Equipment Management in the Post-Maintenance Era

Advancing in the Era of Smart Machines

Kern Peng

• Publisher: Productivity Press
• Year: 2021
• ISBN:
  9781000345216
• Edition: 2
• Topic: Betriebswirtschaft
• Subtopic: Operations

Recent advancements in information systems and computer technology have led to developments in equipment and robotic technology that have permanently changed the characteristics of manufacturing equipment. Equipment Management in the Post-Maintenance Era: Advancing in the Era of Smart Machines introduces a new way of thinking to help high-tech organizations manage an increasingly complex equipment base. It also facilitates the fundamental understanding of equipment management those in traditional industries will need to prepare for the emerging microchip era in equipment.

Kern Peng shares insights gained through decades of managing equipment performance. Using a systems model to analyze equipment management, he introduces alternatives in equipment management that are currently gaining momentum in high-tech industries. The book highlights the fundamental internal flaw in maintenance organizational setup, presents new approaches to replace maintenance functional setup, and illustrates a time-tested transformation and implementation process to help transition your organization from the maintenance era to the new post-maintenance era. Fundamentally, it:

• Breaks down the history of equipment into five phases,

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• Provides a clear understanding of equipment management fundamentals, and

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• Introduces alternatives in equipment management beyond the mainstream principles of maintenance management.

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More specifically, the book examines maintenance management logistics, including planning and budgeting; training and people development; customer services and management; vendor management; and inventory management. Supplying a comprehensive look at the history of equipment management, it analyzes current maintenance practice and details approaches that can significantly improve the effectiveness and efficiency of your equipment management well into the future.

This second edition addresses the role of the development of the Internet of Things (IoT) and significant advancements in artificial intelligence (AI) and machine learning (ML) in enabling a new generation of smart machines, which have in turn laid the foundation for Industry 4.0. Equipment utilizing IoT and sensors can monitor components and allow them to be serviced at an exact time without the need for a preventive maintenance schedule. Moreover, equipment replacement rarely occurs at the end of the piece of equipment's natural life; rather, replacement is driven by the introduction of new technologies and products, all of which lead to less maintenance activities and reduces the importance of the traditional maintenance function. Maintenance departments today operate with fewer employees and smaller budgets. At a point when machines are smart enough to keep themselves running or equipment is rendered obsolete by better equipment in a short time, such as with computers and cellphones, companies do not need a maintenance department.

This updated edition reiterates the importance of transitioning to the post-maintenance era to effectively manage today's sophisticated, smart yet expensive equipment. Many changes the author predicted a decade ago are accelerating in the IoT era. Equipment management is moving further away from the maintenance era and advancing deeper into the post-maintenance era. The trend for smart machines is very clear and companies that do not upgrade their equipment will lose their competitiveness. As equipment and factories become smarter, companies must change their practices and organizational structures to manage the new generation of equipment for Industry 4.0.

1

Introduction to Equipment Management

DOI: 10.4324/9781003054856-1

BACKGROUND

Today, most industries employ sophisticated equipment to produce products. Utilizing advanced equipment not only provides strategic advantages for many companies over their competitors but is also in many cases a necessity for survival. Just in the past decade, the developments in the Internet of Things (IoT), artificial intelligence (AI), and machine learning (ML) technologies have led to an explosion of innovations in equipment and robotic technology. As a result, the characteristics of manufacturing equipment have changed significantly in recent years, especially in high-tech industries. The trend will continue due to the upcoming 5G technology and autonomous revolution, enabling the Industry 4.0 that has already started.

First, the complexity in equipment increases. For instance, in the past, most machines were stand-alone units. Now, many machines are built with sensors and the IoT, computerized locally and connected to data centers to form an automated manufacturing line. Many machines have more parts and operate with higher speed and greater precision than previously and are capable of self-monitoring, self-correcting and even self-optimizing based on big data analytics done on remote servers.

Second, the fast-paced development in technology leads to a shorter equipment life cycle. In the past, the life of a machine generally ended when it failed and was beyond repair. Today, many machines are replaced due to technology obsolescence although they are still in good condition. A company would be in a significant disadvantage if its equipment were not upgraded to the latest models.

Finally, equipment cost has become increasingly expensive. For example, in the semiconductor industry, Rock’s law was developed by venture capitalist Arthur Rock to signify this trend. Rock’s law states that the cost of capital equipment doubles about every four years in the semiconductor industry, and this has been accurate since the beginning of the industry in the 1960s. In a real case, a lithography machine cost about US $10,000 in the 1970s; an EUV lithography machine costs about US $120 million now and has been sold out for years. Building a wafer fab with the latest process technology costs about US $10B now.

As equipment cost increases, the inefficiencies in equipment utilization have a greater impact on a company’s output and profit. Managing equipment performance has become a top priority in many companies. In the high-tech industries, the situation is made worse because the technology becomes obsolete at a rapid rate, leading to a short useful life for equipment. To maximize returns on investment in a short period, companies are often run their equipment longer and push the machines to operate at their limit in terms of speed and precision. As a result, managing equipment performance has increasingly become a challenging task.

Equipment management has gone through many phases. The first phase was the breakdown management phase in the pre-1950 period. In this phase, machines were only serviced when they needed repairs. The second phase was the preventive maintenance (PM) phase in the 1950s. During this period, the maintenance function was established, and time-based PM activities were generally accepted. The third phase was the productive maintenance phase in the 1960s. The key characteristics of this period were equipment reliability and maintainability focus, as well as cost consciousness in maintenance activities. The fourth phase was total productive maintenance (TPM) in 1970s. This period was significant for expanding maintenance techniques to include aspects such as human factors and equipment design. The fifth phase was TPM with predictive maintenance (PdM). This phase prevailed from the 1980s to the mid-1990s, when the condition-based maintenance concept called PdM was widely applied through the implementation of computerized maintenance management systems (CMMSs).

These phases are generalized by the acceptance of the particular equipment management practices by industries and firms in a specific period. This does not preclude that these practices have existed beyond the periods described. In fact, most of these practices are still in use in some industries and companies.

Equipment management has remained in the “maintenance” mode at large for decades. The maintenance methods are widely used and regarded as the norm in managing equipment. The conclusive focus of maintenance is on the optimization of equipment availability. However, only equipment utilization determines the output and profit of a factory. In most cases, factory organizational structure is set up in a way that the operations departments are responsible for equipment utilization, while the maintenance departments are responsible for equipment availability. Because of this functional separation, the whole picture is often not fully comprehended, allowing deficiency to occur in the overall equipment management process.

Because the traditional maintenance methods cannot meet today’s requirements, especially in the high-tech industries, many leading high-tech companies have started to challenge the old norms in equipment management. From the organizational structure aspect, maintenance departments are disappearing. Maintenance functions are either absorbed in the operations via the universal tech concept or merged with equipment development via the platform ownership concept under new departments with titles such as manufacturing engineering, equipment engineering services, or platform engineering. The responsibilities of such departments extend beyond maintenance to include equipment utilization as well as equipment development.

In 2012, the first edition of this book was published and defined this new phase in equipment management called “the post-maintenance era.” Since then, there have been significant technology developments, such as the IoT, cloud computing, ML, and AI, plus hardware advancements in data storage, processing, and transfer, all of which change equipment characteristics and the way we managed them. We are now deeper into the post-maintenance era, and it will continue further with a new generation of smart machines coming.

Increasingly, the equipment platform ownership concept is practiced. The term platform is used to describe the inclusion of everything associated with equipment, from tangible elements such as network and facilities to intangible attributes such as software and network connections. In addition to keeping equipment operational, equipment platform owners are responsible for the entire equipment platform environment, from the development of equipment capability, platform support structures, methodologies, and comprehensive computerized equipment management systems to provision of a total solution to optimizing equipment output.

The structure of this book is as follows:

• Chapter 1 introduces the topic of equipment management and provides the key definitions on frequently used terminologies.
• Chapter 2 reveals the history of equipment management, defining five phases of equipment management in the pre-maintenance and maintenance era.
• Chapter 3 discusses the advancement of equipment management into the post-maintenance era, from the phase of robotic automation to the current phase in smart machine era and the future phase of smart factory.
• Chapter 4 presents the overall equipment management process in the systems viewpoint, which sets a framework for analyzing the progression of equipment management.
• Chapter 5 explores the new changes in equipment management in the post-maintenance era at the strategic level.
• Chapter 6 reviews the past general maintenance concepts and offers suggestions on the adoption and obsolescence of these concepts in the post-maintenance era.
• Chapter 7 describes the key logistics of maintenance management and how they should be modified for the new era.
• Chapter 8 analyzes key maintenance performance indicators and what should be used in the new era.
• Chapter 9 examines the computerized maintenance management systems (CMMS) and the new equipment management systems (CEMS) used in the post-maintenance era.
• Chapter 10 demonstrates a step-by-step implementation plan that may be utilized to transform a company from “maintenance” oriented to the new platform ownership setup in the post-maintenance era.

MAINTENANCE MANAGEMENT

The dictionary definition of maintenance is “the work of keeping something in proper condition.” In maintenance management literature, maintenance is generally defined as combinations of all technical and administrative actions intended to retain an asset or a system in, or restore it to, a state in which it can perform the required functions. In the daily vocabulary of traditional organizations, maintenance most likely refers to the department responsible for the function of maintenance. Obviously, maintenance is also considered a function of an organization. The objective of the function is to preserve either an asset or the ability of the asset to produce something safely and economically. Since maintenance does not produce any product, it is considered an overhead function.

Maintenance management is the discipline of maintenance. It originated in the 1950s with the implementation of the PM concept. Since then, it has been the mainstream discipline providing guidance for managing all company assets, but with manufacturing equipment as the center of attention. Most of the concepts and practices in maintenance management were developed from managing equipment and for managing equipment. Practices of other asset maintenance, such as building maintenance, remain at the early development stage of maintenance management and have not changed much. With managing equipment leading the development of the discipline, maintenance management has evolved to include key concepts and practices such as PM, maintenance prevention (MP), PdM, reliability-centered maintenance (RCM), and TPM. These concepts and practices are discussed in detail in Chapter 6.

Since maintenance is a function generally performed by the maintenance organization, it naturally comes with all the administrative logistics associated with a business unit. Maintenance management also provides guidance and strategies for managing the logistics. The maintenance administrative logistics include resource planning and budgeting, training and certification, customer services and management, vendor and contract management, and spare management, all of which are discussed in detail in Chapter 7.

EQUIPMENT MANAGEMENT

Ever since the establishment of the maintenance management discipline, maintenance management has been considered the principal guide for equipment management, and most of the key maintenance concepts and practices originated from managing equipment. In the mind of most people, equipment management is maintenance management. However, a fundamental change in equipment characteristics and business environments in recent years is that maintenance management principles are no longer providing effective guidance for managing equipment. This book makes a clear distinction between the two terms.

Maintenance management is more suitable for managing assets that are stable and consistent. Today, most industries employ sophisticated equipment to produc...