A coordinated approach to asset management has value for facilities, equipment and the people responsible for both.
From the board room to the break room, improving asset performance through better management is on the minds of a lot of food and beverage manufacturing professionals.
A sleek new building that sips energy and utilizes natural light is all well and good, but the assets of production pay the bills. Managing the equipment and machinery in the plant is front and center in organizations’ thinking, come good times or bad. When new plant construction bottomed out in 2008 and 2009, relocation of production lines sustained many of the architectural engineering (A/E) firms serving the food industry. “Think of it as a line on rollers,” Walt Staehle half-jokingly says. Much of the relocation work is driven by a focus on boosting supply chain efficiencies, allows the former Kraft production manager and current Siemens automation executive, but the activity underscores a simple truth: It’s easier to walk away from a building than a production line.
“Over the last two years, companies have tried to be as efficient as possible in the space they have” to avoid undertaking new construction, observes Michelle Comerford, who heads Austin Consulting’s site selection group. An uptick in greenfield projects began in late 2010 as economic pressures eased and manufacturers maxed out production capacity in existing plants, but decommissioning and relocating of lines accounted for a lopsided share of the Cleveland-based A/E firm’s business in the recent past.
By and large, line relocations are driven by one of two factors: a desire to fortify a regional production network to reduce or better manage supply chain costs, oftentimes by lowering labor costs. Line relocations can backfire, however. One food engineer recalls the unfortunate fate of a dry soup manufacturer that used to operate in his facility: After being shipped several hundred miles to another plant, the well-tuned production line never performed the same and eventually was mothballed. The human assets left behind proved to be the key to efficient throughput.
“As technology develops, the importance of labor skills increases,” acknowledges Comerford. “There’s something to be said for building up the skill level in a community over many years.” Recognizing the importance of skilled operators, maintenance technicians and others, food companies often relocate a core group when production shifts to another location, making quality of life a consideration in site selection. The people side of the equation is not limited to highly automated production. “Fresh-cut produce is highly manual and requires specialized people with unique skills,” she notes. “It can take more analysis to move that type of operation.”
The acquisition wave that engulfed the food industry at the outset of the 21st century produced a glut of facilities that had to be divested. More than 40 Pillsbury plants transferred to General Mills ownership when that 2001 merger closed, putting thousands of managers, maintenance professionals and others in the accountants’ crosshairs. Reduced overhead is the essence of synergy from a business management perspective.
“Synergy means people are going to be fired,” concurs Brian Boyle, senior managing director of McGladrey Capital Markets’ food & beverage group. The Chicago investment banker, who represents both buyers and sellers of food plants, believes the industry is evolving toward a hybrid model in which manufacturers will maintain one megaplant and a network of regional production facilities to ease distribution vulnerabilities as fuel prices increase. Boyle considers many factors when deciding if a plant should be shuttered, and some are beyond the control of the local staff. Nonetheless, the viability of a facility and the jobs it supports is affected by the level of its automation and the quality and working condition of its equipment.
Obsolete equipment, local tax rates and economic incentives to relocate all can play a role in closing a plant, though Stellar’s Jim Oko cites supply chain considerations as the key to many plant closings. Before becoming director of process engineering at Jacksonville, FL-based Stellar, Oko helped lead a now-shuttered Smithfield pork facility. “The labor efficiency was great, the product was high quality, but it was not on a transportation corridor, and there were logistic inefficiencies,” he recalls.
Rather than dwell on factors beyond their control, production professionals need to focus on what they can control, beginning with the preventive maintenance program. Food safety is entwined with effective PM, and customers are demanding their suppliers upgrade food safety, making food companies receptive to capital spending that enhances it. “Sometimes it’s as simple as bringing a line back to its original specs,” says Oko. Pressure to accelerate throughput beyond design limitations results in lines that strain their operating parameters. “There has to be a handshake with production,” he says. “Maintenance is the most unforgiving job out there.”
Unfortunately, the handshake often doesn’t happen, observes reliability engineer Scott Patterson, partially because maintenance funding and PM opportunities are counter cycle: When production is running full tilt, money for PM is plentiful but the opportunity isn’t, and vice versa. Another problem is the tendency of organizations to reward short-sighted behavior. Instead of praising “the white knight who rides to the rescue as calamity looms,” companies should shower rewards on crews who head off disaster by performing diagnostics that flag component wear before major breakdowns occur, he says.
Before becoming corporate manager of reliability programs at Pittsburgh-based H.J. Heinz Co., Patterson spent the better part of three decades with Procter & Gamble and as a reliability consultant to industry. Infrared devices for thermal fingerprinting and stethoscopes for lubrication analysis long have been part of his condition-monitoring repertoire. At a pulp mill assignment, the cost of an hour of downtime was calculated at $100,000, so predictive maintenance was a given. But the cost of predictive tools has plummeted and is also within the reach of organizations where downtime costs are more modest. “A good infrared gun that used to go for $40,000 has fallen to $5,000,” Patterson says.
Ultrasonic devices also are useful tools in the right hands. Patterson uses them to calculate the thickness of process piping, a useful indicator of the condition of both the pipes and the vessels they are linked to. But the calculations require both data benchmarks and a level of skill operators can’t be expected to have without proper training. “You can pass the baton, but you have to prepare them to be successful or else they will fail,” he warns.
Instrument underutilization must be avoided, he cautions. Fellow electrical engineers often take ownership of infrared guns to identify heating and arcing in electrical connection, a useful starting point but not an end-all. He recommends applying the tool to motor and pump connections and other equipment to “learn what good looks like” and identify and replace worn bearings before machine failure occurs.
Operator-driven reliability is a concept being embraced by a growing number of manufacturing organizations. “People are looking beyond the cost of the asset to the cost of downtime,” reasons Terry Fisher, key account manager of the services division of SKF Inc. in Canandaigua, NY. “Within the total productive maintenance framework, it’s part of autonomous maintenance.”
Yet instead of reducing costs, operator-driven reliability can drive it up if inadequate training is provided, Fisher cautions. Over-lubrication is a major factor in bearing wear, yet organizations routinely reassign responsibility without defining the procedures. “Lubrication management has developed into a discipline of its own,” Fisher reflects. Without proper management, autonomous maintenance is destined for failure.
Operators also need to be familiar with condition monitoring tools and have an effective way to record the readings. Handheld devices are replacing clipboards, he says, simplifying data collection and paving the way to work-order generation through a computerized maintenance management system (CMMS).
Corrupt data undermine attempts to improve asset management. Root cause analysis of machine failures resulted in significant reductions in downtime at Kraft Food’s Chicago bakery, Plant Manager Steve Kunkle related in a presentation at the 2010 Food Automation & Manufacturing Conference, but those improvements would never have happened without the CMMS and data cleansing systems he instituted. When he came on board three years ago, data capture was a manual function. With manual systems, workers tend to report numbers that cast themselves in the best possible light, and the distorted picture of downtime that emerges frustrates efforts to maximize asset utilization.
“The key to success is data integrity,” Heinz’s Patterson agrees. “I would rather have no data than bad data and be chasing ghosts.”
Renewed interest in lean manufacturing and Six Sigma, along with expanding use of the OEE metric, helps focus attention on asset management, though their effectiveness in improving asset performance is in dispute. “OEE and efficiency numbers are well and good,” allows Jack Roper, controls group design manager at Boise, ID-based POWER Engineers Inc., “but often we find the OEE numbers go up and down, depending on the operations group behind it.” When equipment is ramped up beyond its design limits, consulting engineers will dial them back to improve overall equipment effectiveness. However, retuning operating parameters must be coupled with changes in how production managers, operators and maintenance technicians manage the assets. “We boosted OEE 20 percent at one plant simply by changing human behavior,” says Roper.
Packaging machinery may be the most stressed assets in a plant, according to Kurt Warzynski, manager-process engineering at Stellar. The velocity of change in package sizes and styles requires more changeovers and greater pressure to exceed design speeds. The sourcing of packaging materials can compound the stress.
John Gunst, POWER Engineers’ packaging design manager, cites a cartoner that was commissioned and validated with one type of paperboard, then was run with inferior stock. “It killed the operating efficiency of the machine,” he recalls. “The machines don’t change, but the raw materials and the people operating them change all the time.”
Lean principles can produce line designs that work against asset utilization, Gunst continues. A glaring example is the minimization or elimination of accumulation points. “You need the right amount of accumulation to keep your bottlenecks from shutting down the line,” he says, yet some lean proponents associate accumulation with muda, or waste, and try to do without surge protection. “Accumulation areas are not just a crutch for a failed system; they have a role,” he insists. “Six Sigma can be taken too far.”
CMMS also suffers from misperception. In a study sponsored by CMMS provider AssetPoint, researchers at the Aberdeen Group correlated reductions in maintenance costs and machine downtime and improvements in OEE to implementation of CMMS and other asset-management software (see chart on page 32). Heinz’s Patterson disputes that conclusion, however. Managers who expect quick reductions in maintenance costs are destined for disappointment, he says. “It’s not going to fix your process; it’s just going to track how you’re operating.” CMMS is a very good asset-management tool, he adds, but presenting it as a panacea “is like saying installing Microsoft Word on your computer will let you type 80 words a minute without error.”
The Aberdeen research, based on a survey of maintenance professionals, highlights one positive trend in asset management. Downtime reduction, not surprisingly, was the top goal for 57 percent of respondents. Close on its heels at 55 percent was asset-utilization improvement. Alignment of the goals of production with the goals of maintenance bodes well for improvements in asset management. A coordinated approach to assets- mechanical and human-is the most intelligent strategy for improving performance.
For more information:
Michelle Comerford, Austin Consulting, 440-544-2682
Brian Boyle, McGladrey Capital Markets LLC, 312-634-3481, firstname.lastname@example.org
John Gunst, POWER Engineers Inc., 208-288-6484, email@example.com
Jack Roper, POWER Engineers Inc., 208-867-3442, firstname.lastname@example.org
Terrance Fisher, SKF Inc., 800-523-1745, Terrance.A.Fisher@skf.com
Jim Oko, Stellar, 904-899-9224, email@example.com
Kurt Warzynski, Stellar, 904-260-2900