How Procurement Can Directly Impact Overall Plant Reliability and Performance

By George E. Krauter

February 16, 2018 at 2:38 PM

Break/fix approaches to asset management, are evolving more and more towards Condition Based Maintenance (CBM). CBM implies “Conditional Probability of Failure” which is the probability that an asset failure will occur over a specific time period provided that the asset concerned has survived from the beginning of the time period being measured. In a break/fix scenario, increased costs are incurred when compared to a CBM procedure. These additional costs include opportunity costs caused by unplanned work orders, increased idle work hours, emergency purchasing, emergency freight costs, and loss of planned production goals.

The goal of CBM / preventative maintenance processes is to optimize mean time to repair (MTTR), and mean time between repairs (MTBR). The steps that are contained in the MTTR process starts when the asset is reported to be down, when maintenance determines the cause and solution, when the proper repair part(s) is identified and located, when the part in installed and the repair is completed, and, finally, when the asset is back in production.

By reducing the time span of an existing MTTR situation, more production is produced and more costs are saved due to decreasing the downtime of the asset in question. Remember the step in the MTTR progression having to do with “When the proper repair part is identified and located”? This means that if the PROPER part is not instantly available in the quantity needed to do the job, MTTR is elongated, i.e. costs are elongated and plant reliability is decreased.

Consider the following real-life example:

A maintenance supervisor, Jim, worked for a dairy processer; one Sunday he received a call from the plant that milk was leaking from one of the production units. He went to work, assessed the situation and went to the MRO storeroom for find the part he needed to fix the problem. He found what he thought was the correct part and installed it. Unfortunately, what was only a leak, now turned into a situation where milk was spewing all over the area. The part installed was the wrong part. In a panic, Jim called Don, the plant manager: “you gotta come in; milk is erupting all over the place.”  Don left the Eagles/Dallas football game and came to the plant (in a very unhappy state of mind). Don went to MRO stores and spent two hours looking for the correct part and finally was able to install it and stop the production loss. MTTR was greatly increased to the point where production goals were adversely affected and plant bonuses were decreased. 

All of this could have been avoided. Below are the reasons why the situation occurred:

  • There was no Bill of Material data in the storeroom
  • SKU’s were not defined properly
  • The storeroom was basically disorganized
  • Duplications of the same parts existed under different descriptions
  • Inventory control methods were not followed
  • Storeroom management was not connected to maintenance reliability programs

Where procurement is responsible for managing and maintaining the MRO supply chain, it is essential to ensure that critical spares are defined, efficiently located, and properly sourced so that optimum MTTR is obtained. Procurement must recognize the value that can be obtained from proper spare parts management and bring Finance and Maintenance together to provide a reliable plant operation.

The dairy company, with their chosen MRO supplier, rebuilt their MRO storeroom and achieved world class MRO status, that is, a storeroom that contributes to the constant improvement of operations to remain an industry leader while providing the best utility for their customers.


Tags: Plant MTTR Plant MTBR Plant CBM Spare parts management
Category: Blog Post

George E. Krauter


George Krauter, former founder and president of Industrial Systems Assoc. [I.S.A.] has retired as vice president of Synovos.

Currently, he has initiated, "George Krauter Consulting [GKC]"  for effective reliability and cost recovery for consumers  of MRO materials. George is a recognized authority on the management of the MRO supply chain and support for maintenance reliability programs. His book, "OUTSOURCING MRO...FINDING A BETTER WAY" is available from Amazon and from Reliability

He is published in Uptime, Modern Distribution Management, and Supply and Demand Chain Executive. George has conducted seminars across North America, in Europe, and in the U.A.R. as well as a guest speaker at Temple U., Howard U., Duke, and MIT.

George is a graduate of Temple University; he lives with his wife, Joyce, in Bucks County, PA. All grand kids live within eating distance. He can be reached anytime:

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