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1 © Life Cycle Engineering 2015 1 Connecting Reliability & Business + ISO 55000 © Life Cycle Engineering
| Date post: | 04-Aug-2015 |
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1© Life Cycle Engineering 2015 1
Connecting Reliability & Business + ISO 55000
© Life Cycle Engineering
2© Life Cycle Engineering 2015
Connecting Reliability & Business + ISO 55000 Framework
Outline:• State of the Industry – Pharma & Biotech Manufacturing Disruptions• Asset Management vs. Reliability vs. Maintenance• Understand the Corporate Business Strategy• The Value Stream and Monetizing Downtime• Strategic Implementation Value• Tactical Implementation Value - Availability• The A3 Tool
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Impact of Manufacturing Disruptions
Graphic Source: Strategic Plan for Preventing and Mitigating Drug Shortages, Food and Drug Administration, October 2013
66% of disruptions resulted from:• Facility remediation efforts (35%)• Manufacturing issues (31%)
Drug Shortages by Primary Reason for Disruption in Supply (2012)
Note:Regulatory agencies are asking companies about asset management programs during audits
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• ISO 55000 (2014): Asset Management Standards• BSI PAS 55 (2004, 2008): Optimized Management of
Physical Assets Standards• ASTM E2500: Pharma-specific Guidance (Create or
Acquire Phase of Asset Life Cycle)
Recent focus on Asset Management
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Graphic Source: Life Cycle Engineering, Copyright 2015
Leadership, Policy & Strategy
Asset Management Strategy
Physical Asset Portfolio
Business Case
Procure & Construct
Commission
Operate & Maintain
Asset Management System
Asset Management Capability
(Processes, Procedures& Knowledge)
Asset Management Objectives
Value DeliveryISO 55000 Compliance
Reliability Excellence
Process Safety Management
Mechanical Integrity
ISO 31000 Risk Management
Asset Management Plans
Asset Criticality
ASSETLIFECYCLE
Asset Management System Implementation Framework
Areas where companies commonly focus
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Asset Management Implementation Broken-Down Further…
1. Understand the corporate (and/or site) business strategy & objectives
2. Create asset management strategy & objectives that align with the business strategy & objectives
3. Implement asset management capabilities, across the asset lifecycle, to deliver value
Asset Management Capability
(Processes, Procedures& Knowledge)
Value DeliveryISO 55000 Compliance
Reliability Excellence
Process Safety Management
Mechanical Integrity
ISO 31000 Risk Management
Asset Management Plans
Asset Criticality
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FAQ: What’s the difference between Reliability, Maintenance and Asset Management?
• Reliability Processes:o Asset criticality, root cause analysis, etc.
• Maintenance Processes:o Planning & scheduling, work execution, etc.
These are Asset Management Capabilities
• Other asset management capabilities include: capital delivery, MRO materials management, etc.
Asset Management Capability
(Processes, Procedures& Knowledge)
Value DeliveryISO 55000 Compliance
Reliability Excellence
Process Safety Management
Mechanical Integrity
ISO 31000 Risk Management
Asset Management Plans
Asset Criticality
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Understanding the Value Stream
How does your business create value?• Producing medicines, vaccines, devices, etc.• Selling products – increasing prices &/or volume over time• Reducing cost of goods sold (COGS) over time
Waste = Cost
TIM WOODT: Transportation I: InventoryM: MotionW: WaitingO: Over-processingO: Over-productionD: Defects
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Understanding the Value Stream• What are your high-profit products?• Do you have capacity-constrained products (everything made is
immediately sold)?• Where in your production is COGS absorbed?• What is the cost of downtime?
• Get to know your corporate & site finance teams! They can answer most of the questions above.
• Great partnership opportunity with your Operational Excellence groups!
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Highest-Level Value Delivery Concepts
Fixed Capital
• Optimize lifecycle costs• Defer asset replacement
through increased asset life
Working Capital
• Leaner manufacturing• Reduce work in process• Reduce spare parts
inventory
Revenue or Output
• Increase asset availability• Increase throughput• Improve quality
Operating Costs
• Reduce unscheduled downtime
• Reduce maintenance cost• Reduce operations Cost
Note: Site-to-site and/or company-to-company benchmarking key to quantifying opportunities for strategic implementations
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Tactical Value - Availability & Opportunity Case for Improvement
Availability as defined by SMRP Best Practices & Metrics Guide (download at SMRP.org – free for members):
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Availability & Opportunity Case for Improvement
Reliability Engineers should focus on improving unscheduled downtime
Unscheduled Downtime due to Equipment Issues:90 hrs/month (1 hr/shift, 3 shifts/day)
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Availability & Opportunity Case for Improvement
Goal: Reduce unscheduled equipment downtime from 90 hrs/month to 45 hrs/month (Improve availability from 44% to 50%)
• 45 hrs/month of additional production time now available
• Average production rate for data collection period: 382 vials/hr
• Average Profit/vial: $10
• Monthly profit gain: $171,900
Annual profit gain: $2.1MM
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Availability & Opportunity Case for ImprovementWhat can we do to reduce unscheduled equipment downtime?• Pareto analysis of equipment issues/failures• FMEA for bad actors on the line (typically filler, inspection
machine)• PM optimization/improvements across line unit ops• Implement PdM for common failure modes & causes• If large line or operation, start with asset criticality analysis
Graphics Source: Life Cycle Engineering, Copyright 2015
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Presenting & Tracking ImprovementsUtilize the A3 Business Case Template
Graphics Source: Life Cycle Engineering, Copyright 2015
The A3 template is named after the ISO 216 ‘A3’ paper size, and incorporates all information on a single 11”x17” sheet of paper. The format was developed in the 1960s as part of Toyota’s Quality Circle problem-solving program.
Example Goal:Reduce unscheduled equipment downtime from 90 hrs/month to 45 hrs/month (Improve availability from 44% to 50%)
Present to Engineering Leadership Team monthly to update on: Implementation Plan, Schedule, Metrics including unscheduled downtime, availability, ROI
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Summary of Reliability Improvement Approaches & Impact on the Business
Graphics Source: Life Cycle Engineering, Copyright 2015
Strategic Approach:• Establish an Asset Management Program with a
policy, strategy and objectives aligned with corporate and/or site business objectives
• Multi-year effort: 1 year to see results in a pilot area of company, 3-5 year full transformation – 1st year benefits often ‘pay for’ the entire program
• Implementation of all asset management capabilities (50+)
• Largest value opportunity: Hundreds of millions of dollars for most pharma & biotech companies
Tactical Approach:• Targeted improvements of one area or production line• Smaller scope, faster return on investment: Average
3-6 month implementation• Can still provide significant business benefit• Implementation of several (3-5) asset management
capabilities• Does require other functioning asset management
capabilities such as maintenance work execution, spare parts management, etc.
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Questions & Discussion
Connecting Reliability & Business + ISO 55000 FrameworkDavid J. Mierau, PE, CMRPDirector, Reliability SolutionsLife Cycle Engineering(954) [email protected]
