Achieving World Class Reliability @ ARC's 2011 Industry Forum

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Achieving World Class Reliability @ ARC's 2011 Industry Forum by Paula Hollywood. Process and Manufacturing Industries Utilize and Extensive Asset Base Majority of process company’s assets are in manufacturing •Manufacturing assets account for 75% of total assets •Raw material, energy, and conversion costs account for 65% of total expenditures •Business Performance ~ Asset Performance •Small improvements can have big impact Process and Mfg Industries are All About Assets Asset Reliability is Vital to Business Performance

Tecnologia Negócios

Achieving World Class Reliability
Paula Hollywood
Sr. Analyst
ARC Advisory Group
phollywood@arcweb.com

2
© ARC Advisory Group
Priorities in Manufacturing
What is Reliability?

3
© ARC Advisory Group
 Process and Manufacturing Industries Utilize
and Extensive Asset Base
 Majority of process company’s assets are in
manufacturing
• Manufacturing assets account for 75% of total
assets
• Raw material, energy, and conversion costs
account for 65% of total expenditures
• Business Performance ~ Asset Performance
• Small improvements can have big impact
Process and Mfg Industries are All About Assets
Asset Reliability is Vital to Business Performance

4
© ARC Advisory Group
Rate the importance of the following risks
to your organization

5
© ARC Advisory Group
The Maintenance Spend
Industry
Maintenance Costs as
% of Total Costs
Oil & Gas Extraction 27 – 49 %
Power Generation 9 – 67 %
Mining 25 – 40 %
Food Production 25 – 40 %
Wood & Paper Products 1 – 34 %
Chemical &
Petrochemical
0 – 53 %
Source: Plant Maintenance Resource Center

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© ARC Advisory Group
What are the drivers behind your
reliability initiative? (Check all that apply)

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© ARC Advisory Group
What Is Reliability?
 Ability of an system/asset to perform a required
function under a stated set of conditions for a
specific time period
The Belief that an Asset Will Operate
as it Should When Required

8
© ARC Advisory Group
What is World Class Reliability?
Objectives Communicated & Understood
Defined Roles & Responsibilities
Work Planned & Scheduled
Strategic Maintenance
Continuous Improvement
LCC Analysis
Effective Asset Management
Balance Workload & Resources
Education/Training
Empowered Workers
Overall Equipment Effectiveness
Asset Information Management
Best Practice Implementation
Risk Management
Meaningful Metrics
Change Management
Work is Prioritized
It is a Culture Based on Organization’s Objectives
C-Level Commitment
Cross-functional Teams
Reliability Based Maintenance
Environmental, Health & Safety Management
Sustainability

9
© ARC Advisory Group
What do you consider to be the most important factors
contributing to the success of your reliability initiative?
(Select top 3)

10
© ARC Advisory Group
What is the single greatest area of overall improvement
your reliability program has achieved for your facility?
(Select one)

11
© ARC Advisory Group
Thank You.
For more information, contact the author at
phollywood@arcweb.com or visit our web pages at
www.arcweb.com

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Achieving World Class Reliability @ ARC's 2011 Industry Forum

1. Achieving World Class Reliability Paula Hollywood Sr. Analyst ARC Advisory Group phollywood@arcweb.com

3. 3 © ARC Advisory Group  Process and Manufacturing Industries Utilize and Extensive Asset Base  Majority of process company’s assets are in manufacturing • Manufacturing assets account for 75% of total assets • Raw material, energy, and conversion costs account for 65% of total expenditures • Business Performance ~ Asset Performance • Small improvements can have big impact Process and Mfg Industries are All About Assets Asset Reliability is Vital to Business Performance

5. 5 © ARC Advisory Group The Maintenance Spend Industry Maintenance Costs as % of Total Costs Oil & Gas Extraction 27 – 49 % Power Generation 9 – 67 % Mining 25 – 40 % Food Production 25 – 40 % Wood & Paper Products 1 – 34 % Chemical & Petrochemical 0 – 53 % Source: Plant Maintenance Resource Center

7. 7 © ARC Advisory Group What Is Reliability?  Ability of an system/asset to perform a required function under a stated set of conditions for a specific time period The Belief that an Asset Will Operate as it Should When Required

8. 8 © ARC Advisory Group What is World Class Reliability? Objectives Communicated & Understood Defined Roles & Responsibilities Work Planned & Scheduled Strategic Maintenance Continuous Improvement LCC Analysis Effective Asset Management Balance Workload & Resources Education/Training Empowered Workers Overall Equipment Effectiveness Asset Information Management Best Practice Implementation Risk Management Meaningful Metrics Change Management Work is Prioritized It is a Culture Based on Organization’s Objectives C-Level Commitment Cross-functional Teams Reliability Based Maintenance Environmental, Health & Safety Management Sustainability

9. 9 © ARC Advisory Group What do you consider to be the most important factors contributing to the success of your reliability initiative? (Select top 3)

10. 10 © ARC Advisory Group What is the single greatest area of overall improvement your reliability program has achieved for your facility? (Select one)

11. 11 © ARC Advisory Group Thank You. For more information, contact the author at phollywood@arcweb.com or visit our web pages at www.arcweb.com

Achieving World Class Reliability @ ARC's 2011 Industry Forum

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