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Joint Reward System Drives Results and Teamwork

by Christer Idhammar

One of the reasons many reliability and maintenance improvement initiatives fail to deliver sustaining results is lack of team work between and within departments. It is still common that operations and maintenance do not work as the team they should be. The engineering department is sometimes described as “the black hole” by the maintenance staff. “This is where we send drawings to be updated, and we never see them again” is not an uncommon comment.

It is a given that all people in a plant should work for the same goal; to competitively manufacture a quality product on time. This could be measured in Overall Production Efficiency or Production Reliability or Prime Tons/cost. If this overall measurement would be applied to all departments and coupled with each department’s measurement and reward systems, an organization stands a better chance to work in collaboration towards the same goal. This is however not always the case, so why is it so?

Ask yourselves what the most important accomplishment is for a:

  • Project Manager
  • Operations Manager
  • Maintenance Manager
  • Store room Manager

A project manager is rewarded if a project is done on time and at lowest cost. Lowest cost does seldom include the future total cost of ownership, therefore you might end up with substandard equipment, no documentation or relevant training in operating and maintaining equipment etc. This will result in higher operations and maintenance costs. But that is not the project manager’s problem!

An operations manager is rewarded if quality production throughput is improved (improved reliability) and if operations costs are down. Maintenance costs are not always the responsibility of the operations manager.

A maintenance manager is rewarded if maintenance costs are going down. Of course everybody knows that the right thing to say is, that it is more important to keep equipment running. But many maintenance managers will agree that they might be in more trouble if they overspend the maintenance budget than if the equipment reliability suffered.

A store room manager is rewarded if he/she manages to lower inventory value. This often leads to that the value of what is kept in store is going down, but because people start keeping their own stores in areas, the total cost for spare parts and material is going up, but this is hidden in maintenance costs. Waste in the form of down time and waiting time for maintenance people because of missing spare parts and material is also hidden in other departments. A better measurement would be – With maintained service level of 97%, reduce inventory value.

The above examples are common and these reward systems does not impel true and necessary collaboration between departments.

If an organization is serious about a closer integration between departments, the rewards systems must be designed to drive everybody’s actions and performance toward the same goal and rewards.

I like to offer some examples:

Results Measurements

All results are outcomes of actions.

  • Operations, Maintenance, Engineering and Stores are all measured and rewarded by Overall Production Efficiency (Production Reliability) and Total Manufacturing Costs.

Action Measurements

  • MTBB – Mean Time Between Breaks for a paper machine. Joint measurement between operations and maintenance.
  • Trend of average vibration level – Joint measurement between operations and maintenance. Measures operating practices as well as execution of precision maintenance.
  • Trend of average life of common components such as pumps, motors, rotary steam joints. Measures operating practices as well as execution of precision maintenance.
  • Scheduled to unscheduled shut downs – not divided by department. Joint measurement between operations and maintenance.
  • Maintenance scheduling compliance for shut downs and weekly daily- joint measurement between operations and maintenance. Measures how well operations and maintenance communicate and execute agreed upon disciplines.

Many more examples can be given. As can be seen above, traditional maintenance measurements are here suggested being joint measurements. The causes to paper breaks, high vibration levels, short component lives, poor shut down performance etc. is very seldom only maintenance or operations related, these indicators should therefore be a measurement on how well these departments work together, and be used as tools to encourage collaboration between departments.

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