Value Driven Maintenance

1. Value Driven Maintenance Discover The Hidden Treasure In Your Organization Mark Haarman, Managing Partner Birmingham, 18 April 2012

2. Agenda 1. Maintenance Dilemma 4. Continuous Improvement 3. Most Valuable Maintenance Organization 2. Value Of Maintenance

3. Importance of Maintenance is Still Neglected • Each management will tell you that maintenance is important • “Without maintenance we will have no production and no safe working facilities” • However, in economic downtimes maintenance is primarily seen as cost center • Maintenance manager is not able to show the added value of maintenance .... • ... because he/she does not speak the language of the board • With all consequences as such

4. Value Driven Maintenance® (VDM) VDM is developed by Mainnovation in close cooperation with leading maintenance organizations from different industries VDM makes the economic added value of maintenance quantifiable and supports the priority setting VDM facilitates the development of the Most Valuable Maintenance Organization (MVMO) ... ... and makes maximum use of proven best practices and is fully embedded in leading EAM systems

5. Companies Using VDM Food & Beverages Life Sciences Paper & Pulp Manufacturing Energy & Utilities Water Oil & Chemicals Marine Public Transport Ports & Roads

6. Agenda 1. Maintenance Dilemma 4. Continuous Improvement 3. Most Valuable Maintenance Organization 2. Value Of Maintenance

7. Maintenance Value Drivers

8. Case - IFF • Leading company in flavors and fragrances • European production centre in Tilburg, The Netherlands • Company data: • Replacement asset value = € 105 M • Technical availability = 87% • EBITDA = € 40 M • Maintenance costs = € 2.8 M • SHE-factor = 1.0 • Value MRO inventory = € 1.1 M € 0 € 50 M € 12 M € 1 M

9. Case - BP

10. Agenda 1. Maintenance Dilemma 4. Continuous Improvement 3. Most Valuable Maintenance Organization 2. Value Of Maintenance

11. Maintenance Competences

12. Measure Performance with Control Panel

13. Benchmark Performance

14. Online Benchmarking With myVDM.com 14

15. Case - GlaxoSmithKline

16. Maximum Use of Proven Best Practices RBI SLA RCM Asset Based Costing TPM Operator Maintenance OEE Supply Chain Integration Condition Monitoring

17. Processes, People & IT

18. VDM Process Map 3.1 Collect maintenance related SHE- legislation 3.2 Translate SHE- legislation in PM strategy 3.3 Measure SHE factor and performance 2.3 Manage PM schedules and task lists 2.1 Manage PM strategy 2.2 Identify critical spares 2.4 Evaluate PM strategy 4.1 Budget maintenance costs 4.2 Monitor maintenance costs 4.3 Analyze maintenance costs 5.1 Receive notifications 5.2 Prepare work orders 5.4 Schedule work orders 5.5 Issue work orders 1.1 Plan equipment performance 1.2 Monitor equipment performance 1.3 Analyze performance losses 4.6 Claim damages 4.5 Claim warranties 4.4 Issue investment request 5.3 Manage work permits 5.6 Manage project 6.1 Execute maintenance 6.2 Register work order results 7.4 Count inventory 7.1 Receive and stock spares 7.2 Monitor inventory value 7.5 Manage catalogue 7.3 Issue spares 7.6 Transport spares 9.5 Calibrate tools 9.1 Manage Skill profiles 9.2 Manage personal certificates 9.3 Manage workforce capacity 9.4 Register 7.7 Create purchase requests 7.8 Review proposals 7.9 Manage frame agreement 7.10 Send purchase orders 7.11 Match invoices 7.12 Manage suppliers 10.4 Collect real time condition data 10.1 Manage equipment data 10.3 Manage drawings and manuals 10.2 Manage equipment permits 8.1 Develop outsourcing strategy 8.2 Supervise contractor

19. Embed Processes in IT and Organization

20. Case - Volvo Cars • Volvo Cars manufactures cars in 5 plants in Sweden and Belgium • Volvo Cars is well known because of its innovative maintenance approach and TPM awards • After years of focus on Asset Utilization Volvo Cars wanted a maintenance model that helped them to find the right balance between uptime and costs • Volvo has adopted VDM as their standard maintenance management philosophy • In 2005 they started with the implementation of standardized VDM work processes: • based on internal and external best practices • fully supported by their Maximo system • 2010: 50% cost reduction on biggest plant

21. Agenda 1. Maintenance Dilemma 4. Continuous Improvement 3. Most Valuable Maintenance Organization 2. Value Of Maintenance

22. Continuous Value Improvement Growing in professionalism means creating value When realistic achievable level of professionalism is reached, the value potential is utilized Automatically, the secondary value driver becomes the dominant one MVMO needs to be redesigned based on the new core competences Without loosing the achieved level of professionalism of the other value drivers

23. Know Where You Are!

24. Case – Conagra Foods • Leading Food Company in US with 100 plants • With Conagra Performance System (CPS) towards World Class Maintenance • VDM programm based on TPM and RCM: • Internal/external benchmarking • Standard work processes • Standard SAP EAM • Equipment Reliability Improvement • Global and local performance management with Maintenance KPI Dashboard (VDM Inside) • Built in leading Business Intelligence software (SAP Business Objects and IBM Cognos) and fully integrated with SAP EAM and Maximo

25. VDM Inside

26. Thank you! • Mark Haarman | Managing Partner | mark.haarman@mainnovation.com | +31 621553313