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Maintenance Engineering & Asset Management

Module M06

MAINTENANCE AUDITING SYSTEMS

MAJOR ASSIGNMENT

Name: Hernn Quiroz

Company: Ternium Siderar

The completed assignment must be received at the Programme Office by23.59 on

Friday 30th May 2011

Late assignments will be penalised.


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Table of Contents

I. EXECUTIVE SUMMARY.................................................................................................................3

II. ACKNOWLEDGEMENTS................................................................................................................4

III INTRODUCTION.......................... ..................... ...................... .................. ........................ ................5

A. BACKGROUND ....................................................................................................................................5B. THE BRIEF .........................................................................................................................................6C. REPORT FORMAT ...............................................................................................................................6

IV. OBJECTIVES AND SCOPE................... ..................... ................... ..................... ........................ ......7

A. OBJECTIVES.......................................................................................................................................7B. SCOPE ...............................................................................................................................................7

V. METHODOLOGY ................ ..................... ................... ......................... .................. ....................... ...9

A. DIFFERENT WAYS OF ACCUMULATING EVIDENCE...............................................................................9B. STRUCTURED INTERVIEWING ............................................................................................................9C. DATA ANALYSIS ................................................................................................................................9D. COLLATION OF INFORMATION, RATING METHOD AND RECOMMENDATIONS..................................10E. PRESENTATION AND REPORT WRITING ..........................................................................................10

VI. RESULT OF THE PERFORMANCE REVIEW.................... ................... ....................... ............... 11

A. GENERAL .........................................................................................................................................11B. STRATEGY AND POLICY (RATING 0,9 OUT OF 5)...........................................................................11C. ORGANISATION (RATING 1,4 OUT OF 5).......................................................................................13D. COMMUNICATION (RATING 2,5 OUT OF 5) ....................................................................................15E. EMPLOYEE INVOLVEMENT (RATING 1,8 OUT OF 5)........................................................................16F. WORKLOAD MANAGEMENT (RATING 2,6 OUT OF 5)......................................................................17G. MAINTENANCE REGIME (RATING 0,5 OUT OF 5) ...........................................................................19H. SAFETY, HEALTH AND ENVIRONMENT (RATING 2,5 OUT OF 5).....................................................20I. MATERIALS MANAGEMENT (RATING 0,6 OUT OF 5) .....................................................................21

J. VALUE FOCUS (RATING 1,5 OUT OF 5)...............................................................................................23K. MEASURE OF PERFORMANCE (RATING 1 OUT OF 5) ......................................................................24

VII. RECOMMENDATIONS.................... ................... ....................... ................... ................... ...............26

VIII. CONCLUSIONS ................... ...................... .................. ...................... ..................... ................... .......32

IX. APPENDICES............... ..................... ................... ........................ .................. ....................... ............33

X. REFERENCES..................................................................................................................................43


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I. Executive Summary

An audit of the maintenance activities of the Ternium Siderar Cranes Steel Shop

has identified that the actual performance is not aligned with the business

requirements.

The most positive finding is the supervisors and technicians empowerment. The

other strengths are the Workload Management, Safety, Communication and

Employee Involvement. But they are in the level where the need for

improvement and change has been recognised.

Nevertheless, along the audit I couldnt find any improvement programme. In

addition to this, there are some topics like Strategy & Policy, measure of

performance, materials management and maintenance regime where the needfor improvement and changes has not been identified.

An improvement programme managed by a senior management is

recommended in order to improve the actual maintenance systems

performance. This programme is based on:

- Review of Maintenance Policy

- Review of Maintenance Strategy (procedures, process, workload, KPIs

and standards)

- Review the CMMS process

- Review the Control of the Maintenance Systems (1st, 2nd, 3rd and 4th order

control viii)

- Develop a Benchmark with other crane steel shop maintenance

organisation.


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II. Acknowledgements

Hernn would like to express its grateful to the whole Ternium Siderar Steel

Shop Cranes staff who gives their time and effort to make it possible this

analysis.

I want to thank to Paul Wheelhouse for having trained me in this modality to

audit maintenance systems.

This audit is made in the spirit of continuous improvement.


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III. Introduction

A. Back g r ou n d

1. Ternium Siderar Steel Shop Cranes

Ternium Siderar Steel Shop has 31 cranes that transport all the Converters andContinuous Casting raw material and final products. As a consequence the

cranes availability problems directly affect the Continuous Casting Machine

(CCM) performances. It is important to highlight that the CCM is the Ternium

Siderar bottle neck.

In addition to this, these cranes are the most criticality Ternium Siderar assets

from the safety points of view. They lift and transport 12 tons slabs and ladles

with 180 tons of liquid steel at 1600 C. There are a lot of crane equipment

failures modes that produces fatality consequences. There are examples in the

steel industry like the Qinghe Special Steel Corporation disaster where thirty two

people died and six were injured when a crane used to transport molten steel

failed iii.

a) Figure 3: Qinghe Special Steel Corporation Disaster

What is more, in Ternium Siderar during the last five years there were 6

different maintenance steel shop cranes managers. As a consequence there is

no medium or large maintenance continuous improvement program.

To sum up, the steel shop cranes are criticality from production and safety point

of view. After these organizational changes it is crucial to audit the steel shop


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cranes maintenance systems in order to determine where each one of the ten

elements of Good Practices1 is ranked. It will be the base for the continuous

improvement program.

B. Th e Br i ef

The brief of this analysis was as follow:

Asses the maintenance requirements in the business context.

Determine the actual maintenance performance with an audit.

Suggest the follow steps in order to improve the actual maintenance

performance.

Propone the continuous improvement program in order to align the

maintenance systems with the business requirements and the safety

policy.

C. Re po r t Fo r m a t

This report describes the work that was performed during the audit and finally

presents the improvement recommendations. It is organized as follows:

Section IV: Determine the Objectives and Scope for this work

Section V: Describe the Methodology used for the analysis

Section VI: Present the maintenance audit results according to the 10

elements of good practices

Section VII: Propone the recommendations for improvement.

Section VIII: Cover the Conclusions of this analysis

Section IX: Contains the Appendices

Section X: Contains the References

1

The Audit is based on EFQM (European Foundation for Quality Management) business excellent model and

Manchester University Maintenance audit model


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IV. Objectives and Scope

A. Ob j ect ives

The main objective of auditing the Cranes maintenance group is about

discovering opportunities where the continuous improvement can be apply in

order to assure safety operations and make better maintenance performance,

cost-effectiveness, efficiency and service delivery.

As it is known, the role of Maintenance in the modern business is to satisfy the

operational demand for the long term at the lowest total life cycle cost of the

equipment.

Operational demands include:

- Safe operation

- Environment issue

- Availability of equipment (MTBF, MTTR)

- Throughput rates

- Service Delivery Management (SDM)

- Product Quality

- Cost

- Regulatory Requirements

The role of Maintenance Auditing is to confirm how well these responsibilities are

being fulfilled and to recognize areas where the continuous improvement can be

implemented.

In this assessment particular attention was taken about safety operations and

every aspect of maintenance systems that could affect it.

B. Scope

This analysis focused on evaluating Steel Shop Cranes Group. It was evaluated

all kind of maintenance activities related with steel shop cranes. In order to

obtain how well this group is carrying out maintenance, it was assessed the

following points:

Strategy and Policy Maintenance Regime

Organisation Materials Management


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Communication Value Focus

Employee involvement Safety, Health and Environmental

considerations

Workload Management Measure of Performance


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What is more, I have examined the data of failure rates, cost, work backlogs

and the other KPIs that are available in the Ternium Siderar intranet

maintenance site.

D . Co ll at i on o f I n f o r m at i on , Ra t in g Me t ho d an d

Recommenda t ions

The information obtain was used to score the ten elements of maintenance best

practice (see section IV-B: Scope) based on:

- EFQM (European Foundation for Quality Management) business excellentmodel.

- M06 Maintenance Audit Systems, from Manchester University.

- A step by step guide to Maintenance Audit, by Paul Wheelhouse

I used a simple scoring scheme which gives a rating from zero to five against

each one of the ten elements.

0. The need for improvement and change has not been recognised.

1. The need for improvement and change has been recognised.

2. A change programme has begun.

3. Barriers to achieving World Class performance have been identified.

4. Significant improvements have been achieved and the improvementprogramme is well underway

5. World Class performance has been attained when compared to the

recognised benchmarks.The results were plot in the spider web diagram in order to create a composite

picture of the organisation in a simple snapshot. The key advantage is that it is

possible to compare strengths and weaknesses of maintenance approach at a

glance.

Taking into account the result of the audit, benchmarking, the world class

companies and the Ternium Siderar business objectives, I have develop a list of

continuous improvement recommendation (Section VII)

E. Pr esen t at i on an d Rep or t W r i t in g

The results of the audit were presented to Ternium Siderar Maintenance Staff

and constructive feedback and suggestions were produced. This writing

document is the final report.


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VI. Result of the performance review

A. Gen er a l

The results of the audit are shown below. Taking in combination, the ten

elements of good practices, reflects an overall picture of how well an

organisation is carrying out maintenance.

From the information review from the systems, interview with key persons,

observation of work activities, plant tours and attendance at meeting; I

summarize the analysis result in a simple snap shot in order to create a

composite picture of the organisation.

Audit Result

0,0

1,0

2,0

3,0

4,0

5,0STRATEGY & POLICY

ORGANISATION

COMMUNICATION

EMPLOYEE INVOLVEMENT

WORKLOAD MANAGEMENT

MAINTENANCE REGIME

SAFETY HEALTH & ENVIRONMENT

MATERIALS MANAGEMENT

VALUE FOCUS

MEASURES OF PERFORMANCE

B. St r at eg y an d Po li cy ( Rat i ng 0,9 o ut o f 5 )

1.Alignment between Maintenance and Business Objectives (0,1)

There is no overall maintenance policy. There is an informal strategy related to

schedule turnaround but they are not aligned with the actual business

requirements. The planner (technician) is the responsible to determine the

turnaround strategy. He decides the opportunity for each shutdown according


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with his notes and memory. Nobody remember when the last strategy revision

was performed? The actual maintenance engineers that are related with these

cranes have no participated or reviewed the actual informal strategy. Operations

managers claim that the actual strategy effectiveness is so far from their actual

business requirements.

Furthermore there is no formal communication to the supervision, technician

and workforce about the actual Ternium Siderar business performance,

requirements and the future maintenance and company plans.

There are no formal standards of maintenance required. Every person has its

own feeling.

2.Resources matched to objectives and strategy (0,2)

There is a deficiency of electricians to support the actual informal maintenance

plans. So the technicians produce work orders according the actual capacity

instead of their necessity to guarantee the business required reliability.

What is more the electricians have poor capabilities because they are new in this

job and they do not have proper technical training. As a consequence, there is

an unacceptable child mortality rate.

Furthermore, the engineering improvement support (In Siderar it is called IAME

area), is practically absent. The IAME (applied engineering improvement

department) area that gives the centralized engineering support to study the

chronic or major outages practically does not give service to the crane area.

3.Constraints understood - initiatives in place. (0,2)

Constraints are followed but not completed understood because they are not

proper communication between the management and the

supervision/technicians.

There are initiatives in place for some critical equipment but they are promoting

for individual intentions. They are not part of an overall plan.

There is no evidence of 5Ss implementations. There is a big opportunity in this

topic. (see appendix 6)


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4.Vision, objectives, shared goals owned by all (0,3)

As I said, there is no formal strategy or objectives. In addition to this there is no

formal vertical communications about the business strategy. So there cannot be

shared goals although many personnel are working to maintain the cranes

working. The supervision, technicians and workforce have a common goal. Theiraim is to avoid failures in lift systems. What is more, their second objective is to

maintain al the crane working, which represent a big personal effort because

there is a 30% of emergencies. There is a culture of reactive maintenance.

Every morning there is a meeting between the supervision, technician and the

workforce. The objective of this meeting is to share the goals for the day and

how to concentrate the resources according to the news. There is no medium or

large term goals. There are no weekly or monthly meetings in order to review

the performance and compare it against the goals.

There is reasonable spend allowed by the site engineering function but there is

no control about it. Technicians do not know the budget and the real spends.

5.The strategy and policy is subject to continuous review andupdating. ? (0,1)

Without a formal strategy it cannot be reviewed or updated but every morning

they are reviewing the work that they are currently doing.

C. Or gan isat ion ( Rat in g 1 ,4 ou t of 5 )

Certain positive aspects were identified:

- Teamwork between all technicians

- Good technician competence

- Technicians commitment

- Ownership

However, I think that there are opportunities to improve in the following points:

1.Are there clearly defined responsibilities and accountabilities?(0,2)

There are clearly defined roles and responsibilities for staff and for the shop

floor. They are not written, but everybody now it informally. There R&R for staff

has not been developed on site. Along the last five years there were 6 different

maintenance steel shop cranes managers. As a consequence this function has

not been performed properly. An evidence of this is that there isnt any medium


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or large plan in every management aspects. All the management actions are

associated to solve a day to day problem (from the technical or managerial point

of view). The management is working as a firefighting.

Furthermore, there are so limited engineering resources (internal or external) to

perform continuous improvement and it is very difficult to obtain this resources.

2.Flexible work-process based organization (0,4)

There are some flexible processes, with team work on the shop floor. Flexibility

is derived from people and relationships rather than processes.

There is no provision for sickness and holiday cover.

3.Job accountabilities are linked to personal performance measures.(0,2)

On the one hand managers and supervisors are evaluated according with the

Ternium Siderar Human Resources policy. They should have aims aligned with

their performance measures. But as a consequence of the management

changes, during the last 6 years, each personal performance appraisal has

begun with a manager (and his objective) but was evaluated with a different

boss. Most of these periods there werent supervision feedback meeting after the

performance appraisal.

On the other hand, according with the RRHH policy and the trade union

intention, the shop floor do not has personal performance measures.

4.Multi-skilling spans craft and production disciplines. (0,4)

Some electricians do limited amounts of fitting work. There is an intention to

train fitters or contractors to isolate there own equipment but this is not in place

yet.

5.Needs and skills dynamically matched through training. (0,2)

Training matrices are available and development needs identified. HHRR

department has organised the annual training fixture. At this moment the crane

department does not have programmed or schedule the training for the shop

floor, supervision or staff personnel. Furthermore, the contractors work force is

not included in the Ternium Siderar training programme. In the electrician case

there are some repairs carried out by unqualified personnel.


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D. Com m u nicat ion ( Rat in g 2 ,5 ou t of 5 )


- Nextel communication very useful.

- The technician, supervisors and engineers has their nextel available at

home 24 hours. They are also available by Nextel during the weekend for

any emergency.

- Intranet site

- Corporate magazine

- Newsletters


1.Effective vertical and lateral two-way communication (0,5)

There are a number of methods of communications, intranet site, corporate

magazines, newsletters, emails. These appear to work, but they are only

available for staff, supervision and technician. The workforce could not access to

the intranet communications because their do not use computers.

The top down communication is working but an opportunity area is the bottom

up communication that is so few performed.

2.Mission statement interpreted/owned by all. (0,7)

The company mission, vision and values statement are available on various

notice boards and the intranet site. But it has not been communicated down to

the shop floor.

3.Cascade communications are more effective than rumours. (0,4)

Cascade communications is working but rumours do precede formal information

processes, especially when emergencies or production changes are happening

on site. These operational rumours produce uncertainty in the supervision,

technician and workforce.

What is more, as cranes are considered as a secondary facility like fluids

(services), sometimes there are some suddenly production windows decisions

that are not properly cascade communicated to the crane staff.


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4.High visibility communication and feedback. (0,3)

As a consequence of the last management changes along of the last 6 years,

there werent supervision feedback meeting after the performance appraisal.

What is more, change initiatives are developed and issued but not always

properly communicated to the shop floor.What is more, there is a good communications between production and

maintenance staff. There is a daily meeting. Some operators reports problems

by e-mail. The supervisor of every shift reports the equipments failures news by

the QNX frame.

After every work is performed by the contractors, there is no formally feedback

face to face; neither by SAP systems.

Finally there is an important improvement area in the communication w hen

an operational mistake occurs (feedback). When this communication fails,it is increased the equipment failure probability with safety consequences.

5.Communications by intranet and CMMS (0,6)

Information systems help communications but not everyone reads everything

because not everybody from the shop floor can access to it. SAP CMMS is used

by supervisors and technicians in order to request repairs, services,

enhancements, spare parts and work orders.

E. Em p loy ee I n vo lv em en t ( Rat in g 1 ,8 ou t o f 5)


- Technicians and Supervisors empowerment

- Technicians autonomy


However, I believe that there is scope for improvement:

1.Individuals genuinely empowered to take decisions. (1)

I consider that the most important asset of the crane maintenance systems is

their supervisors and technician empowerment. May be this empowerment has

born as a consequence of the last management changes (6 boss in 5 years).

They are very autonomous and their usually take their own decision. They

decide if a crane must be stopped. If they realize that there is a possibility of

failure in critical equipment (safety point of view), the stop the crane and take

action in order to solve it.


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2.Effective team-working/problem-solving/shared goals/recognition(0,1)

No operator maintenance, little responsibility taken by the operators for

housekeeping. Informal system used for the operator task required, in the

reactive way trough the trade union representatives.

3.Everyone's talents are known and harnessed for continuousperformance improvement (0,2)

On the one hand, there is a limited involvement of operators/engineering in site

improvement.

On the other hand, there is a big involvement of maintenance shop floor in order

to improve the equipment performance. They required the management support

in order to emphasize the continuous improvement.

4.All share cost responsibility/information is provided to all. (0,1)

At the moment of the audit, the supervisors do not know how much money they

are spending and what the budget is? After investigation I realize that the

budget is overspending in 50%.

What is more, very little information is passed down about costs so

responsibilities cannot be shared.

5.Continuous appraisal/training/development of all individuals. (0,4)

Appraisal systems was implemented for staff but have not been developed toshop floor level.

F. W or k load Man ag em en t ( Rat in g 2 ,6 ou t o f 5)


- Daily workforce programme

- Steady workforce (The same people works all days in the crane with the

same supervision)


1.Flexible scheduling exploits opportunities and is based aroundplant need. (1)

Apart from the steel shop monthly turnaround, the rest of maintenance

shutdowns are planned the day before, according to:

- A major shutdown plan which determine the opportunity for each crane


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- Production windows opportunity

- Criticality malfunction news derives from previous technician inspections.

There are two kinds of shutdowns according with the criticality of each crane.

The most critical cranes stop for maintenance ones a month in concordance with

the steel shop turnaround.The less critical cranes have their shutdown when the steel shop is producing

because they have a redundancy. In addition to this if the redundancy has an

unexpected outage; it is possible to repair it, with out affecting the continuous

casting speed.

2.Job execution is to plan and best practice whilst under constantreview (0,5)

There is a daily program for the day after. All the resources are program in the

day before. There is not formally revision for the best practices.

Maintenance is very reactive (30% of emergences). Engineering adopting

firefighting strategy.

3.Appropriate use of technology for fault diagnosis, planning,scheduling, condition monitoring and maintenance management.(0,4)

I consider that actual planning and scheduling resources are according with the

necessity.

There is a big opportunity improvement with fault diagnosis (mainly notpracticed). There is informal reporting of machine problems and faults.

Considering condition monitoring, there is a set of accelerometer installed in

only one crane but there is no measurement performed. Furthermore there is no

oil analysis. Finally, thermography is limited.

4.Maintenance controlled against agreed performance measures. (0)

There is a sheet to control the maintenance workload but it is not review. The

information is available but nobody used it to detect problems and solve them.

There are some standards but nobody contrast the real length against with the

objective. What is more, I saw contractors that finished their job 2 ours before

the end of the shift and they use the time to rest. Nobody gave them another

work order neither nobody realize the situation.

There isnt a culture of workload control.


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5.Rational priority setting procedures utilised with feedback. (0,7)

In a day to day basis, the program can be modifying for emergencies. Every

morning before to begin the program work, the workforce supervisor check the

news of the shift before. If there is an emergency, he changes the program in

order to solve it.

G. Mai nt en an ce Reg im e ( Rat in g 0 ,5 o ut of 5 )


- Teamwork between all technicians

- Good technician competence


- Ownership


1.Maintenance regime matched dynamically with the businessneeds. (0,1)

On the one hand, there is a maintenance regime that is determined into the SAP

systems, which generate work orders. It is base on five cense inspection and

preventive replacement. In theory there is a maintenance regime.

On the other hand, there is the reality which is completely different from the

SAP systems. The inspectors do not follow the SAP. They usually inspect the

cranes according with their memory, not following a procedure of maintenance

plan. In reality, there is no maintenance regime. The efficacious of the actual

maintenance regime is 63% (see appendix 5). 30% of the contractors man

hours are apply to crane emergences.

Considering condition monitoring, thermography is the only technique that

actually is performed.

Practically there is no maintenance regime; neither will it be matched with the

business requirement.

2.Best current practice figures are achieved for un-planned outages.(0,1)

There is some evidence of identification of downtime best practice and programs

to improve are in place. But I consider that it is an important improvement area,

because not all downtime are analysed, few of them has improvement plan and

less few are implemented.


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3.Maintenance tasks and methods determined through logical /auditable processes (Criticality Analysis, RCM etc.) (0)

There is no evidence of maintenance task derived from logical processes like

RCM or Criticality Analysis. What is more, they do not known RCM when I ask

them.

4.Through-life maintenance prevention and maintainabilityimprovement established. (0,1)

At the moment there is no maintenance engineer working in order to improve

the life maintenance prevention or maintainability. The technicians are

performing so few improvement but they are limited (with few economic

resources and when they have time to do it.)

5.Contractors, specialists, support services and equipment / spares

vendors are an integral part of the maintenance regime. (0,2)

The cranes are been manufactured by MORGAN or IPH factories. All of them are

so far from Argentina in order to deliver assistance. (10000 to 12000 km)

There is some evidence of Argentinean specialist, like Hillman, that assisted to

Siderar in particular cases. For example in the last year, Hillman supervised a lift

gear changes that took 5 days.

H. Saf et y , Heal th an d En v ir on m en t ( Rat in g 2 ,5 o ut of 5)

1.Clear leadership and policy communicated effectively and ownedby all. (1)

There is clear safety and environment policy. The company has put the security

in the upper level of interest, beginning from the CEO. It is a top-down initiative

extended to all levels. This new program had been communicated by different

sources (intranet, visual factory, flash, internal newspaper). This is a recent but

the company has progressed very well.

2.Safety always comes first. Safety critical tasks identifiable /

auditable by the maintenance management system. (1)The new safety policy considers the security in the first place over the rest of

management issue. In this new plan, there is a topic that we call: procedure of

critical task (PTC). It consist in determine the ten most critical task from the

safety point of view for each department. This PTC required a particular analysis,

review process and audit program.


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3.Routine audits. Safety competition. Statutory work is continuallychallenged. (1)

There is a regular safety audit. Every Monday, Wednesday and Friday, at eleven

oclock, all the supervisors and engineers has to stop their activities and go out

to the floor in order to audit the work of their own responsibility. Every

observation detected, has to be inform in the safety system in order to generate

a plan to solve it.

4. Incidents and near misses are recorded and reviewed so thatlessons can be learned. (1)

All accidents and high criticality incident must be investigated. There is a formal

method to analysis these events. The most critical events are monthly presented

in a company meeting. In this opportunity, the Industrial Director form part of

this presentation.

5.Best current practices are used for safety, health andenvironmental management systems (0,8)

The most critical events are analysed, review for safety department and then

communicated to all supervisors in the company. Then they communicate the

same information to their dependant. The object is to learn from previous

experiences.

On the one hand there is a very good policy as it was indicated in the previous

five points. From the policy point of view, safety could be mark as 4,8 out of

five.

On the other hand, I think that the risk awareness to work at high levels is the

weakness safety point. One mistake can produce fatality consequences. I saw

people working at 30 meters with risk to fall without safety harness! This

point reduces the safety mark for this audit. In my opinion it coudnt receive no

more than 2,5.

I . Mat er ia ls Man agem en t ( Rat in g 0 ,6 ou t o f 5)


- There is a system that identify all the Siderar spare parts

- There is a central warehouse that preserves the spare parts.



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1.Stock levels are matched dynamically to the business needs -balancing cost and risk. (0,1)

At the audit moment, in the crane department there is no stock strategy. Some

equipment has stocks, it can be overestimated or underestimated, but nobody

review it. In addition to this there are some components that must be in the

warehouse with it correspondent stock. In reality this elements are distributed

along of the steel shop without any sense. (See spare parts pictures in appendix

6). There are unidentified components in the steel shop area.

The warehouse policy is to continuously reduce the stocks without consider focus

for value. Their internal policy is to make so difficult the devolution process. So,

elements like an electric motor of 200 HP that has been repaired in a workshop

will stay in the plant. (See appendix 7)

2.Criticality analysis linked to JIT objective for minimum cost. (0)

There is no analysis related to cost optimization, neither Just in Time analysis.

All the technician audits, expresses that the main problem is the spare part

issue. They do not have place to store the spare parts. There is no policy about

it. It is very difficult to return a spare part to the warehouse because there is a

very difficult procedure to do it. The reason of this difficult procedure is because

the objective of the warehouse management is to reduce the inventory. This aim

it is over any other reason. As a consequence, there is no place to store the

critical equipment.

3.Materials categorised / consumables / common plant spares /insurance items and managed appropriately. (0,2)

There is a categorisation but it required a review because nobody agrees the

classification that it is in the SAP system.

4.Alliances and partnerships with suppliers to minimise stocks.(0)

At this moment there are no alliances with suppliers in order to minimise the

stocks levels.


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5.Appropriate use of technology is made in the maintenancemanagement system to aid materials management. (0,3)

The SAP is the system that manages the materials and all the maintenance

management issue. The system was softly customized, so I consider that the

technology is not given the properly help to manage the materials management.

J. Value Focus (Rating 1,5 out of 5)


- Continuous improvement is part of the company culture

- Maintenance Site to show the KPIs


1.Continuous performance improvement is truly embedded in theorganisation. (0,4)

Continuous improvement is part of the company culture. But in this case, there

are so few examples of it. I consider that it could be because there is no

engineer in the area. What is more, the management is based in operational

issue with focus in solve the short term problems.

2.Value for money analysis is carried out by comparing downtimeand maintenance performance. (0,4)

In the maintenance SITE, there are some KPIs that measure the downtime andmaintenance performance. At the moment the KPIs exist but nobody analyse

them in order to generate value for money. The cost of breakdowns is

misunderstood by the supervisors and the work floor.

3.Differentiation of chronic / sporadic problems and correctiveinitiative in place. (0,2)

I consider that the information is available; it can be improving its quality. But it

is no generate corrective initiative in place.

4.Continuous review / feedback on methods, tools, techniques,procedures, organisation, strategy etc. (0,1)

The management control and feedback it is no performed. There is a lack of

management that maintains the continuous improvement process working

(apart of the technique used)


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5.Suggestions encouraged / consistently evaluated / actioned /successes recognised / publicised. Optimum use of self-managingteams. (0,4)

The crane group takes the suggestions from different sources. A more formal

suggestion process could be analysed.

K. Measu re of Per fo r m an ce ( Rat in g 1 ou t of 5 )


- In Ternium Siderar there is a culture of KPIs

- Intranet maintenance performance reports which contain the following KPIs:

Budget vs. Real Cost reporting

% Work orders completed on time

% Work orders delayed

% Improvement Work orders

Work Orders Backlog

Downtime

Condition Based Maintenance Alarms

However, I believe that there are some opportunities improvements:

1.Simple performance measures linked to business needs andshared goals are displayed and understood / owned by all. (0,4)

There are useful KPIs but nobody is using them. This KPIs are aligned with

the business objective but not properly understood.

2.Regular performance benchmarking exercises are carried out.(Internal and external.) (0)

There is no information from others companies in order to make comparisons.

3.A comprehensive / accurate plant history file is available andutilised. (0,2)

The information is not properly fulfilled into the SAP system. So there is no

accurate history. It is very difficult to represent the cranes reliability from the

information of the systems. The shop floor people do not know the intranet SITE

information.


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4.Trends in maintenance performance are recognised and rootcauses are sought. (0)

Considering the medium management, nobody control the result and neither

follows the tendency. There are no plans associated with the KPIs performance

in order to improve actual performance.

5.Timely exception reporting tailored to individual requirements isthe norm. (Not mountains of un-read paper.) (0,4)

The cranes department is not reporting every breakdown with its consequences.

This is because not every cranes fault produces losses of the continuous

casting machine.


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VII. Recommendations

As Paul Wheelhouse said: The main objective of the maintenance Audit is about

discovering opportunities where the continuous improvement can be apply in

order to make better the maintenance performance, cost-effectiveness,efficiency and service delivery.

The following analysis refers to the recommendations aligned with the audit

finding:

1.Propose Performance Improvement Programme

a) Strategy and Policy

- Define the Maintenance Policy

- Define the Steel Shop Maintenance Policy

- Define the Crane Steel Shop Maintenance Policy. Include the technicians

and supervisors in the definition. Top down and Bottom up approach.

- Review and write the Crane Maintenance Strategy. Include the technicians

and supervisors in the definition. In order to develop it iv, consider:

Vision

Mission

Objectives

Roles and Responsibilities

Equipment scope and organisational arrangements

Key process and procedures to be followed.

Questions that must be answered:

What do we want to achieve?

Why is this important?

How are we going to do it?

- Develop an electrician training program for the contractors (ASSAsupplier)

- Communicate the maintenance policy, strategy, vision and goals.

- Determine and formalize the scheduling meeting, include the objective for

each one. (take into account the monthly meeting)


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- Schedule the annual strategy and policy review

b) Organisation

- Define Roles and Responsibilities. Write and communicate to all the

persons who works for maintenance crane department (Engineers,supervisor, technicians, workshop, work floor, contractors)

- Determine how the Engineers (IAME) will support the crane department.

- Develop a sickness and holiday cover, considering the contractors

candidates for technician position. Close this policy with RRHH department

and with the trade union.

- Compliance the performance appraisal process determine by the RRHH

department, including the feedback meeting.

- Implement the performance appraisal for the contractors people in order

to identify the future Siderar technicians.

- Identify the training matrices needed for our person. Determine a training

programme.

- Determine the contractors training requirements and coordinate the

resources to train them.

c) Communication

- Generate a periodic meeting in order to receive bottom up

recommendations. Generate the environment to make it possible. Include

the contractors.

- Communicate to crane staff including the shop floor, the Ternium Siderar

Mission, Vision and Values. Inform where this information in the intranet

is?

- Define the communication procedure for production changes which

generates production windows.

- Use the monthly meeting to communicate the last company news.

- Generate a non bureaucracy method to assure the contractor feedback

after each turnaround.


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- Develop a brain storming with operation and maintenance crew in order

to increase the operation feedback, specially after one mistake or

accident.

d) Employee Involvement

- Empower a continuous improvement team with topics like: Reduce the

fall down probability at high levels working (over the cranes and

everything related).

- Develop for each crane a list of:

o Mechanical continuous improvement necessity

o Electrical continuous improvement necessity

o Workshop continuous improvement necessity

o Contractors continuous improvement necessity

o Safety continuous improvement necessity

o Drawing and redesign necessity

o New products continuous improvement necessity

- Communicate the budget and programme task for this year. Take it into

account for the followings budget.

- In the monthly meeting, communicate how the real budget is going.

e) Workload management

- Review the actual Turnaround strategy for the cranes number 190-191.

They are not satisfying the business requirement.

- Develop a process in the SAP system in order to identify the emergencies,

their cause reason and a plan in order to reduce them from 30% to fewer

than 5%.

- Implement the performance review after each crane turnaround.

f) Maintenance regime

- Develop a plan in order to review the maintenance regime for each crane.

Consider to implement Condition Based Maintenance every time that it is

possible. The implementation must be performed with the technicians.

- Train to supervisors and technicians in RCMII method.


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- Implement RCMII in the lift systems for every crane, in order to increase

the lift systems reliability (safety reason)

- Review how the outages are informing in the SAP system. Assure that all

the Outages are considered and that the Siderar outage procedure is

implemented.

- Generate the ABC problem for each crane in order to create a reliability

programme with the objective of increase the MTBF. Develop a list of

work for the IAME sector. (applied engineering improvement department)

- Make a contract with Hillman in order to review the state of the main lift

gears.

- Contract to Desk Norsk Veritas in order to audit the situation of the

cranes. (technical point of view)

- Consult to Morgan cranes company the maintenance regime

recommended for Morgan lift systems (the most critically from the safety

point of view)

- Arrange a training program in Morgan company for the Engineer how is in

charge of the mechanical part of the cranes.

g) Safety, Health and Environment

For this topic, the main issue is the fall dawn risk while the people are going,

working or returning to each crane. In order to improve, the proposal is the

same that I have presented for employee involvement.

- Empower a continuous improvement team with topics like: Reduce the

fall down probability at high levels working (over the cranes and

everything related).

h) Materials Management

- Review the warehouse devolutions equipment process, in order to avoid

the bureaucracy.

- Determine the list of stock control for the most critical equipment

(insurance spares) It is necessary to identify the key components and


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review its situation ones a month in the monthly crane management

meeting.

- Review the warehouse stocks applying the Manchester University

Inventory Management concepts v. The idea is to justify the stocks and

determine the ideal total cost of spares stocked in the warehouse.

(Considering the downtime cost and the holding cost). I recommend to

review the case study example about how a paper mill reduce in Scotland

went to reducing its inventory vi.

In addition to this, I suggest to implement the Microsoft Excel

spreadsheet Spares Analysis.xls for the insurance stock vii. If you prefer,

another alternative is to apply the SKF software Spare Part Optimizerviii.

- According with the analysis recommended in the previous point,determine the elements required to stock in the plant. The idea is to

eliminate them. If it no possible, determine their localisation and who the

responsibly will be.

- Determine the alliances and partnerships with suppliers possibilities in

order to minimise the stocks.

- Develop a sap transaction in order to detect the under desire stocks for

the insurance spares. What is more, this information must be available in

the maintenance intranet site.

i) Value Focus

- Review the SAP process related with the downtime and redefines the

registration method for the cranes equipments malfunction. The idea is to

explode the potential of the actual intranet ABC downtime equipment

malfunctions. For this analysis, include the advice of the maintenance

engineering specialist (Eduardo Villagra).

- After this, include the following points in the monthly management

meeting:

Downtime ABC equipments and evolution. Work plans.

Differentiate between chronic and sporadic events.

Emergency level, ABC and tendency. Work plans


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- Daily review of the quality registered information about downtime

problems, related equipment and it consequences. Every problem must be

properly registered.

- Determine the unavailability level that required the Continuous

Improvement Report

j) Measure of Performance

- Review all the KPIs in the monthly management meeting. The KPIs

exist and they are very useful and well designed. There is a lack of

leadership in order to keep these KPIs working, followed, analyzed with

its correspondent work plans.

- Develop a professional net in order to built benchmark with other

companies. I recommend two ways of work

Companies from the same Techint group Holding, like

Ternium Hylsa, Terniym Hymsa and Tenaris Siderca

Siderurgical Companies from others holding like Usiminas, or

Arcelor Mital Acindar.


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VIII. Conclusions

An audit of the maintenance activities of the Ternium Siderar Cranes Steel Shop

confirmed that performances are not aligned with the business requirements and

Ternium Siderar policy.

On the one hand, it is important to highlight that the most positive audit finding

is the supervisors and technicians empowerment.

On the other hand, the best audit marks are associated with Workload

Management, Safety, Communication and Employee Involvement. Nevertheless,

they are in the level where the need for improvement and change has been

recognised. What is more when the audit was performed I couldnt find any

change programme. I consider that the cause reason for this lack ofimprovement programme is the poor leadership as a consequence of the high

rotations of the maintenance steel shop cranes managers. (6 managers in 5

years). In addition to this, there are some topics like Strategy & Policy, measure

of performance, materials management and maintenance regime where the

need for improvement and changes has not been identify.

In my opinion with a continuous improvement programme and its appropriate

leadership it would be possible to achieve the business requirements. These

recommendations are based on revision of maintenance policy, maintenance

strategy, its process and its control through a new meeting schedule. (1st, 2nd,

3rd and 4th order control viii)


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IX. Appendices

1. Appendix 1: Ternium

Ternium is a manufacturer of flat and long steel product. Ternium consolidates

the operations of the steel companies in Argentina, Mexico, Guatemala and

United States. It is one of the leading steel companies in Latin American with an

annual finished steel production of 9 million tons i.

Ternium Siderar is the most important Argentinean Steel Factory. It produces

2,8 million tons a year. It manufactures slabs, hot rolled, cold rolled, hot dip

galvanized, prepainted and tinplate steel sheet products. It has 9 production

centres throughout the Argentina.

2. Appendix 2: Ternium Siderar Steel Process

Ternium Siderar is an integrated steel factory. The figure 1 shows the basic

scheme of Ternium Siderar Steel Process.

a) Figure 1: Ternium Siderar Steel Process

3. Appendix 3: Steel Shop

The Steel Shop is the facility where the pig iron is transformed into slabs, which

is the row material for the Hot Street Mill. It has two main processes, The

Converter area and the Continuous Casting Machine. The cranes are the

equipments that feed up and evacuate these productions units.


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a) Figure 2: Converter charging

The Converters is a batch process that feed the continuous casting machine. The

batch process takes 30 minutes in which the Converter produces 180 tons of

liquid steel at 1600 C. If one converter or their cranes has an operational or

maintenance problem, then the continuous casting machine has to reduce the

speed affecting its productivity. If two converters or/and two cranes have

simultaneous problems for more than 25 minutes, then the continuous casting

has to cut the sequence producing a downtime for more than 2 hours2.

The Continuous Casting is the production facility where the liquid steel is

transform into slabs. It has 2 strands of 200 mm of slab thickness.

4. Appendix 3: Production Scenario - Ternium Siderar BottleNeck

Actually, the Continuous Casting Machine (CCM) is the Ternium Siderar bottle

neck. The actual CCM downtime cost is U$S 1100 / minute ii ( 41250/hour).

The following chart shows the capacity of the primaries areas:

PlantDealy Capacity

[Ton]

Minimum Dealy

Capacity [Ton]

Blust Furnace 10500 7900

Continuous

Casting 8500

Hot Street Mill 9500

(1) Table 1: Daily Capacity

2

Two hours is the minimum time required for Continuous Casting Machine to restart the sequence. Apart from

the time required to solve the Cranes and/or Converters problem


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Today, the Blast Furnace N1 and 2 are working at their minimum technical

capacity. They couldnt produce less pick iron than 7900 Ton/day, otherwise

they become unsteady (permeability- thermal -chemical process problems).

What is more, the Hot Street Mill has an average capacity3 of 9500 Ton/day.

Nowadays, the Hot Street Mill has 90 free hours a month. These hours have not

been program because there are no available slabs to feed it up.

Furthermore the company cant import slabs from another company since there

is no profit margin. (The market cost and sells price make it not possible to

import slabs in order to transform into coils.)

In addition to this, the Argentinean market is demanding more downstream

products that do not have been produced because of the slabs limitation.

To conclude, the actual scenario generate the CCM bottle neck with excess of

pick iron (it is stocking as a solid pick iron) and free hours in the Hot Street Mill.

Every slab that is not produced at Siderar must be import as a final product

from other companies. In this cases Siderar act as a trader. To sum up, it is

crucial to improve the CCM availability (downtime and low speed failures) which

is influenced by the Steel Shop Cranes performances.

3

Its depends of the production mix (chemical composition, thickness and width). The same considerations

apply for the CCM.


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5. Appendix 5: Efficacious of the actual crane MaintenanceRegime

6. Appendix 6: Spare Parts not properly stocked.


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7. Appendix 7 Repaired Motors not allocated into thewarehouse (bureaucracy policy)


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8. Appendix 8: Cranes Steel Shop Lay Out


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9. Appendix 9: KPIs

To continuous it is presented examples of other lines, like continuous casting, in order to

exemplify what it is possible to obtain from the actual CMMS if the registration process is

follow. (the CMMS for the cranes do not have information)

a) Direct Maintenance Cost

10. Diary Plant Downtime

a) Diary Plant Downtime

LabourMaterials

Contracts

Services

Others

Month Year

Dif. Dif.

MAINTENANCE DIRECT COST

BUDGET BUDGETReal Real

LabourMaterials

Contracts

Services

Others

Month Year

Dif. Dif.

MAINTENANCE DIRECT COST

BUDGET BUDGETReal Real

Cool Mill

DOWNTIM

E(HoursFrequency)

TotalMonth

Frequency Last Month DowntimeTotal Last Month

Frequency Month SAPTotal Month IGO

Frequency Month IGOFrequencyDowntime Last Month

Maintenance Downtime

Cool Mill

DOWNTIM

E(HoursFrequency)

TotalMonth

Frequency Last Month DowntimeTotal Last Month

Frequency Month SAPTotal Month IGO

Frequency Month IGOFrequencyDowntime Last Month

Maintenance Downtime


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b) Pareto Downtime (6 month)

c) Efficacy-N Job Completed/Month

PARETO DOWNTIME (6 Months)

Hours

SAP Equipment Number

PARETO DOWNTIME (6 Months)

Hours

SAP Equipment Number


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d) Workshop Backlog

e) Turnover of spare parts

Workshop Backlog

WorkOrders

Months

Workshop Backlog

WorkOrders

Months


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f) Frequency Index (FI), Gravity Index (GI)


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X. References

i Ternium Siderar, http://www.ternium.com/sp/default.asp . Part of this introduction wasdeveloped for others major assignments of Maintenance Engineering and AssetManagement Topics, like M13 or M04.

ii Ternium Siderar Industrial Engineering Department (January 2011)

iii Qinghe Special Steel Corporation disaster, available from:http://www.timesonline.co.uk/tol/news/world/article1671455.ece

ivManchester University, Maintenance Engineering and Asset Management, M01-

Maintenance Strategy, Section 10 .2: Strategy Guide.

vManchester University, Maintenance Engineering and Asset Management, M02-

Maintenance Organisation, Section 10.1: Balancing Dow ntime and Risk.

vi

Manchester University, Maintenance Engineering and Asset Management, M02-Maintenance Organisation, Section 10.6: Inventory Reduction Methodo logy.

viiMicrosoft Excel spreadsheet Spare Analysis.xls develops by Paul Wheelhouse.

Manchester University, Maintenance Engineering and Asset Management, M02-Maintenance Organisation, Section 10.3.2: Factors affecting spares needed .

viiSKF Aptitude Exchange, Spare Part Optimizer, Available from

http://www.skf.com/portal/skf/home/aptitudexchange?contentId=0.237932.237939.238021.238023.238755 [Accessed 16/4/2010]

viiiManchester University, Maintenance Engineering and Asset Management, M03-

Maintenance Systems, Section 1, figure 1.2 Maintenance Systems process model.

auditoría mantenimiento de grúas

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