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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 1
Enterprise Asset Management Benchmark Survey Report 2004
Is maintenance worth doing?
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Intentia Enterprise Asset Management Benchmark Survey Report 20042
In 2003, Intentia set out to create the first global enterprise asset management
survey. Now in its second year, the survey is continuing to provide mainte-
nance professionals with the only guide to help benchmark and judge their
performance on key maintenance and asset management issues.
In this report, we will consider whether organisations actually regard mainte-
nance as worthwhile, and if so, how they view its effectiveness.
The management of plants, equipment, facilities and other assets to maintain
peak performance is vital to productivity and profit. Organizations continue tostrive for best practice, deploying advanced management software, cutting-edge
management practices and the latest equipment.
As one of the world’s leading enterprise application providers, Intentia takes a
keen interest in helping establish, and assisting our clients in achieving, industry
best practices.
Our second survey was conducted during August–September 2004 and
includes responses from over 400 global manufacturing and operations-related
organizations.
We hope that the results of this, our second Intentia Global Enterprise Asset
Management Survey, constitutes a source of powerful information to help youimprove the way you do business.
Disclaimer: Intentia has compiled the information contained in this document using data which, to thebest knowledge of Intentia was current and accurate as at the date of this report. Intentia disclaimsall responsibility for any harm or loss arising from use or otherwise of the information provided. Allwarranties, express or implied, statutory or otherwise are excluded to the extent permissible under the Trade Practices Act 1974 and any other relevant legislation. The contents of this document areprotected by Copyright ©2004.
Introduction
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 3
Is Preventive Maintenance Worth the Effort?
A key question to begin the review of the 2004 Global EAM Survey is to
consider this: Is maintenance actually worth doing in the first place? Preventive
maintenance can take many forms and over the years has gained many
names. Ultimately, it’s a process that provides the business with the right asset
availability at the right time.
Question: Does your preventive maintenance increase
plant production / operations capacity?
For preventive maintenance to be worth the effort, it has to provide clear and
undeniable benefits. For many years, industry has taken for granted the fact thatpreventive maintenance increases operational capacity by improving uptime, thus
allowing the operations team greater confidence in achieving the operations plan
and increasing the equipment’s operational tolerances, therefore producing a
better end product with less scrap. This increases the equipment’s average speed
in producing more product and so on. However, is this view too generic? Could
preventive maintenance actually be ineffective in some industries or types of plants?
Over 85 percent of all survey respondents agree that preventive maintenance
increases their plant production or operations capacity. Nearly half strongly
agree with the notion that they can achieve increased capacity through
preventive works.
Interestingly, power generation and utilities organizations disagree most with
the notion that preventive maintenance increased production/operations
capacity, although they were the most likely to spend the largest percentage
of their maintenance budget on it. Can we therefore conclude from this that
preventive maintenance in asset-intensive industries may not be as effective?
Probably not. Intentia believes that in these types of industries, preventive
maintenance on its own does not increase operational capabilities. Our survey
has shown that power generation and utilities organizations use preventive
maintenance in conjunction with a high level of stand-by systems to provide
an optimum level of equipment availability. This is shown later in the survey by
achieving one of the highest proportions of zero-downtime results.
"Over 85 percent of
all survey respondentsagree that preventative
maintenance increases
their plant production or
operations capacity."
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Intentia Enterprise Asset Management Benchmark Survey Report 20044
In a more positive light, facilities and infrastructure and food and beverage
organizations were the most likely to agree that preventive maintenance
increases capacity. These are industries that also invested heavily in preventive
maintenance in terms of their overall maintenance budget, telling us that those
who invest in preventive maintenance are doing so because they believe that it
is providing them with an economic advantage.
The analysis of an organization’s size shows a general agreement that
preventive maintenance does increase operation capabilities with the 251–500
size companies leading this view.
European organizations were the most likely to strongly agree that preventive
maintenance increased operational capabilities although, in general, there was
an even view across all geographies that it did make a difference.
Can the use of preventive maintenance do more than increase the operationalcapabilities of the business? Can it go further and actually give us a competitive
edge? Increasing the availability of equipment can clearly have an impact down
the entire supply chain. Reliable equipment enables the operations group to
complete customer orders on time and at the pre-determined unit cost. This,
in turn, delivers what the customer wants, when they want it, at the right price.
This provides a clear competitive advantage over those suppliers with less
reliable plants.
"This provides a clear competitive advantage over
those suppliers with less
reliable plants."
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 5
“Obviously, there is a directlink between preventive
maintenance and a
competitive edge”
Question: Do you believe that your preventive
maintenance program gives you a competitive advantage
over others in your industry?
Almost two-thirds of the organizations surveyed reported that their preventive
maintenance program gave them a competitive advantage over others in their
industry. Clearly, there is a direct link between preventive maintenance and a
competitive edge.
In general, there was a consistent view across industries that preventive
maintenance provided a competitive advantage over others in their industry.
Overall, pharmaceutical and chemical companies believed it gave them
more of an advantage, although in practice these industries indicated that
they performed a high level of corrective maintenance. Food and beverage
organizations believed that it gave them the most significant advantage.
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Intentia Enterprise Asset Management Benchmark Survey Report 20046
Medium-sized (251-500 employees) firms were the most likely to think that
they had a competitive advantage with almost three-quarters expressing
this viewpoint. Small companies were then most likely to think that they
were at a slight disadvantage as a result of their preventive works, while
larger organizations were more likely to be indifferent as to any competitive
advantage acheived as a result of their preventive maintenance program.
From a geographical point of view, Europe had the strongest view that
preventive maintenance gave them an advantage. This may in part be due to
the fierce cross-border competition faced by many European companies.
From these results, preventive maintenance is clearly worth the effort both
in terms of its ability to increase operational output (which could also be
translated by some businesses into a lower cost unit) and also in its providing
a competitive advantage over competitors in their own industry. It is alsoclear that in certain industries, notably the asset-intensive ones, preventive
maintenance on its own cannot deliver optimum results.
"From these results,
preventive maintenance is
clearly worth the effort"
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 7
"The majority of survey respondents are spending
less than 10 percent of
total cost of operations on
maintenance."
Is Industry Spending Enough on Preventive
Maintenance?
If maintenance is worth the effort and can provide a competitive advantage, are
companies putting enough effort into getting results? In this section, we wanted
to find out how much organizations were spending on maintenance, and how
much of this was spent on preventive maintenance.
Question: Approximately what percentage of your cost
of operations is attributable to maintenance?
The majority of survey respondents are spending less than 10 percent of total
cost of operations on maintenance.
Power generation and utilities organizations were the most likely to spend 50
percent or more of their cost of operations on maintenance, which is endemic
in asset-intensive industries.
Smaller organizations were the most likely to spend the least on maintenance,
as they may have a lower cost base and achieve higher efficiencies. The survey indicated that almost 60 percent of smaller organizations spend less than 10
percent on maintenance.
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Intentia Enterprise Asset Management Benchmark Survey Report 20048
European firms were more likely to spend less on maintenance than
Australasian firms. This is surprising because this survey shows that European
firms see preventive maintenance as providing more of a competitive edge and
believe it increases operational capabilities.
From these results, we can see that the majority of organizations spend
relatively small percentages of their operational costs on maintenance. We
wanted to understand how maintenance spending was being allocated.
Industry Spotlight:
Power Generation and Utilities
Power generation and utilities organizations have strong views regarding
maintenance as being an investment, however, in the case of a maintenance
strategy, they are inclined towards the use of redundancy systems to maintain
output. This view is backed up with their attitude towards preventive
maintenance on its own, not increasing operational capacity. Clearly this is an
appropriate strategy when you consider that that they claim very low plant
downtime and have the highest percentage of all industries able to claim zero
downtime. These asset-intensive organizations also outsourced the highest
percentage of their maintenance compared to the other industries. However,
when these organizations have a stoppage, they are typically very protracted
and carry a severe cost penalty. The major issues for the maintenancemanagers within these industries is highlighted as poor management techniques
and a lack of funding, however, unlike most other organizations, maintenance
was seen to be given sufficient weight.
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 9
Question: Of your total maintenance budget per annum,
what percentage is allocated to preventive maintenance
as opposed to corrective maintenance?
Over two-thirds of organizations allocate less than half of their maintenance
budget to prevention, which is consistent with the 2003 results. In our view,
many organizations are either still in a 'fire-fighting' mode—not having changed
to a more preventive approach—or, worse, are unconvinced of the benefits of
preventive maintenance.
Power generation and utilities organizations were the most likely to invest atleast half of their maintenance budget in prevention, reflecting the importance
of continuous operation in these industries, in which unscheduled downtime
has very significant consequences on the bottom line. These organizations
were closely followed in maintenance spending by facilities and infrastructure
organizations.
Only 7.1 percent of pharmaceutical and chemical firms spent half or more of
their total maintenance budget on prevention— the great majority of spending
going to corrective maintenance. Clearly, many of these types of organizations
spend vast amounts of money developing new products. One view is that
in a development environment, where large-scale changes to the equipment
configuration are required regularly, preventive maintenance is less effective.
"Many organizations
are either still in a ‘fire-
fighting’ mode — not
having changed to a more
preventive approach"
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Intentia Enterprise Asset Management Benchmark Survey Report 200410
Small organizations were the most likely to spend 10 percent or less of their
total maintenance on preventive maintenance. This result confirms other
indications that smaller organizations really are less focused on preventive
maintenance and have a much higher reliance on the 'fix it when broken'
approach.
By region the results were similar, indicating a common view across regions
regarding expenditure on preventive and corrective maintenance.
Intentia believes that organizations are still spending insufficient amounts of
money on preventive maintenance. This is one of the few untapped areas of
real improvement potential for many organizations, offering an opportunity to
significantly improve the bottom line. Budget allocations for maintenance need
to focus more on identifying preventive maintenance opportunities within the
business and reducing the reliance on corrective maintenance.
Industry Spotlight:
Facilities and Infrastructure
This survey has found that facilities and infrastructure organizations are the
leaders in outsourcing their maintenance to third-party organizations. They are
also very likely to believe in the benefits of maintenance as an investment that
can increase operational capacity, which is confirmed by their heavy investmentand reliance on preventive maintenance. On the surface, this maintenance
strategy is supported by their ability to report a high percentage of months
with zero downtime, as well as the smallest downtime cost of all industries.
The maintenance profession within these organizations suffered heavily from
poor comprehension of their problems from other line mangers. This is
supported by a strong 'fix it when broken' attitude.
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 11
"Less than 30 percent of all
firms surveyed responded
that their cost for lost
production ranged from zero
to USD 10,000."
What Is the Impact of Poor Maintenance?
The Intentia 2004 Global EAM Survey investigated whether plant and
equipment failures were having a significant impact on the profitability of
organizations in the current economic climate and, if so, to what extent. In this
section, we will examine a number of factors in order to judge the impact of
poor maintenance on organizations.
Question: What is your average annual cost (USD) for
lost production due to plant equipment failure?
Production failure can be an expensive issue for many organizations. Less
than 30 percent of all firms surveyed responded that their cost for lost
production ranged from zero to USD 10,000. In addition, only around half of
the organizations surveyed responded that their average annual cost for lost
production was under USD 50,000. Of all firms surveyed, 6.5 percent reported
that their average annual cost for lost production was more than USD 1 million,
with power generation and utilities organizations leading this group.
We believe that these figures are highly understated, and that many organiza-
tions do not fully consider the true cost of downtime, which can include scrap,
lost customers, higher unit costs, additional labor and utility overheads, and so
on. In reality, the situations faced by many organizations could be much more
costly than they initially believe.
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Intentia Enterprise Asset Management Benchmark Survey Report 200412
"This clearly demonstrates
the risk of poor preventivemaintenance within asset-
intensive organizations and is
probably best characterized
by the recent major US
power outage"
Facilities and infrastructure organizations generally reported the lowest losses.
By their nature, many of these organizations are least liable to suffer lost
production or operational capacity in the same way as a 'production' facility.
Power generation and utilities companies were most likely to average losses
of more than USD 1 million. This clearly demonstrates the risk of poor
preventive maintenance within asset-intensive organizations, a risk probably
best characterized by the recent major US power outage. Pharmaceutical and
chemical businesses reported losses greater than USD 10 million, a finding
supported by the fact that they are also most likely to report substantial
downtime. Clearly, ineffective maintenance in this type of industry can have a
significant effect on profitability, at a time when these types of businesses canleast afford it.
There is a clear trend that smaller organizations have less of a cost for lost
production, however, as a percentage of revenue, the impact may be just as
serious as a large loss for a larger company. More than 10 percent of firms with
more than 250 employees average in excess of USD1 mill ion per year in lost
production—an enormous cost to bear for most organizations.
The findings regarding lost production were not dramatically different between
the European and Australasian regions. Knowing the magnitude in cost of
equipment failures, this survey then investigated the amount of downtime being
experienced.
Industry Spotlight:
General Manufacturing
A mixed picture appeared from the general manufacturing group, with a high
percentage of companies spending relatively small amounts on maintenance
but achieving zero major downtime occurrences—second only to power
generation and utilities companies. Almost one-third of these organizations
relied on repair-based maintenance. Does this therefore indicate some degree
of excess capacity within these businesses, allowing them to rely on repair-
based maintenance while still maintaining operational capacity?
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 13
"Over 60 percent of allorganizations reported
that they experienced 5.0
percent or less downtime
per month"
Question: How much downtime would your
production/manufacturing resources experience
monthly?
According to our survey respondents, the typical organization experiencesbetween 0.1 percent and 5.0 percent downtime per month. Nearly 60 percent
of all organizations reported that they experienced 5 percent or less downtime
per month for their production/manufacturing resources.
A high percentage of facilities and infrastructure businesses reported that
they typically had no downtime at all per month, reflecting their practice of preventive maintenance. These impressive claims could also reflect the nature
of some facilities and infrastructure businesses, in which failures can have
less significance on operational downtime. The other industry that strongly
supported preventive maintenance, power generation and utilities, also
reported very low downtime, with 63.9 percent reporting 2.5 percent or less.
Although the levels of downtime are clearly lower in the power generation
and utilities industries, nevertheless, based on the responses from previous
questions, the cost of downtime is substantially higher than in most other
industries.
The pharmaceuticals and chemicals industries were the most likely to report
substantial downtime problems, with 1.6 percent reporting more than
40 percent downtime per month, potentially having a crippling effect on
productivity. These statistics are interesting as these companies, as this survey
shows, have a strong tendency to practice preventive maintenance yet some
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Intentia Enterprise Asset Management Benchmark Survey Report 200414
still have significant downtime issues. Although this survey does not identify
the exact type of organization within this industry sector, we believe one
explanation of this finding is that mainstream chemical and pharmaceutical
companies are benefiting from preventive maintenance, whereas specialized
research-oriented organizations, with a high number of equipment
configuration changes, find preventive maintenance to be less effective.
Larger organizations were most likely to experience more than 10 percent
downtime per month.
Geographically, comparable results were shown across the board.
A major breakdown that causes production stoppages in more than half of the
plant is clearly a significant event that can have a dramatic effect on the bottom
line. In this section, we analyze the scale of these types of failures.
Industry Spotlight:
Food and Beverage
A clear belief in the investment qualities of maintenance and its ability to both
increase capacity and provide a competitive advantage emerges from the food
and beverage industries. We have to question whether these beliefs are being translated in reality, when we consider the higher-than-average unscheduled
downtime of these industries compared to other industries, as well as when
considering their preference for repair-based maintenance. A key issue
affecting many maintenance professionals in the food and beverage industries
was poor decisions regarding capital purchasing. Could these decisions be
negatively influencing the success of the maintenance strategy?
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 15
"In total, over three-
quarters of all firms surveyed
reported two or fewer
major plant shutdowns in
the last year."
Question: How many times in the last year did you have
a breakdown that stopped production in more than half
of your plant?
Over 50 percent of firms surveyed were able to claim that they did not have
a single breakdown that stopped production in more than half of their plant
during the last year. In total, over three-quarters of all firms surveyed reported
two or fewer major plant shutdowns in the last year. These results seem to
add weight to the argument that preventive maintenance can prevent significant
amounts of downtime in most industries.
Power generation and utility firms were the most l ikely to claim zero major
shutdowns. These companies have indicated their reliance on redundancy
systems, which gives them an edge.
Food and beverage firms reported the most breakdowns, with over 14 percent
of respondents indicating that they had more then ten major breakdowns in
their plant in the last year. Although in this survey, food and beverage companies
generally appear to believe in the ability of preventive maintenance to increase
capacity and give them a leading edge, results show that they rely on repair-based
maintenance. We believe that many of these organizations could significantly
reduce downtime by focusing more of their efforts on effective preventive
maintenance techniques.
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Intentia Enterprise Asset Management Benchmark Survey Report 200416
"It is imperative thatorganizations react quickly to
minimize the impact of the
stoppage."
Smaller firms reported a much higher likelihood to have zero major shutdowns
than 1000+ employee firms. Organizations with 251–500 employees were
significantly more likely to have more than ten major breakdowns per year.
Australasian firms were notably less likely to report zero major shutdowns over
the last 12 months compared to their European counterparts, and were also
more likely to have more than ten.
Intentia believes that when a breakdown occurs, particularly if it impacts more
than 50 percent of the plant, it is imperative that organizations react quickly to
minimize the impact of the stoppage. Organizations can reduce the impact of
failures on critical plant processes by ensuring that key spare parts and tools
are available, and that repair information and documentation are accessible,
although this is, of course, no substitute for effective preventive maintenance.
In the next question, the survey considered the extent of the downtime within
the organizations surveyed. In our experience, we believe that many of these
major stoppages could have been avoided with better preventive maintenance,
or could have had less of an impact with better preparation.
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 17
"Unfortunately, over 18
percent of all organizations
surveyed reported some
shutdowns that lasted for
over 90 hours"
Question: Last year, how many hours did your longest
period of downtime last, which was caused by a single
breakdown?
Just under 30 percent of all organizations reported that the longest periodof downtime they experienced last year was one to ten hours in duration.
Unfortunately, 15.0 percent of all organizations surveyed reported some
shutdowns that lasted for over 90 hours.
It was the heavy industries that reported the longest shutdowns, with power
generation and utilities organizations leading the group by some margin.
However, by nature of their asset-intensive industry, it should be expected that
equipment failures could have a dramatic impact on their ability to operate.
Facilities and infrastructure organizations followed a similar pattern. Although it
might be expected that pharmaceutical and chemical companies would report
findings similar to other manufacturing industries, their potential for more
lengthy shutdowns was notably higher.
In 2004 no food and beverage firms were able to report zero downtime. This
result is not surprising due to the nature of food and beverage equipment,
often consisting of high-speed production and packaging machinery.
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Intentia Enterprise Asset Management Benchmark Survey Report 200418
Smaller organizations generally reported shorter shutdowns, whereas larger
organizations reported much longer shutdowns, some lasting more than 90
hours.
European businesses were more than twice as likely as Australasian firms to
report no hours of stoppages at all. However, in terms of the percentage
of businesses reporting a period of downtime of 20 hours or less, both the
European and Australasian regions ended up with almost identical results.
In some situations, an alternative to preventive maintenance is the use of
redundancy or standby systems that can be brought online in the event of a
failure. In the next section, we consider how widespread this practice is and
whether it is prevalent in particular sizes or types of businesses.
"Smaller organizations
generally reported shorter
shutdown."
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 19
"Almost 60 percent of all
organizations surveyedindicated that they relied on
preventive maintenance to
maintain continuous plant
operations."
Question: How strongly do you rely on redundancy
systems as opposed to preventive or repair based
maintenance to maintain continuous plant operations?
Almost 60 percent of all organizations surveyed indicated that they relied onpreventive maintenance to maintain continuous plant operations. Of this group,
over one-quarter of respondents indicated that they had a high reliance on
preventive maintenance.
A reliance on redundancy systems was most common among power generation and utilities organizations, which is not surprising for asset-intensive
industries, where downtime costs can be very large and repairing an asset
online may not be feasible.
Preventive maintenance was most heavily relied upon by facilities and
infrastructure organizations as well as by pharmaceutical and chemical
organizations, which reported that they relied strongly on preventive
maintenance to keep their plants operating. However, previous responses also
indicated that chemical and pharmaceutical organizations were likely to spend
the least of their budget on preventive maintenance, although they also suffered
from substantial periods of downtime.
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Intentia Enterprise Asset Management Benchmark Survey Report 200420
This data indicates a definite split in the attitudes towards preventive
maintenance across different types of industries, with asset-intensive industries
opting for the redundancy approach, regulated industries using preventive
maintenance and manufacturing organizations relying on repair-based
maintenance.
Medium-large firms (500-1000 employees) and large firms (1000+employees)
showed the strongest support for preventive maintenance.
European organizations were the most likely to report a reliance on repair
based maintenance, while Australasian firms were more likely to indicate
a reliance on redundancy systems. Industries in both geographical areas
expressed similar responses regarding the use of preventive maintenance.
Based on our results, what can be learned about the impact of poor
maintenance on global industries? Surprisingly, typical organizations
experienced quite low levels of downtime of their operational resources.
Over 60 percent reported 5 percent or less downtime per month, and over
50 percent reported that no breakdown impaired more than half of the plant
during the last year. However, how did the less fortunate organizations fair?
They saw significant financial penalties from poor maintenance, with over
7 percent of organizations reporting losses of over USD 1 million, a figure
which we believe is understated. Some food and beverage organizations
encountered ten or more significant breakdowns that closed down more than
half of their production operations, while the asset-intensive businesses sawshutdowns of over 90 hours.
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 21
"Over the last 12 months
we have seen an increasingpercentage of survey
respondents beginning to
view maintenance as an
investment"
What Are the Key Issues for Improving
Maintenance?
In this section, we consider a number of key issues that may be preventing
organizations from improving their current maintenance situation. In many
cases, funds for improving the maintenance strategy may not be the primary
obstacle for improvements.
In our first question, we look at whether industries actually consider the money
spent on maintenance as a real business investment. Intentia believes that
organizations which see maintenance as an investment are much more likely to
be successful in combating the causes of downtime.
Question: Do you describe money spent on
maintenance as a cost or an investment?
In general, nearly 60 percent of survey respondents view maintenance as an
investment. From this proactive perspective, spending money on maintenance
activities is seen as having a significant impact on equipment reliability, and
therefore availability, which ultimately improves an organization’s bottom line.
Over the last 12 months, we have seen an increasing percentage of survey
respondents reporting maintenance as an investment. In particular, the number
of respondents who strongly agree with the view that maintenance should
be regarded as an investment has increased by over 10 percent. Hopefully,
this indicates a continuing trend of organizations considering maintenance
operations, particularly preventive maintenance, in a more positive light.
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Intentia Enterprise Asset Management Benchmark Survey Report 200422
"The survey clearly shows
that larger organizations
are more likely to hold the
view that maintenance is an
investment"
The survey clearly shows that larger organizations are more likely to hold the
view that maintenance is an investment, and that, overall, this perspective has
increased slightly since 2003.
In total, Australasian organizations were the most likely to agree that
maintenance was an investment, while European organizations were more than
twice as likely to 'strongly agree' that it was a cost.
Maintenance managers play a pivotal role in supporting higher equipment
efficiencies. Intentia’s Global EAM Survey investigated which key issues these
managers are facing.
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 23
"Poor comprehension of
maintenance problems
by other line managers
is a growing problem for
maintenance managers."
Question: What do you believe is the greatest problem
faced by maintenance managers?
Poor comprehension of maintenance problems by other line managers is agrowing problem for maintenance managers—the number of respondents
holding this view increased by almost 10 percent compared with last year’s
results.
Power generation and utilities organizations were the most likely to report
poor management techniques and a lack of funding as the greatest problems
faced by maintenance managers — 20 percent of respondents in each instance
indicated that these were major issues.
Making them the most likely industry to raise this concern, by a significant
margin, 45.8 percent of facilities and infrastructure firms reported that a poor
comprehension of maintenance problems by other line managers was the
greatest problem they faced.
Pharmaceuticals and chemical firms were the most likely to indicate staff
shortages as their greatest problem, with 18 percent reporting this as their
leading issue. 18.5 percent of food and beverage organizations reported poor decisions regarding capital purchasing as their greatest problem — compared to
a cross-industry average of 8.4 percent.
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Intentia Enterprise Asset Management Benchmark Survey Report 200424
Poor comprehension of maintenance issues seems to be very prevalent in
larger organizations. This may be a result of the more formal management
systems of larger organizations, which are perhaps more removed from day-
to-day issues than those found in smaller companies. This same prevalence
in larger organizations carried across into the view on poor management
techniques.
Lack of funding was a significantly larger problem in smaller companies than in
larger ones.
From a geographical perspective, poor management techniques in Australasia
stand out by a substantial margin, which raises questions regarding whether the actual quality of the management is at issue, or rather the perception of its
quality within the workforce.
Staff shortages were more an issue for European firms, with 18.6 percent
referring to this as their greatest problem, whereas the same figure for
Australasian firms was only 12 percent. It is not clear from the survey
results whether this shortage is due to skills availability or simply the result of
downsizing.
Continuing on the same theme, the survey delved deeper into the perception
of managers regarding the maintenance process.
"Lack of funding was asignificantly larger problem
in smaller companies than in
larger ones."
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 25
Question: Do you believe that a 'fix it when it is broken'
approach is still predominant among managers not
directly responsible for manufacturing?
The 'fix it when it is broken' approach is still predominant in most industries, and is
unfortunately becoming more prevalent, as a comparison with the 2003 survey results
indicates.
Facilities and infrastructure firms were the most likely to agree—72 percent—
that a 'fix it when it is broken' approach is still very common. In contrast,pharmaceutical and chemical companies were the most l ikely to disagree.
Smaller companies are the most likely to strongly agree that the 'fix it when it
is broken' approach is predominant among those not directly responsible for
manufacturing.
European firms were more than three times as likely to strongly agree that
a 'fix it when it is broken' approach still dominates, as compared with their
Australasian counterparts.
"The fix it when it is broken
approach is still predominant in
most industries"
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Intentia Enterprise Asset Management Benchmark Survey Report 200426
Industry Spotlight:
Pharmaceutical and Chemical
An interesting picture emerges regarding the success of preventive
maintenance within the pharmaceutical and chemical industries. Theseorganizations reported a strong bias towards preventive maintenance and
strongly believed that it gave them a competitive advantage. They also did not
agree with the 'fix it when broken' approach, however, the reality may not
be as clear cut as these findings suggest. Their spending on maintenance was
relatively low compared to other types of industries, and of this spending, few
companies spent more than half on preventive maintenance — the majority
opting for corrective strategies. The results of this strategy are evident in their
indication that substantial downtime issues exist. The maintenance profession
in these industries suffers greatly from a lack of staff. Could this lack of staff
be due to cost-cutting measures, or staff leaving for other industries that have
more stable operating environments?
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 27
"The majority of
organizations surveyed
outsourced less than one-
quarter of their maintenance
services."
Question: How much of your total maintenance is
outsourced to third party organizations?
Outsourcing has now long been accepted as an alternative to internalizing
services. Leading analysts such as Gartner have already identified that there
will be a continued increase in the use of outsourced maintenance services.Outsourcing allows organizations to concentrate on their area of competitive
advantage and, at least theoretically, maximize their returns. Of course,
it also means that you can call on specialists — such as with maintenance
and management—who have a higher level of proficiency. The majority of
organizations surveyed outsourced less than one-quarter of their maintenance
services.
Facilities and infrastructure organizations were shown to be the leaders in
opting for maintenance services, with 25 percent of these organizations opting
to outsource 75 percent or more of their maintenance work to third-party
organizations.
81 percent of pharmaceutical and chemical firms outsourced less than half of
their maintenance, however, this may be due to the nature of their businesses.
Other types of organizations are less willing to outsource some or all of their
maintenance work due to the highly secretive or complex nature of their
operations, particularly in the chemical and pharmaceutical fields.
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Intentia Enterprise Asset Management Benchmark Survey Report 200428
Most likely underscoring the importance of concentrating on competitive
advantage, smaller companies were more than twice as likely as large
companies to outsource more than three-quarters of their maintenance work.
Australasian firms were nearly two-and-a-half times more likely than their European counterparts to outsource three-quarters or more of their
maintenance work.
'Maintenance is a cost', 'poor comprehension of maintenance', and 'fix it
when broken' are all views that clearly indicate that fundamental maintenance
issues exist within many global industries. These attitudes form a platform
of key inhibiters that are stopping many companies from making significant
improvements to equipment reliability. Maintenance professionals clearly need
to do more to prove that they can return significant benefits from investing in
maintenance.
"Maintenance professionals
clearly need to do more to
prove that they can return
significant benefits from the
investment in maintenance."
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 29
This final section of the 2004 Global EAM Survey considers whether the
investment that organizations make in maintenance software is actually
worthwhile, and whether it has a positive impact on the manufacturing and
operational processes.
Question: Do you believe that maintenance software
has enhanced the capacity of your maintenance program
in preventing downtime?
More than 65 percent of all firms surveyed reported that they agreed with
the view that maintenance software had enhanced the capacity of their
maintenance program in preventing downtime, an increase of 4.6 percent from
2003. This is a clear confirmation that well-implemented systems can provide
significant benefits.
Facilities and infrastructure firms were the most likely to agree that maintenance
software has enhanced the capacity of the maintenance program in preventing
downtime. 80 percent of facilities and infrastructure firms either generally or
strongly agreed with this assertion.
19.0 percent of pharmaceutical and chemical firms were indifferent as to
the value of their maintenance software in preventing downtime, while
11.1 percent of power generation and utilities organizations believed that their maintenance software had not reduced downtime. A surprisingly high
percentage of food and beverage and general manufacturing firms indicated
that they did not have any maintenance software at all.
Does Maintenance Software Work?
"This is a clear confirmation that well-implemented
systems can provide
significant benefits."
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Intentia Enterprise Asset Management Benchmark Survey Report 200430
Smaller organizations were the least likely to register their agreement,
primarily because 22.6 percent of firms with zero to 250 employees had no
maintenance software at all. This compares with only 6.3 percent of firms with
1,000 employees or more. 78.1 percent of all firms with 1,000 employees or
more agreed with the notion that maintenance software had enhanced their
capacity to reduce downtime.
While 89.4 percent of Australasian firms indicated they had maintenance
software installed, only 80.8 percent of European firms were able to say the
same. In total, 71.3 percent of Australasian firms thought that their maintenance
software had helped them avoid downtime, while 62.4 percent of European
firms reported the same view. Australasian and European organizations were
equally likely to strongly agree with this assertion.
Close cooperation between maintenance and operations during the planning
process can reap significant rewards, ensuring that production plan is fully optimized. If carried out correctly, this process provides a win-win opportunity
for both operations and maintenance. Operations produce what they expect
and when they expect it, without unplanned stoppages due to equipment
failures. Maintenance gets the equipment when they need it, and can ensure
they provide the highest level of availability.
"Close cooperation betweenmaintenance and operations
during the planning process
can reap significant rewards."
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IntentiaEnterprise Asset Management Benchmark Survey Report 2004 31
Question: How do you integrate your maintenance and
production planning?
Almost 35 percent of all organizations surveyed indicated that they integrate their
maintenance and production planning using IT-based systems. Integrated systems were
most predominantly used in power generation and utilities organizations while paper-
based systems were most popular among the pharmaceutical and chemical sector.
This is surprising, as these types of systems are particularly effective when planning a
wide variety of complex products in short batches, in which the maintenance require-
ments are also compared. It could be expected that food and beverage manufacturers
would be the most prolific users of these types of systems, and that power and utilities
manufacturers would be less likely to use them. Does this then indicate that manufac- turers have really not seen the benefits that these types of systems can deliver?
Smaller organizations were the least likely to use integrated systems, and were
also most likely to use informal word of mouth to integrate production and
maintenance planning.
It is clear from the survey that industries do see a benefit in computer systems to support the maintenance process. It seems, however, that asset-intensive
organizations have actually made the move to use them, and it was these industries
which were also most likely to report lower or zero downtime.
"Almost 40 percent of all
organizations surveyedindicated that they integrate
their maintenance and
production planning using IT-
based systems."
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Intentia
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