Automotive Purchasing News Review 21 July 2014 - page 8

21 July 2014
automotive purchasing
Overlayingmaturitymodels toAPM
Jul 15, 2014
With asset performance becoming an
profitability, companies are rushing to adopt
progressive maintenance practices. Indeed,
as Automotive Purchasing editor Drew
Hillier reports, predictive, condition-based
and reliability-centred maintenance are now
among key organisational topics. Principal
Analyst with LNS Research, which provides
advisory and benchmarking services to line-
of-business and IT executives, Dan Miklovic
(pictured) shares his long experience in the
asset and energy management practices
in inspecting different Asset Performance
Management (APM) maturity models and the
importance of understanding them further.
Not everything is a nail
While advanced asset performance
management practices are commendable
you need to remember two important points.
First: Power tools require a certain level of
maturity before you should use them – you
would not let a five year old use a chain saw.
And second: Not every piece of equipment
needs the same level of sophistication when
it comes to maintenance – just because you
have a hammer not everything is a nail.
Models of maturity
Organizations and Processes are like people:
they exist in stages. Some say we progress
from infancy through youth to adult stages in
life. Others offer a more granular model of our
lives, starting with conception followed by birth,
infancy, childhood, adolescence, adulthood,
and finally the senior or golden years. Both
groupings are correct and are simply just
representations of the stages of maturity we
have. We refer to these as models of maturity.
Like humans, organizations pass through
stages as well. The overall culture or character of
an organization as well as individual processes
that are practiced within an organization
pass through different stages. When trying to
characterize how sophisticated or accomplished
an organization is at performing certain
processes it often refers to its maturity level.
Just as there are many ways to describe
an individual’s maturity there many models
on how to describe the maturity of an
organization or its ability to use a specific
process methodology. None are “better” than
others, but some are more widely adopted.
Capability Maturity Models
Universities Software Engineering Institute
formulated one of the more widely adopted
maturity models. They published a Capability
Maturity Model which was promoted for use
in process improvement, originally in software
development and implementation, but since
applied to virtually any process.
Like many terms that are registered
trademarks, the term Capability Maturity
Model (CMM) has become a widely used way
to refer to any process maturity model.
The Carnegie Mellon CMM uses five levels
of maturity:
Quantitatively Managed
Another five-level model, the Quality
Management Maturity Grid was presented
by Philip Crosby in his book “Quality is Free”
and consists of the stages of Uncertainty,
Wisdom, and Certainty. At LNS
Research, we've developed
our own Quality Management
Maturity Model as well.
Preventative maintenance
In the maintenance field,
a common practice has been
to characterize maintenance
approaches as maturity levels
such as Reactive, Preventative,
Predictive, Condition-Based
Avoid the Temptation to Mix
and CMM. While the idea of a simple five-
level characterization of your maintenance
approach starting with reactive and moving to
RCM is attractive, you need to avoid it.
Maintenance approaches have evolved
from the break-fix mode associated with
reactionary, tomore sophisticated approaches
such as doing preventative maintenance
based on either calendar hours or run-time,
to various forms of predictive maintenance
using tools like condition monitoring as well
as performance monitoring and correlating
machine condition to quality and throughput.
The reason you don’t want to equate these
approaches with process maturity is that all
of them may be very valid approaches for
different types of equipment in the plant. Not all
equipment requires the same approach. In fact,
as one matures to become optimized it implies
that each appropriate approach has been
identified for every specific item maintained.
Risk of failure
Think about your automobile; we tend
to change light bulbs when they burn out –
reactive maintenance. We change our oil every
7,500 miles or six months, which is preventative
maintenance. We may use an antifreeze test
strip to test the condition of the antifreeze,
which is a form of predictive or condition-
based maintenance. Another condition-based
maintenance action would be to take the car in
for service if we note the fuel economy declining
or performance to be not quite as we expect.
Likewise, in manufacturing your approach
to maintaining assets needs to be based on
the criticality of the asset to the manufacturing
process, the risk that failure represents to the
process, and the costs of maintenance versus
downtime. All approaches to maintenance
have their usefulness depending on the
specifics of your manufacturing process.
Investing in CBM or RCM is certainly
appropriate for critical assets that have high
cost of associated downtime, but for other
assets a preventive approach may be more
cost-effective. When you recognize the
difference and adopt the right approach for
each asset you are on your way to having a
more mature APM process.
Volvoprofit risetemperedbyEuropeanlag
Jul 18, 2014
The shine has been dulled for global truck
maker Volvo’s core earnings (July 18) as a
slower than expected pick-up in demand
in its biggest market, Europe, had left it
with over-capacity in its
Despite posting a smaller than expected
rise the company, nonetheless Sweden's
biggest company by sales and top private
sector employer, also said it was slightly
ahead of plan with efforts to secure
better prices for
its trucks and
bolster profit
ma r g i ns
in its
biggest unit. Volvo, vying for market
leadership with Germany's Daimler and
Volkswagen's Scania and MAN brands, said
operating profit excluding restructuring
charges rose to 4.3 billion crowns (£367.74
million) versus a year-ago 3.3 billion and
a forecast 5.0 billion in Reuters poll of
Hangover in Europe
Truck makers have seen North American
sales accelerate this year as the economy
picks up while the need to replace ageing
fleets has taken some of the edge off
a hangover in Europe from a buying
spree of old truck models ahead of
new emission rules.
Volvo, which makes heavy-duty
trucks under the Renault, Mack and
UD brands as well as its own name,
said order intake of its trucks fell 6
percent year-on-year in the second
quarter, steeper than the 3 percent
fall seen by analysts. "Following the
weak first quarter, the European
market recovered gradually during
the second quarter, but the improvement
started somewhat later than we had
anticipated," Volvo said in a statement,
adding: "Toward the end of the quarter the
order intake increased and the fill rate in
our plants has improved ahead of the fall."
Volvo stood by its 2014 forecasts for
truck markets across the world, implying
decent growth in North America and a
small decline in Europe due to the weak
initial months of the year.
Significant results
Looking beyond the swings in market
demand, Volvo is under investor pressure
to show that a drive to boost profitability,
which has historically lagged nimbler
rivals such as Scania, is beginning to yield
significant results. Volvo's operating margin
hit 4.9 percent in the second quarter
versus a year-ago 4.5 percent, still a far
cry from the nearly 9 percent it had when
Chief Executive Olof Persson launched his
efficiency scheme in 2012.
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