is
often a lengthy and expensive process because of the investment in training
and the installation of the newstructure
Apart from introducing inter-trade flexibility within the maintenance
tradeforce, there is another emerging trend in maintenance management
amalgamating the roles of plant operator and first-line maintainer. The
operator-maintainer is trained both to operate the plant and do first-line
maintenance across all the traditional trades. An advanced form of this
approach is autonomous maintenance, a key element of total productive
maintenance (TPM) (Nakajima, 1988). The concept, to be discussed further in
the next section, fosters a sense of plant ownership by developing the operator-
maintainer to be involved in continuous improvement.
Dimensions of
maintenance
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21
Structuring of maintenance work
Clamp (1996) advocates that level 2 and level 3 work (defined earlier) should be
organized around whole tasks. These could be significant fabrication work or
overhauls of a particular type of plant items such as motors, pumps or
compressors. Work groups with the resources to plan, do and evaluate these
whole tasks in as self-sufficient a way as possible need to be established. Each
work group will have the responsibility of satisfying the customers of its
particular service.
When the quantity of work does not justify setting up a separate work group
for each of the identified whole tasks, it is necessary to aggregate the whole
tasks into clusters that offer mutual benefit to the tasks and the assigned work
group. The clustering can be determined by assessing the strength of the
relationships between tasks based on four factors: technology (skills,
knowledge and common equipment required), information (for planning,
scheduling or modification), the interaction between one task and the other and
the degree to which the output of one task becomes the input to the other. For
example, maintenance work on motors, gearboxes and pumps can form a
cluster. Each work group thus formed is a group of technicians with the
aggregate skills to tackle its whole tasks.
The practice of work structuring tends to move organizations from rigid
functionalism towards task-based structures. This makes it more important to
have functional centres of responsibility to maintain plant standards. Each
functional centre of responsibility needs to determine the mandatory plant
standard and ensure the long-term training and career paths of the respective
engineers and technicians.
Yet another approach to solving the common maintenance problems is to
make the engineering staff responsible for the plant and locating them, to the
extent practicable, next to the corresponding production staff. The engineering
staff become the plant owners, taking on the responsibilities of asset
management. In some organizations, the asset management unit also
encompasses the functional centres of responsibility introduced above.
Interface with operations
This issue is particularly relevant to level 2 maintenance because it is
in-situ work performed by the maintenance unit. The appropriate degree of
integration between operation and the maintenance-support service can be
determined by using a methodology called technology profiling, which is based
on the concepts of hard technology and soft technology. Hard technology is
reliable and stable. When the level 2 maintenance work involves predominantly
hard technology, such as the annual maintenance of a toll bridge, the related
support engineering can be organized separately from operation and the work
handled by a separate maintenance unit.
Soft technology, on the other hand, is insecure and evolving, as in the case of
grand prix car racing. In such an environment, engineering needs to be closely
integrated with operation, and there is a strong case for professional, broadly
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skilled engineering to support the more complex, varied, flexible and changing
process technology because of the frequent interactions (Clamp, 1996).
Teamwork
Hierarchy and fractionated tasks (a result of specialisation) are the design logic
of traditional organizations. In this approach to organizational design, people
are not expected to respond to unpredictable events. It works fine for stable
environments, but is ill-suited in work situations with inherent uncertainties, as
in the case with maintenance work: the multiple possible locations of a fault,
the variability in the extent of damage caused by a failure and the differing
windows of opportunities available for disruptive work to be performed on the
plant. Self-managing teams (SMTs), which aim at leveraging and enhancing
employees capabilities and commonly used in agriculture, mining, and
construction, are better suited for such uncertain environments. Members in a
self-managing team are responsible for executing the task as well as
monitoring and controlling their own performance. Each SMT needs to contain
sufficient variety to match the range of its work tasks. It also needs the
autonomy to adjust and reorganize its internal resources, skills and
competencies in response to the changed needs of its work. With these design
features, SMTs are immensely flexible and responsive, and members are highly
satisfied in doing their work.
Sociotechnical systems (STS) concepts (Taylor and Felten, 1993) provide the
theoretical basis for SMTs. The design principles for establishing SMTs as
proposed by Kolodny and Stjernberg (1993) are:
.
Team activities are task oriented and designed with a strong
performance focus.
.
The team is organized to perform whole and integrated tasks.
.
The team should have some autonomy (that is, control over many of its
own administrative functions such as self-planning, self-evaluation and
self-regulation.) Furthermore, members should participate in the
selection of newteam members.
.
Detailed specifications of tasks, procedures and methods are kept to the
minimum. Only those essential for information sharing with outside
parties, for scheduling or for coordination are established. Within the
team, standards are arrived at through agreement on group norms. The
flexibility allows the team to evolve and change as members grow and
develop, and increase their competencies through multi-skilling.
.
Multiple skills are valued. This encourages people to adapt to planned
changes or occurrence of unanticipated events.
Examples of successful SMTs and their critical success factors are reported by
Hackman (1986a), Kolodny and Stjernberg (1993) and Gephart and VanBuren
(1996). Work groups consisting of operator-maintainers, introduced earlier,
who are also empowered to manage their day-to-day activities with minimum
Dimensions of
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23
direct supervision are SMTs with first-line maintenance work in the portfolio of
their responsibilities (Kelly, 1997).
Introducing self-managing teams in an existing maintenance organization is
a major undertaking with pitfalls. Figure 3 shows a four-stage process for
making the transformation.
Self-managing teams do not exist in isolation. A support system must be in
place to make them successful, as highlighted in some of the managerial work
in the transformation process. The support systems that should be in place for
successful implementation of various strategic initiatives of maintenance
management are discussed in a subsequent section.
Maintenance methodology
To keep it in running condition, a plant needs to receive primary care, which
includes routine servicing such as cleaning, fuelling and lubricating, as well as
periodic inspection and calibration. On top of these essential activities, policies
have to be established to maintain plant availability. There are four basic
approaches to maintenance: run-to-failure, preventive maintenance, condition-
based maintenance and design improvement.
(1) Run-to-failure (RTF). Only routine servicing is performed on the item
until it fails. This can be justified when the impact of failure is
inconsequential or the investment in preventive measures exceeds the
expected benefits of improved reliability or higher availability.
(2) Preventive maintenance (PM). Items are replaced or returned to good
condition before failure occurs. The most common forms of this policy
are scheduled PM and condition-based maintenance (CBM), respectively.
In the former approach, PM action is performed on the item at the
scheduled time regardless of its actual condition. The schedule can be
usage based or time driven. Since the schedule is often drawn up on the
suppliers recommendation made with limited, if any, local knowledge of
Figure 3 .
Stages of
managerial work for
creating SMTs
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actual use conditions, or from past experience, it is seldom optimal. PM
schedules that minimize resource consumption or maximize availability
can be determined through the use of quantitative decision models.
Parameters featured in these models are factual information such as
time-to-failure distributions, costs of intervention (inspection, repair or
replacement) and the consequence of failure. Models for optimization of
PM decisions can be obtained in Jardine (1973), Duffuaa et al. (1999),
Campbell and Jardine (2001).
(3) Condition-based maintenance (CBM). It is obvious that under the regime
of scheduled PM some items may be over maintained, that is, replaced
prematurely. However, if the condition of the item can be monitored
continuously or intermittently it will be possible to carry out PM actions
only when failure is judged to be imminent. This is the concept of CBM.
Performance-parameter analysis, vibration monitoring, thermography,
oil analysis and ferrography are some of the condition-monitoring
techniques that support CBM. Each of these methods is designed to
detect a specific category of faults. For example, vibration monitoring
can be deployed to detect wear, imbalance, misalignment, loosened
assemblies or turbulence in a plant with rotational or reciprocating
parts. An OR model for optimizing replacement decisions which takes
into account the information obtained from condition monitoring is
provided by Makis and Jardine (1992). A survey of recent work on CBM
models can be found in Tsang (1995).
(4) Design improvement. The design is modified to achieve one or more of
these objectives: improve reliability, enhance maintainability, minimize
maintenance resource requirements and eliminate the need for routine
servicing.
Reliability-centred maintenance
The maintenance approach best suited to an item can be determined using the
reliability centred maintenance (RCM) methodology. It provides a structure for
determining the maintenance requirement of any physical asset in its operating
context, with the primary objective of preserving system function cost
effectively (Moubray, 1997; Smith, 1993). Identification of system functions and
functional failures, as well as failure mode and effects analysis, are important
elements in RCM. Performing these analyses on assets for the first time is
labour intensive and time consuming. It requires the involvement of the
operators and the maintainers. There are two reasons for such requirement.
First, it draws on the operators intimate knowledge about the asset concerned.
The involvement motivates the operators to use their resourcefulness to
develop innovative ways of performing the PM tasks. Second, the collaboration
nurtures a teamworking spirit between operations and maintenance, replacing
the adversarial relationship which commonly exists between the two parties. It
is also part of the buy-in process being an active collaborating party of the
Dimensions of
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decision process, operations will be more ready to implement the maintenance
tasks they have to perform as determined from the RCM exercise. Furthermore,
the learning outcomes and communications outcomes of RCM studies will
enhance the organizations intellectual assets. The knowledge and experience
thus acquired are firmly locked up in the organization and they can be put to
good use in future projects.
Being a costly and lengthy process, RCM should be implemented selectively.
Only complex and high-risk systems or those being grossly over maintained
are likely to get benefits that justify the investment. One further caveat: RCM
can create anxiety in the workforce. The existing maintenance practices are
challenged. As a result, some of the current practices will be abandoned and
new ones introduced. With elimination of non-value-adding work on previously
over-maintained assets, the workforce engaged in maintenance activities will
be downsized. The prospect of job displacement is commonly perceived by
employees as a threat to their job security. The challenge for them to learn new
skills required by their new job requirements may also be threatening. Taking
steps to allay these fears is key to successful implementation of RCM.
Total productive maintenance
RCM is an asset-centred methodology with a primary focus on making
decisions on the type of maintenance tasks to be used. Total productive
maintenance (TPM), on the other hand, is a methodology with a very different
orientation it focuses on people and is an integral part of total quality
management (TQM). The methodology was developed in Japans
manufacturing industries, initially with the aim to eliminate production losses
due to machine breakdowns in just-in-time (JIT) production systems. TPM
redefines the organization of maintenance work by applying the following
principles:
.
Cultivate a sense of ownership in the operator by introducing
autonomous operator maintenance the operator takes responsibility
for the primary care of his plant. The tasks involved include cleaning,
routine inspection, lubrication, adjustments, minor repairs, as well as
cleanliness and tidiness of the operators work space.
.
Optimize the operators skills and knowledge of his plant to maximize
operating effectiveness. The operator is thus mobilized to detect early
signs of wear, misadjustment, note oil leaks, errant chips, or loose parts.
He is also involved in making improvement suggestions to eliminate the
losses due to breakdowns or sub-optimal performance of the plant.
.
Use cross-functional teams consisting of operators, maintainers,
engineers and managers to improve people and equipment performance.
.
Establish a schedule of clean-up and preventive maintenance to extend
the plants life span and maximize its uptime.
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Being relieved of the primary care activities, the expertise of the maintenance
department can be redeployed to focus on more specialised work such as major
repairs, overhauls, tracking and improvement of plant performance, creation,
replacement and modification of physical assets. Instead of having to attend to
numerous chores, it can devote its resources to address strategic issues like
formulating maintenance policies, implementing maintenance information
systems, scanning and introducing new maintenance technologies, training
and development of the workforce in operations and maintenance.
TPM is not a quick solution. It requires a change in employees attitude
and their values, which takes time to accomplish. Therefore, it demands
long-term thinking and planning. Quick and company-wide performance
gains should not be stressed in the initial stage. Senior managers must
demonstrate their commitment to TPM by devoting time and allocating
resources to create and sustain the cultural change and to provide
necessary training to employees to achieve autonomous maintenance.
Experience shows that planning and correct timing of moves are important.
Full-scale implementation will be short-lived if it is not done after a
corresponding change in work culture. To limit uncertainty and enhance
the chances of success in the initial stage, small-scale pilot projects should
be conducted where quick and visible benefits can be expected. The
experience gained from these pilot projects can also be used to fine-tune
the subsequent full-scale implementation (Tsang and Chan, 2000).
Support systems
The strategic initiatives discussed above, such as multi-skilling, inter-trade
flexibility, outsourcing, RCM, TPM, redesign of work processes and
structures, often fail to deliver the expected benefits. The main reason for
such failures is that values, management behaviours and support systems
(including information, training, performance management and reward
systems) that align with these initiatives were not in place when the
change programs were implemented. Effective deployment of information
technology[1] in support of maintenance operations is also a critical issue. The
convergence of digital technologies that gave birth to e-business has created
newoptions for maintenance, just as it does for other business functions.
Participation and autonomy
Employee empowerment is a core concept shared by these change
programs, with the expectation of creating internal commitment in
employees. To get internal commitment, management must involve
employees in defining work objectives, specifying how to achieve them and
setting stretch targets. If employees have little control over their destinies,
the organization only gets external commitment that is akin to contractual
compliance. Many organizations believe that they have embraced
empowerment in their change programs. However, in more cases than not,
employees receive mixed messages in these programs. For example, in
Dimensions of
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many change programs all the steps involved have been precisely
prescribed by the change agent (management). The mixed message
employees get in these initiatives is ``do your own thing the way we tell
you. With all actions and requirements defined externally, the resulting
behaviour cannot be empowering and liberating. While autonomy should be
a core concept of empowerment, management retains control through
information systems, processes and tools (Argyris, 1998). Thus, employee
participation and autonomy must be in place for empowerment to take
root.
Hierarchy and communication
Evolutionary psychology, the science which asserts that human beings
retain the mentality of their stone-age forebears, provides insights into
human behaviour at work. Some of its findings that relate to hierarchy and
communication in organizational settings are (Nicholson, 1998):
.
People tend to classify others into in-groups and out-groups. It explains
why some groups, such as operations and maintenance, within
organizations are so difficult to mix, an impediment to communication
and organizational learning.
.
Bad news is heard first and loudest.
.
People tend to be risk averse when they stay in the comfort zone. They
are more willing to take risks when dissatisfied with the status quo.
.
Informal communication networks exist throughout the organization
and information passes through them rapidly. Having managers who
wander around and ask questions can be an effective way to
communicate, as long as it is done in a climate of trust and openness.
Such informal practices also have the benefits of sending out positive
signals and reinforcing official messages.
Managers will do well to recognize the above innate tendencies of human
beings when communicating with employees. This is particularly important
on sensitive issues such as outsourcing, de-layering and restructuring of
work. Framing the situation as a crisis looming on the horizon (losing
competitiveness due to high maintenance costs) and taking steps to address
the expected anxieties of employees (no-lay-off policy) are useful moves to
get buy-in for change programs.
In a culture that stresses participation and autonomy, the function of
hierarchy is not control but support. Decisions on broad-based issues, such
as implementation of RCM or introduction of a new reward system, are
made after management has entered into a dialogue with the affected
employees. In their new roles, managers provide overall direction for the
work that is clear and engaging. They also offer hands-on coaching and
consultation to help employees avoid unnecessary losses of effort, to
increase task-relevant knowledge and skills, and to formulate uniquely
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appropriate performance strategies that generate synergistic process gains.
They should also be responsive to requests from employees to ensure that
the resources required for performance are available when needed
(Hackman, 1986a). Every complaint should be considered an opportunity
for improvement, and people are encouraged to turn their complaints into
improvement ideas, as managers at Toyota do (Maccoby, 1997). Employee
empowerment can degenerate into exploitation if changes at the first level
of management are not continuously reinforced by changes throughout the
management hierarchy. A strong employee voice is needed to ensure that
shop-floor concerns are heard at all levels of management (Adler, 1993).
Education and training
Empowerment will degenerate into abandonment if employees fail to get
the right tools, training on their use and support in their implementation.
Educational resources, which can include technical consultation as well as
training, must be available and accessible to employees with identified
needs. For instance, the specialists of maintenance department are called
upon to upgrade operators to operator-maintainers in TPM, or external
consultants are hired to train members of the contract-negotiation team and
the contract-management team for outsourcing of maintenance work.
However, the training should not be limited to transfer of technical skills
and knowledge needed for optimal task performance. It should also cover
generic matters like the business imperatives peculiar to the organization
(what determines the value of its product and services to customers),
problem-solving techniques, team dynamics and facilitation skills. The
additional training for managers addresses issues such as the new roles
(leader, communicator, coach, resource providers) they perform in the
change programs, and the new management behaviours that will align
efforts and engender commitment towards organizational goals.
Reward and recognition
According to evolutionary psychologists, the desire to obtain status in
organizational settings is human nature. Attempts to eliminate status
through de-layering, or removal of status markers such as assigned
parking space, will find new variations spring up in their place. Instead of
working against such human instincts, managers are advised to recognize
and reward employees through status recognition (Nicholson, 1998) in
flexible ways. At NUMMI, a GM joint venture with Toyota in Fremont,
California, teamwork is the norm for getting work done. The culture is
reinforced by promoting employees who teach and help others to team
leadership roles (Maccoby, 1997). It is realised that promotion cannot be
used liberally to reward exemplary performance, especially in flat
organizations. Therefore, fluid forms of recognition may need to be
adopted. These include bonuses, performance awards, certificate of
Dimensions of
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appreciation and one-shot responsibilities such as leadership in a system-
commissioning task or a plant-refurbishment project.
A wide variety of remuneration programs that take into account factors
other than rank, experience and length of service are being used in some
progressive organizations. In the pay-for-skill program at MTR Corporation,
Hong Kong, maintenance tradespersons are paid for acquiring and applying
new skills and knowledge required by their jobs. Corning and Eastman
Chemical have similar reward programs to develop their multi-skilled
employees. Pay-for-performance and goal-sharing programs award bonuses
that are linked to group performance. For example, ``work-group excellence
is a pay-for-performance program at Xerox that rewards the performance of
a work team as a whole. Within each team, rewards are distributed on the
basis of factors such as experience. In Cornings goal-sharing program, 75
per cent of each bonus dollar award is based on how well a business unit
meets its objectives. The remaining 25 per cent is based on Cornings
return on equity. All employees in the unit receive the same percent of
base pay as a goal-sharing bonus (Gephart and VanBuren, 1996).
If an organization stresses teamwork, the remuneration structure should
promote teamwork rather than undermine it. From a study on two best-
practice organizations (Fel-Pro and Steelcase), Meimoun (1995) identifies the
following critical success factors for a reward and recognition system that
encourages teamwork:
.
Top management commitment to teamwork and the concept of
team-based rewards and recognition.
.
Management is available and visible.
.
Employees are regarded as the organizations most valuable assets.
.
Employees value empowerment and involvement as a form of reward
and recognition.
.
The organization relies on structured processes, policies and
documentation.
.
A strong network is in place for vertical, horizontal, diagonal, intra-team
and inter-team communication.
.
Aperformance measurement is in place.
.
Employees participate in training.
Argyris (1998) cautions that offering employees the ``right rewards alone is
unlikely to produce sustained empowerment. The power of such methods
wears off with use, creating dependency to maintain commitment. Trust,
involvement and autonomy are the lasting ingredients that drive human
energy and activate the human mind.
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Performance measurement
Performance is measured with reference to clearly defined objectives.
Measuring maintenance performance in its totality is complicated because
multiple interacting objectives are involved. Some of these aims affect each
other in an inverse relationship. For example, if prompter service and faster
response to service calls are desired, it may be necessary to employ more
people in maintenance, have more strategically located sub-stores, and
better communication and transportation methods. Such decisions will
probably increase the cost per maintenance hour (Priel, 1974). One may
argue that better service and lower maintenance costs can be achieved by
reengineering the process of delivering maintenance services. However,
major process innovations in a specific function such as maintenance do
not occur continuously. In view of the complications, it becomes common
practice to measure individual aspects of maintenance performance. The
commonly used maintenance performance indicators can be classified into
three categories (Campbell, 1995):
.
Measures of equipment performance, such as availability, reliability and
overall equipment effectiveness.
.
Measures of cost performance, such as labour and material costs of
maintenance
.
Measures of process performance, such as ratio of planned and
unplanned work, schedule compliance.
Typically, these performance indicators are tracked because of the following
reasons:
.
These indicators have been used by the organization in the past.
.
Some of themare used for benchmarking with other organizations.
.
The required data are easy to collect.
.
Some of themare mandated by regulators or the corporate office.
These are diagnostic measures (Simons, 1995) that determine whether the
various aspects of maintenance operations remain in control or compare
favourably with counterparts elsewhere. Thus, they are used largely to
support operational control and benchmarking purposes. Given their
retrospective and introspective perspectives, these generic measures are
inappropriate to provide a holistic assessment of maintenances
performance. Furthermore, it does not provide information for predicting
the units ability to create future value needed to support the business
success of the organization. To achieve that purpose, performance measures
that are linked to the espoused strategy of the maintenance function must
be tracked. These are known as strategic measures. Tsang (1998) presents
a process for managing maintenance performance from the strategic
perspective (see Figure 4).
Dimensions of
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A core feature of the process is the balanced scorecard (BSC) that
provides a balanced presentation of strategic performance measures around
four perspectives: financial, customer, internal processes, and learning and
growth (Kaplan and Norton, 1996). Managers often find the strategy too
abstract to guide them in making day-to-day decisions. By using the BSC,
the strategy is translated into something more tangible and actionable
long-run (strategic) objectives, the related performance measures and their
targets, and action plans. Figure 5 shows a BSC template.
The BSC is a powerful communication tool for providing a sharp focus
on factors that are important to maintenance in making contributions to
business success of the company. It enables holistic assessment of unit
performance and guards against sub-optimization because all the key
measures that collectively determine the total performance of maintenance
are monitored. Tsang and Brown (1999) give a report on an electric utilitys
experience of introducing the BSC to measure the total performance of its
maintenance function.
Management information systems
Managers formulate strategies, make decisions and monitor progress
against plans by collecting, retrieving and analysing data. Management
information systems should allow seamless flow of information through the
organization to support these managerial tasks. However, managers often
find that their existing information systems do not communicate with each
Figure 4.
Strategic maintenance
performance
management process
Figure 5 ,
The balanced scorecard
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other and their operating practices are inconsistent. This is because these
so-called legacy systems were developed at different times to serve their
dedicated purposes with little, if any, due consideration for integration with
other systems.
The emergence of enterprise systems (ES) software packages with
fully integrated modules for the major processes in the entire organization
offers the promise to integrate all the information flows in the
organization with the following benefits:
.
Replacing a large number of the legacy systems with an integrated
one produces significant cost savings. It eliminates the expensive
tasks of maintaining redundant data, transferring data between
incompatible systems, and updating and debugging obsolete
software code.
.
Managers can make informed decisions when data on multiple
aspects of operations are readily available for analysis. If the
financial-reporting system cannot talk with the maintenance-
management system, then optimal decisions on equipment
replacement cannot be made with confidence. If the work-order
control system is incompatible with the inventory-control and
purchasing systems, then maintenance jobs cannot be done
efficiently when the critical spares are not available. Fragmentation
of information is a cause of incoherent decisions.
The decision to install a generic, off-the-shelf ES has its pitfalls. Managers
must consider the implications on their business imperatives. They should
check whether the logic of the system is in conflict with the logic of the
organizations practices. The suitability of an ES should be determined
from a strategic perspective. In other words, the enterprise should be
stressed, not the system (Davenport, 1998).
If maintenance is a significant function in the organization, the ES
should have modules supporting maintenance management. The required
features in these modules include facilities for maintaining records of
equipment history, support for preventive maintenance, work-order control,
inventory control and purchasing. Through integration with the other
software modules that handle payroll, accounts payable, cost accounting,
shop-floor data collection, knowledge-base diagnostics, etc., real-time
decision-support information can be retrieved by managers using user-
friendly interfaces.
To leverage the benefits of enterprise systems that support maintenance,
managers are advised to specify the following requirements in the software
modules:
.
To exploit the wealth of information embedded in their maintenance
data, there should be functions that support modelling of life-time
distributions, inspection or preventive maintenance schedules, or
Dimensions of
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equipment-replacement decisions. Without these decision-support
facilities, organizations are likely to be ``data rich, but information
poor!
.
If RCM is implemented, features that support the methodology are
desirable. Support for documentation of failure mode, effect and
criticality analysis (FMECA) is one such feature.
.
The system can present performance results in a format specified by
the user. If the balanced scorecard (BSC) approach is in use, the
system should be able to support it. In such cases, the design should
follow the logic of the process strategic objectives are linked to
their performance measures which, in turn, have their respective
targets; the top-level BSC is deployed to lower level ones in a
cascading manner. Navigating within the process should be done
through a graphical user interface (GUI). The system should allow
the user to drill down high-level measures to reveal further details
provided by the lower level measures they summarise. Trending of
data is another essential capability required. Furthermore, the
information should be accessible in real time to all employees who
play a direct role in affecting the performance tracked.
.
If the organization has strategic partners in its logistics system,
there are huge benefits in establishing direct electronic links with
their software systems. If the inventory control, purchasing and
accounts-payable modules can communicate seamlessly with their
counterparts in the supplier, then provisioning of spares can be
managed efficiently with minimal human intervention and
transactions can be processed with low error rates. If part of the
maintenance service is outsourced, a direct link with the external
suppliers system will shorten the elapsed time between the issue of
job requests and response of the supplier. Tapping into the
suppliers system also enables the user to monitor the suppliers
performance in delivering the required maintenance services. This
requirement suggests that the strategic partners need to be involved
in establishing the system specifications and in system
commissioning.
E-maintenance
A major aspect of maintenance management is optimisation of inspection,
maintenance and replacement decisions. This ability depends on the
availability of good quality and timely data captured by the various
computerised systems in supplier, user and service-provider organisations
(Tsang et al., 2000). The volume of data available to managers responsible
for maintenance is expanding rapidly. The problem is exacerbated in the
case of organisations with operations covering large geographical areas,
such as public utilities, transportation and mining operators, building-
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services suppliers. E-maintenance, an emerging concept that exploits the
potential of digital technologies, offers new options to deal with this
problem.
The ubiquitous Internet creates new business opportunities such as
remote services in business-to-business (B2B) commerce (Champion and
Carr, 2000), and enables the emergence of B2B marketplaces (Kaplan and
Sawhney, 2000). Its impacts on maintenance are discussed in Levitt (1998),
LePree (1999), Singer (1998) and Wiseman (2000). Two of the e-maintenance
initiatives are:
(1) e-CBM. Remote sensing devices are deployed to monitor the condition
and performance of physical assets. The captured data are transmitted
via the Web to a secure site for analysis and decision making. In this
initiative no software other than the Web browser will be required,
eliminating the need for software administration at remote sites (the
clients).
(2) e-CMMS. Web enablement of computerised maintenance management
systems (CMMS) , as in the case of other enterprise systems, is becoming
the norm. This paves the way of making the entire application available
over the Web and the emergence of the application service provider
(ASP). In this option, the ASP is the expert who knows the users
software requirements and provides the user with a total solution it is
responsible for the hardware and software installation, customisation
and monitoring of the ongoing application to ensure delivery of the
required system performance. This approach is attractive to the user
seeking to avoid the expense and distraction of non-core activities of
software maintenance, security and hardware upgrade. The driving
forces that make this option increasingly appealing now are: the
ubiquity of Internet connectivity and the increasing market presence of
leading products in key niches (Schwartz, 2000).
In the e-maintenance model, internal systems will be exposed to other
applications on the Web. An IT strategy that supports such exposure is
the adoption of the Web-services architecture. It offers the advantages of
openness and modularity, making the IT infrastructure both robust and
highly adaptable to changes in the marketplace and strategic restructuring.
It also opens the option of using ASP services rather than building and
maintaining internal systems. Hagel and Brown (2001) propose an approach
that will smooth out the transition from a traditional IT infrastructure with
rigid, proprietary systems to a Web-services architecture.
At the device level, wireless technology and palm computing top the list
of technologies to be exploited. Bluetooth (http://www.bluetooth.com) is the
wireless technology that offers the promise of implementation of e-
maintenance. It is the de facto standard for small-form factor, low-cost,
short-range radio links between mobile computing devices, mobile phones
and other portable devices. Integration of Bluetooth wireless technology
Dimensions of
maintenance
management
35
and palm computing into the maintenance-execution process offers these
benefits (Wiseman, 2000):
.
Accessibility and mobility. Enterprise systems are accessible from remote
sites. Controlled documents such as manuals, multimedia work
instructions, safety information and inspection plans can be downloaded
for field use on location.
.
Accuracy and consistency. Diagnosis, maintenance-work performed and
parts replaced are documented on the spot through structured responses
to work steps displayed on the palm top. Time and costs are recorded
against correct job and location. Results of inspection and audits can be
recorded in real time using standardised responses to ensure
consistency of captured data. The non-value-added and error-prone
operation of transferring operator logs to computer systems can be
eliminated.
.
Stores management. Goods are checked out from stores against a work
order or a location and the transaction is recorded in real time. The
enterprise systemis notified as soon as any withdrawal takes place.
.
On-site permits. Lock-outs and isolation can be performed and recorded
on location. Equipment tagged with bar codes prevents possibility of
error.
An important restraining force that holds back speedy adoption of e-
maintenance is the security concern arising from transactions over the
Internet. E-maintenance renders the enterprise systems accessible not only
to employees but also to suppliers, customers and anyone that the
organisation is likely to do business with, thereby allowing competitors and
other intruders possible access to the enterprises information resources.
Approaches to address such security concern include authentication,
confidentiality, secure delivery, privacy and non-repudiation. Risk
management in e-maintenance is a trade-off between protection on the one
hand and functionality, performance and ease-of-use on the other (Dhanji
and Steadman, 2000).
The key to strike a balance between these conflicting needs is to build
up trust between the enterprise and its e-business partners. ISOs Code of
Practice for Information Security Management offers guidelines for building
the requisite trust through preserving confidentiality, integrity and
availability of information assets accessible to parties involved in
transactions over the Internet (ISO/IEC 17799:2000, 2000).
Conclusion
Four strategic dimensions of maintenance management service-delivery
options, organizational design, maintenance methodology and support
systems have been discussed. Table I summarizes and examines the
critical decision areas in each of these dimensions. The two factors that
JQME
8,1
36
Table I.
Strategic dimensions
of maintenance
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Dimensions of
maintenance
management
37
permeate in these dimensions are human factors and information flow. An
understanding of behaviour at work and the conditions for enhancing
group effectiveness will produce better organizational designs that
stimulate peoples minds and create internal commitment. Due
consideration of these factors will also increase the chances of success in
the change programs. These principles also apply to the design of
interfaces with external partners suppliers of equipment, spares and
maintenance services. The seamless flow of information is another enabler
of exemplary performance. Information can influence peoples behaviour
when a performance-management system communicating the espoused
strategy and emphasizing balanced assessment is in place. Implementing
this system is a big challenge, but the huge potential pay-off will justify
the effort. The e-maintenance model provides unprecedented convenience
and expedience for enhancing efficiency of maintenance activities. However,
issues related to the IT strategy and the security concern must be
addressed before a decision is made to connect to the Internet.
Note
1. Digital technologies include remote sensing, condition monitoring, knowledge engineering,
telecommunications and Internet technologies.
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