Life Cycle Management for Mining Machinery.

by

W.F. Barkhuizen

A dissertation submitted in partial fulfilment

of the requirements for the degree

MAGISTER INGENERIAE
in

ENGINEERING MANAGEMENT

in the

Faculty of Engineering

at the

RAND AFRIKAANS UNIVERSITY

Supervisor : Prof. L. Pretorius

November 2002

1
ABSTRACT.

Until very recently reactive maintenance was still used in the mining industry.
Equipment failures occurred without warning and resulted in catastrophic breakdowns
and large production losses and maintenance cost.

As a result, the mining industry turned to preventative maintenance that focused on

changing parts before they fail. Although preventative maintenance was an
improvement over reactive maintenance practices, equipment reliability did not
necessarily improve. Next came predictive diagnostics, which monitored the health of
components within assemblies, and thereby predicting the life expectancy of
assemblies through vibration analysis, infrared thermography, lubrication and oil
analysis and ultrasonic detection.

However, the level of success could not be achieved. Many hours and a lot of money
are spent in developing and implementing a maintenance management system, but
without the correct approach, efficient maintenance might not be achieved. The
overall objective of this dissertation is to introduce a logical approach to managing the
maintenance of mining equipment over the economical life of the equipment. This
concept can be defined as Life Cycle Mana gement.

The research included in this dissertation is partially aimed at developing the Life
Cycle Management program for P&H MinePro Services A division of Joy Global
(South Africa) (Pty) Ltd.

The dissertation also includes case studies on the P&H Mining Equipment (Blast Hole
Drills) and their alliance partners (LeTourneau Front-end Loaders).

The dissertation focuses on the cradle to grave approach of maintenance for mining
machinery, referred to as the Life Cycle Management of Mining Machinery.

2
TABLE OF CONTENTS

PAGE

Abstract. 2
Definitions. 6
Abbreviations. 8
List of Figures. 9
List of Tables. 10
List of Equations. 11

1. INTRODUCTION. 12
1.1. Evolution of the Maintenance Approach. 13
1.2. Objectives and Goals. 15
1.3. Layout of Dissertation. 16

2. DEVELOPING A MAINTENANCE STRATEGY. 17

2.1. Introduction. 17
2.2. Maintenance Management Goals. 17
2.2.1. Life Cycle of Equipment. 18
2.3. Maintenance Strategy Framework. 19
2.4. Maintenance Management Focus and Vision. 21
2.5. The Maintenance Plan. 21
2.5.1. Planning and Scheduling Resources. 23
2.6. Maintenance Tactics. 25
2.6.1. Identify Tactical Options. 25
2.6.2. Transforming Reactive State of Maintenance into
Preventative State of Maintenance. 26
2.6.3. Cost of Tactical Options. 27
2.7. Conclusion. 27

3. CONTROL OF MAINTENANCE PERFORMANCE. 28

3.1.Introduction. 28
3.2.Analysing Maintenance Performance. 28
3.3.Benchmarking. 29

3
 3.4.Reliability and Risk. 30
3.4.1. The Role of Reliability in Maintenance. 30
3.4.2. Developing a Risk Analysis. 31
3.4.3. The Risk Matrix. 31
3.4.4. The Risk Register. 33
3.4.5. The Risk Treatment. 35
3.4.6. The Risk Action Plan. 35
3.4.7. The Risk Implementation Register. 35
3.6. Conclusion. 36

4. LIFE CYCLE MANAGEMENT – A CASE STUDY. 37

4.1.Introduction. 37
4.2.The Maintenance Plan. 37
4.2.1. Construction of the Maintenance Plan. 37
4.2.2. Prioritising the Work Processes. 39
4.2.3. Developing the Work Processes. 40
4.2.4. The Maintenance Planner. 41
4.3.Analysis of the Maintenance Data. 42
4.3.1. Machine Hours. 42
4.3.2. Machine Availability. 43
4.3.3. Machine Mean Time Between Failure (MTBF) and
Mean Time To Repair (MTTR). 45
4.4.Reliability of Machines. 45
4.5.Improving Life Cycle Management. 46
4.5.1. Cost of Maintenance. 46
4.5.1.1. Fixed Cost. 47
4.5.1.2. Variable Cost. 47
4.5.2. Life Cycle Maintenance Costs. 47
4.5.3. Customer Expectations and Views. 49
4.5.3.1. Adding Value. 49
4.5.3.2. Utility. 49
4.6. Conclusion. 50

5. SUMMARY AND CONCLUSION. 51

5.1. Introduction. 51
5.2. General Conclusion. 51
5.3. Proposed Further Work. 52

4
LIST OF REFERENCES 54

APPENDICES

Appendix A

A1 Risk Register.
A2 Risk Treatment Table.
A3 Risk Action Plan.
A4 Risk Implementation Register.
A5 Monthly Report Extract.
A6 Illustrative Calculations.
A7 Maintenance Audit Extract.

5
DEFINITIONS

Asset – the physical resources of a business, such as plant, facilities, fleets or their
parts and components.[21]

Availability – the period of scheduled time for which an asset is capable of

performing its specified function, expressed as a percentage.[21]

Breakdown – failure to perform to a functional standard.[21]

Component – a constituent part of an asset, usually modular and replaceable, that is

serialised and interchangeable.[21]

Corrective maintenance – only when the failure occurs, the situation is remedied
(restoring the asset to productive capability) as quickly as possible.[4]

Condition-based maintenance – maintenance based on the measured condition of an

asset.[21]

Detective maintenance – applies to the type of devices that only need to work when
required and do not tell the maintenance team when it is nearing the failed state e.g. a
fire alarm or smoke detector. They generally require a periodic functional check to
ascertain that they are still working.[4]

Direct Maintenance Cost – costs incurred when purchasing parts, hiring labour or
equipment, to perform maintenance.

Downtime – the period of time during which equipment is not performing its intended
function.[21]

Economical life – operational life of equipment whereby it is less expensive to

maintain the equipment than to replace it.

Failure – when equipment seize to perform its required function to a specific

standard.[21]

Forecasting - the projection of the most probable : as in forecasting failures and

maintenance activities.[21]

Inspection – a function that is performed by maintenance personnel to establish the

condition and maintenance requirements of equipment.[21]

Inventory – all spare parts, tools and equipment.

6
Life cycle – life of equipment, in this context the life of equipment starting directly
after the design and manufacture stages. Thus the period equipment is in operation.

Maintainability – the rapidity and ease with which maintenance operations can be
performed to help prevent malfunctions or correct them if they occur, usually
measured as mean time to repair.[21]

Maintenance – an activity carried out to retain an item in, or restore it to, an

acceptable condition for use or to meet its functional standards.[21]

Maintenance schedule – a comprehensive list of planned maintenance and its

sequence of occurrence based on priority in a designated period of time.[21]

Manpower – the amount of labour power

Overhaul – a comprehensive examination and restoration of an item to an acceptable

condition.[21]

Preventative maintenance (PM) - regular maintenance attention will keep an

otherwise troublesome failure mode at bay. [4]

Predictive maintenance – rather than looking at a calendar and assessing what

attention the equipment needs, the ‘vital signs’ are examined and assessed what the
equipment is trying to highlight. The term ‘Condition Monitoring’ has come to mean
using a piece of technology (vibration analyser, ultrasonic analysis) to assess the
health of the equipment.[4]

Reliability – measured as the mean time between failures, an indicates the ability of
an item to perform to a required standard.

Reliability centred maintenance (RCM) – maintenance optimisation to ensure risks

are managed and counter -action are planned through scheduled maintenance.

Repair – restoring a failed item by replacement, repair or renewal.[21]

Sub-assembly – a group of components working together and coming into contact

with each-other (a transmission is an example)

Total Value Added Costs – indirect costs incurred.

Work order – documentation that describes all the tasks associated with a specific
job. Work orders may include parts used, repair of components, labour hours etc.

7
ABBREVIATIONS

CMMS Computer Maintenance Management System.

FAA Federal Aviation Administration.
KPI Key Performance Indicators.
LCM Life Cycle Management.
MTTR Mean Time To Repair.
MTBF Mean Time Between Failure.
MSG Maintenance Steering Group.
RCM Reliability Centred Maintenance.
R&M Repair and Maintenance.
PM Preventative Maintenance.
SOP Standard Operating Procedures.

8
LIST OF FIGURES

Figure 2.1. Life Cycle of Equipment.

Figure 2.2. Maintenance Strategy Framework.
Figure 2.3. Maintenance Focus.
Figure 2.4. Project Life Cycle.
Figure 2.5. Project Effort.
Figure 2.6. Total Cost of Maintenance.
Figure 3.1. Logical Flow of the Reliability Plan.
Figure 4.1. The Maintenance Plan Construction.
Figure 4.2. Strengths and Weaknesses of the Work Processes.
Figure 4.3. Maintenance Planning Diagram.
Figure 4.4. Machine Running Hours.
Figure 4.5. Loader 1 Availability Graph.
Figure 4.6. Loader 2 Availability Graph.
Figure 4.7. Loader 3 Availability Graph.
Figure 4.8. Ratio of Direct Maintenance Cost to Total Value-added
Costs.
Figure 4.9. Variable Maintenance Cost of Loader vs. Drill.
Figure 4.10. Actual Variable Maintenance Cost vs. Planned Variable
Maintenance cost.

9
10
LIST OF TABLES

Table 4.1. Illustrative Measures of Impact.

Table 4.2. Illustrative Measures of Consequence.
Table 4.3. Risk Matrix.
Table 4.4. Legend for Risk Matrix.
Table 4.5. Value of Risk Levels.

11
LIST OF EQUATIONS

Equation 2.1. Availability.

Equation 3.1. Availability.
Equation 3.2. Reliability.
Equation 3.3. Maintainability.
Equation 3.4. Process Rate.
Equation 3.5. Equipment Effectiveness.
Equation 3.6. Availability.
Equation 3.7. Downtime Cost.
Equation 3.8. Repair Cost.
Equation 3.9. Total Cost.
Equation 3.10. Total Cost (after completion of action plan)
Equation 3.11. Risk Factor Improvement.
Equation 4.1. Value.

12
1. INTRODUCTION.

Where maintenance was a reactive impulse, equipment failures occurred without

warning, leaving the customer in a catastrophic situation causing major production
losses.[2]

As a solution to the problem, among other, mine managers implemented the proactive
procedure of preventative maintenance, in which parts are changed at regular intervals
based on the theoretical life expectancy. The evolution from a reactive approach to
maintenance, to a proactive mindset resulted in a cost-effective method of maintaining
mining equipment.[4]

However, the level of success achieved on a specific machine is related to the

combined management of preventative maintenance, predictive diagnostics and
inventory.

The term Life Cycle Management (LCM) is best suited to describe and summarise the
combined management of preventative maintenance, predictive diagnostics and
inventory, during the economical life of equipment. LCM and Repair and
Maintenance (R&M) are also generally used by the mining industry, although there
are definite differences between the two concepts.

The R&M approach is generally use in the industry to describe the procedure of
performing maintenance on equipment to repair equipment to a workable state after a
breakdown has occurred.

The life-cycle concept is a “cradle to grave” approach to thinking about products,

processes and services. [1] It recognises that all product life-cycle stages have a start
and finish. The life-cycle concept is used during decision-making processes,
maintenance planning and almost every activity associated with a product. Assessment
of the life-cycle processes of a product quantifies the energy and resource inputs and
outputs during all stages of the life cycle, then determines and weighs the associated
impacts to set the stage for improvements.[1]

Life-cycle management, and more specifically the life cycle manager can be described
as the person using the available information and local experience and knowledge
from on-site personnel regarding problems on the one side, and comparing this to the
knowledge of achieving performance, best practices and improvement, on the other
side. If information is not available, systems should be put in place to ensure proper
data gathering.

13
Some objectives of life-cycle management in general, are :

• improved equipment reliability and availability.

• optimise the maintenance expenditure.
• maintained or increased equipment integrity.[1]

Through the different stages of development of LCM it has allowed the industry to
redefine maintenance, by focusing on the following aspects of reliability centred
maintenance.[2] :

• The implementation of life cycle management requires the implementation of a

successful preventative maintenance plan (PM Plan). The objective of a successful
PM plan is to prevent or mitigate the consequences of failures, not to prevent the
failures themselves. [2]
• The consequences of equipment failure depend on the conditions of operation and
the location of the equipment.
• Not all failures can be prevented by implementing preventative maintenance. Even
if a particular failure can be prevented by PM it should still be established if this
would be desirable.
• In marketing terms one would focus on the needs of the customer, when it comes
to life cycle management, the focus would also be on what the main objective of
the equipment is, not what equipment it physically is.[2]

Preventative maintenance is a very powerful tool to use, one should just remember
that it is also a special tool and can only be applied to selected areas on equipment.

Implementing PM into a LCM contract requires a great amount of time and effort to
be invested into the LCM site. This will ensure that the maintenance effort is
concentrated on the areas where it will be most beneficial.

1.1. Evolution of the maintenance approach.

Changes occur at all levels; from the obviously technical focus as equipment and
systems become increasingly complex, to strategic transformation in the way failure is
understood and the rationale used to develop planned maintenance activities.[3]

During the first quarter of the 20th century maintenance approaches were very
different from the current maintenance practice. Equipment was generally very robust
and easy to maintain. The mindset of the industry was also amenable to equipment
failure and production losses due to equipment unavailability.[3]

Shortly here after, this reactive approach to maintenance started to change as the
industry became more complex. This lead to the maintenance approach known today
as the preventative maintenance approach. The industry worked towards preventing

14
failures before they actually happen, these resulted in less manual intervention and
reduced manpower requirements.[3]

The evolution from the corrective maintenance approach to the preventative

maintenance approach, was believed to have been caused by the fact that it was
realised as equipment gets older it becomes more susceptible to failures and is more
likely to fail. This knowledge was applied to the sub-assemblies or sma ller
components within a piece of equipment, with the intention to maintain the items that
cause the equipment to fail.[2]

This chain of thought led to the development of a model for maintenance. This model
was based on the fact that planned intervention before the failure occurs, can reduce
the likelihood of failure. If the failures still occur the model suggests that the
intervention was not early enough in the life cycle of the equipment.[3]

However, in some cases it was found that the reliability of the equipment was not
related to the overall frequency of the maintenance, as suggested by the model, and
also the belief that reliability declined with increasing age, could not be proven. It
became obvious that too much emphasis was placed on conducting the maintenance at
the correct intervals.[3]

The frequent scheduled maintenance model could not :

Ø improve the overall reliability of a complex item unless there is a dominant failure
mode.
Ø effectively maintain all the parts and assemblies on a piece of equipment. There
are many items that cannot be effectively maintained with scheduled
maintenance.[3]

This led to the development of Reliability Centred Maintenance (RCM).

The development of reliability centred maintenance was initiated by a task force

consisting of members from the Federal Aviation Administration (FAA) and the
airlines in the United States of America. The programs developed by the task team is
now known as Maintenance Steering Group 1 (MSG-1). MSG-1 was eventually
reviewed and became MSG-2 and later MSG-3. MSG-3 was applied to other
industries and became known as Reliability Centred Maintenance (RCM).[3]

15
1.2. Objectives and Goals.

It is the objective and goal of this dissertation to introduce to the reader some of the
concepts in maintenance management, to use these concepts and apply them to a case
study to illustrate the practical implementation of the theory.

The general objectives and goals of this dissertation is :

• Provide a background of the historical development of maintenance strategies.

• Provide and discuss concepts from various literature references.

• Discuss the development of a maintenance strategy, maintenance focus and vision

and using this foundation to develop a maintenance plan.

• Provide a case study illustrating the practical implementation of maintenance

management.

• Conclude and summarise the research findings.

16
1.3. Layout of the Dissertation.

The dissertation is based on the development of an effective and practical

maintenance management strategy. Various literature references are used to gain
knowledge of the current maintenance trend and the controlling of the maintenance
program, once put into action. The information gathered from the literature are then
combined with the actual impleme ntation of a maintenance program discussed as a
case study. The combination of the theoretical aspects and practical implementation
results in an unique approach to maintenance management which are defined as Life
Cycle Management, due to the fact that the maintenance of the equipment is managed
during its economical life.

Chapter 1 is an introduction to the information contained in this dissertation and

contains a literature overview of the evolution of the maintenance approach. Chapter 1
also includes a section describing the introduction of preventative maintenance to the
mining industry. The objectives and goals of the dissertation are briefly discussed
with an overview of each chapter.

Chapter 2 provides a literature overview on the development of a maintenance

strategy. This chapter provides some background to maintenance management,
possible approaches to developing a maintenance strategy and also discusses some of
the key items used in the development of a maintenance strategy.

Chapter 3 describes the controlling function related to maintenance management.

The chapter describes the analysis of maintenance data and explains an approach to
managing maintenance risks.

Chapter 4 contains a life cycle management case study illustrating the

implementation and control of a maintenance strategy.

Chapter 5 is a summary and contains the final conclusion of the dissertation, as well
as possible further work.

17
2. DEVELOPING A MAINTENANCE STRATEGY

2.1. Introduction.

One should keep in mind that a maintenance strategy is very similar to a business
strategy. Developing a business strategy you have to know where you are, how well
you are currently doing, and where you are heading.[21]

It is very important for a company to define and communicate its business strategy,
the same applies for the maintenance strategy.

2.2. Maintenance Management Goals.

An approach to a problem might be to take one step back and look at the problem
from a different perspective.

What is the function of maintenance management? An answer to this question is that,

maintenance management deals with all the planning, organising, and controlling, it
requires to keep a specific asset performing to the standard that is required by the
customer, in this case mining machinery.[21]

Ma intenance management is only one portion of the life cycle of a machine.

Maintenance management goals cannot really be defined without a clear picture of the
entire life cycle of a machine. The life cycle of an asset is initiated by asking why the
asset is required in the first instance and how this asset relates to achieving the
business plan.[21]

Consider as an example, that a customer has a goal, in order for the customer to
achieve his goal he puts together a business strategy. Certain resources are identified
as essential to success. After establishing that one of the resources required is a blast
hole drill, the customer sets the standards of performance, specifications, function and
purpose for this asset. The asset is procured and put into productio n, once in
production the machine must be operated and maintained. After the asset’s economic
usefulness is ended, it is disposed of.

18
2.2.1. Life Cycle of Equipment.

A part of Life Cycle Management is based on the costs associated with the life cycle
of the equipment.

Life cycle costs are defined as all the costs, both nonrecurring and recurring, that
occur over the life cycle.[6]

Life cycle costs should be analysed early in the development of the product and
during the design. This will ensure that the life cycle cost in the operational phase of
the equipment is lower. An example of life cycle cost planning is the design for
maintainability. If maintainability is not considered during the design of a machine the
maintenance costs of the machine might become very high at a certain point in the life
cycle of the machine.

Mining machinery is often procured on the basis of life cycle cost, instead of first
cost, illustrating that the maintainability of mining machinery is very important to the
mining in dustry. The maintenance of equipment is based on the life cycle cost,
represented by the bathtub curve (Illustrated in Figure 2.1.). According to the bathtub
curve, which is based on time-dependant failure rates, increased maintenance is
required during the wear-out phase. Mining machinery in general, is a combination of
both electrical and mechanical assemblies. Figure 2.1. therefore illustrates that the end
of the economical life of mining machinery, will be determined by the mechanical
assemblies, due to the exponential rise in maintenance cost during the wear-out
phase.[16]

19
 Figure 2.1. Life Cycle of Equipment [22]

It should be clear that the maintenance strategy is focused on achieving the business
strategy, this warrants the construction of a maintenance strategy framework, which
forms the backbone of the maintenance strategy.

2.3. Maintenance Strategy Framework.

Figure 2.2. illustrates an example of a maintenance strategy framework. The
maintenance strategy framework in reality acts as the connection between the current
status, and the vision, as can be concluded from Figure 2.2.

20
 Figure 2.2. Maintenance Strategy Framework. [21]

The framework essentially consists of the maintenance objectives and the logical flow
of procedures to achieve the maintenance objectives.

2.4. Maintenance Management Focus and Vision.

Maintenance improvement can only begin once the strengths and weakness of the
present system has been assessed, and the areas for improvement have been identified.
[21]

A Bell-Mason type spider diagram can be used to highlight the areas that should head
the list for enhancements. A Bell-Mason type spider diagram is illustrated in figure
2.3.

21
 Figure 2.3. Maintenance Focus. [21]

Once the status of the current maintenance plan has been established, it is very
important to develop a shared vision. The shared vision is developed by setting
objectives for each person involved in developing the maintenance program. These
objectives should be part of the overall shared vision and shows each person what his
contribution to the shared vision is.

With the vision determined and the current status of the maintenance known, a plan
should be devised to achieve the vision; a maintenance plan.

2.5. The Maintenance Plan.

From the previous discussion it has become clear that the maintenance plan is the plan
that will be put into action to ensure the maintenance vision becomes a reality.

The carving of the maintenance plan has all the characteristics of a project and should
be regarded as a project. It is worth mentioning a few basic aspects of the life cycle of
a project to acquire a clear picture of the different stages of the maintenance plan
evolution.

22
 Figure 2.4. Project Life Cycle [22]

Figure 2.5. Project Effort [22]

Figure 2.4. illustrates that as the project nears completion, continued inputs of time
and resources results in successively smaller increments of completion.

The development of the maintenance plan very often follows the characteristics
portrayed in figure 2.3. due to the fact that the maintenance processes build on each
other. If the maintenance schedules are in place, the required stock levels and
resources can be planned, thus for example reducing the time required to do stock
management, although a lot of effort should be invested for the project to near
completion.

23
When planning the implementation of the maintenance plan the following should be
considered :

• The tasks of the maintenance plan and each activity within a task.
• Priority of each initiative, relative to the others.
• Estimated resources and level of requirement. (Figure 2.5.)
• A “champion” and “sponsor” should be identified. The “champion” will be
responsible for ensuring successful completion, and the “sponsor” will provide the
necessary resources.
• Like any project the start and end date, and milestones should be set.
• How the successful completion will be measured. [21]

2.5.1. Planning and Scheduling Resources.

All the effort of planning, scheduling and prioritising tasks should be done with the
focus on efficient execution. The execution should be planned in such a manner that
resources are not wasted. [12]

The following steps are critical to achieving this goal [10] :

• Establish the Rules of conducting business : The maintenance team responsible for
maintaining the equipment should know exactly what rules to follow, what
guidelines are in place and how performance are measured. The team should know
exactly what was mutually agreed in the maintenance contract.

• Integration/Control System: The integration of all the information and systems

introduced into the maintenance program is the next step. The integration process
can be done preferably by using a maintenance software system. These type of
software systems can be easily used to analyse and manage information; it saves
time and ensures that maintenance personnel spend the majority of their time on
actual maintenance in stead of time consuming paper work. The integration
process should however be carefully managed to ensure that the selection and
application of the system is best suited to the current and future requirements.

• Work Processes : Work processes should be integrated with the business rules and
the control system. The work processes should be clearly defined. Defining and
summarising the work processes can be established by setting up Standard
Operating Procedures (SOP)

• Standard Operating Procedures is a step by step guide to every work process, task
or situation that the maintenance team may be faced with. SOP eliminates
confusion and sets a general standard.

• Maintenance Strategies : A certain maintenance strategy should be adopted by the

maintenance team regarding planned maintenance. This strategy will be
determined by the desired results and objectives of the company. In determining

24
 this strategy t he maintenance cost on the one side and the equipment reliability on
the other side will determine the outcome.

• Functional Reports : Functional reports, monitor the all the functions of the
maintenance team. A functional report can be in the form of a daily report
consisting of the tasks completed for the day, the planned tasks for the next day,
outstanding issues and problems.

• Key Performance Indicators (KPI) Report : The key performance indicators are
used to benchmark maintenance. Every piece of machinery is different and acts
and behaves differently in different environments, thus one piece of equipment
can be compared with another piece of equipment, but a piece of equipment can
only be benchmarked against it own performance.

Mean Time Between Failures (MTBF), Mean Time To Repair (MTTR),

Availability, Utilisation, Running Hours etc. are all classified as key performance
indicators.

Key Performance Indicators are the key to establishing the performance of the
equipment.

Consider the following example :

The availability of a certain piece of equipment is measured as follows :

Availability =
____________________(Total Available Hours/Month)_____________________
(Total Available Hours/Month – Scheduled Downtime – Unscheduled Downtim e)
[2.1.]

If a maintenance contract is based on the above availability, the management of

MTTR and MTBF will determine the availability achieved at the end of each
month. This illustrates the impact of KPI on maintenance practice.

25
2.6. Maintenance Tactics.

With the maintenance strategic plan in place, it is important to know what tactics to
follow. To be able to define a tactical approach, one has to identify the different
options available and which of these options are applicable when.[8]

2.6 .1. Identify Tactical Options.

Selecting the correct maintenance approach is a very difficult task, especially if the
selection will influence economical performance and production output. The tactical
approach to each type of machinery is very unique.

• Run-to-failure – Maintenance is only performed after the equipment fails. A

typical example will be a headlight of a vehicle.[21]
• Redundancy - A backup system is build into the main system to ensure the
system is more reliable. In aircraft, dual or triple redundant systems are used on
the hydraulic and electrical systems. [7]
• Scheduled component replacement – At a predetermined point in time a particular
part is changed regardless of its condition. Transmissions on electrical mining
shovels are often changed at a certain number of machine hours determined by
working conditions and based on life expectancy of the assembly.[21]
• Scheduled equipment overhaul – Many equipment manufacturers combine
equipment component changout with other tasks and schedule a yearly or six
monthly equipment overhaul to perform these tasks.
• Ad hoc maintenance – Maintenance is done when equipment becomes available,
daily inspections and small maintenance tasks can often be performed during
operator shift changes.
• Preventative mainte nance – Maintenance based on factors, such as machine hours,
fuel consumption and cycle times. An example will be the replacement of motor
brushes, where a trend analysis can be done on the wear.
• Condition-based maintenance – Maintenance is based on condition measuring.
Vibration and ultrasonic measurements are some of the techniques used.
• Redesign – Designing out maintenance is done when it is difficult to detect or
predict failures. [21]

Age-related failure can be illustrated by the Bathtub curve. Following the curve
represented in figure 2.1., it should be clear that there is usually a high number of
failures initially when the machine starts its life cycle. The failure rate decreases after
the initial burn-in period. Close to the end of the life cycle, the curve enters the wear-
out period where the failure rate increases.

26
2.6.2. Transforming Reactive State of Maintenance into Preventative State of
Maintenance.

To be able to transform maintenance practice from one state to the other one needs to
identify the characteristics of the maintenance system. The reactive state of
maintenance has the following characteristics [10]:

• Low mean time between failures (MTBF) : A low mean time between failures
indicates an unreliable system. If MTBF is not measure d, the reliability of the
system can be easily misinterpreted if one analyses only the availability.
• Low mean time to repair (MTTR) : In the reactive state the MTTR will often
indicate very low time requirements on breakdowns. This can be due to the
workforce being accustomed to having to repair a certain component frequently
and found ways to do the repair in less time. Although being very positive on the
one side, it can indicate that the equipment breaks down frequently.
• Inventory problems : Inappropriate maintenance planning leads to inaccurate
inventory planning. When it is not known what will be required the following day
how can the correct inventory be in place?
• Uncontrolled parts : When performing reactive maintenance there will always be
the problem of uncontrolled parts. Parts are changed out very quickly under
breakdown situations. The parts are not reordered, because it was not properly
booked out of the store due to the downtime pressure.

The planned state of maintenance has the following characteristics [10]:

• Maintenance Resource Control : When it is known what is planned for a particular

maintenance service one can also plan the workforce and resource requirements.
• Controlled Inventory : The maintenance planner will know what inventory must
be kept and when. This optimises inventory values and also ensures that the
correct inventory is available.
• Eliminating wasted downtime : Wasted downtime is machine downtime that is
caused by parts not available, equipment not available or human resources
overworked.
• Maintenance cost is lower : Because of all the above-mentioned activities,
maintenance cost is lower when tasks are planned.[10]

Keeping these characteristics in perspective, the task at hand is to move from the
reactive state of maintaining equipment to the planned or preventative state.

27
2.6.3. Cost of Tactical Options.

Selecting the correct maintenance tactic for a specific application is impossible

without considering the economical aspects.

If a reactive maintenance approach is used, thus maintenance is done whenever a

breakdown occurs, downtime and repair bills will be very high due to the lack of
planning. On the other hand, preventative maintenance will cause downtime to be
less, unexpected failure rates will decline and production time can be increased.
Preventative maintenance will mean planned shutdowns that cost money. Figure 2.6.
illustrates the balance between cost of breakdowns and preventative maintenance. [22]

Figure 2.6. Total Cost of Maintenance. [21]

To be efficient in selecting the correct tactics and maintenance approaches it is very

important to have the correct data collection and analysis systems in place, and
enough experience to be able to see the strengths and weaknesses of each maintenance
approach in context of the equipment that has to be maintained.

2.7. Conclusion.

It should be clear from the discussion that the maintenance plan can only be
constructed after the maintenance strategy has been determined and the vision and
focus were established. Various tactics are available and can be applied to improve
maintenance management. Once the maintenance plan has been constructed it is
important to control the plan to ensure proper maintenance management.

28
3. CONTROLLING MAINTENANCE PERFORMANCE.

3.1. Introduction.

To be able to improve performance, the current performance must be known, to be

able to know what the current status is, it is necessary to have efficient measuring and
analysis of measured quantities. This relates to assessment of the key performance
indicators (KPI) allowing the control of the developed maintenance strategy.

3.2. Analysing Maintenance Performance.

Maintenance effectiveness and efficiency cannot be measured by one equation. The

efficiency of maintenance however can be measured by a set of equations analysing
each area of the maintenance activity. These areas include [Equations source 21 ] :

• Availability – Uptime is measured with availability. Thus is also an indication of

downtime.

Availability = Scheduled Production Time – All Unplanned Delays

Scheduled Production Time
[3.1.]
• Reliability – Measurement of how frequently downtime occurs, also known as
Mean time between failures (MTBF) in this context.

Reliability = Total Production Time

Number of Failures
[3.2.]
• Maintainability – Measures the ability to conduct maintenance; how quickly
equipment can be made available after a failure, also known as mean time to
repair (MTTR) in this context.

Maintainability = Total Downtime due to failures

Number of Failures
[3.3.]
• Process rate – Measures the ability to operate the equipment at a certain speed or
cycle time.

Process rate = Ideal cycle time

Actual cycle time
[3.4.]

29
• Equipment Effectiveness – An overall measurement that considers uptime and
speed.

Equipment Effectiveness = Availability X Process rate

[3.5.]

Analysis data based on the above equations is only accurate when it is based on data
gathered over a period of time. Analysing data over a period of time will produce a
trend which can be a valuable tool in maintenance management. [22]

Maintenance cost is used to make decisions. Tracking cost trends is much more
sensible than looking at individual actual numbers, although major service costs can
be excluded and tracked individually. Maintenance cost can be divided into the
following categories :

• Labour cost
• Parts and materials
• Internal services
• External services
• Technical support
• Miscellaneous overheads [21]

3.3. Benchmarking.

There will always be room for improvement, this relates to continuous improvement.
Benchmarking is the tool used to close the gap between the ideal scenario and actual
performance. To be able to benchmark successfully it is important to know the current
status of the maintenance program and the vision, as discussed in section 2.[21]

Efficient benchmarking can only be done with a successfully implemented

maintenance plan. Information is drawn from all the areas within the maintenance
plan [21 applied]:

• The maintenance control system contains information on every maintenance job

performed on the equipment. The information captured also contains the spare
parts usage and hours spent on each activity.
• Predictive diagnostics data containing ultrasonic testing and specific trends that
are tracked for condition monitoring purposes.[14]
• The financial data gathered can also be useful to improve future maintenance cost;
for example the cost of hiring a subcontractor to perform a certain task, cost of
spare parts used and the hourly cost of the on-site maintenance personnel.

30
• Oil analysis and failure modes of specific components and assemblies can
determine if future maintenance should be delayed to a later stage in the life cycle
or brought forward.
• Information from equipment working in the same environment on other
production sites can provide valuable information. This information can be even
more valuable if the piece of equipment is older with more operating hours.

If the data from all these sources are combined to form the centre of the maintenance
decision making process, the operation can be viewed from different perspectives.
This makes it possible to guide the operations by managing the preventative
maintenance.[13]

Equipment can be benchmarked against other similar applications on other sites, to

ensure continuous improvement.[13]

3.4. Reliability and Risk.

Why is reliability important in maintenance management? Reliability can be defined

as the mean number of failures in a given time, or the failure rate. Maintenance
management is conc erned with the management of failures, thus reliability forms the
basis.[20]

Reliability is an aspect of engineering uncertainty. The reliability can be defined as

the probability that an item will perform a required function without failure under
stated conditions for a stated period of time.[7]

3.5.1. The Role of Reliability in Maintenance.

Reliability can be used to achieve the following goals in maintenance management :

• To be able to deal with each type of failure most appropriately and in a cost-
effective way.[21]
• Approaching possible failures in a more proactive and planned manner.[21]

Traditional preventative maintenance as described in section 1 does not have

quantitative effect on overall reliability of complex equipment due to the fact that
components are change -out in predetermined periods. There are many sub assemblies
and items that form part of the equipment and can not be maintained by scheduled
maintenance, these items might never fail, and therefore changing an item based on
theory, does not always improve reliability.[9]

31
3.5.2. Developing a Risk Analysis.

Reliability generally affects availability, and maintainability is also relevant.

Reliability and maintainability can be related to availability by : [7]

MTBF
Availability =
(MTBF + MTTR)
[3.6.]

Risks can be identified and managed by setting up a Risk Analysis for the particular
risk area on the machine. The development of the risk analysis presented in this
dissertation is based on the flow diagram presented in figure 3.1. derived from the
case study in section 4.

Figure 3.1. Logical flow of reliability plan. [Case Study]

3.5.3. The Risk Matrix.

The first step to managing risks is to quantify the risks. Risks can be quantif ied by
allocating a certain value to each type of risk and classifying the risks. When risks are
managed it is important to quantify the impact of the risk and the likelihood of the
risk. The impact is a measurement of the damage the risk can cause, while the
likelihood is a measure of how likely it is for the risk to occur.

32
The following explanation should clarify the use of a risk matrix :

When the impact and likelihood of a risk is quantified it is important to customise the
steps of likelihood and impact according to the specific application. For the purpose
of this dissertation it is assumed that the different levels of impact can be defined as
set-out in Table 4.1. It is also assumed that the likelihood can be defined as set-out in
Table 4.2.

The likelihood and impact tables are combined to form the risk matrix for this
application, represented by Table 4.3.

LEVEL DESCRIPTOR DETAILED DESCRIPTION

1 Insignificant No Downtime, No Cost, No Delaytime.
2 Minor Can be resolved within 24 Hrs. Low
Financial Impact.
3 Moderate More than 24 Hrs downtime. Medium
Financial Impact.
4 Major Less than 72 Hrs downtime. High
Financial Impact.
5 Catastrophic More than 72 Hrs downtime. Hugh
Financial Impact.

Table 4.1. Illustrative Measures of Impact.[Case Study]

LEVEL DESCRIPTOR DETAILED DESCRIPTION

A Almost Certain Is expected to occur in most circumstances
B Likely Will probably occur in most
circumstances.
C Possible Might occur at some time.
D Unlikely Could occur at some time.
E Rare May occur only in exceptional
circumstances

Table 4.2. Illustrative Measures of Likelihood.[Case Study]

LIKELYHOOD IMPACT
1 2 3 4 5
A H H E E E
B M H H E E
C L M H E E
D L L M H E
E L L M H H

Table 4.3. Risk Matrix. [Case Study]

33
The risk matrix makes use of the impact and likelihood of each risk to identify risk as
an Extreme Risk, High Risk, Medium Risk or Low Risk, represented in Table 4.4.

LEGEND DESCRIPTION
E Extreme Risk
H High Risk
M Medium Risk
L Low Risk

Table 4.4. Legend for Risk Matrix (Table 4.3.)

A customised risk model is developed for each specific machine, the reason being that
each machine has a different application, value and utility, working in specified
conditions and requiring a certain performance. The model is constructed of a risk
register, a risk treatment, risk action plans and a risk implementation plan, which will
be discussed individually.

3.5.4. The Risk Register.

When comparing the risk analysis to the maintenance plan, the risk register forms the
foundation of the risk analysis. The risk register contains the majority of information
on the risks and serves as a summary of the technical information from the
engineering personnel and the financial information from the accounting personnel.

The risk register contains the following :

• A reference number for each risk. This number is used to combine the risk register
with the risk treatment, risk action plan and risk implementation plan.
• A description of the risk detailing what can happen when the risk occurs and how
it can happen.
• Consequences of a risk happening : Using the qualitative measure of likelihood
and impact (refer to Table 4.1. and Table 4.2.) it is determined what the impact
and likelihood of each risk is.
• Level of the risk before the action plan is implemented : The level of the risk
before the action plan is implemented, is determined from the risk matrix (refer to
Table 4.3. and Table 4.4.).
• Machine downtime before the action plan is implemented : The estimated
downtime for the machine caused by the event, includes the repair or installation
of parts and testing of the machine after machine has been repaired.
• Downtime cost before the action plan is implemented : The downtime cost is
determined by the following equation :

Downtime Cost = Downtime in hours X Variable cost

[3.7.]

34
• Repair cost before the action plan is implemented : The repair cost is determined
by the following equation :

Repair Cost = Cost of parts + Cost of labour (Including subcontractor labour)

[3.8.]

• Level of risk after the implementation of the action plan : The level of the risk
after the implementation of the action plan is again determined from the risk
matrix (refer to Table 4.3. and Table 4.4.). Taking into consideration the influence
of the action plan on the impact and consequence.
• Machine downtime after the implementation of the action plan : The estimated
machine downtime is determined with the action plan in place.
• Downtime cost after the implementation of the action plan : The cost of the
downtime is determine by equation 3.7. Taking into consideration the influence of
the action plan on the downtime hours.
• Repair cost after the implementation of the action plan : The repair cost is
determined by equation 3.8. Taking into consideration the influence of the action
plan on the labour cost.
• Cost of the action plan implementation : The estimated cost of implementing the
action plan is determined by the stock holding cost, inspection and predictive
diagnostic costs and labour costs.

3.5.5. The Risk Treatment.

The risk treatment is a summary of the best possible solutions to each risk in the risk
register. The risk treatment can be determined once the all the relevant information
about a risk is available as contained in the risk register.

The risk treatment contains the following :

• A reference number for each risk : The reference number relates to the specific
risk in the risk register.
• A possible treatment for each risk : Under this heading is a short description of the
best possible treatment of the risk.
• The following sections are derived using the risk register :
Ø The risk level before the implementation of the action plan.
Ø The total cost before the implementation of the action plan determined by :

Total cost = Downtime Cost + Repair Cost

[3.9.]

Ø The risk level after the implementation of the action plan.

35
 Ø The total cost after the implementation of the action plan determined by :

Total Cost (after implementation of action plan) =

Downtime Cost + Repair Cost + Action Plan Cost.
[3.10.]

• Risk factor improvement : The risk factor improvement is a qualitative measure of

the improvement of the risk by implementation of the action plan, and is
represented by the following :

LEGEND DESCRIPTION VALUE

E Extreme Risk 100%
H High Risk 75 %
M Medium Risk 50 %
L Low Risk 25 %

Table 4.5. Value of risk levels.

In equation 3.11. each level of risk represents 25% as illustrated in table 4.5. :

Risk Factor Improvement = Risk level (before action plan) – Risk level(after
action plan) %
[3.11.]

The risk treatment is essentially a summary of all the costs involved, and is used to
make decisions based on the estimated cost benefit of each risk treatment.

3.5.6. The Risk Action Plan.

The function of the Risk Action Plan is to guide the maintenance personnel in the
implementation of the risk treatment. It contains :
• A detailed summary of the risk .
• A proposed action to resolving the risk (Risk treatment).
• Parts and Labour requirements to implement the risk treatment. (Resource
Requirements.)
• Allocation of responsibilities.
• Schedule for implementation and the frequency of the tasks if an inspection is
involved.
• Reporting and monitoring required on the action plan.
To ensure the implementation of the risk analysis and to close the loop of continuos
improvement the risk implementation register concludes the risk analysis.

36
3.5.7. The Risk Implementation Register.

The risk implementation plan forms part of the reporting function on a monthly basis
and its function is to promote continuous improvement of the risk analysis.

The risk implementation register contains three sections :

• A replacement record for each machine to keep history on the replacement of parts
at certain machine hours.
• A inspection record for each machine to keep history on the frequency of
inspections.
• A implementation date for each machine.

The risk implementation register also forms part of the data gathering function. Thus
the maintenance strategy is partially controlled by the risk analysis. These two items
are combined in the life cycle management to ensure availability and reliability.

3.6. Conclusion.

Maintenance cannot be managed without a proper and efficient control function.

Control includes benchmarking, risk analysis and reliability management, as
discussed in this chapter.

Reliability and risk management were discussed in detail through the development of
the risk analysis plan. An extract of the risk analysis program developed for the case
study in chapter 4 is included in Appendix A.

Chapter 4 now illustrates the implementation of both the development and control of
the maintenance plan through a case study.

37
4. LIFE CYCLE MANAGEMENT – A CASE STUDY

4.1. Introduction.

In Chapter 4 the actual life cycle maintenance data of three front-end loaders, in
operation in South Africa, is used as a case study to elaborate on some of the concepts
and ideas discussed in the previous chapters. The objective of the case study and
examples is to illustrate the implementation of the some of the concepts and ideas
discussed in the previous chapters.

Some of the data used in this chapter to illustrate concepts, was changed due to
confidentiality of the information.

4.2. The Maintenance Plan.

A physical asset is put into use to perform a certain function, although the foremos t
reason for maintenance is to maintain a certain machine condition, the maintenance
plan should also preserve the function. [23]

As an example of this statement, consider a front -end loader loading coal into trucks.
The foremost reason for maintenance on this machine is to maintain the machine’s
condition, but maintaining the machine’s condition should also be aimed at
maintaining the amount of coal loaded into the truck; maintenance procedures should
be aim at improving both machine condition and machine production.

Referring to chapter 2 where the maintenance strategy is compared to a business

strategy, it is very likely that there are many approaches to developing a maintenance
plan.

4.2.1. Construction of the maintenance plan.

One of the approaches to developing a maintenance plan that will form part of the life
cycle management of equipment, is to visualise the construction of the maintenance
plan and all of the components as similar to the construction of a house.

38
 Figure 4.1. The maintenance plan construction [23]

As illustrated in Figure 4.1., the maintenance requirements form the foundations of

the house, without the foundations in place the maintenance plan development cannot
continue.[23]

The maintenance requirements are all the work processes needed to develop the
maintenance plan for the equipment. These work processes include (also discussed in
section 2) :

• Generating works orders and job cards.

• Organise and track inventory.
• Track equipment history.
• Scheduling of tasks and project equipment failure.
• Maintain labour records.
• Allocate resources.
• Planning and ordering of spare parts.
• Forecasting.
• Management of service exchange units.

The walls form the building blocks and consist of the resources required to achieve
the maintenance requirements. [23] Resources include :

• Parts and inventory.

• Skilled site personnel.
• Tools and equipment.
• Stores and offices.

The roof represents the maintenance control systems. The maintenance control system
ensures that all the information collected, is used to improve the maintenance plan.

The next step in the development of the maintenance plan is to establish the priority of
the work processes that must be actioned, it is important to ascertain the current
strengths and weaknesses in the maintenance plan.

39
4.2.2. Prioritising the Work Processes.

Applying the maintenance approaches discussed in section 2, the spider diagram can
be constructed from the actual case study data (Compiled from the maintenance audit
in Appendix A7) as illustrated in figur e 4.2. , it should be clear that knowing the
current status of the work processes it is possible to highlight the necessary
improvement in work processes for the case study.

Strengths and Weaknesses of Work Processes

Maintenance
80
60
Safety and Housekeeping Administration
40
20
0
Parts Management Work Order System

Reporting PM Plan

Current Situation

Figure 4.2. Strengths and Weaknesses of the Work Processes. [Case Study]

Figure 4.2. indicates that for the case study the systems implemented, should improve
the following areas in the priority listed:

• Work order system.

• Administration.
• PM Plan.
• Parts Management
• Reporting.

Establishing the priorities of the maintenance system determines the focus point of the
maintenance plan.

The next step is to set a vision or objective, this will be the new maintenance plan, in
essence, the new maintenance plan will be the path from the present to the vision.

40
4.2.3. Developing the Work Processes.

The maintenance plan consists of work processes. Work processes should be

developed for the following processes :

• Work order management.

• Equipment records and history.
• Preventative maintenance tasks and scheduling.
• Costing and budgeting.
• Materials management.
• Labour skills capacity planning.

These processes are used to control the use of resources in the maintenance plan. A
standard operating procedure can be compiled which is a document used to describe
a ll the work procedures and ensure that the work processes are completed and
managed using a certain quality standard set by the customer.[15]

The quality standards are determined by the customer’s needs. A section that will
form part of the standard operating procedures will be the reporting. One of the
customer’s needs might be a monthly report compiled on the 15th of each month and
submitted before the 20th of each month. To be able to compile this report the
maintenance data must be gathered and analysed before the 15th and this process is
typically one of the sections to be documented in the standard operating procedures.

Optimisation of the maintenance plan starts with the actual data gathered. The next
step will be to analyse the data and make use of the information gathered. A typical
monthly report should contain the Key Performance Indicators (KPI). A portion of the
monthly report developed for the case study is attached in Appendix A.[15]

The key to analysing the data is to compile KPI for a specific piece of equipment. The
KPI can be used to determine on which aspects or parts the maintenance should focus,
depending on the objective of the maintenance.

The objective of the maintenance approach for example, can be to reduce maintenance
cost, or on the other hand to improve availability no matter what the maintenance cost
will be. Thus, these two objectives will focus on different aspects of maintenance.[18]

A “champion” or owner must be appointed to manage the work processes, this person
is the maintenance planner.

41
4.2.4. The Maintenance Planner.

The maintenance plan should be optimised in all aspects. This can only be achieved
by a dedicated planner, who devotes his/her time to maintenance planning.

The maintenance planner should be responsib le for planning :

• The hours spend on each task, amount of labour resources required and the type of
skills needed for each task.
• The tools and equipment needed for each task.
• The spare parts and logistic of the spare parts.
• The safety requirements, security clearance and other permits.

The maintenance planner should resolve :

• Unnecessary downtime due to interrupted tasks,

• Reduce the number of unplanned tasks,

In order for the maintenance planner to achieve the above-mentioned results, he/she
will have to make assumptions and for these assumptions to be as close as possible to
the actual performance he will have to base his assumptions on past experience and
information gathered from on-site personnel.[17]

The key behind information control and management is the continuous feedback of
information.

Figure 4.3. Maintenance Planning Diagram. [Case Study]

42
Figure 4.3.illustrates the situation for the specific case study in this chapter.

4.3. Analysis of the Maintenance Data.

Maintenance information and data are gathered typically to base future events on past
events. When the maintenance planner has access to maintenance information every
maintenance activity can be treated as a single project. The work breakdown and
project scope of work can be based on history, and the project will eventually become
a reoccurring event.[19]

Every time the project or maintenance task is completed the new information is fed
back into the information system and helps the maintenance planner to make a more
realistic estimate when the project reoccurs. The data captured must be correct,
complete and sufficient to be of any use during the analysis or for building up a
maintenance model. Data capturing should be done using a standardised format, this
always ensures that the correct data is captured.

Information is a valuable tool that can be used to sharpen the maintenance program
and change the maintenance approach to a more to-the point approach. The following
section was compiled using data from the case study to illustrate what information can
be derived from the data gathered.

4.3.1. Machine Hours.

Machine hours are mostly used as the time reference for equipment. The machine
hours for each machine in the case study is illustrated in figure 4.4. Loader no.1 has
the mos t machine hours and are therefore the oldest of the three machines. From
previous discussions in chapter 1 and 2, the age of equipment is a very important KPI
and influences the maintenance strategy significantly.

43
 Machine Running Hours

Loader 3
Equipment

Loader 2

Loader 1

0 5000 10000 15000 20000 25000 30000

Machine Hours

Figure 4.4. Machine Running Hours. [Case Study]

4.3.2. Machine Availability.

Tracking machine availability forms part of the control function of maintenance

management as discussed in chapter 3. Figures 4.5., 4.6. and 4.7. illustrates the
availability for the three case study machines over a period of time.

The availability was calculated using equation 3.1. and 3.6. The machine hours were
used in equation 3.6. and calendar hours were used in equation 3.1., resulting in the
difference illustrated in the figures.

44
 Loader 1 Availability Graph

120

100

80
Availability

Availability
60
MTBF/(MTTR+MTBF)

40

20

0
Jan Feb Mrt Apr May Jun Jul Aug Sep
Month

Figure 4.5. Loader 1 Availability Graph. [Case Study]

Loader 2 Availability

120

100

80
Availability

Availability
60
MTBF/(MTTR+MTBF)

40

20

0
Jan Feb Mrt Apr May Jun Jul Aug Sep
Month

Figure 4.6. Loader 2 Availability Graph.

45
 Loader 3 Availability

120

100

80
Availability

Availability
60
MTBF/(MTTR+MTBF)

40

20

0
Jan Feb Mrt Apr May Jun Jul Aug Sep
Month

Figure 4.7. Loader 3 Availability Graph. [Case Study]

4.3.3. Machine Mean Time Between Failures (MTBF) and Mean Time To Repair
(MTTR).

The MTBF indicates the reliability of the machine and the MTTR indicates the
maintainability of the machine. (The reader is referred to chapter 3)

4.4. Reliability of Machines.

From the discussion in chapter 3 it should be clear that reliability is then generally
concerned with the failures during the life of a product. This identifies Reliability
Centred Management (RCM) as one of the essential legs of Life Cycle Management
(LCM). Reliability Centred Maintenance forms part of Life Cycle Management when
the failure of equipment in its operating context is addressed.

Appendix A contains extracts from the risk analysis program for the case study, to
illustrate the use of the risk analysis.

46
4.5. Improving Life Cycle Management.

The Life Cycle Management is typically an agreement between a company (Mine)

and a contractor (Service Supplier). The contractor agrees to perform certain
maintenance functions, and in return for these maintenance functions the company
agrees to reward the contractor for the maintenance service delivered.

A very important aspect in this agreement between the company and the contractor is
the maintenance cost, which is discussed in the next section.

4.5.1. Cost of Maintenance.

Production facilities today, are focused on availability, cost-effectiveness, production

output and flexibility. These are also the key issues in any maintenance or Life Cycle
Management Contract.[21]

Maintenance is one of the most costly parts of operation, especially if the cost of
production losses are added to the equation. Maintenance has a huge impact on the
performance of any operation and therefore determines the profitability of the
operation.

Many managers do not know what the total cost of maintenance is, from the ratio of
Direct Maintenance Cost to Total Value Added Costs. Referring to Figure 4.8., one
should see why maintenance in the mining industry is so important.

Ratio of Direct Maintenance Cost to Total Value-Added

Costs.
Fabrication and Assembly
Processing
Industry Manufacturing
Primary Metal
Mining

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100
%
Direct Maintenance Cost Percentage
Total Value Added Cost Var

Figure 4.8. Ratio of Direct Maintenance Cost to Total Value-added Costs. [21]

47
Figure 4.8. illustrates that the ratio of Direct Maintenance Cost to Total Value-added
Costs for the mining industry varies between 20% and 50%, towering above the other
industries.

Life cycle maintenance agreements similar to the case study, normally consists of a
variable portion and a fixed portion.

4.5.1.1. Fixed Cost.

By definition the fixed cost is that group of costs involved in a going activity whose
total will remain relatively constant throughout the range of operational activity.[6]

In the case study the fixed costs are made up of such cost items as salaries to site
technicians, equipment and tools, infrastructure and any other costs that are incurred
and are not part of the maintenance cost.

Although fixed costs remain relatively constant, it may be expected to increase in a

stepped pattern with an increase in activity. When extra equipment is added, an extra
site technician will have to be appointed to maintain this equipment and this causes a
step increase to the fixed rate.

4.5.1.2. Variable Cost.

By definition the variable cost is that group of costs which vary in some relationship
to the level of operational activity. [6]

Variable cost is expected to increase with an increase in required availability.

In the case study, the variable cost consists of a rate per machine hour or a rate per
ton, thus the uptime of the machine has direct financial implications to the company
maintaining the machine as well as the mine; more uptime results in more production.

4.5.2. The Life Cycle Maintenance Cost.

Most products are brought into being and utilised over a life cycle. The maintenance
life cycle starts when a machine is at zero running hours and ends with phaseout and
disposal or selling the machine at salvage value. (The reader is referred to chapter 2)

The variable cost varies during the life cycle of the machine. This variance can be
linked to the preventative maintenance strategy and coincides with the planned parts
change-out.[18]

48
 Loader vs. Drill variable maintenance costs.

Loader
Drill

0 - 6000 6001 - 12000 12001 - 18000 18001 - 24000 24001 - 30000 30001 - 36000 36001 - 42000 42001 - 48000
Machine Hours

Figure 4.9. Variable Maintenance cost of Loader vs. Drill. [Case Study]

Planned vs. Actual Variable Cost

0 - 6000 6001 - 12000 12001 - 18000 18001 - 24000 24001 - 30000 30001 - 36000 36001 - 42000 42001 - 48000
Machine Running Hours

Loader Actual
Actual vs. Planned

Figure 4.10. Actual Variable Maintenance cost vs. Planned Variable Maintenance
Cost. [Case Study]

Used as a case study figure 4.9. illustrates a typical variable maintenance cost for a
drill and a front–end loader, and illustrates that the maintenance on each type of
equipment is unique. In the first three maintenance periods, the variable rate curve of
the loader and the drill is similar. In the fourth period the variable rate between the
drill and loader starts to vary, this can be contributed to the different life expectancy
and replacement of parts on the two types of equipment.

49
The life cycle costs of the equipment follows a trend similar to that of the bathtub
curve illustrated in figure 2.1. The following can be seen from figure 4.9. and figure
4.10 :

• A major rebuild is scheduled for the period 18000 hrs to 24000 hrs. to improve
reliability some components are rebuild at 18000 hrs while other components are
scheduled for 24000 hrs.
• The life cycle of the maintenance agreement is 48000 hrs although major
components are replaced during a midlife service.
• The second portion of the maintenance agreement from 24000 hrs to 48000 hrs is
different to the period from 0 hrs to 24000 hrs. The difference in cost is a result of
the difference in maintenance strategy. In the last period maintenance costs are
kept low to lower the salvage value of the machine at the end of the agreement.
During this period the guaranteed availability will also be lower.

Figure 4.10. illustrates the actual and planned maintenance cost for the case study.
The difference between the actual and planned maintenance cost is the profit margin.
From the case study experience, the profit margin should be constant throughout the
life cycle of the machine.[11]

4.5.3. Customer Expectations and Views.

Taking into account that the customer in the case study will be the mine manager
making the decision on purchasing new equipment and signing the maintenance
agreement with the service provider, it is important to address some of the basic
concepts that will be involved in the decision.[17]

The decision will be based on maintenance cost as discussed in the previous section,
and, value and utility.

4.5.3.1. Adding value.

Value in this context can be defined as a measure of the worth that a person ascribes
to a good service.

Thus, the value of an object is inherent not in the object but in the regard that a
person has for it. [6]

The value of Life cycle management to the customer can be represented by the
following relationship [22]:

Value = Quality x Service

Cost x Time x Risk
[4.1.]

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From this relationship it is clear that value to the customer is gained by delivering the
best Quality and Service at the lowest cost and in the shortest time.

4.5.3.2. Utility.

Utility in this context can be defined as a measure of the power of a good service to
satisfy human wants.

Thus, the utility of an object, like it value, inheres not in the object itself but in the
regard that a person has for it. [6]

4.6. Conclusion.

Customers ask the question : Why Life Cycle Management? The only marketing tool
for Life Cycle Management is to be able to deliver value and utility to the customer,
thus providing equal or better services at a lower cost, quicker and with reduced risk.

Costs can be lowered by sub-contracting the correct activities and keeping an

effective level of spares, material and consumables. Service and time can be improved
by having trained specialists and the correct tools and special equipment on site. Risk
can be lowered by implementing a risk analysis program as described in chapter 3.

All these ways of improvement will not market the LCM. These strategies are used to
improve the value to the customer (refer to equation 4.1.)

Both the value and the utility has to be present, this can be illustrated through the
following example.

Each person either possesses goods or render services, or both.

Customer 1 has a drill with a life cycle management contract in place that ensures the
drill can be used to fulfil their needs. The drill must be available whenever it is
needed. Customer 2 has a front end loader with a life cycle management exactly the
same as customer 1. The front-end loader must have very high availability with high
MTBF and low MTTR.

Although both customers have the same life cycle management contract, their value
and utility differs. The life cycle management contract is only valuable to customer 1
if the drill is available when neede d and for customer 2 only when the availability is
very high.

Through this example it becomes clear that the utility of a service is portrayed by the
customer. Marketing a life cycle management agreement can be successful if a person
desires a utility possessed by another and sees the value in the object or service.

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5. SUMMARY AND CONCLUSION.

5.1. Introduction.
The evolution of the maintenance approach from the summary provided in the
introduction section of this dissertation, provides the background for further research.
The dissertation is then focused on developing a maintenance strategy by combining
theory from a literature research.

Controlling the maintenance strategy through analysis, benchmarking and managing

reliability and risk, ensures the final process in maintenance management.

Finally chapter 4 combines all the practical experience from a case study and
discusses the practical implementation of the maintenance concepts, leading to the
general conclusion.

5.2. General Conclusion.

The maintenance strategy never becomes a fixed model, the maintenance strategy of
any company changes to adapt to the changes in the company and the strategy of the
company. Referring the reader to chapter 4, were the maintenance plan construction
was compare d to building a house. If the foundations of the house change it implies
that the maintenance requirements changed, it also implies that the resources needed
to accomplish the maintenance requirements and the systems needed to manage them,
changed, because these are the walls and roof of the construction.

Controlling the maintenance strategy through data analysis involves gathering the
correct KPI’s. If maintenance data are not measure, it cannot be controlled.
Controlling maintenance means controlling the input and measuring the output against
the input, this leads to controlling maintenance costs. Getting accurate and complete
data form the maintenance personnel is often a very tedious and time consuming task,
implementing and controlling the data gathering function by introducing a standard
operating procedure for each task of data gathering is a practical way to ensure data is
accurate, complete and available.

Maintenance costs in the mining industry is significantly higher than other industries.
(Refer to chapter 4). This can be as a result of the high availabilities and reliability
required by the mining industry. Although maintenance systems improve the
profitability of a maintenance agreement, it should be realised that the core driver
behind maintenance systems are improved availability and reliability.

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5.3. Proposed Further Work.
There will always be ways for improvement; research generates both answers and
questions. Some of the areas proposed for further work include the following :

• Investigating the impact of the human factor on maintenance.

People and the mindset of people can have the largest impact on maintenance
systems and the management of maintenance strategies. Imposing penalties on
non performance and awarding bonuses for over performance should be discussed.
The human factor was not discussed in the dissertation but should be part of any
further work.

• Condition monitoring.[19]

Condition monitoring forms a very important part of the control function of

maintenance management and should be included in further work.

• The relationship between availability guarantee and maintenance resource

requirements.

In a maintenance agreement the qualitative measures of performance are

availability and maintenance costs. (Certain availability are guaranteed at a certain
cost per machine hour.) This concept also relates to the believe that the higher the
risk becomes, the higher the cost should be. Proposed further work should
included the development of a mathematical model illustrating the re lationship
between a guaranteed availability and the maintenance cost.

• Closing the maintenance loop.

Improved reliability can only be established once breakdowns are analysed and
root-cause analysis is done. Proposed further work should include a study on the
improvement in reliability of equipment once maintenance analysis results are fed
back into the maintenance system and implemented on the equipment. An
improvement in the reliability of equipment can be achieved by implementing the
risk analysis disc ussed in this dissertation.

53
LIST OF REFERENCES.

1. www.ec.gc.ca/ecocycle/english/whatis lcm.cfm , What is life cycle management?, June

2002.

2. www.maint2k.com , MOSaIC, June 2002.

3. www.maint2k.com , What is RCM?, June 2002.

4. www.maint2k.com , What is TPM?, June 2002.

5. Donald R. Cooper, Pamela S. Schindler; Business Research Methods, 7th

edition, McGrawHill, 2001, ISBN 0-07-118109-1.

6. G.J. Thuesen, W.J. Fabrycky; Engineering Economy, 8th Edition, Prentice Hall,
1993, ISBN 0-13-279928-6.

7. Patrick D. T. O’Conner; Practical Reliability Engineering, 3rd Edition Revised,

Wiley, 1999, ISBN 0-471-96025-X.

8. Benjamin S. Blanchard; Logistics Engineering and Management, 5th Edition,

Prentice Hall, 1998, ISBN 0-13-905316-6

9. Ramakumar R.; Engineering Reliability : Fundaments and Applications, Prentice

Hall, 1993, ISBN 0-13-280512-X.

10. www.maintenanceworld.com , Daryl Mather, The Planned State : Maintenance

Management, July 2002.

11. www.maintenanceworld.com , Daryl Mather, Calculating the savings from

Implementation of the CMMS, July 2002.

12. www.maintenanceworld.com , Daryl Mather, Planning and Scheduling, July 2002.

13. www.maintenanceworld.com , Daryl Mather, Work Order Execution and Data Capture,
July 2002.

14. www.bi-cycle.com , Preventative Maintenance Optimization, July 2002.

15. info@snoino.com , SNOINO Newsletter – Performance TiPS for Maintenance,

Reliability and Asset Managers, November 2002.

16. www.maint2k.com; Sandy Dunn, Best Practice Maintenance Strategies for Mobile
Equipment – Bali, Indonesia, March 1997.

54
17. Terry Ritzel – Cyprus Sierrita Corporation, Michael Lenz – P&H Mining
Equipment; Application of Predictive Maintenance Techniques for Large Electric
Mining Shovels at Cyprus Sierrita, Arizona. Marketing Newsletter, October 2000.

18. Parametric Cost Estimating Handbook, Department of Defence – United States of

America, Fall 1995, www.maint2k.com

19. L. E. Gouws; Maintenance Management with emphasis on condition monitoring

of excavation machines, Rand Afrikaans University, November 1995, TM10
GOUW, Johannesburg, South Africa.

20. J. L. Coetzee; New Developments in RCM, Mechanical Technology, May 2002.

21. J. D. Campbell; Uptime – Strategies for Excellence in Maintenance Management,

Productivity Press, 1995, ISBN 1-56327-053-6.

22. J. R. Meredith, S. J. Mantel Jr; Project Management – A Managerial Approach,

4th edition, Wiley, 2000, ISBN 0-471-29829-8.

23. www.aladon.co.uk/12cust.html, Reliability Centred Maintenance – The Responsible

Custodianship of Physical Assets, September 2002.

24. The risk analysis case study in this dissertation is based on a risk analysis that
originated from P&H Minepro Services Australia. The only reference available :
AS/NZS 4360:1999.

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APPENDIX A

56