WJI Nov 2017 Feature Sample

WIREE JOU JOURNAL NOVEMBER 2017

®

50 RS YEA 8-2017 196

INTERNATIONAL www.wirenet.org

OFFICIAL PUBLICATION OF THE WIRE ASSOCIATION

d rt o r po e e ir r w us I N T E R N A T I On NAL o b

FEATURE

Maintenance: a different view

It may be tempting to see maintenance as a necessary evil, but its contributions could be more appealing if it could be pictured as low-hanging fruit. This feature—which includes a presentation on why change is difficult, comments from a consultant who did his own survey, one company’s efforts to get qualified staffers, and more—suggests that there are direct and indirect benefits to be had. Also, do see two related technical papers (p. 52 and p. 60).

Why manufacturers often struggle with maintenance The below edited article and images were excerpted from “The maintenance advantage in manufacturing,” a presentation by the Boston Consulting Group (BCG/www.bcg.com), a global management consulting firm. ufacturers often struggle to determine which improvement Why is improving maintenance productivity so measures to prioritize and the sequence for implementing challenging? them. Once an implementation plan is developed, manGood question. Many manufacturers have historicalufacturers must execute it in a way that minimizes disly taken a hands-off approach to maintenance labor. ruption to equipment operations and maintenance staff. A Maintenance workers have been regarded as skilled transformation craftsmen, and involving indimanagement rect labor such has feared as maintenance alienating them workers are by introducing also more comnew stanplicated than dards, metrics changes that and practices affect direct to improve labor assigned productivity. to a machine or Manufacturers line. The nature have also of maintenance sought to keep work (fulfilling maintenance work orders) staffing levels makes it more high to ensure challenging to that equipment measure probreakdowns ductivity and are addressed effectiveness, immediately.

BCG Chart 1. Savings of 10-20% are feasible from the above cost categories.. to identify the The savings root causes from minimizing of problems, and to make improvements. And a shift in production downtime are thought to outweigh the costs mindset is required to get skilled craftsmen with potenof keeping excess capacity in the maintenance labor pool. tially decades of experience to accept a new approach to But this traditional mindset has come with a price. their jobs. These overall challenges translate into specific Manufacturers are missing out on opportunities to challenges in strategy, execution, and governance. improve overall operating performance as well as reduce A manufacturer must be able to prioritize areas for maintenance costs. Enabling the maintenance function productivity improvements. This requires distinguishing to provide better service to production promotes better among different types of equipment with respect to the equipment performance. The resulting increase in uptime optimal level of planned maintenance and the correspondcan lead to significant operating improvements. At a ing capacity requirements. However, many manufacturers global steel manufacturer, the introduction of world-class have not made such an assessment of criticality. The maintenance practices at a single plant (see Chart 1) failure to do so leads to an undifferentiated approach and reduced equipment downtime due to maintenance delays a misallocation of scarce resources that can cause highly by 13%, resulting in almost $5 million in annual savings. disruptive breakdowns. An effective maintenance strategy Improving the productivity of maintenance labor is not a entails rethinking the traditional roles of production and simple task. There is no one-size-fits-all approach—man42 | WIRE JOURNAL INTERNATIONAL

ment is heavily used, and not enough on the second and third shifts, when it is easier to work on the equipment.

The direct reduction in costs can also be significant.

Per our analysis, the portion of a plant’s cost structure that is usually addressable—labor, repair and maintenance (R&M) parts and tools, and utilities—accounts for approximately 15% of total costs for the typical organization. Experience shows that improvements in maintenance productivity can enable 10 to 20% savings on these addressable costs, reducing conversion costs by 2 to 4%. (See Chart 2.)

Manufacturers with a portfolio of plants can potentially capture more value by using a central program-management office to support best-practice sharing and performance measurement.

While older workers still dominate the maintenance labor pool, the proportion of younger employees is increasing, and they are often more open to accepting new ways of working. Also, maintenance work can be performed according to a predictable schedule using standardized methods and a common set of tools.

Standardization helps to reduce variability in performance and thereby improve productivity. Finally, manufacturing productivity and costs will suffer if the maintenance function does not raise its game to handle the workload.

A multi-step approach to maximizing maintenance efficiency to corrective maintenance to scheduling and use of the key levers, and more. The BCG Maintenance Maturity Assessment (MMA) can assess how well this is done compared to best-in-class performance.

2) Solution identification The proposed and planning. framework One must covers three understand dimensions— a plant’s strategy, exelimitations cution, and before it can governance— be improved. and includes The levers 14 activities, cover critical or “levers.” A areas, from comparison historical with best pracmaintenance tices in terms of records and these levers is the regular used to assess BCG Chart 2. The 14 “levers” of maintenance practices of maintenance staff, to analysis of plant abnormalities, setting standards performance, with levers applied to improve productivity for what should be done and when, and estimating the per the assessment’s results. Plants may address some potential gains to be had. of these levers, but few address all of them well. A four3-4) Pilot and rollout. This step should start in one area phase framework can be used. and be done in waves, modified as need be.

1) Diagnostic. This focuses on aspects from how resources are used and the labor ratio of preventative With the backdrop of the main article on this page, this section, from the same BCG report, summarizes a maintenance framework that can provide real-world results. For full details, contact BCG.

NOVEMBER 2017 | 43

FEATURE

maintenance personnel, transitioning from “I produce, you repair” to “We are all responsible for equipment upkeep.”

Many manufacturers have established maintenance routines that are hard to change. Manufacturers often base the schedule on the equipment supplier’s recommendation and do not revise it based on the plant’s actual usage pattern. They also lack processes to ensure that maintenance and production can coordinate their activities so maintenance workers will have access to machines at the scheduled time.

Maintenance labor is typically viewed as a fixed cost, and manufacturers determine the maintenance workforce based on the number of production lines rather than the amount of planned maintenance and an estimate of unplanned equipment downtime. Also, workers frequently don’t have the flexibility to take on tasks that call for specific skills, such as pipefitter, welder, machine repairman, oiler, carpenter, tool and die maker or electrician. Manufacturers need to strike the right balance in deciding whether workers should be dedicated to a line or department or placed in a single labor pool serving an entire plant. Staffing schedules should take advantage of equipment’s planned downtime. Plants often schedule too many maintenance workers on the first shift, when equip-

Steel access: a divisive industry issue As the U.S. industry continues to grapple with a global imbalance of steel capacity, there are not one but two separate vehicles: one being an ongoing Section 232 action, a political approach that could take place this year (see next page), the other being ongoing federal trade action relief sought by domestic wire rod producers.

The following pages seek to provide some perspective, most of it on the wire rod case. The Section 232 action is important, only the petition brought by four U.S. wire rod producers and supported by United Steel Workers, can be seen as direct a hit—or blessing, depending on one’s perspective—as there is.

As access to competitively priced wire rod is vital for wire manufacturers, it’s understandable that the remedies sought by wire rod producers has etched deep lines between the two groups. The chasm is broad enough that each side—armed with hard stats and skilled trade attorneys—insist that if their desired action (or non-action) does not happen, the results will be disastrous.

The wire drawing members of the American Wire Producers Association (AWPA) and Executive

Director Kimberly Korbel were on opposite sides of this matter with the four wire rod petitioners before the U.S. International Trade Council (ITC).

The rod producers also are part of AWPA, albeit not voting members.

Korbel, AWPA President John T. Johnson and other members spoke at the ITC hearing, as did representatives for three of the four wire rod producers. Excerpts from their comments are presented on the following pages. A neutral party reading them may well conclude that both sides presented sound arguments at the ITC hearing.

So who’s right? Who’s wrong? Do those concepts even apply?

Of note, Canada, the largest exporter of wire rod to the U.S., is not part of this matter.

This report does not set out to plunk white or black hats on either side. Rather, it presents the following: some of the key points each side made to the ITC; observations from an industry speaker/consultant; a company CEO who wants more demanded from any wire exporter; the role (or non-role) of the scope in an AD hearing or review; a philosophical twist; and more.

Volume of Rod, Wire, and Wire Products Imports 2016 and 2017 YTD — July 2017 939900

Carbon Rod

1027853 19547 25134

Stainless Rod

119286 161584

Alloy Rod

367393 367163

Carbon Wire 26702 31194

Stainless Wire

91274 78912

Alloy Wire

180190 183949

Wire Strand

2016

71656 79614

Wire Rope

2017 214064 230452

Other Wire Products

358450 381609

Nails 251959 253579

Misc Wire Products

786577 812025

Fasteners 0

200000

400000

600000

800000

1000000

The above AWPA chart reflects the scope and range of wire rod products that may be affected..

2 | Platinum Member Report

1200000