Cutting Maintenance Cost Through Better Planning
David Krings, Potlatch
Cutting costs has become a high priority, due to the recent
economic conditions. Maintenance shutdowns are a major part
of the annual budget at most mills, and are usually a target
for cost reduction. Maintenance shutdown costs can be reduced
by 30-50 percent from historical levels, with start up after
the outage occurring smoothly and predictably. Using simple
and effective shutdown management techniques can result in
such improvements, creating savings equal to several weeks
of additional production each year. This can be done without
sacrificing any work, or canceling any scheduled downtime.
Effective shutdown management is critical to the operation
of most facilities. Without well-planned and executed shutdowns,
equipment reliability suffers, and the plant pays the price
with poor quality and lost production. Becoming proficient
at managing shutdowns is the path to reducing overall downtime
costs, so the shutdown itself does not consume the savings
it is capable of generating. It is an exercise in waste reduction.
The actions needed to make shutdowns more cost effective can
be taken immediately if the principles of successful shutdown
management are clearly understood.
THREE KEY CONCEPTS. There are three basic
concepts that govern how we should manage the planning and
scheduling of each shutdown. Shutdowns have a serious affect
on mill success, and low-cost, quality shutdown management
techniques are different from traditional practices. The three
important concepts that differentiate a well-managed shutdown
from a poorly managed one are:
- What type of work is executed during the shutdown
- When the shutdown work list is finalized
- How well the shutdown work is planned
What type of work is executed during the shutdown:
It is vitally important that the shutdown work list be kept
as short as possible. This is both a means to reduce costs,
and the primary method for remaining focused on work that can
only be done during a major outage. All other work should be
deferred to a time outside of the shutdown window. The main
activity during the shutdown should be preventive in nature
(including equipment inspections), followed by cleaning and
repairs. When this basic concept is followed, it results in
reduced overtime, lower contractor costs and superior documentation.
It is also almost certain that the budget will be met. During
the April 2001 steam utility outage at Potlatch's Cloquet mill,
one department completed its work within 3% of its budgeted
cost using the short work list method for the second year in
It is common to find that many mill personnel believe that
it is wise to execute as much work as possible during a major
outage, arguing that major shutdowns should be filled with
the maximum activity. There is also pressure to eliminate scheduled
minor repair days by executing this work during the major outage
instead. It is likely that additional costs for overtime labor,
expedited parts delivery, execution of unplanned work and reduced
worker efficiency will exceed the apparent savings. In one
case, insisting on the maximum workload possible during the
shutdown to avoid a scheduled minor repair day cost $300,000
more in labor alone than taking the minor downtime as scheduled.
The same work would have been completed in either case.
Major shutdowns should never be used to avoid taking periodic
minor downtime. Minor downtime is important, because it provides
an opportunity to do preventive maintenance and repairs that
cannot be done during operation. Each facility must determine
the frequency of its planned minor downtime events, and once
an effective cycle is established, it should not be interrupted
There is a delicate balance between scheduled downtime and
plant reliability. Major shutdown work is intended to support
maintenance efforts carried out until the next major shutdown,
including minor downtime repairs. An easy measurement technique
is available to help in determining whether outages and other
maintenance work are providing maximum value. If the ratio
of the Mean Time Between Production Loss (MTBPL) and Mean Production
Loss (MPL) 1 are tracked over time, one can readily see if
the plant is experiencing greater reliability and less severe
failures (Figure 1).
FIGURE 1. Increasing MTBPL vs. MPL indicates
that the efforts of maintenance and operations are resulting
in improved productivity. Increasing the time between scheduled
outages or reducing the time available for repairs during the
scheduled outages may cause this trend to turn downward due
to increased unscheduled breakdowns.
When the shutdown work list is finalized: While
this is not a budget development exercise, shutdowns do have
a significant impact on the budget. The long-term plan for
shutdown management should be outlined in the budget forecast
3-10 years before execution. In the long-term plan, there should
be fairly detailed lists of the major work that must be done
during each shutdown in the coming years. For instance, boiler
inspections, relining of large tile tanks, sewer repairs and
electrical power distribution system inspections should be
planned and estimated in the long-term plan. Some funds must
also be included for smaller repairs needed during the shutdown,
which is often estimated as a lump sum figure. The long-term
plan is the tool for controlling the scope of each outage.
Long-term planning is a critical and often overlooked piece
of the proactive approach to maintenance. Without a long-term
plan, major repairs and inspections often do not get adequate
attention until it is too late to properly prepare for their
Normally, a new operating budget is constructed annually.
In order to get a major shutdown accurately budgeted, the scope,
duration and timing of the outage must be supplied before the
budget is approved. This means that any major shutdown must
be scoped to an accuracy of +/- 10% at least 18 months before
it is scheduled to take place, in order for the budget process
to proceed. This is the short-term plan for shutdown management.
The short-term plan can be developed using
the long-term plan as a starting point. In addition to the
large, expensive repairs, the short-term plan must include
detailed lists and estimates for the smaller, less costly work.
As the budget and shutdown plan enter the approval process,
it should be clear what the upcoming outage will accomplish.
It should be relatively easy to establish which projects are
driving the outage. If this is not the case, then a shutdown
is probably not justified.
It is acceptable to rearrange and substitute jobs for an
outage up to six months before it occurs, provided the budget
contains funding for the work. Plant management should seriously
enforce the six-month lockdown, and anything brought up for
addition after the lockdown date should be carefully scrutinized.
Usually, it is necessary to drop another job to make time and
funds available to do the additional work. If this rule is
not enforced, planning efficiency for the shutdown will rapidly
drop to unacceptable levels. Parts delivery issues will also
be a problem. Jobs added on short notice before a shutdown
is generally the cause of most disruption to planned and scheduled
work. Also, it is important to remember that planning work
is expensive, and cancellation of a job that is already planned
with parts onsite is extremely wasteful.
The use of specific, challenging lockdown dates is a concept
that may be difficult to accept. The 18-month budgetary work
list is often misunderstood, because it is not immediately
clear how anyone could know in advance what repairs would be
needed. This is where planning comes into play. Each facility
usually knows what work must be done every outage. Review repair
histories, and make an educated estimate of the time, materials
and expenses that commonly occur with each project. If you
don't have this information, now is an appropriate time to
start building a history file for all equipment. Planning ahead
for outages will get simpler as the proactive approach gains
acceptance (Figure 2).
FIGURE 2. Success shutdown planning and scheduling
depends on key events occurring far in advance. Continuous
improvement of the process requires a detailed critique of
each shutdown be performed, with input solicited from maintenance,
operations, engineering, and supply stream personnel.
A word of caution is in order at this point. Do not estimate
the budget for shutdowns using budget figures from the past.
You will over-budget significantly, if the plant has adopted
the new methods. It is not uncommon to achieve shutdown cost
reductions of 50 percent or more.
How well the shutdown work is planned: The quality
of the planning time that is invested in each shutdown will
directly affect the completed work. More work will get executed
with fewer people, in less time, if it is well planned. Repair
quality will increase, and the cost for each repair will drop
significantly. Unplanned repair work orders that used to take
8 hours to complete will take less than 2 hours when planned
(on average). This is due to a combination of better instructions,
easy access to parts, tools and materials, and better coordination
of resources. In some cases, the savings will be as high as
Each work order (sometimes called a job order or service
order) should be planned before execution. This includes all
preventive maintenance work, as well as repairs and route checks.
It is very important that adequate personnel be dedicated to
planning work full time. If this is not done, planners will
often get pulled into the role of supervisor, craftsperson
or parts chaser. None of these activities will increase the
efficiency of maintenance activities by the magnitude that
planning will accomplish.
Each planned job is accompanied by a work package, which
is a written document containing all information needed to
execute the work. The work package includes:
- A clear scope of the work required
- An accurate estimate of the manpower required
- A detailed procedure for performing the work
- A complete list of all tools and equipment required
- All non-standard tools acquired and staged at work site
- A detailed parts list
- The location of the parts, staged near the work area in
- All necessary permits attached
- Sketches, drawings, digital photographs as necessary
- Contact information, should questions arise
- Special notes, instructions
- Coordinated vendor support etc.
- Schedule for execution for each craft, production etc.
- Safety and environmental hazard communication
- Personal Protective Equipment (PPE) required
Any work that is placed on the shutdown schedule (or on any
schedule) should be fully planned. If this is not done, it
effectively places the burden of planning the job on the craftsperson.
This slows the work tremendously, and creates numerous opportunities
for delays, mistakes and confusion. It is also much safer to
execute planned work, because the hazards are methodically
identified and avoided.
Technicians who are accustomed to working on planned jobs
become the greatest source of valuable information in the process.
They identify weaknesses in the planned work packages, and
they have the time to document these weaknesses for correction.
As time passes, most routine repairs will have work packages
collected in the history file. When that happens, the time
required to plan repeated jobs in the future will be reduced,
and the planners can shift their focus to continuous improvement
efforts. This is the point where proactive maintenance begins
to save increasingly large amounts of money. The knowledge
base for doing almost all maintenance activities will then
be accessible to the entire workforce.
WHERE DO THE SAVINGS COME FROM? In a side-by-side
comparison of quality shutdown management philosophy versus
a poor shutdown approach, it becomes very clear where opportunities
for cost reductions exist (Figure 3).
FIGURE 3. Savings from shutdown management
are a result from good planning and scheduling.
CONCLUSION. Shutdown management is an effective
tool for reducing costs and increasing plant productivity.
When the decision is made to identify major outage work far
in advance and then carefully plan the work for maximum ease
of execution, the result will be lower costs. If, at the same
time, disruptions to the process (such as late add-on work)
are kept under control, there will be sufficient resources
available to continually refine and improve the shutdown model
for even greater savings.
Christer Idhammar, "Operations + Maintenance = Production
II," Article, Pulp & Paper, October 2000, IDCON,