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Reliability Improvements = Cost Reduction (Part 1)

by Christer Idhammar

In the May column, I discussed results that a mill had experienced in the ten years following implementation of initiatives with a primary focus on cutting costs as quickly and extensively as possible. In summary, it proved to be a financial disaster. 

In this article, I will discuss what happened in another pulp mill during a similar time period. 

PRIMARY FOCUS: RELIABILITY. This mill decided to focus primarily on reliability improvements instead of cost reduction alone. This program included the following activities:

  • Development of a clearly spoken and well-established partnership between operations, engineering, and maintenance.
  • Replacement of a reactive maintenance policy with one that is planned and scheduled. Formerly, less than 10% of all maintenance work was planned and scheduled; ten years later, more than 85% of all work was executed after being planned and scheduled.
  • Implementation of a strong vibration analysis program; prior to the project, the average vibration level was 0.23 in./sec, but today, it has been decreased to 0.11 in./sec.
  • Professional training of lubricators; this training resulted in better filtration, including water removal, better seals, oil testing, and use of fewer types of lubricants. Cost for lubrication was reduced by 60%.
    Dynamic balancing of all rotating equipment above 1,000 rpm before being put into service;
  • Improvement of many equipment bases by installation of Jack-bolts to facilitate better alignment precision;
  • Marking and rotating of electric motors and rolls in store at an interval of twice per month;
  • Implementation of alignment training, standards, and execution;
  • Analysis and improvement of stores inventory and services; by maintaining a service level of more than 96% to maintenance, stores value was reduced by more than 30%.
  • Adherence to preventive maintenance schedules increased more than 90%.

RELIABILITY BRINGS RESULTS. During the first three years of the reliability improvement program, maintenance costs increased a total of 8% (2.5% to 3.0% per year). During the same period, reliability - and, consequently, production throughput - increased steadily from 83% to 90%. After the initial three years, the reliability continued to increase to 92%, resulting in a reduction of maintenance costs by 40% (Figure 1). Figure 2 shows the financial impacts of the reliability improvement program.

During the first three years, maintenance costs increased 8% and then began to fall, ending with a final reduction of 40%.Reliability and production throughput increased steadily to a total of over 92% (time and quality performance).

FIGURE 1. During the first three years, maintenance costs increased 8% and then began to fall, ending with a final reduction of 40%.Reliability and production throughput increased steadily to a total of over 92% (time and quality performance).

 

 

 

 

 

Short-term increase in maintenance costs of about $3.3 million resulted in savings of $17 million annually. Value of increased and sold production represented $18 million annually ($ values are per year).

FIGURE 2. Short-term increase in maintenance costs of about $3.3 million resulted in savings of $17 million annually. Value of increased and sold production represented $18 million annually ($ values are per year).

Read Part 2