Lessons Learned from Reliability and
Maintenance Benchmarking
What Does World-Class Performance Look Like?
Presented by: Tom Svantesson
Senior RAM Consultant
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This presentation is confidential and intended for the sole use of the client to
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Protecting Intellectual Property (IP)
Mutual Trust and Obligations
Methodology, Metrics
& Database
Input Data
Client IP
Aggregated Industry
Results
Company Annual
Reports & Websites
Investment Community
Taxing Authorities
Client Results
Solomon’s IP
Non-Disclosure Agreement (NDA)
Consulting Firms
Potential Third Parties
Written authorization required before sharing IP with a third party
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Comparative Performance Analysis
• Solomon began its Comparative Performance Analysis
(CPA) approach to benchmarking in 1980
• Comparative Performance Analysis
 Fuel Study (>85% of global refining)
 Olefin Study (>67% of global manufacturing)
 RAM Study (>1,000 process industry plants)
 Power Study (power generation)
 Pipeline and Terminal Studies
 Other Specialty Studies
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International Study of Plant Reliability
and Maintenance Effectiveness
• Solomon began benchmarking Reliability and
Maintenance (RAM) in 1996
• Process industry
 Chemical/petrochemical
 Refining
Implemented in the
1996 chemical process industry
using 17 process families
covering >200 chemicals
1995
RAM Study developed in response to
a request from the Chemical
Manufacturers Association
2000
Adapted for refining using Solomon
Fuels Study process families
(e.g., CDU, FCC, etc.)
Developed Equivalent
Maintenance Complexity
(EMC) factor to enhance
data normalization
2008
RAM Study redesign
based on client feedback
2011
2010
RAM Study database contains
>1,000 sites with >8,000
process units
2012
Re-designed RAM Study launched
with increased value and
decreased client effort
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RAM Study Indices
• Reliability and Maintenance Effectiveness Index (RAM EI)
 Lost margin (due to RAM causes)
 Maintenance cost
• Maintenance Cost Index (MCI) – cost improvement
• Mechanical Availability – reliability
• Direct Maintenance Cost (craft labor and material)
• Indirect Maintenance Cost (supervision and staff)
• Routine and Turnaround Maintenance
• Company and Contractor
• Maintenance Expense and Maintenance Capital
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What is Benchmarking?
• The process of comparing performance against others in
the same or similar industry to
 Confirm competitive position
 Gauge the opportunity for improvement
 Identify practices employed by best performers
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What is Reliability Benchmarking?
• The measurement and comparison of downtime
(mechanical unavailability) attributable to RAM causes
• Downtime translates into lost margin that is often
overlooked while focusing on maintenance costs
• Margin loss should be monetized to gain an appreciation
for the value of lost production
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What is Maintenance Benchmarking?
• The measurement and comparison of routine and
turnaround maintenance costs
 Includes direct and indirect costs for company and
contractors
 Also includes maintenance capital costs, which are often
ignored and can skew performance
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RAM Benchmarking?
• Benchmarking is the use of actual operational
performance data to track performance trends, to
compare to others, and to identify best practices
• Benchmarks are fact-based and should not be confused
with opinion
• Benchmark thresholds are realistic, having already been
achieved by a subset of the total population
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Why is RAM Benchmarking Valuable?
Historically, reliability and maintenance have not
been managed well, resulting in…
HIGH cost and
POOR reliability
Maintenance is the largest fixed (non-volume-related) cost
in a refinery or chemical/petrochemical plant
Maintenance is the third largest overall cost behind raw
materials and energy
• Every dollar of reduced maintenance spending goes to the
bottom line; consider how much sales would be needed!
• Every hour of increased uptime increases capacity without
capital investment – free capacity!
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Benchmarking
Lessons Learned
Myths & Facts!
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Reliability and Maintenance are
Inextricably Linked
Reliability
Cannot cost-cut your way
to improved reliability
Maintenance
Maintenance costs are
driven by reliability…or
the lack thereof
A 1% increase in mechanical availability can
translate into a 10% reduction in maintenance cost
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Traditional Approach
Pressure Applied Here
Maintenance
Costs
Reliability
(Margin)
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Initial Traditional Result
Pressure Applied Here
Lower
Reliability
(Margin)
Lower
Maintenance
Costs
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Long-Term Traditional Result
Higher
Maintenance
Costs
Lower
Reliability
(Margin)
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Progressive Approach
Maintenance
Costs
Reliability
(Margin)
Apply Pressure Here
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Progressive Result
Higher
Reliability
(Margin)
Lower
Maintenance
Costs
Apply Pressure Here
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Impact of RAM on Replacement Capital
Quartile
Performance
Average Maintenance
Capital Spent, % of PRV
1
2.1
2
2.8
3
3.4
4
4.6
Conclusion: Better maintenance of existing assets results in lower
replacement capital cost requirements. Conversely, poor maintenance
of existing assets results in higher replacement capital cost
requirements.
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Factors that Influence RAM Performance
>90% Confidence Level
• Reliability (failure avoidance)
• Direct costs (craft labor and repair materials)
• Maintenance support (e.g., foremen, planners)
• Turnarounds (frequency and duration)
• Unplanned failures
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Factors that Influence RAM Performance
>90% Confidence Level
• Maintenance planning and scheduling
• Craft skills and experience
• Spare parts availability
• Operator engagement
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Factors that Do Not Influence RAM
Performance >90% Confidence Level
• Plant or refinery age
• Site footprint (geographic size)
• Plant replacement value
• Labor rates
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Factors that Do Not Influence RAM
Performance >90% Confidence Level
• Contract versus in-house maintenance
• Production rates
• Support costs (maintenance/reliability engineers)
• Management years of experience
• Union versus non-union
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Path to First-Quartile (Q1)
RAM Performance
Effectiveness
Mechanical Availability, %
>98
Industry Leaders
Sustainable
97
High Mechanical Availability
and Low Cost
96
Low Mechanical Availability
and High Cost
Not Sustainable
95
Facility
<94
1
1.4
>10
Maintenance Cost, % (US $/PRV)
Efficiency
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Do You Need to Benchmark Your
Reliability Performance?
Mechanical availability <96.7%
Unreliability (characterized by equipment
failures) is your largest downtime contributor
Equipment failures are driving maintenance behaviors
Total plant maintenance turnaround (shutdown)
occurs more frequently than once every 10 years
Increased uptime would provide much needed capacity
Breakdown maintenance is your normal
mode of operation
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Do You Need to Benchmark Your
Maintenance Performance?
Maintenance costs are >1.4% of PRV
Maintenance costs are your highest fixed cost
Maintenance costs are not effectively controlled
Maintenance activities are predominantly
corrective in nature (something broke, now you
must repair it)
Corrective maintenance costs exceed preventive and
predictive maintenance costs
Reactive maintenance is your normal mode
of operation
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RAM Effectiveness Index
Chemicals – Quartiles of Performance (Example)
RAM EI, % of PRV
12
10
8
6
4
2
0
Q1
Q2
Q3
Q4
Site 1 Site 2 Site 3
Quartiles of RAM EI
Value of Lost Production
Total Maintenance Cost
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RAM Opportunities, US $M
0
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T/A - Indirects
T/A - IE Matl Cost
T/A - FP Matl Cost
T/A - IE Work Hours
T/A - FP Work Hours
T/A - RE Matl Cost
Ann T/A & Short OHs Prod Losses
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RT - RE Matl Cost
Rate Reductions
T/A - RE Work Hours
T/A - Wages
RT - IE Matl Cost
RT - FP Work Hours
RT - RE Work Hours
RT - IE Work Hours
RT - Wages
RT - Indirects
RT - FP Matl Cost
Equip Failure Prod Losses
RAM Study Deliverables
Site Detailed Opportunities Report (Example)
Total Opportunities = US $40M
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6
4
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MTBF – Pumps
Meantime Between Failures, months
By Quartiles of Pump MTBF (Example)
120
100
80
60
40
20
0
Q1
Q2
Q3
Q4
Site 1 Site 2 Site 3
Quartiles of Pump MTBF
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Summary
• You are not a world-class performer if
 Maintenance costs are not below 1.4% of PRV
 Mechanical availability is not above 96.7%
• Best performers continue to get better while poor
performers continue to fall further behind
• Regrettably, for some, it is already too late
• The path to world-class performance begins with the first
step…what are you waiting for?
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Thank You!