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Development of maintenance function performance measurement framework and indicators Peter Muchiri a,n , Liliane Pintelon a , Ludo Gelders a , Harry Martin b a Centre for Industrial Management, Katholieke Universiteit Leuven, Celestijnenlaan 300A, 3001 Heverlee, Belgium b Open Universiteit Nederland, 6401 DL, Heerlen a r t i c l e i n f o Available online 4 May 2010 Keywords: Maintenance Performance measurement Indicators a b s t r a c t The
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  Development of maintenance function performance measurementframework and indicators Peter Muchiri a, n , Liliane Pintelon a , Ludo Gelders a , Harry Martin b a Centre for Industrial Management, Katholieke Universiteit Leuven, Celestijnenlaan 300A, 3001 Heverlee, Belgium b Open Universiteit Nederland, 6401 DL, Heerlen a r t i c l e i n f o Available online 4 May 2010 Keywords: MaintenancePerformance measurementIndicators a b s t r a c t The performance and competitiveness of manufacturing companies is dependent on the reliability,availability and productivity of their production facilities. To ensure the plant achieves the desiredperformance, maintenance managers need a good track of performance on maintenance process andmaintenance results. This can be attained through development and implementation of a rigorouslydefined performance measurement framework and indicators that are able to measure importantelements of maintenance function performance. The purpose of this paper is to demonstrate thatperformance indicators are not defined in isolation, but should be the result of a careful analysis of theinteraction of the maintenance function with other organisational functions, most evidently with theproduction function. In this paper, a conceptual framework that provide guidelines for choosingmaintenance function performance indicators is proposed. It seeks to align maintenance objectives withmanufacturing and corporate objectives, and provides a link between the maintenance objectives,maintenance process/effortsandmaintenance results.Basedon thisconceptualframework,performanceindicators of the maintenance process and maintenance results are identified for each category. &  2010 Elsevier B.V. All rights reserved. 1. Introduction In the face of the current global competition and increasingdemands from stakeholders, there is a basic business demand toimprove manufacturing performance. The performance andcompetitiveness of manufacturing companies is dependent onthe reliability and productivity of their production facilities(Coetzee, 1997; Madu, 2000; Fleischer et al., 2006). This need toimprove the production system’s performance that has broughtthe maintenance function into the limelight. There is consensusamong authors (Madu, 1999; Cooke, 2000; Madu, 2000) thatequipment maintenance and system reliability are importantfactors that affect organization’s ability to provide quality andtimely services to customers and to be ahead of competition.Maintenance function is therefore vital for sustainable perfor-mance of any manufacturing plant.Maintenance is defined as a combination of all technical andassociated administrative activities required to keep equipments,installations and other physical assets in the desired operatingcondition or restore them to this condition (BSI, 1984; Pintelonet al., 1997; Pintelon and VanPuyvelde, 2006). The MaintenanceEngineering Society of Australia (MESA) gives a definition thatindicates that maintenance is about achieving the required assetcapabilities within an economic or business context (MESA,1995). They define maintenance as the engineering decisionsand associated actions, necessary and sufficient for optimizationof specified equipment ‘capability’. The ‘‘capability’’ in thisdefinition is the ability to perform a specified function within arange of performance levels that may relate to capacity, rate,quality and responsiveness (Tsang, 1998).Charged with this responsibility of ensuring that the plantachieves the desired performance, maintenance managers need agood track of performance on maintenance operations andmaintenance results. In addition, it is in the interest of assetmanagers to know the relationship between the input of themaintenanceprocessandtheoutcomeintermsoftotalcontributionto manufacturing performance and business strategic objectives(Dwight, 1995; Tsang, 1998; Parida and Chattopadhyay, 2007). Thiscan be realised through development and implementation of arigorously defined performance measurement system and indica-tors that are able to measure important elements of maintenancefunction performance. It is the objective of this paper todemonstrate that performance indicators are not defined inisolation, but should be the result of a careful analysis of theinteraction of the maintenance function with other organisationalfunctions,most evidently withthe production function. This is done Contents lists available at ScienceDirectjournal homepage: www.elsevier.com/locate/ijpe Int. J. Production Economics 0925-5273/$-see front matter  &  2010 Elsevier B.V. All rights reserved.doi:10.1016/j.ijpe.2010.04.039 n Corresponding author. Tel.: +32 16 322567; fax: +32 16 322986. E-mail address:  peter.muchiri@cib.kuleuven.be (P. Muchiri).Int. J. Production Economics 131 (2011) 295–302  by developing a maintenance performance conceptual frameworkthat aligns maintenance objectives with manufacturing strategy,and provides a link between the maintenance objectives, main-tenance process/efforts and maintenance results.This paper first explains the maintenance function of amanufacturing plant based on its objectives, strategies andvarious maintenance actions. Second, the literature on main-tenance performance measurement is reviewed. Finally, theconceptual framework that provide a guideline for developingperformance indicators for maintenance function is introduced.Based upon this conceptual framework, the performance indica-tors of maintenance process and maintenance results areidentified for each category. 2. The maintenance function Deterioration of manufacturing systems’ condition, and henceits capability, begins to take place as soon as the system iscommissioned. In addition to normal wear and deterioration,other failures may occur especially when the equipments arepushed beyond their design limits or due to operational errors. Asa result, equipment downtime, quality problems, speed losses,safety hazards or environmental pollution become the obviousoutcomes. All these outcomes have the potential to impactnegatively the operating cost, profitability, customers’ demandsatisfaction, and productivity among other important perfor-mance requirements. To ensure the plant operates at the requiredcondition while meeting its production targets at an optimal cost,maintenance management has to make conscious decisionsregarding the maintenance objectives and strategies that needto be pursued.Good maintenance assumes that maintenance objectives andstrategies are not determined in isolation, but are in some wayderived from factors such as company policy, manufacturing policyand other potentially conflicting demands and constraints in thecompany (Swanson 1997; Johnsson and Lesshamar, 1999; Swanson2001; Pinjala et al., 2006). According to some authors (Kelly 1989;MESA 1995; Tsang, 1999; Visser and Pretorious, 2003), main-tenance objectives are related to attainment of production target(through high availability) at required quality, and within theconstraints of the system condition and safety. Further, mainte-nance resources are utilised so that the manufacturing equipmentsare in good condition, the plant achieves its design life, the safetystandards are met, the energy use and raw material consumptionare optimised among other factors (Dekker, 1996).We summarize the maintenance objectives under five head-ings (as shown in Fig. 1): ensuring the plant functionality(availability, reliability, product quality etc); ensuring the plantachieves its design life; ensuring plant and environmental safety;ensuring cost effectiveness in maintenance and effective use of resources (energy and raw materials). We assume that themaintenance objectives pursued at a given plant influences thekind of performance indicators used.Once the maintenance objectives are outlined, maintenancestrategy formulation (Pinjala, 2008) is necessary to help decidewhich type of maintenance needs to be done, when to do it, andhow often it can be done. According to Pintelon and VanPuyvelde(2006), maintenance decision making can be broadly explained interms of maintenance actions (basic elementary work), main-tenance policies and maintenance concepts. Maintenance policiesare the rules or set of rules describing the triggering mechanismfor the different maintenance actions. Examples of these policiesare failure based maintenance (FBM), use based or time basedmaintenance (UBM/TBM), condition based maintenance (CBM),design out maintenance (DOM) (Coetzee, 1997; Madu, 2000;Waeyenbergh and Pintelon, 2002; Pintelon and VanPuyvelde,2006; Savsar, 2006). A maintenance concept entails the generaldecision structure for both maintenance actions and policies (Gits,1984; Gits, 1992). Some examples are reliability centred main-tenance (RCM), total productive maintenance (TPM), life cyclecosting (LCC) and business centred maintenance (BCM) amongothers. Some maintenance decision elements are carried out at theoperational level,for example the basic maintenance interventionsdone by technicians. Other decision elements, for example themaintenance policies and concepts, apply to strategic level.Once the objectives and strategies have been established,the success of the maintenance function is dependent on themaintenance work management. The maintenance work manage-ment cycle, as outlined by Campbell (1995), consists of workidentification, planning, scheduling, execution and closing the job.Maintenance work is identified from the preventive, predictiveand failure finding work orders that are usually generated byproactive maintenance. Repair work arises as a result of failure. Atthe heart of the maintenance function are work planning andscheduling, which defines what gets done and when. To completethe work cycle, effective work execution is vital in ensuring thatrequired equipment condition and performance is attained.From the review of maintenance objectives, maintenancedecision making and work management, we get some insightsin the complex environment under which the maintenancedepartment functions. We presume that these elements areessential ingredients for developing maintenance performancemeasurement system and indicators. Likewise, they form apotential basis for performance evaluation. 3. Maintenance performance measurement review Performance measurement is a fundamental principle of management. Like other manufacturing functions, performancemeasurementis importantin managingthemaintenancefunction.Well-defined performance indicators can potentially supportidentification of performance gaps between current and desiredperformance and provide indication of progress towards closingthe gaps. In addition, performance measures provide an importantlink between the strategies and management action and thussupport implementation and executionof improvement initiatives(Kaplan, 1983; White, 1996; Neely, 1999; Neely et al., 2005).Further, they can potentially help maintenance managers to focusmaintenance staff and resources to particular areas of theproduction system that will impact manufacturing performance.Difficulties arise when quantifying and measuring the inputand output of the maintenance process. This is attributed to thecomplex relationship between maintenance and manufacturing(Daya and Duffuaa, 1995; Pintelon et al., 1997; Al-Najjar, 2000;Pintelon and VanPuyvelde, 2006). Some authors term therelationship between maintenance and production as paradoxical(Dunn, 1998; McGrath, 1999), since the more maintenancecontributes positively to the overall strategic goals of anorganization, the less noticeable it becomes to top managementas a value adding activity other than just adding to the cost. Onthe other hand, poor maintenance can obstruct addition of value,retard the advantage of capital resource and destroy a businessstrategy (Al-Najjar, 2002; Alsyouf, 2004). Since maintenance is aservice function for production, neither the merits nor theshortcomings of the service rendered are immediately apparent(Pintelon et al., 2000). There is a consensus among authors thatthere is a need for a holistic performance measurement thatassesses the contribution of the maintenance function tomanufacturing and business strategic objectives (Tsang, 1998;Tsang, 1999; Muthu et al., 2000). P. Muchiri et al. / Int. J. Production Economics 131 (2011) 295–302 296  Some approaches of measuring maintenance performancehave been proposed in literature. Dwight (1999) proposed theuse of a system audit approach in measuring the performance of maintenance system contribution to organisational success calledvalue-based performance measurement. It takes into account theimpact of maintenance activities on the future value of the organization. The main finding of Dwight’s (1999) worksurrounded the variation in lag between an action and itsoutcome. Some authors advocate use of aggregated measureslike the maintenance productivity index, which measures theratio of maintenance output to maintenance input (Lofsten, 2002).The main shortcoming of this approach is that it gives a verylimited view of maintenance performance and the obviouschallenge of quantifying different types of maintenance inputs.Tsang (1998) proposes a strategic approach of managing main-tenance performance by the use of the popularly known balancedscorecard (Kaplan and Norton, 1992; Kaplan and Norton, 1996).The success of the balanced scorecard approach is dependent onthe fact that strategy has a strong and positive effect on a firm’sperformance. Weber and Thomas (2006) developed a frameworkof defining the key performance indicator for managing themaintenance function based on physical asset managementrequirements and asset reliability process. The frameworkconsists of maintenance planning, process improvement, andmaintenance control. For each process, key performance indica-tors are defined. This framework is focused on aligning themaintenance function with the business goals and supportmanagement in measuring and managing maintenance function.A recent research (Al-Najjar, 2007) proposes a model to describeand quantify the impact of maintenance on business’s keycompetitive objectives related to production, quality and cost.The model can be used to assess the cost effectiveness of maintenance investment and in strategic decision support onchoice of different improvement plans.Different categories of maintenance measures can be identifiedfrom literature. Arts et al. (1998) use the time horizon to classifymaintenance control and performance indicators into three levelsnamely strategic, tactical and operational. Maintenance measureshave also been derived to support control at each level. A goodexample is the multi-criteria hierarchical framework for mainte-nance performance measurement (Parida and Chattopadhyay, 2007)that consist of multi-criteria indicators for each level of management(strategic, tactical and operational). Komonen (2002) presented ahierarchical system of maintenance performance indicators andclassifies indicators into three main dimensions of maintenanceperformance (OEE, production costs and production quality). Theobjective of the system is to explain the purpose and significance of various indicators at different hierarchies. Dwight (1999) classifiesperformance measures into a hierarchy according to their implicitassumptions regarding the impact of the maintenance system on thebusiness. He gives five levels in the hierarchy namely overt (visible)bottom-line impact, profit-loss and overt cost impact performance,instantaneous effectiveness measures, system audit approach andtime-related performance measurement.Campbell (1995) classifies the commonly used measures of maintenance performance into three categories based on theirfocus. These categories are measures of equipment performance,measures of cost performance and measures of process perfor-mance. The European standard for maintenance key performanceindicators (EN:15341, 2007) provides three main categories of indicators namely economic indicators, technical indicatorsand organisational indicators. For each category, a list of indicators is given to choose from. The other commonlyused classification is leading and lagging indicators. Leadingindicators monitor if the tasks are being performed that will ‘lead’to results. On the other hand, lagging indicators monitor whetherthe results or outcomes that have been achieved. Both leading andlagging indicators are therefore important for managing theperformance of the maintenance function. Moreover, the leadingindicators are even more important than lagging indicatorsbecause they have the potential to avoid unfavourable situationsfrom occurring.This review shows the different maintenance performancemeasures and frameworks proposed in literature. The differentcategories of measures show different areas of interest inmaintenance performance in both literature and practice. MaintenanceObjective CorporateStrategyPlant Functionality -Availability-Reliability-Desired output/Operatingpattern (Operability)-Product QualityMaintenance Cost EffectivenessPlant Safety &EnvironmentOther Plant Factorse.g. Energy Use, Plant Shine Plant Life ManufacturingStrategy Fig. 1.  A summary of maintenance objectives for a maintenance department. P. Muchiri et al. / Int. J. Production Economics 131 (2011) 295–302  297  However, it was observed that the literature mainly proposes listsof KPI’s but lacks a methodological approach of selecting orderiving them. As a result, users are left to decide the relevantKPI’s for their situation. Further, an operational level-basedmaintenance measurement model that links maintenance objec-tives to maintenance process and results is lacking. Such a modelcould provide a basis to identify suitable performance measure-ment indicators for a maintenance function in a certain context. 4. Developing a basis of maintenance performancemeasurement To develop a structured approach of measuring performance of the maintenance function, it is imperative to have a well-formulatedmaintenance strategy based on corporate and manufactur-ing strategy. The approach should then encapsulate a coherenttheory of maintenance processes that are critical success factorstowards contribution to manufacturing and business success.Recentresearch (Pinjala, 2008) have shown how maintenance strategy canbe developed and aligned with manufacturing and corporatestrategy by use ofcognitive mapping and analytical network process(ANP).The maintenance performance conceptual framework pro-posed in this paper (see Fig. 2) identifies key elements andprocesses that drive the maintenance function towards delivery of performance demanded by manufacturing objectives. Theconceptual framework advocates alignment of maintenanceobjectives with the manufacturing and corporate objectives andthus directs the maintenance efforts towards attainingthe required performance and continuous improvement of theproduction equipment performance. The conceptual frameworkhas three main sections that include: maintenance alignmentwith manufacturing, maintenance effort/process analysis andmaintenance results performance analysis.The first section of the conceptual framework seeks to alignthe maintenance objectives with the corporate and manufactur-ing strategy. By reviewing the composite requirements of thevarious stakeholders, the performance requirements of themanufacturing system can be defined. Based on these manufac-turing requirements, the maintenance objectives for the main-tenance function are derived. Cognitive mapping is an importanttool of mapping the cause and effect relationship among variousstrategic elements (Ackermann et al., 2005). We refer to theresearch of  Pinjala (2008) for the mapping and alignment of maintenanceobjectives and processes to corporate objectives. Themaintenance objectives help the maintenance management to setperformance targets and benchmarks for the desired maintenanceresults. The performance targets are related with the equipments’condition and performance, and maintenance resource utilization(cost) and they are used as a standard against which themaintenance results are analyzed.To attain the desired results and maintenance objectives,management of maintenance process (efforts) is important. Thesemaintenanceprocesses equate to critical success factors that drivemaintenance performance. The key steps for the maintenanceprocess are outlined as work identification, work planning, workscheduling and work execution (Campbell, 1995).  Work identifica-tion  deals with identifying the right work to be performed atthe right time by the maintenance staff based on maintenanceobjectives. It identifies and controls failure modes affectingthe equipments ability to perform their intended function at therequired performance. Activities are evaluated based onthe consequences of failure on equipment performance so thatmaintenance resources are directed to effective use. This in turnensures that the maintenance activities contribute effectivelytowards the performance results.  Work planning   develops proce-dures and work orders for the maintenance activities identified.This involves identification of resource requirements, safetyprecautions and instructions required to carry out the job. Scheduling   evaluates the availability of all resources required forthe work and the time frame for executing it. The schedule alsoevaluates the impact of maintenance work on the productionschedule.  Work execution  ensures the scheduled activities arecarried out within the allocated time and through effective use of resources. This process forms a complete loop of maintenanceprocess and ensures maintenance work is done effectively.To manage the maintenance process, performance indicatorsneed to be defined for each step. Since maintenance processes arethe determinant of the maintenance outcomes and results, theindicators related with the maintenance process are referred to as leading indicators .Once the maintenance processes are completed, the  main-tenance results  for a given period need to be monitored. The resultsare measured in terms of equipments’ condition and performance,together with maintenance cost and effective use of maintenanceresources. Careful analysis of maintenance results is importantsince it supports identification of performance gaps and hencesupports continuous improvement of equipments’ performance.The performance analysis involves comparison of the achieved CorporateStrategyManufacturingPerf. Requirements Maintenance Effort/Process MaintenanceObjectiveWork IdentificationWorkExecutionWork Planning MaintenanceLoop Work SchedulingPerformance Targets&Benchmarks Maintenance Results Maintenance CostEquipmentPerformance PerformanceAnalysisLeading Performance IndicatorsLagging Permance Indicators Maint. Alignment withManuf. Requirements Maint. Strategy Formulation Fig. 2.  The Performance measurement framework for the maintenance function. P. Muchiri et al. / Int. J. Production Economics 131 (2011) 295–302 298
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