Typical steel industry metrics are compared with 25 maintenance

benchmarks to provide guides in identifying achievable

improvements.

correlated with top quartile performance against the benchmarks.

Best-in-Class When actual performance against the benchmarks indicates
opportunity for significant improvement, a gap analysis against
maintenance benchmarks
James B. Humphries,Vice President-Manufacturing, BENCHMARK QUARTERLY
Technology and Operations Support, Fluor Daniel, Greenville, BOTTOM THIRD SECOND TOP
S.C. RESULTS METRICS
OSHA Injuries par 200,000 Houn, >5.5 5.5-3.1 3.0-1.0 <1.0
Stores/Replacement Value >1.3 1.3-0.8 0.7-0.3 <0.3
Percentage
BEST-IN-CLASS benchmarks provide a mechanism to help Maintenance Cost/Total Sales >8 8-7 6-3 <3
evaluate improvement opportunities. Percentage
Fluor Daniel gathered these benchmarks from 148 global Maintenance Cost/Replacement
Percentage
companies that are considered top quartile in their industry in Discrete >5.0 5.0-3.2 3.2-2.0 <2.0
terms of earnings and/or market share. All data points were Batch Process >3.5 3.3-3.2 3.2-2.4 <2.4
validated to ensure consistency. ChernIcal, Refining Power >4.8 4.8-3.0 3.0-2.5 <2.5
Industries represented in the data include: Paper >9.0 9.0-5.5 5.5-2.2 <3.2
Availability

• Mining and metals. • Rubber product.

Discrete
Batch Process
<78
<172
78-84
72-80
85-91
81-90
>91
>90
• Refining/petrochemical. • Power. Chemical, Refining Power <85 85-90 91-95 >95
• Paper. • Electronics. Paper <83 83-86 87-94 >94

• •
Overall Equipment Effectiveness Not <48 48-78 >78
Automotive. Consumer products. Measurable
• Textiles. • Chemicals. PROCESS METRICS

• Foods. • Pharmaceuticals.
Mechanic Wrench Time
Percentage Planned Work
<31
<65
31-41
66-78
42-52
79-94
>52
>95
Request Compliance Percentage <88 68-77 78-90 >90
The distribution of plant locations represented by the Schedule Compliance Percentage <15 15-35 36-70 >70
benchmarks is illustrated in Fig. 1. The benchmarking data were Work Order Discipline Percentage <54 55-83 84-95 >95
PM Percentage by Operations 0 0-9 10-24 >25
evaluated for statistically significant differences among industries Replacernent Value ($MM) per <3.2 3.2-5.0 5.0-7.5 >7.5
and plant locations. Although Japanese plants tend to have lower Mechanic
investments in stores and a higher usage of contractors, plant Suggestions per Mechanic per Year Not <0.5 0.5-4 >4
Measurable
location showed no discernible differences in maintenance cost Stores Turnover <5 5-7 .7-1.2 >1.2
ratios. However, as indicated in the quartile table summarizing the Stores Service Level <93 93-96 97-99 >99
Best-In-Class maintenance benchmarks (Fig. 2), there was a sta- Contractor Cost Percentage <8 8-19 20-40 >40
tistically significant cost difference among industries. Stores Issues/Total Material >82 82-68 67-20 <19
Percentage
TRAINING AND STAFF RATIOS
NORTH AMERICA Span of Control <9 9-17 18-40 >40
Mechanics per Effective Planner <25 25-59 60-80 >80
Replacement Value ($MM) per <50 50-200 200-250 >250
ASIA Maintenance and Reliability Engineer
Mechanics per Plant Worker >32 32-21 20-10 <10
Percentage
Total Craft Designations >7 7-6 5-3 2
Training Hours per Mechanic >80 80-70 69-40 <40
EUROPE Training Cost per Mechanic >3000 3000- 1800-500 <500
1800

Fig. 2 - Best-in-Class maintenance benchmarks.

Fig. 1 - Distribution of plant locations represented by benchmarks.
In using the benchmarks, caution should be taken in applying a
single benchmark to the exclusion of other benchmarks. This
often leads to erroneous conclusions regarding performance.
Similarly, apparent improvements can be merely the result of a
lowered level of maintenance that is reducing the long-term
production capacity of a plant. Finally, significant maintenance
focused on aesthetics rather than productive capacity should be
taken into account. For example, large plant beautification
campaigns can have major short-term impacts on many of the
benchmarks.
For maximum effectiveness, Fluor Daniel uses the benchmarks
with a set of best practice listings. These listings are the
strategies, policies, methods and procedures that have been
the best practices associated with the benchmark reveals how to
achieve the improvement.
Use of quartile table
The distribution of performances tabulated for each benchmark is
shown in Fig. 2. The data in the bottom quartile column show the
performances of the worst 25% of the companies benchmarked.
The third quartile column shows the performance of 25% of the
companies who just exceeded the bottom quartile. The top
quartile column indicates the benchmark measurements for the
best of the best. A worthy goal is to acquire or maintain top
quartile performance for all areas benchmarked (other than the
training/staffing ratios). Since these benchmarks are from the

Iron and Steel Engineer 1 October 1998

most successful companies, bottom quartile performance can, in
some cases, be relatively good.
The training and staffing ratios represent the cumulative
distribution of companies benchmarked and do not imply what is
recommended as targets. In most circumstances, the second or
third quartile is the proper target for these benchmarks. Only after
superior performance in plant availability and maintenance cost
should the top quartile in training and staffing be considered.
When targeting top quartile performance only for the training and
staffing benchmarks, consideration should be given to the strong
negative impacts this targeting can have on other, more important
performance measures.
Benchmark descriptions
This discussion describes the application and interpretation of
each category of benchmarks:
• Results metrics.
• Process metrics.
• Training and staff ratios.
Results metrics - These benchmarks express the value or cost of
the maintenance function to the manufacturing enterprise.
OSHA injuries per 200,000 hours is a basic safety metric that
provides an equal comparison basis for all manufacturing plants.
An OSHA injury is defined as reportable under the Occupational
Safety and Health Administration laws of the U.S. Lost workday
incidence rates are often one fiftieth of the total reportable rate on
which this benchmark is based.
Stores/replacement value percentage is a measure of working
capital invested in local stores. World-class plants have achieved
values well below 1.0%. Traditional store operations have
achieved inventory levels in the range of 0.7 to 0.9%. Some
plants have utilized a mixture of advanced material management
techniques and achieved levels in the 0.2 to 0.5% range.
Maintenance cost/total sales percentage is a metric that indicates
the percentage of revenues that is returned to the equipment to
keep it in proper working condition.
Maintenance cost/replacement percentage is the ratio of annual
maintenance cost to plant replacement value. It is a widely used
barometer of maintenance effectiveness. It is a direct measure of
the labor, material, contractor and overhead resources applied to a
specified aggregate equipment investment. The value of this
measure varied with the industry studied. When using these
benchmarks for steel plants, a comparison was made between
blast furnace activities to continuous plants, BOFs to batch
industries and the balance of the mill to discrete operations.
Availability is an extremely important measurement of the
effectiveness of plant maintenance, design and operation. It is
expressed as the percentage of time that a unit could run if called
upon to do so. Availability is sensitive to industry type as well as
to production scheduling.
Overall equipment effectiveness is a comprehensive
measurement often associated with total productive maintenance
(TPM) and total quality programs. It measures actual operations
against perfect production rates, assuming no scheduled or
unscheduled downtime, no defective product and operation
without reduced production rates. Experience in the steel industry
Iron and Steel Engineer
suggests that the overall equipment effectiveness data in internal
publications must be adjusted prior to comparing to the
benchmarks. Many steel companies use baseline production rates
that are theoretical and often surpassed by actual production rates.
To use the benchmarks, the production rate element of the overall
equipment effectiveness formula should be computed as the
percentage of maximum possible production at the typical
production mix that is achieved. Comparison to production
records rather than the initial equipment design capacities often
provides the best basis for the calculations.
Process metrics - These benchmarks indicate how well
maintenance-related processes are performed. They are important
because scoring well on the processes is generally associated with
good results.
Mechanic wrench time is the percentage of time that a mechanic
is directly advancing the completion of a maintenance task. It
includes time spent using tools and excludes idle time, planning,
travelling, transporting tools or parts, and securing information.
The most accurate measurements are gathered by work sampling.
Percentage planned work is a direct measure of the portion of
the workload that is known in advance and for which a job plan
has been prepared, material ordered and resources scheduled.
World-class plants normally exceed 80% planned work. In
previous studies, there are U.S. plants that routinely exceeded
90% planned work.
Request compliance percentage is a measure of the ability of a
work unit to adhere to a requested work schedule. World-class
plants often exceed 90% request compliance. Upward trends
should reflect successful efforts to improve equipment reliability
and, therefore, predictability through preventive and predictive
maintenance techniques, and reliability engineering.
Schedule compliance percentage is the percentage of hours
worked exactly as scheduled on a daily schedule. Because
miscues in job estimates and in planning, and material deliveries
or availability directly impact compliance, high compliance data
are impossible without an excellent maintenance management
program.
Work order discipline percentage is the percentage of mechanic
hours covered by a work order. This is a measure of record
keeping discipline. Work orders are a basic control tool for
planning, scheduling, tracking equipment history, parts used,
repair costs and reliability information. The measurement can be
influenced by use of such methods as total productive
maintenance (TPM) and associated operator-performed
maintenance. While low measures may indicate a lack of
discipline in managing the workload, they can also reflect a
different work structure. Consequently, the measurement focus
should be on documentation of maintenance needs rather than on
terminology.
PM percentage by operators is a measure of preventive and
predictive maintenance tasks performed by equipment operators.
The value of this measure will be influenced by work practices
and labour agreements that dictate the workforce flexibility.
Plants practising total productive maintenance will typically
reveal higher percentages in this category.
Replacement value ($million) per mechanic is a measure of
maintenance system productivity. The value of this measure can
be impacted by the industry studied and the extent to which
contractors are used as a workforce supplement.
2 October 1998
 Suggestions per mechanic per year is the average number of Comparison of integrated mills to benchmarks
formal suggestions by each mechanic in a year. The world-class
plants want to optimize the contribution by all personnel. This Highlights of Fluor Daniel's observations of the steel industry are
metric helps focus on getting the most brain power from those summarized in Fig. 3. Highlighted quartiles show the
closest to the maintenance work. performance levels typical of 11 integrated steel mills.
Stores turnover is a measure of the effectiveness of the parts and
supplies in the storeroom. A higher number means that working Suggestions for use of benchmarks
capital is being exercised regularly. World-class plants have
achieved turnover levels well over 1.0. The following narratives discuss lessons learned in helping clients
Stores service level is a measure of both inventory accuracy and apply the benchmarks to major improvement initiatives.
stockout events in which the inventory of stores units has been
depleted. It is the percentage of requests on stores stock that are BENCHMARK QUARTILE
BOTTOM THIRD SECOND TOP
filled upon request.
RESULTS METRICS
Contractor cost percentage is a measure of the extent to which OSHA Injuries Per 200,000 Hours >5.5 5.5-3.1 3.0-1.0 <1.0
the plant or unit supplements its in-house workforce. There are no Stores/Replacement Value Percentage >1.3 1.3-.8 .7-3 <3
universally accepted levels for this measure. The appropriate level Maintenance/Total Sales Percentage ~8 8~7 6~3 ~3
Maintenance Cost/Replacement
of contract maintenance is determined by business fluctuations, Percentage
labour costs, need for special skills, availability of contract Discrete >5.0 5.0-3.2 3.2-2.0 >2.0
resources, etc. Batch Process >3.5 3.5-3.2 3.2-2.4 <2.4
Stores issues/total material percentage is the percentage of total Chemical, Refining, Power >4.8 4.8-3.0 3.0-2.5 <2.5
(continuous)
maintenance materials that come from the storeroom(s). It Availability
expresses how much of the maintenance materials are handled in Discrete <78 78-84 85-91 >91
the most convenient, often least cost-effective, way. Batch Process <72 72-80 81-90 >90
Chemical, Refining, Power <85 85-90 91-95 >95
(continuous)
Training and staffing ratios - These benchmarks reflect the Overall Equipment Effectiveness Not <48 48-78 >78
cumulative distributions of the companies benchmarked. Top Measurabl
quartile metrics rarely reflect what training or staffing approach e
PROCESS METRICS
delivers top quartile results or process performance. MechanicWrench Time <31 31-41 42-52 >52
Span of control is a term often used to describe the working ratio Percentage Planned Work >65 66-78 79-94 >95
of mechanics to firstline supervisors. There has been an increase Request Compliance Percentage <68 68-77 78-90 >90
in span of control from previous studies conducted in the late Schedule Compliance Percentage <15 16-35 36-70 >70
Work Order Discipline Percentage <54 55-83 84-95 >95
1980s. PM Percentage by Operations 0 0.9 10-24 >25
Mechanics per effective planner is a measure of the job Replacement Value ($MM) per <3.2 3.2-5.0 5.0-7.5 >7.5
preplanning provided for mechanics in a proactive, planned work Mechanic
Suggestions per Mechanic Per Year Not ~.5 .5-4
environment. The number of effective planners is computed by Measurabl
dividing the number of mechanics by the number of personnel e
who plan maintenance. Partial headcounts are appropriate for Stores Turnover <.5 .5-.7 .7-1.2 >1.2
mechanics, supervisors, engineers, or others who might plan Stores Service Level <93 93-96 97-99 >99
Contractor Cost Percentage <8 8-19 20-40 >40
part-time. Stores Issues/Total Material >82 82-68 67-20 <19
The replacement value ($million) per maintenance and Percentage
reliability engineer is a ratio that serves as a measure of the TRAINING AND STAFF RATIOS
Span of Control <9 9-17 18-40 >40
maintenance and reliability engineering assistance provided by a
Mechanics per Effective Planner <25 25-59 60-80 >80
technical professional. For breakdowns, these resources are often Replacement Value (($MM) per <50 50-200 200-250 >250
involved in failure analysis and repair strategies. Proactively, Maintenance and Reliability Engineer
these engineers are frequently engaged in maintenance elimina- Mechanics per Plant Worker >32 32-21 20-10 <10
Percentage
tion or reliability engineering. The number of maintenance and Total Craft Designations >7 7-6 5-3 2
reliability engineers is computed by summing whole or partial Training Hours per Mechanic >80 80-70 69.40 <40
headcounts providing this support. Training Cost per Mechanic >3000 3000- 1800-500 <500
1800
The mechanics per plant worker percentage ratio indicates the
portion of the total workforce that consists of mechanics. The
indicator is industry-specific and becomes most useful when Fig. 3 - Best-in-Class benchmarks-shaded blocks show typical
either comparing like businesses or plotting trends over time. metrics for North American integrated steel mills.
The total craft designations data represent the number of
formally classified job descriptions of those executing the The application of benchmarks is most effective when work
maintenance work. groups benchmark themselves and, consequently, self-discover
Training commitments are reviewed in terms of total time their own improvement opportunities.
provided for training mechanics and in terms of the expenditures There are seven steps in applying benchmarks:
provided (excluding wages of mechanics). Recent studies show an
increase over data from the 1980s.
• Validation.

Iron and Steel Engineer 3 October 1998

• Calculation.
• Comparison.
• Prioritization.
• Best practice search.
• Best practice application.
• Audit and improvements.

Step 1. Validation - The first step for a work group is to

convince itself that the benchmarks proposed are valid and form a
proper basis for performance comparison. Rather than contact
numerous other companies, eg, Xerox, it is suggested that the
work group review the numerous magazine articles in the public
domain that have been written by companies such as AT Kearney,
Fluor Daniel, DuPont, and Kurt Salmon. Joining the Society of
Maintenance and Reliability Professionals (SMRP) will provide
additional sets of benchmark data. After reviewing this
information, most work groups are convinced that the
Best-In-Class benchmarks provide a reasonable basis to measure
the results and processes employed for their maintenance
activities.

Step 2. Calculation - After validation, the next step is for the

work groups doing the benchmarking is to calculate its process
and results metrics.

Step 3. Comparison - During this vital step, work groups

compare their metrics to the benchmarks. Metrics that fall into the
fourth, third, or second quartiles indicate potential for the most
rapid, significant improvement.

Step 4. Prioritization - With an emphasis on results and process

improvement, the work groups then rank the importance of
improving their standing against the quartile table benchmarks.

Step 5. Best practice search - In the areas they have ranked

most important, the work groups search for the practices that
create top quartile performance. Contacting companies that have
achieved maintenance excellence awards is a common approach
for completing the step. A more expeditious approach sometimes
is to access maintenance best practice data bases maintained by
companies such as Fluor Daniel.

Step 6. Best practice application - Once the practices that

promote superior performance in the important metrics have been
isolated, the work group must implement a form of the practices
that provide superior performance. This can be a simple exercise
or a significant one. When the cost is significant, a common
approach is to reference the computed value of top quartile
performance against the cost of implementing associated best
practices. This typically provides needed cost justifications.

Step 7. Audit and improvement - Monitoring perfor-

mance against a targeted benchmark is essential for
feedback to ensure the targets are achieved. All
stakeholders must have access to and involvement with
the metrics routinely.

Iron and Steel Engineer 4 October 1998