CHEMICAL AND PHARMACEUTICAL
PROJECT STUDY
VALUE ORIENTED MAINTENANCE AND ASSET MANAGEMENT
Highlights
• Importanceofmaintenance
• ValueorientedMaintenanceasthebasisanddriverforsustainablesuccess
• Evaluationofmaintenanceandassetmanagement performancebymanagers andoperationalstaffin67 chemicalandpharmaceutical companiesonsite
• Benchmarkwithidealsituationandindustry-specificvalue creationareas • Keysuccessfactorsand resultsinthechemicalandpharmaceuticalindustry
Excursus: Overall Equipment Effectiveness (O.E.E.)
Content
2
Page3 Preface
Page4-15 Chemicalandpharmaceuticalprojectstudy
Page4 ExecutiveSummary
Page5 Maintenanceasafactorworthbillions–There‘sstilllotstobedone
Page6 ValueorientedMaintenance–Basisanddriverforsustainablesuccess
Page7 Studydesign–TheConMotoMaintenanceScoreTest©
Page8 LevelmodelofMaintenanceandAssetManagementExcellence
Page9 Resultsofevaluation–Industrycomparison
Page10 Industry-specificvaluecreationareas
Page12 Keyfactorsinsuccessfulimplementation
Page13 Excursus:OverallEquipmentEffectiveness(O.E.E.)
Page14 Results–What‘sthebottomline?
Page16 Yourcontactperson
MarkusMärzDirectorBusinessDevelopmentConMotoConsultingGroupGmbHmaerz@conmoto.de
NilsBlechschmidtManagingDirectorConMotoConsultingGroupGmbHManagingDirector [email protected]
Dr.LeonhardWeckSeniorPartnerandManagingDirectorConMotoAkademieundTrainingweck@conmoto.de
©2014ConMotoConsultingGroupGmbH.Allrightsreserved.Forrepeatordersandreprintingauthorisationpleasecontact:
ConMotoConsultingGroupGmbHBoschetsriederStr.6981379MunichGermany
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Authors
The huge significance of both the chemical andthepharmaceutical industries for theeconomy isbeyondquestion.In2012alone,thetwoindustriesturnedovermorethanfourbillioneurosworldwide.Aretheydifferentorsimilar?Howeverdifferenttheproductsof thechemical andpharmaceutical in-dustriesmaybe, they still havenumerouspointsincommon.Bothhaveahigh levelofequipmentintensity1 and automation, sophisticated processtechnology,complexvaluecreationprocessesandextensiveregulatoryrequirements.
The chemical industry primarily produces in-termediate goods and is therefore heavily dependenton itsuser industries.Accordingly, its developmenttendstobeaheadoftheoveralleco-nomy.Thus, for example, thesectorwasable torecoverrelativelyquicklyfromtheserioussetbackscausedby thefinancial crisisof2009and reporttwo recordyears in2011and2012.At thesametime, growth is distributed very unevenly. In par-ticular, someAsiancountries–withChinaaheadoftherest–wereabletogrowdisproportionately.TheforecastsoftheVCI2areevenpredictingthatby 2030, almost half of the chemical productionin theworldwillbe located inChina,whileespe-ciallyinEurope,thesliceofthecakewillbecomeeversmaller(seeFigure1).Evenso,Chinaiscur-rentlyfalteringsomewhatasanengineofgrowth.Althoughadeclineisanticipatedworldwideinthepolymerandspecialistchemicalssegments,pro-ductionremainsatahighlevel.Onthecostside,thechemicalcompaniesareconfrontedwithcons-tantpressureasaresultofincreasingrawmaterialandenergyprices.
Thepharmaceutical industry isvery importantbe-cause of demographic change and medical ad-vancesalone.Itisoneofthemostdynamicindus-try sectors in theworld. In2011,more than three quartersof its total turnoverwasstillgenerated inNorth America, Europe and Japan. But here too,countriessuchasChinaandBrazilarecatchingup.Overall,thesectorischaracterisedbylesssensiti-vitytoeconomicfluctuations.Atthesametime,therateofexpansionhasslowednoticeably in recentyears.This is linked,amongother things,with therequirementsandregulationsofhealthpolicy,whichhaveastrong impactonthebasicconditionsandearningspotentialofthepharmaceuticalindustry.
There are certainly some factors that have a ne-gative effect on business development and thuson long-term competitiveness in both industries.The chemical and pharmaceutical companiesshould now focus on pushing their efficiency tosustainably withstand the increasing cost andrelocation pressures and to defend their marketshares.TheConMotoprojectstudymakesitclearthat chemical andpharmaceutical companies dohave a future in Europe, too. The key to this is Value oriented Maintenance and Asset Manage-ment–asoneofthemostimportantcostblocksinproductionthatissusceptibletoinfluence.
Yourssincerely,
NilsBlechschmidt
Preface
3
Source: VCI-Prognos-Studie (Oct. 2012)
Rest of Europe
Germany
USA
Rest of World
China
Japan
2011[%]
2030[%]
15,012,1
24,4
16,5
3,45,6 29,0
47,1
11,07,4
13,415,0
Figure 1: Distribution of worldwide chemical production in 2011 and 2030 in percent
1) Intensity of equipment (investment rate) = Fixed assets ÷ Total assets2) Verband der Chemischen Industrie e. V.
Cost ef�ciency
Shutdown optimisation
Stock of spare partsInvestments
Overall Equipment Effectiveness (O.E.E.)
Reliability
PROFIT ORIENTED VALUE CREATION
VALUE ORIENTEDMAINTENANCE/
ASSET MANAGEMENTEFFICIENT CAPITAL
EXPENDITURE
Executive Summary
4
ChemicalandPharmaceuticalprojectStudy
There is hardly any other industry in which pro-ductionsystemsandequipmenthavesuchahugeimportance as in the chemical andpharmaceuti-cal industry. And yet, inmany companies, thosesystems are too often shut down. The cause isfrequentlyinadequateMaintenanceandAssetMa-nagement–companieswastebillionsinthisway.
One thing is clear: the importance of mainte-nance increases as the equipment intensity andinterconnection or the automation of productionincreases. In the investment-intensivecompaniesof the chemical and pharmaceutical industry, upto60percentofthetotalproductioncostscanbeinfluenceddirectlyandindirectlybytheefficiencyofmaintenanceandassetmanagement.This isasignificant lever for the successof thecompany.Butwhatisthebenchmarkfortopperformanceinmaintenanceandwherearethecompaniestoday?
The ConMoto Consulting Group has examined indetail the Maintenance and Asset Performanceof a total of 158 companies and production siteson fourcontinentsover therecentyears.Thiswasnot completed on the basis of questionnaires butof severalweeksofprojectworkwitheachofourclientsonsite.Intheindustrysectorchemicalsandpharmaceuticals,theefficiencyof67differentsitesinGermany,Austria,Switzerland,France,theUSA,BrazilandIndiawasanalysedandoptimised.Theseincludebothconcernsandcorporationslistedonthestockmarketaswell asmediumsizedcompaniesfromthesegmentsbasicinorganicchemicals,petro-chemicals, polymers, silicones, fine and specialistchemicals,detergentsandbody-careproducts,ba-sicpharmaceuticalmaterialsandspecialities.
The companies are currently a long way fromfirst-class maintenance and asset management. The average evaluation of the chemical/pharma-
ceuticalsector is just47%incomparison tobestpractice. Even the best company in the class stillhasconsiderableroomforimprovementat70per-centmaintenancematurity.
Thequestionnowarisesastowhatistobedonetosetnewstandardsforprofitorientedvaluecreationwithefficientcapitalexpenditure.Forward-thinkingdecisionmakersrecognisethenecessity,aboveall,ofpushing forwardwith increasing technical avai-labilityandreliabilitywhilereducinglife-cyclecostsof production systems and equipment. Both theindustry-specific valuecreationareasand thekeyfactors in successful implementation are summa-risedinthisstudy.
Thesuccessesachievedinthechemicalandphar-maceutical industries speak for themselves. Thecompanieswereabletomoveupagood1.5levelsonaverageontheirwaytoMaintenanceandAssetManagementExcellence.The implementationpro-jectscompletedalsoshowthat inall relevantKeyPerformance Indicators, objectively measurableimprovementswereachieved.Forexample, itwaspossible to improve theOverall Equipment Effec-tivenessbybetween2and15percentagepoints.As a consequence, one of the central profitabilityindicators, themaintenancecost rate,wascutbybetween7and27percent.Inotherwords,itwaspossibletoachieveasignificantlyhigheravailabilityand therefore additional value creationwith lowerresourcecosts.
These advances in operational performance alsohad a sustainably positive impact on financial results: companies that combine a high level ofeffectiveness and efficiency are among themosteconomicallysuccessfulintheirindustry.Theche-mical/pharmaceutical project study by ConMotopointsoutthewayforward.
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HeadofConMotoCompetenceCentre ValueorientedMaintenanceandAssetInnovation
NilsBlechschmidtManagingDirectorConMotoConsultingGroupGmbHManagingDirectorConMotoStrategieundRealisierung
Tel.:+49(0)8978066-114Fax:+49(0)8978066-101Email:[email protected]
ConMotoConsultingGroup
We have been supporting companies for more than 24 years to secureandimprovetheircompetitivenessandsustainability.Around80consultants,distributedacrossourofficesinMunich,Stuttgart,Vienna,St.Gallen,BratislavaandShanghai,workcompetentlyandwithcommitmenttorealisethebestpossiblebenefitsforourclients. Wecreateadvantage!This is the guiding approach of our implementation-oriented consultancy.
Nils Blechschmidt is managing director at ConMoto ConsultingGroupGmbHaswell asmanagingdirector atConMotoStrategieundRealisierung.Heisresponsibleforthefieldof“ValueorientedMaintenanceandAsset Innovation”.Asanexpert inthisareaandwith extensive knowledgeof various sectors, such as aerospace,engineering and plant construction, automotive and componentsupplier,plasticsprocessing,pulpandpaperandtransporttechnol-ogyaswellasprocess(chemicals,steel,pharmaceuticalsandfood),hegivesnumerouslectures.Since1997hehasbeenspeakerinre-nowned expert forums, like PlantMaintenance, EuroMaintenance,WorldMaintenanceForumandconferencesofVDIwithparticularemphasisonMaintenanceExcellenceandLeanProduction.BeforehistimeatConMoto,NilsBlechschmidtwasemployedastheTech-nicalHeadofanaircraftmaintenancebusinessforsevenyears.HecompletedhiseducationasagraduateengineerinAerospaceTech-nologyattheUniversityoftheBundeswehrinMunich.HepassedapostgraduatestudiesleadingtoaMasterofBusinessAdministra-tionatHenleyManagementCollege(UK).
