Maintenance Cost Analysis
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Questions and Answers

What is the definition of unscheduled downtime?

The time an asset is down for repairs or modifications that are not on the weekly maintenance schedule.

What does uptime refer to?

The amount of time an asset is actively producing a product or providing a service.

Which of the following is not a time basis for performance qualifications?

  • Real Time
  • Monthly
  • Daily
  • Historical Time (correct)

    • OEE is used for benchmarking assets, components, or processes.

    <p>False</p> Signup and view all the answers

    What should the performance efficiency value not exceed?

    <p>100%</p> Signup and view all the answers

    TEEP stands for Total Effective __________ Performance.

    <p>Equipment</p> Signup and view all the answers

    What is a key caution when calculating OEE?

    <p>Caution should be used when calculating OEE at a plant or corporate level.</p> Signup and view all the answers

    What is the best production rate?

    <p>The maximum output rate a machine can produce.</p> Signup and view all the answers

    What does a quality rate of 92% indicate?

    <p>92% of the units produced met quality standards.</p> Signup and view all the answers

    The total available time in a year is calculated as 365 days x 24 hours = __________ hours.

    <p>8760</p> Signup and view all the answers

    What is the formula to calculate the Ratio of Replacement Asset Value to Craft-Wage Headcount?

    <p>RAV ($) / Craft-Wage Headcount</p> Signup and view all the answers

    The ratio of Replacement Asset Value (RAV) is expressed in dollars per __________.

    <p>craft-wage employee</p> Signup and view all the answers

    The Ratio of Replacement Asset Value can be used to determine a plant's standing relative to best-in-class plants.

    <p>True</p> Signup and view all the answers

    What does the term 'Craft-Wage Headcount' refer to?

    <p>The number of maintenance personnel responsible for executing work assignments pertaining to maintenance activities.</p> Signup and view all the answers

    What is the definition of Replacement Asset Value (RAV)?

    <p>The dollar value required to replace the production capability of the present assets in the plant.</p> Signup and view all the answers

    Calculate the Ratio of Replacement Asset Value for a facility with a RAV of $624,500,000 and a craft-wage headcount of 150.

    <p>$4,160,000 per maintenance employee</p> Signup and view all the answers

    What does the Maintenance Unit Cost measure?

    <p>Total maintenance cost required to produce a unit of production</p> Signup and view all the answers

    What is included in the Total Maintenance Cost?

    <p>All expenditures for maintenance labor, materials, contractors, services, and resources.</p> Signup and view all the answers

    What is an example of a Standard Unit Produced?

    <p>Gallons or kilograms</p> Signup and view all the answers

    What is the Maintenance Unit Cost formula?

    <p>Total Maintenance Cost / Standard Units Produced</p> Signup and view all the answers

    No target values are currently available for the Maintenance Unit Cost metric.

    <p>True</p> Signup and view all the answers

    What is the formula for calculating the Stocked MRO Inventory Value per RAV?

    <p>[Stocked MRO Value ($) × 100] / Replacement Asset Value ($)</p> Signup and view all the answers

    Which factors are included in the Replacement Asset Value (RAV)?

    <p>Production/process equipment</p> Signup and view all the answers

    What percentage is generally considered the best-in-class target for Stocked MRO Inventory Value per RAV?

    <p>Less than 1.5%</p> Signup and view all the answers

    Lower stocked inventory value automatically equates to best-in-class performance.

    <p>False</p> Signup and view all the answers

    What is the purpose of calculating Total Maintenance Cost per RAV?

    <p>To compare maintenance expenditures across different plants.</p> Signup and view all the answers

    What components are included in the Annual Maintenance Cost?

    <p>Services and resources</p> Signup and view all the answers

    What is the formula for calculating Total Maintenance Cost per RAV?

    <p>[Total Maintenance Cost ($) × 100] / Replacement Asset Value ($)</p> Signup and view all the answers

    Lighter, less complex industries typically require more stocked inventory than heavier industries.

    <p>False</p> Signup and view all the answers

    What does OEE stand for?

    <p>Overall Equipment Effectiveness</p> Signup and view all the answers

    The availability formula is: Availability (%) = [Uptime (hrs) × 100] / [Total Available Time (hrs) - _____ (hrs)]

    <p>Idle Time</p> Signup and view all the answers

    What does performance efficiency measure?

    <p>The degree to which the equipment operates at historical best speeds.</p> Signup and view all the answers

    What is the total available time in hours for a year?

    <p>8760 hours</p> Signup and view all the answers

    What is the formula for calculating uptime?

    <p>Uptime = Total Available Time – (Idle Time + Total Downtime)</p> Signup and view all the answers

    How is uptime expressed as a percentage?

    <p>Uptime (%) = (Uptime Hours / Total Available Time) × 100</p> Signup and view all the answers

    On a 30-day month, the total available time is _____ hours.

    <p>720</p> Signup and view all the answers

    What is considered unscheduled downtime?

    <p>No demand for production</p> Signup and view all the answers

    The best-in-class target value for continuous processing is greater than 95%.

    <p>False</p> Signup and view all the answers

    What is the definition of idle time?

    <p>The amount of time an asset is idle or waiting to run.</p> Signup and view all the answers

    What is one objective of the idle time metric?

    <p>To identify reasons for a loss in potential capacity.</p> Signup and view all the answers

    What factors does utilization time take into account?

    <p>Scheduled operation time</p> Signup and view all the answers

    What does the metric for systems covered by criticality analysis measure?

    <p>The ratio of critical systems analyzed to total systems in a facility.</p> Signup and view all the answers

    What is the total scheduled downtime?

    <p>1.66 hours</p> Signup and view all the answers

    What is the total unscheduled downtime?

    <p>2.08 hours</p> Signup and view all the answers

    What is the total downtime (scheduled + unscheduled)?

    <p>3.74 hours</p> Signup and view all the answers

    What is the uptime calculated for the period?

    <p>12.26 hours</p> Signup and view all the answers

    What is the availability percentage?

    <p>76.63%</p> Signup and view all the answers

    What is the performance efficiency percentage?

    <p>59.88%</p> Signup and view all the answers

    What is the quality rate achieved?

    <p>92.00%</p> Signup and view all the answers

    What is the Total Effective Equipment Performance (TEEP)?

    <p>28.14%</p> Signup and view all the answers

    The availability formula is: Availability % = {Uptime (hrs.) / [Total Available Time (hrs.) - ______ (hrs.)]} x 100. What is the term for hours not producing?

    <p>Idle Time</p> Signup and view all the answers

    The metric of availability reflects purely the operating time of the asset.

    <p>False</p> Signup and view all the answers

    What does the term 'unscheduled downtime' refer to?

    <p>Repairs or modifications not on the maintenance schedule</p> Signup and view all the answers

    Which of the following is NOT a reason for unscheduled downtime?

    <p>Scheduled maintenance</p> Signup and view all the answers

    The metric for performance efficiency is calculated as (Actual Production / Design Rate). The design rate in the example is ____ units/hour.

    <p>12.5</p> Signup and view all the answers

    What is Criticality Analysis?

    <p>A quantitative analysis of events and faults ranked based on consequences and frequency.</p> Signup and view all the answers

    What should the assets included in each system be defined by?

    <p>Management of the facility or organization</p> Signup and view all the answers

    The type of Criticality Analysis used can only be a simple criticality table.

    <p>False</p> Signup and view all the answers

    What is the formula for calculating the percentage of Systems Covered by Criticality Analysis?

    <p>Systems Covered by Criticality Analysis (%) = [Number of Critical Systems / Total Number of Systems] × 100</p> Signup and view all the answers

    Total Downtime is defined as the sum of __________ and __________.

    <p>Scheduled Downtime, Unscheduled Downtime</p> Signup and view all the answers

    What is the objective of the Total Downtime metric?

    <p>To evaluate the total time an asset has not been capable of running</p> Signup and view all the answers

    What is Scheduled Downtime?

    <p>The time required to work on an asset that is on the finalized weekly maintenance schedule.</p> Signup and view all the answers

    Study Notes

    Replacement Asset Value (RAV) to Craft-Wage Headcount Ratio

    • This metric calculates the RAV divided by the craft-wage employee headcount, expressed in dollars per craft-wage employee.
    • Enables site comparisons among different plants, benchmarking data, and assessing efficiency.
    • High asset utilization and reliability reflect a lower maintenance craft-wage cost.
    • Formula: RAV ($) / Craft-Wage Headcount.

    Definitions and Qualifications

    • Craft-Wage Headcount: Number of maintenance personnel, including contractors performing maintenance, measured in full-time equivalents (FTE).
    • Replacement Asset Value (RAV): Estimated dollar value needed to replace the plant's production capability, excluding real estate values and insurance assessments.
    • Measured on a yearly basis and used to analyze maintenance workforce effectiveness.
    • Includes maintenance performed by operators within a total productive maintenance framework.

    Sample Calculation

    • Example: RAV of $624,500,000 and a headcount of 150 yields a ratio of $4,160,000 per employee.

    Maintenance Unit Cost

    • Represents total maintenance cost required for an asset or facility to generate one unit of production.
    • Aids in quantifying maintenance expenses over specified periods, allowing tracking of trends.
    • Formula: Total Maintenance Cost / Standard Units Produced.

    Component Definitions

    • Standard Units Produced: Output of acceptable quality measured in units like gallons or kilograms.
    • Total Maintenance Cost: All expenses associated with maintenance labor, materials, and services, including costs of turnarounds and operator maintenance.

    Best Practices

    • No benchmark values have been established for the maintenance unit cost metric; organizations are encouraged to utilize this metric for individual assessments.
    • Ensures accurate comparisons by necessitating standardized units of output across similar businesses.

    Stocked MRO Inventory Value as a Percent of RAV

    • Metric quantifies the value of MRO materials and spare parts stocked relative to the plant's RAV, expressed as a percentage.
    • This allows comparison of inventory value across various plants and benchmarks.

    Formula and Definitions

    • Formula: (Stocked MRO Value × 100) / Replacement Asset Value.
    • MRO: Stands for Maintenance, Repair, and Operating materials.
    • Stocked MRO Inventory Value: Book value of MRO supplies on hand to support maintenance activities.

    Summary

    • Metrics provided focus on evaluating maintenance costs, asset values, and workforce efficiency critical for operational excellence.
    • Emphasize the importance of benchmarking, standardization, and thorough definitions to facilitate consistent assessments of maintenance practices across various industries.### MRO Inventory Value
    • Stocked MRO inventory value covers all storage locations, including remote storerooms and unofficial stores.
    • Estimates may include materials not under storeroom control or not listed in financial records.
    • Excludes manufacturing-related inventory (raw materials, finished goods, etc.).
    • Calculated as: Monetary Cost of Individual Storeroom Item = Quantity on Hand × Individual Item Cost.
    • Total cost of storeroom items is the aggregation of individual costs.

    Reporting Frequency

    • Metrics can be calculated on an annual or quarterly basis.
    • Used by corporate and plant management for performance comparison.

    Benchmarking and Targets

    • Helps assess plant performance in a four-quartile measurement system, with best-in-class settings having lower stocked inventory values.
    • Top-performing plants exhibit efficient material usage, indicated by higher asset utilization and reliability.
    • Best-in-class target for stocked MRO inventory value is typically less than 1.5% of Replacement Asset Value (RAV).

    Cautions in Metrics

    • A lower inventory value does not automatically signify best-in-class; should be balanced with stock-out rates and service level indicators.
    • Less advanced maintenance practices require higher inventory levels to mitigate stock-outs and downtime.

    Industry Variation

    • Lighter industries (e.g., non-industrial facilities) usually require less stocked inventory compared to heavier industries (e.g., mining).
    • Target metrics may vary by facility, consultation with experts recommended for specific target settings.

    Total Maintenance Cost as Percent of RAV

    • Measures annual maintenance expenditures as a percentage of the asset replacement value (RAV), calculated as:
    • *Total Maintenance Cost per RAV (%) = [Total Maintenance Cost ($) × 100] / Replacement Asset Value ($)**.
    • Includes all maintenance expenses, excluding capital expenditures for plant expansions.

    Best Practices and Targets

    • Recommended target for total maintenance cost typically below 3%, with a top quartile range from 0.7% to 3.6% based on industry.
    • Facilities with advanced maintenance practices may set more aggressive targets.

    Overall Equipment Effectiveness (OEE)

    • OEE measures asset performance based on availability, performance efficiency, and quality output, calculated as:
    • *OEE (%) = Availability (%) × Performance Efficiency (%) × Quality Rate (%)**.
    • Availability assesses operational uptime relative to total available time.

    Key Performance Indicators

    • OEE serves as a lagging KPI, best utilized in Continuous and Lean improvement programs to identify areas for enhancement.
    • Stakeholders across operations, maintenance, and engineering must collaborate for effective OEE improvement.

    Performance Definitions

    • Uptime is calculated by subtracting idle and downtime from total available time.
    • Performance efficiency is the actual production rate compared to the best production rate.
    • Quality rate reflects the proportion of non-defective units produced.

    Important Considerations

    • OEE should not be used alone for benchmarking; its internal indicators are better for focusing improvement efforts.
    • Attention is needed to ensure appropriate definitions, measurement periods, and consistent application in OEE calculations.### Overall Equipment Effectiveness (OEE)
    • OEE is a measure of asset performance based on availability, performance efficiency, and quality.
    • Total available time is determined as 365 days x 24 hours, equating to 8760 hours annually.
    • Uptime is calculated by subtracting total downtime (scheduled and unscheduled) from total available time.
    • Availability percentage reflects the actual operating time versus scheduled operating time.

    Components of OEE Calculation

    • Idle time represents periods when equipment is not in use but not necessarily due to faults.
    • Scheduled downtime includes planned maintenance and other pre-arranged stoppages.
    • Unscheduled downtime involves unexpected failures or delays caused by various factors.
    • Performance efficiency measures actual production rate against a predetermined best production rate.

    Quality and Production Metrics

    • The "first time pass" rate quantifies the percentage of quality output produced without rework or defects.
    • Overall Equipment Effectiveness combines availability, performance efficiency, and quality to create a comprehensive performance metric.

    Best-in-Class Targets

    • Target OEE values for batch-type manufacturing range from 85% to 100%.
    • Continuous discrete manufacturing targets generally fall between 90% and 100%.
    • Continuous process manufacturing aims for OEE values of 95% to 100%.
    • Key quality targets include availability greater than 90% and quality rates exceeding 99%.

    Cautions in OEE Calculation

    • OEE is best suited for measuring specific equipment or production lines rather than entire plants.
    • It is an internal improvement metric, primarily for tracking specific asset effectiveness over time.
    • OEE cannot exceed 100%, and performance efficiency values must be specified correctly.
    • Planned maintenance during idle periods does not count against production uptime.

    Total Effective Equipment Performance (TEEP)

    • TEEP evaluates performance over total available time, factoring in utilization, availability, performance efficiency, and quality.
    • Calculation of TEEP uses a formula that multiplies the percentages of each component.
    • TEEP highlights how effectively an organization extracts value from its assets across all operational hours.

    Identifying Performance Inefficiencies

    • Production losses are categorized and visualized to identify areas needing improvement.
    • Machinery with low OEE or TEEP points to potential underlying issues that require analysis.

    Important Definitions

    • Utilization Time: Time asset is scheduled to run vs. total available time.
    • Availability: Actual running time of the equipment compared to its scheduled time.
    • Defective Units Produced: Number of products that do not meet quality standards.
    • Idle Time vs. Downtime: Idle time occurs when the asset is inactive by design; downtime reflects mechanical or operational failures.

    Best Practices

    • Utilize detailed industry benchmarks for target OEE values and performance indicators.
    • Engage with industry trade associations for continual improvement strategies.
    • Track and trend OEE over time for insightful maintenance and operational decisions.

    Standardization

    • OEE measurement has not been completely harmonized with standards like CEN EN 15341.
    • TEEP calculations are subject to similar cautionary principles as OEE to ensure reliability and accuracy.

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    Description

    This quiz focuses on understanding key concepts related to maintenance unit costs and the ratio of replacement asset value to craft-wage headcount. Participants will explore financial metrics essential for effective maintenance management. Test your knowledge in this specialized area of maintenance and reliability.

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