Case Study: Balanced Scorecard for Total Productive Maintenance in Planned Maintenance, Apuntes de Fundamentos de Administración y Gestión

¡Descarga Case Study: Balanced Scorecard for Total Productive Maintenance in Planned Maintenance y más Apuntes en PDF de Fundamentos de Administración y Gestión solo en Docsity! Vol. 8 nº 2 December 2010 143Product: Management & Development Balanced scorecard for TPM maintenance management Eduardo Biasotto, Acires Dias, André Ogliari Santa Catarina Federal University e-mails: ebiasotto@gmail.com; acires@emc.ufsc.br; ogliari@emc.ufsc.br Abstract: This paper proposes the use of Balanced Scorecard (BSC), a strategic management methodology, for the improvement of the Planned Maintenance pillar of the Total Productive Maintenance (TPM) program once adopted by a pulp and paper plant in Brazil. The World Class Manufacturing pattern requires a high organizational level from the maintenance function in order to achieve an optimum plant performance. The TPM program provides the basis and culture for organization; however, it is necessary to make use of a strategic management method to assess the whole maintenance structure. The Balanced Scorecard allows the alignment of performance indicators to the proposed strategy for Planned Maintenance pillar (vision, mission and objectives) in four perspectives: financial, clients, internal process and learning & growth. Also, it provides a strategic map showing the dependency relationship (cause-effect) between the performance indicators to support actions (strategic initiatives) that the maintenance function must carry out in a continuous improvement cycle. Keywords: balanced scorecard (BSC), maintenance management, total productive maintenance (TPM), performance indicators. 1. Introdution Nowadays every company aims to increase, or at least sustain, their profitability by controlling and reducing production costs. Maintenance activity is a fundamental pillar sustaining product high standards and plant availability. Without this viewpoint, the maintenance results remain restricted to the performance of each action, losing the overall perspective (DIAS, 2001). The World Class Manufacturing (WCM) concept, originally introduced by Hayes and Wheelwright in 1984 (FLYNN; SCHROEDER; FLYNN, 1999), is characterized by high productivity, availability and flexibility. In order to achieve this higher development stage in the manufacturing processes, maintenance skills are a key element. The maintenance function adapted for the global competition environment characterizes World Class Maintenance. Yamashina (2000) considered in his research on Japanese manufacturing companies that TPM (Total Productive Maintenance) maintenance management system along with the JIT (Just in Time) production system and TQM (Total Quality Management) are the path to reach the WCM concept in processes and innovative products. Hendry (1998), Tsang (1998), Bond (1999), Liyanage and Kumar (2003) and Dunn (2003) assert that world class performance in the maintenance function depends on metrics that can be obtained by a benchmarking process. Therefore, performance indicator systems linked to an organization strategy become essential to reaching excellence in maintenance processes. Amendola (2003), Ahlmann (2002), Ellingsen et al., (2002) and Biasotto, Dias and Ogliari (2006a) recommend the Balanced Scorecard (BSC) methodology to integrate a specific maintenance strategy system to the whole plant evolution. Maintenance is a strategic function in companies business, particularly for those with a continuous process and high stoppage cost. BSC application has led to excellent results since its popularization in 1992 by its two authors Robert Kaplan and David Norton. TPM is incapable to identify critical points in maintenance performance by treating financial indicators and performance indicators separately. This limitation motivated the research, proposing a BSC approach to the Planned Maintenance pillar in TPM program, bringing shop floor actions (autonomous maintenance) near to maintenance strategic plan and overall company results, fundamental issue to reach WCM pattern. The article presents a brief introduction about TPM, BSC focused on maintenance and further discussions. Also, comments about TPM program case study released in 2006 by Biasotto (2006b) in a paper mill from Klabin S.A., a long-standing company in the pulp and paper business in Brazil, followed by the BSC proposal for its maintenance management system. Balanced scorecard for TPM maintenance management Biasotto et al.144 2. TPM - Total Productive Maintenance Total Productive Maintenance (TPM) is a worldwide known management system, born in 1971 in Nippon Denso, a Toyota division in Japan, which basic aims the loss elimination in plant processes by continuous training and machine control, improved quality activities, safety and environmental care. This methodology has been well received over the years. Its concepts are been increasing to all sectors of the company. According to Palmeira (2000) the fourth TPM generation, after 1999, involves all organization sectors in the loss elimination concept, cost reduction and effi ciency maximization, including sales and product development integration, introducing a more strategic view for the administration process, including inventory, logistics and purchase process. Although consider each particular culture in the TPM program implementation, some basic principles are common to all. These are called the TPM “pillars” (NAKAJIMA, 1989; PALMEIRA, 2002) and are described as follows: • Focused Improvement Pillar: corrective maintenance concept in equipment with chronical losses; • Autonomous Maintenance Pillar: focused on theoretical and practical employees training, teamwork spirit and continuous improvement of production and maintenance. • Planned Maintenance Pillar: preventive maintenance routines based on time (TBM) or on equipment condition (CBM), seeking the continuous improvement in availability and reliability besides maintenance cost reduction. (This pillar is the main subject in this article, where the case study was applied.) • Training Pillar: technical and compartmental qualifi cations for team leadership, fl exibility and autonomy; • Product Development Pillar: based on preventive maintenance concepts where all the previous equipment reports are used in the product development in order to build equipment with greater reliability and higher maintainability indexes. • Quality Maintenance Pillar: interaction between equipment reliability, product quality and demand capacity. • Safety, Health and the Environment Pillar: based on the others pillars actions and consequences. This pillar focuses in better working conditions, safety and environmental risk reduction; and • Administration Process Improvement Pillar: also known as TPM Offi ce, this pillar deals with organizational losses in administrative routines that somehow interfere in the production process and equipment effi ciency. 3. Balanced Scorecard (BSC) Kaplan and Norton (1992) developed a strategic management system, based on performance indicators, called out the Balanced Scorecard (BSC). It translates the business view and strategy into more tangible objectives and targets for all organization levels by fi nancial and non fi nancial tendency indicators with internal and external perspectives. The BSC promotes balanced performance indicators based on four perspectives: fi nancial, internal business processes, learning and growth, and customer’s perspective, as shown in Figure 1. Figure 1. The Main Framework of the Balanced Scorecard (KAPLAN; NORTON, 1996). Vol. 8 nº 2 December 2010 147Product: Management & Development 7. The TPM program in Klabin Klabin is the largest Brazil paper manufacturer and exporter, being market leader in producing paper and board packaging, corrugated boxes and industrial sacks. It is also the biggest paper recycler in South America and it produces and sells wood in logs. Founded in 1899, today it has 17 industrial plants in Brazil, spread around eight states and one in Argentina. It is organized into four business units: forestry, paper, corrugated packaging and industrial sacks. The main plant is a paper and board packaging plant located in Telêmaco Borba town, in Parana state, called KPMA (Klabin Papéis, Monte Alegre). The TPM implantation process in KPMA was driven by the necessity to compete at global excellence levels and, in the same way, to consolidate a management system that must be disseminated throughout the organization, based on problem solving, man hours and continuous improvement. Seeking to align people and actions in the same direction, the TPM implantation process at KPMA was called “the SUPERAR program” (superar means to surpass in Portuguese), aiming to break limits and increase competitiveness. The program main objective is to overcome problems and surpass limits continuously, through new tools dissemination, new resolution processes, team work, being the employees the main asset of the company. By that, the SUPERAR Program “Vision” was defined as – “engage employees, improve KPI and achieve the TPM Award”. Since 1971, the JIPM (Japanese Institute of Plant Maintenance), the organization responsible for TPM global dissemination, which awards the companies, inside and outside Japan, by auditing excellence in the TPM implantation and sustaining (NAKAJIMA, 1989). Figure 4 shows the SUPERAR sustaining pillars to reach the world class pattern in excellence, productive, quality, cost, delivery, morale and safety. The pillars are based on quality tools, OEE implement and other performance indicators in each specialized area and to identify the improvement points. Proceeding with the TPM implantation plan, the Planned Maintenance Pillar was created, seeking to optimize the maintenance managerial process, establishing policies, methods, activities procedures, elimination of weak points; employee’s training, involving the production staff in machine control. Based on its activities the Maintenance Planned Pillar “Mission” was defined as: “Increase the availability and reliability of the machines and installations with safety and adequate costs.” The pillar presents a lack in controlling and communicating means between the work done by the employee and the administration goals used to check the Planned Maintenance Pillar success in its defined mission, damaging the employee’s commitment with the program. That is the deficiency where the BSC can be used to link the shop floor results with the goals of the maintenance administration through interconnected performance indicators. Figure 4. TPM Pillars (Superar Program, Klabin S.A.). Balanced scorecard for TPM maintenance management Biasotto et al.148 A case study in KPMA plant will be presented below, in which the BSC was implemented in the Planned Maintenance Pillar. This case was developed aiming to optimize the pillar’s results and upgrade the whole TPM program concept. 8. Case study In way to apply the BSC methodology to a maintenance structure based on the TPM system, the “Four-Stage Model” previously described was used. This methodology is suitable to manage the maintenance function, being simple and objective, showing how the BSC methodology can be applied in a TPM environment, by translating the Planned Maintenance Pillar strategy and showing the BSC contributions to the plant maintenance management. This development process is expressed in Biasotto (2006b) in collaboration with the KPMA´s maintenance department. The BSC adaptation proposal, its implantation method and problems related are detailed in the following sections. 8.1. Stage 1: Strategy The fi rst stage is integrates the BSC with the Planned Maintenance Pillar plan, highlighting the BSC contribution to visualizing the relationship between the shop fl oor and the top managerial strategic plan. Figure 5 shows the BSC dynamic using questions to defi ne the Success Critical Factors – SCFs to reach the pillar’s “Mission” and consequently its “Vision”, as defi ned in section 7. Beginning with the fi nancial perspective, all four BSC perspectives will take shape. The SCFs are the line actuation where the pillar team must perform in order to succeed in its maintenance management. The SCFs defi ned by the pillar team seek to: • Reduce, eliminate and prevent breakdowns; • Implement a Planned Maintenance System; • Support the groups of Autonomous Maintenance; • Support the Quality Guarantee System; and • Control and reduce the maintenance costs. Once the SCFs have been identifi ed, a cause-effect analysis must be done, taking care with possible confl icts between perspectives, as well as some synergy. So, a strategic planning map for the pillar achieves its Mission can be established, as shown in Figure 6. From this preliminary strategic map it is possible to see clearly that the control and reduction of the maintenance costs (financial perspective) will occur through the reduction, elimination and prevention of breakdowns jointly with a quality guarantee system for the plant operation (costumer perspective). This will be possible with a planned maintenance system in the maintenance department (internal process) by training the autonomous maintenance teams (learning and growth), the staff responsible for plant operation and maintenance. With this relationship it can be noted that the SCF requiring an Autonomous Maintenance Team support, based on employees training and qualifi cation, characterizes the pillar base to obtain success in all other BSC perspectives. The next step involves identify the strategic objectives where the Planned Maintenance Team must actuate to succeed. Figure 5. BSC dynamic to defi ne the SCF. Figure 6. Planned Maintenance Pillar strategic planning map with its SCFs. Vol. 8 nº 2 December 2010 149Product: Management & Development 8.2. Stage 2: Strategic objectives Proceeding with the strategy translation process, according with the Amendola`s methodology, the strategic objectives are now identified, from the SCFs deployment considered in the previous stage. The “strategic objectives” are the key actuation points where the pillar must act, as shown in Table 1, based on availability, reliability, costs, energy consumption, systemic improvement and employee characteristics. Now the key actuation points become objectives related to a strategy, specifying where the maintenance management pillar must act to succeed in its strategy. 8.3. Stage 3: Performance indicators Performance indicators are introduced to evaluate maintenance staff actions to accomplish the pillar strategy, related to each strategic objective defined. The performance indicators selected for the Planned Maintenance Pillar are given in Table 2. Observing that the same performance indicator could refers to more than one strategic objective, like the “Replacement Pieces” indicator, that refers not only to a ideal maintenance policy (systemic improvement) in the internal process perspective but, also, it indicates a spare parts reduction (costs strategic objective) in the financial perspective. The other internal process indicator, the “Monthly Number of Breakdowns per Machine” refers to a breakdown analysis system necessity (systemic improvement), as well as to breakdown prevention (reliability) and breakdown reduction (availability). On the other hand, some strategic objectives, such as spare parts reduction and rework elimination (costs), in the BSC’s financial perspective, are not directly supported by an performance indicator but, generically assessed by cost indicators like the “Maintenance Cost (% cost based on costs of the base year 2002)” and “Specific Maintenance Cost”. Besides “TFG - General Accident Frequency Rate” and “Training” indexes, which measure the pillar management performance in the learning and growth strategic objectives of the BSC. The Operational Availability (A o ), defined by Blanchard, Verma and Peterson (1995), can be calculated as the MTBM (Mean Time between Maintenance) divided by the sum of MTBM plus MDT (Mean Downtime). Also the MTBM indicator can be approximated to MTBF (Mean Time Between Failures), then, the equation will be A o = MTBF / MTBF + MDT. So, the “OEE – Availability of Maintenance”, our operation availability measurement from the costumer perspective, is directly dependent on the MTBF and MDT, also performance indicators from the costumer’s perspective. Table 1. Strategic objectives for the Planned Maintenance Pillar. BSC´S perspectives Success critical factors – SCF Strategic objectives Financial Control and reduce the maintenance costs Costs • Material waste reduction • Spare parts reduction • Rework elimination Power consumption • Usage optimization • Losses reduction Costumer Support the Quality Guarantee System & Reduce, eliminate and prevent breakdowns Availability • Breakdown reduction • MDT and MTTR reduction • Maintenance schedule improvement Reliability • Increase MTBF • Breakdown prevention • RCM and FMEA Internal process Implement a planned maintenance system Systematic improvement • Ideal policy of maintenance • Breakdown analysis system • Support to autonomous maintenance • Support to quality system Learning and growth Support the groups of autonomous maintenance Employees • Skill´s development (operator and maintenance worker) • Occupational accidents reduction Balanced scorecard for TPM maintenance management Biasotto et al.152 With this model, the pillar’s management can be carried out from its performance indicators as foreseen in the BSC methodology, not just visualizing the reduction in the cost indicators (financial perspective), as the usual administration focus, but considering that this reduction will depend of plant’s availability and reliability (costumers).What will happen with lower number of breakdowns (internal process) by employee’s training (learning and growth). This logic promotes a strategic maintenance management for TPM program as detailed in Biasotto (2006b). 8.4. Stage 4: Implantation To succeed in this methodology, a “strategic learning cycle” must be performed (KAPLAN; NORTON, 2000), comprises the following activities: • Organizational deployment: indicators dissemination in whole company, through workshops, besides scorecards and strategic maps exhibition; • Popularization: in a top-down way, first to highest administration until reach the entire staff; • Automation: data storage and performance indicator follow-up driven by the BSC logic. • Meetings to try hypotheses: analyze the proposed strategy by the TPM maintenance team based in data collection, always considering supplier needs, external consulting or the benchmarking process; and possibly reevaluate the strategic plan (new vision, mission and strategic objectives) to meet new and future challenges that will arise through cost reduction, plant availability needs, etc; • Communication with the administration: meetings with the highest manager to show the BSC evolution; and • Feedback: apply the strategic changes needed in a “continuous improvement process”, which represents the biggest BSC methodology contribution to the TPM program. 9. Managing the planned maintenance pillar using BSC The “continuous improvement process” represents the greatest BSC advantage by integrating both, tactical management (financial perspective) and strategic management in the BSC perspectives, in a continuous process, what is called out by its authors “strategic double loop” (KAPLAN; NORTON, 2000), as shown in Figure 9. In the traditional management model practiced by the planned maintenance pillar in KPMA plant, the focus revolves around the financial perspective through budget control and managerial reports with maintenance cost indicators. The BSC strategic management, as shown in this Figure 9. Strategic double loop for the Planned Maintenance Pillar. Vol. 8 nº 2 December 2010 153Product: Management & Development Figure 10. Comparison between the actual management model and BSC’s strategic management. paper, transfers the proposed strategy to the maintenance pillar, in strategic objectives linked to performance indicators, where the management is focused not only on considering the financial perspective (maintenance costs), but also on the maintenance clients (production sector and its machines), the internal process (work flow), and the learning and growth perspective (training and innovation). This comparison becomes clearly visible in Figure10. Kaplan and Norton (1997) consider that a typical project to construct a BSC can take sixteen weeks without, however, spending all the time working with the scorecard activities. 10. Conclusions The BSC implantation to orient the maintenance management based in TPM philosophy, as shown, does not necessarily requires a whole organizational change or a great investment, but rather the holistic vision promoted by the BSC in meetings already held by the pillar team. BSC represents a natural evolution, for organizations seeking by World Class Manufacturing concept,what is not characterized by a steady ideal in the processes, but rather a constantly improving state. 11. References AHLMANN, H. R. From traditional practice to the new understanding: the significance of life cycle profit concept in the management of industrial enterprises. In: IFRIMMMM CONFERENCE, 2002, Växjö Sweden. Proceedings… AMENDOLA, L. Balanced scorecard en la gestión del mantenimiento. 2003. Available from: <http://internal. dstm.com.ar/sites/mmnew/bib/notas/Amendola1.pdf>. AMENDOLA, L. Sistemas balanceados de indicadores en la gestión de activos “Maintenance Scorecard”. 2005. Available from: <http://internal.dstm.com.ar/sites/mmnew/ bib/notas/SBI.pdf>. BIASOTTO, E. BSC application on TPM management: a case study in process industry. Dissertation (Master)- Santa Catarina´s Federal University, Technological Center, Mechanical Engineering Department, Florianópolis, 2006b. Available from: <http://www.tede.ufsc.br/teses/PEMC0935. pdf >. BIASOTTO, E.; DIAS, A. C.; OGLIARI, A. Indicadores de desempenho para gerenciamento da manutenção de classe mundial. In: CONGRESSO NACIONAL EM ENGENHARIA MECÂNICA - CONEM, 4., 2006, Recife, PB. Anais… 2006a, v. 1, p. 1-11. Cod 09-517. BLANCHARD, B. S.; VERMA, D.; PETERSON, E. L. Maintainability: a key to effective serviceability and maintenance management. New York: Wiley Interscience, 1995. 537 p. BOND, T. C. The role of performance measurement in continuous improvement. International Journal of Operations & Production Management, v. 19, n. 12, p. 1318-1334, 1999. Balanced scorecard for TPM maintenance management Biasotto et al.154 DIAS, A. C. Confiabilidade na manutenção industrial. In: ENCONTRO DE MANUTENÇÃO - EMAN, 2., 2001, São João Del Rei. Anais... São João Del Rei: Fundação de Ensino Superior de São João Del Rei, 2001. 1 CD-ROM. DUNN, S. Benchmarking as a maintenance performance measurement and improvement technique. Assetivity Pty Ltd, 2003. Available from: http://www.plant-maintenance. com/articles/Maintenance_Benchmarking.pdf. ELLINGSEN, H. P. et al. Management of assets, resources and maintenance by using a balanced scorecard based performance framework. In: INTERNATIONAL MAINTENANCE CONFERENCE: EUROMAINTENANCE, 16., 2002. Proceedings… p. 203-11. FLYNN, B. B.; SCHROEDER, R. G.; FLYNN, E. J. World class manufacturing: an investigation of Hayes and Wheelwright’s foundation. Journal of Operations Management, v. 17, p. 249-269, 1999. HENDRY, C. L. Applying world class manufacturing to make- to-order companies: problems and solutions. International Journal of Operations & Production Management, v. 18, n. 11, p. 1086-1100, 1998. KAPLAN, R. S.; NORTON, D. P. A estratégia em ação. Rio de Janeiro: Campus, 1997. 344 p. KAPLAN, R. S.; NORTON, D. P. Organização orientada para a estratégia: como as empresas que adotaram o Balanced Scorecard prosperam no novo ambiente de negócios. 4. ed. Rio de Janeiro: Campus, 2000. KAPLAN, R. S.; NORTON, D. P. The Balanced Scorecard – Measures that Drive Performance. Harvard Business Review, p. 71-79, 1992. LIYANAGE, J. P.; KUMAR U. Towards a value-based view on operations and maintenance performance management. Journal of Quality in Maintenance Engineering, v. 9, n. 4, p. 333-350, 2003. McADAM, R.; BAILIE, B. Business performance measures and alignment Impact on strategy: the role of business improvement models. International Journal of Operations & Production Management, v. 22, n. 9, p. 972-996, 2002. NAKAJIMA, S. TPM development program: implementing total productive maintenance. New York, NY: Cambridge Productivity Press, 1989. PALMEIRA, J. N.; TENÖRIO, F. G. Flexibilização organizacional: aplicação de um modelo de produtividade total. Rio de Janeiro: FGV Eletronorte, 2002. 276 p. TSANG, A. H. C. A strategic approach to managing maintenance performance. Journal of Quality in Maintenance Engineering, v. 4, n. 2, p. 87-94, 1998. TSANG, A. H. C. Strategic dimensions of maintenance management. Journal of Quality in Maintenance Engineering, v. 8, n. 1, p. 7-39, 2002. WIREMAN, T. Developing performance indicators for managing maintenance. New York: Industrial Press Inc., 1998. 195 p. YAMASHINA, H. Challenge to world-class manufacturing. Journal of Quality in Maintenance Engineering, v. 17, n. 2, p. 132-143, 2000. Appendix 1. Abreviations. BSC Balanced Scorecard OEE Overall Equipment Effectiveness CBM Condition-Based Maintenance RCM Reliability-centered Maintenance JIPM Japanese Institute of Plant Maintenance ROCE Return On Capital Employment KPI Key Performance Indicator ROI Return On Investment MDT Mean Downtime SCF Success Critical Factors MRP Material Requirements Planning TBM Time Based Maintenance MTBF Mean Time Between Failures TFG General Accident Frequency Rate MTTF Mean Time To Fail TPM Total Productive Maintenance MTBM Mean Time Between Maintenance TQM Total Quality Management MTTR Mean Time to Repair WCM World Class Manufacturing