Maintenance-Management Performance an-Overview Towards Evaluating Malaysian Palm Oil Mill

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The Asian Journal of Technology Management Vol. 3 No. 1 (2010) 1-5

Maintenance Management Performance An Overview towardsEvaluating Malaysian Palm Oil Mill

Nazim Baluch1*, Che Sobry Bin Abdullah1, Shahimi bin Mohtar11Universiti Utara Malaysia, Sintok Kedah, Malaysia

ABSTRACT

Deficient maintenance management can severely affect competitiveness of an organization by reducingthroughput, increasing inventory, and leading to poor performance. Performance cannot be managed withoutmeasurement: it provides the required information to the management for effective decision making; and isused by industries to assess progress against set goals and objectives in a quantifiable way for effectivenessand efficiency. For the palmoil mills to stay competitive, it is imperative that they elevate the maintenancemanagement role; from a cost center to the strategic partner in business. This paper highlights howmeasuring maintenance performance helps us identify the factors causing poor performance, and provides anopportunity to improve companys profits.

Keywords: key performance indicators, lean, total productive maintenance

1. IntroductionIn manufacturing context, maintenance

management is the process of directingmaintenance organization effectively byutilizing administrative, human, financial,and material resources in an efficient andeffective way through planning, scheduling,executing and monitoring their own progressfor continuous improvement. Maintenancemanagements role is to provide support to

production, and by providing reliableequipment and processes it helpsorganization to be competitive andcontribute to sustainable profitability;socially, economically and environmentally.It is no longer a cost center but a strategicbusiness partner that plays a vital role thathelps the organization to achieve its goals.

Maintenance management performance canbe evaluated using key performanceindicators (KPIs): This provides vitalinformation to the management for decisionmaking; it helps to identify inefficiencies inthe systems and provides an opportunity forimprovement.

It is evident from the literature thatmaintenance is still a low priority in the SMIsof Malaysia, 23 % - according to Shamsuddin

Masjuki et al., 2004. In todays operatingenvironment, both management and theoperation of the oil palm estates and crudepalm oil mills need effective team work,fruitful synergy effect on each other, cross-functional responsibility and accountability,inter personnel co-operation and relationship,reduced bureaucracy and resources utilization

www.sbm.itb.ac.id/ajtm

*Correspondence author. Email: [email protected]


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to achieve higher productivity and betterquality product. In order to stay competitivein the 21st century, it is imperative, for thepalm oil mills to recognize the importance ofmaintenance management and elevate its role

to the strategic business level.

2. Maintenance Management andMaintenance Strategies

With increased global competition,attention has been shifted from increasingefficiency by means of economies of scaleand internal specialisation to meeting marketconditions in terms of flexibility, deliveryperformance and quality (Y amashina, 1995;

Karuppuswamyet al., 2007).

In todays dynamic environment, areliable production system must be seen as acritical factor for competitiveness (Brah andChong, 2004). Poor organisationalcompetencies in managing the maintenancefunction effectively can severely affectcompetitiveness by reducing throughput,increasing inventory, and leading to poor due-date performance (Patterson et al., 1996,Ashayeri, 2007).

This has provided the impetus to theleading organizations worldwide to adopteffective and efficient maintenance strategiessuch as condition-based maintenance (CBM),reliability-centered maintenance (RCM) andtotal productive maintenance (TPM), over thetraditional firefighting reactive maintenanceapproaches (Sharma et al., 2005). The termlean production was introduced by Krafcik(1989) and by Womack et al., (1990) in thebook The Machine That Changed the World.

Lean production can be considered anextended JIT that includes new intra-organizational and inter-organizationalaspects (Enkawa and Schvaneveldt, 2001;Holweg, Matthias, 2007). Leanimplementation is therefore focused ongetting the right things to the right place at

the right time in the right quantity to achieveperfect work flow, while minimizing wasteand being flexible and able to change. Leanmaintenance is a pre-requisite for Leanmanufacturing

3. Maintenance Performance andevaluation

Performance measurement is amanagement tool to measure the directionand speed of change done by the company.Performance measurement plays an importantrole for the improvement of a progress(change) towards a better performingorganization.

Therefore, we need to formulateappropriate performance indicators. Theseindicators must be directly linked withcompanys strategic objectives (Gasperz, V.2003). Measuring maintenance performancehelps us identify the factors causing poorperformance, and provides an opportunity toimprove companys profits.

Besides, performance measurement isalso a way for the management to evaluatethe condition of its systems and make a

decision relating to maintenance policyadapted by the company. Maintenanceactivity is an activity that has a significantcontribution in operation costs, approximately30 percent of operation costs, especially if thecompany is implementing automatedproduction system (Garg, A., and Deshmukh,S. G., 2006).

Here are some of the key performancemeasuring tools being applied in the industry,depending on the strategies adopted. Strategic

TPM implementation programs have revealeda significant realisation of manufacturingperformance achievements leading toimproved core competitiveness oforganisations (Ahuja and Khamba, 2008, a,b).


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4. TPMs Key PerformanceIndicators (Metrics) andOperational Availability (OA)

The first metric for TPM is MTBF

(Mean Time between Failures). This ismeasured by machine, and for this metric, thelarger number the better it is. The secondmetric is Percent Reactive Maintenance (%Reactive). The smaller the number the betterit is. World class is 20% or less reactive and80% preventive, improvement, or scheduledmaintenance. Mean Time to Repair (MTTR)is the third metric. For this metric, the smallerthe number the better it is. As TPMprogresses, repairs are less serious and arequicker. Tracking repair hours and showing

an overall reduction is a direct cost savings.The fourth metric is Overall EquipmentEffectiveness (OEE).

This is measured by machine or byprocess. The higher the number the better itis. World class is 85% or better. Directfinancial impact can be shown as machinesrun faster with better quality more reliably.

TPM seeks to improve the overall equipmenteffectiveness (OEE), which is an importantindicator, used to measure TPM. An overall

85 percent of OEE is considered as worldclass and a benchmark for others (Blanchard,1997; McKone et al., 1999; Chand andShirvani, 2000).

Operational Availability (OA) - is ameasure of the "real" average availabilityover a period of time and includes all sourcesof downtime, such as administrativedowntime, logistic downtime, etc. It is theratio of the system uptime to total time.Mathematically, it is given by: OA=UPTIME

/ OPERATING CYCLE; where the operatingcycle is the overall time period of operationbeing investigated and uptime is the total timethe system was functioning during theoperating cycle. (Note: The operationalavailability is a function of time, t, oroperating cycle.)

5. Malaysian Palm Oil Industry andPalm Oil Mills Importance andScope

There are 434 palm oil mills operating in

Malaysia. The processes used are broadlysimilar and primarily involve: transportationof the fresh fruit bunches (FFBs);sterilization; stripping; digestion andpressing; clarification; nut/fibre separation;nut conditioning and cracking; crackedmixture separation; and kernel drying. TheMalaysian palm oil industry recorded animpressive performance in 2008 where theexport earnings of the oil palm products roseto a record RM 65.2 billion. Palm Oilcurrently contributes about 5-6% of

Malaysian GDP and provides employment for1.4 million workers (direct employment of570,000).

It triggers downstream activities andbrings in revenues for national developmentand stability, with foreign exchange earningsamounting to an average of US$ 11.5 billionannually. However, over the years, Malaysiahas been losing her market share toIndonesia; Indonesia is now the largestproducer of palm oil in the world (MPOB,

2008). Malaysian Palm Oil Boards NationalSeminars on Palm Oil Milling, RefiningTechnology, Quality and Environment clearlyemphasize the need to; lower the costs ofproduction, increase productivity, andimprove quality by adopting newenvironmentally friendly technologies. Thetrend in modern maintenance systems, tointegrate maintenance systems to enterpriseresource planning (ERP) and other businesssystems, offers an excellent opportunity toattain these goals (Basiron, Y . and Chan, K

W., 2004).

6. ConclusionPerformance measurement is used by

industries to assess progress against set goalsand objectives in a quantifiable way foreffectiveness and efficiency. For the palm oil


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mills to stay competitive, it is imperative thatthey elevate the maintenance managementrole; from a cost center to the strategicpartner in business. Performance cannot bemanaged without measurement; it provides

the required information to the management

for effective decision making. Researchresults demonstrate that companies usingintegrated balanced performance systemsperform better than those who do not managemeasurements (Kennerly and Neely, 2003;

Lingle and Schiemann, 1996).

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Maintenance-Management Performance an-Overview Towards Evaluating Malaysian Palm Oil Mill

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