Importance of Planned Maintenance

  • Date: 01/05/2015

Published in Greenport Magazine May issue.

In this article Laurence Jones, director global risk assessment at international freight and cargo handling insurer, TT Club, offers advice on how carefully considered and implemented planned maintenance of cargo handling equipment saves not just time and resources but also radically improves the safety record and reputation for clean, quality performance at terminals.

Asset management is of great importance to any business of which maintenance, or thethe maintaining and monitoring of assets, is an integral and important part.

The purpose of maintenance is to maximise an asset’s useful lifetime and minimise cost. Decisions are regularly made about how to sustain assets – from servicing intervals and frequency to a responsibility hierarchy. While software tools can aid in the administration of a planned, efficient, cost-based, maintenance schedule, the fundamental issue is one of management attitude. If an asset is maintained more often than necessary, valuable time and resources are wasted.

It is also self-evident that well maintained machinery will be more efficient and less ‘power hungry’.  A greener environment will therefore result.  Whether the saved power involves electricity or the more direct burning of fossil fuels, the energy consumed in operating the terminal will be reduced and emissions cur down.

Maintenance performed too infrequently will also lead to a loss, resulting in unplanned down-time. Additionally, the cost of unexpected failure and repair can be up to six times that of planned, preventive maintenance. Costs saved by delaying routine servicing are short-term savings that may, eventually, incur financial loss.

Asset management
Maintenance should only be carried out within the strictures of a documented plan, when all the required resources are readily available and at a time that will cause least disruption to operations and customers. It may be performed by in-house employees or out-sourced to contractors. This decision is made based upon the degree of expertise and equipment which is required as well as the funds and time available.
It is important that there is a well-organised asset management structure. Front-line supervision, engineering/maintenance management, engineering support, training, participative teamworkand planning and maintenance data management are all key aspects.

Key Performance Indicators (KPIs) which monitor how a site’s assets are being maintained include the safety of personnel and the environment, the performance of equipment and the cost of engineering. Retirement, the final phase of an asset’s life cycle, can be the result of a need for newer models, changes to operational requirements, high maintenance costs or the risk of total failure.  As regards fuel efficiency and emission control, naturally early investment in new machinery and technology will be, in the vast majority of cases, more beneficial than repairing older equipment.  However, when funds are tight, there are still undeniable advantages to the environment in running handling equipment in a good state of repair.

Improving safety
Cost of claims caused by maintenance issues

Maintenance policy
In order to alleviate these issues and minimise risk and their insurance claims, every port and terminal operation should have a maintenance policy to maximise uptime and minimise cost. The following provides some guidance about developing such a policy. The principal aims of such a policy should be to:
Ensure a safe working environment for all terminal operations
Protect the company’s investment in infrastructure and equipment by introducing a framework for regular preventative maintenance and routine inspections thus maximising their useful life
Provide a structured plan for cost-effective maintenance expenditure

Routine inspections of all equipment and infrastructure should be planned and carried out at regular intervals in order to check the general condition of all components and should include general wear and tear, component failure and incidental damage. The interval between inspections, and the level of detail required, should be determined using component wear and tear predictions. Components should be prioritised based upon their operational and safety importance.

Regular maintenance, in line with the manufacturer’s recommendations and operational best practice should be carried out upon all equipment and infrastructure in accordance with maintenance procedures.

A framework for inspections and routine maintenance should be prepared by the site maintenance department based upon manufacturers' recommendations. A Computerised Maintenance Management System (CMMS) would usually be used for the management and control of such maintenance activities.

Maintenance Strategies
A maintenance strategy may be seen as the mission statement of the department and organisation. It must be supportive of, and be supported by, the business plan, must identify the needs and wants of customers, shareholders and other stakeholders, and should identify the best maintenance tactics for the application and equipment. Such a strategy should:
 Maximise productivity
 Phase out ineffective and inefficient equipment
 Optimise expenditure against equipment availability and reliability

Maintenance tactics are the specific actions taken to minimise the consequences of unexpected equipment failure. There is a particular operational difficulty when deciding the appropriate maintenance tactic. How does one decide the most appropriate action taking into account cost, plant down-time and risk? There is a balance between insufficient maintenance, having to tolerate unexpected down-time, or doing too much, bearing unnecessary cost.

The task of maintenance is to minimise an asset’s life cycle cost, maintain its fitness for purpose and provide availability and reliability so that operational requirements are fulfilled. Reactive or breakdown maintenance will, generally, increase down-time and result in higher overall cost.

Implementation of a preventive maintenance schedule always reduces the number of unexpected failures. A preventive approach means more equipment down-time for inspecting, servicing, repairing and testing, which leads to less equipment availability for operations. This may become difficult to manage and may also have a detrimental operational impact. There is a balance to be had between the cost of breakdown maintenance and the cost of preventive maintenance.

Budgetary constraints are often cited by operators as a reason for reduced maintenance standards or the absence of a planned, on-going maintenance programme.  While the financial challenges for operators in certain markets and at particular times are understood, the contention remains that a lack of investment in proper maintenance will inevitably cost the operator more when the consequences materialise. 

It is important not to lose sight of the fundamentals of maintenance practice. No matter how sophisticated the condition monitoring or the scheduled maintenance strategy, it is the responsibility of management to ensure that basic procedures are followed. It is dangerous to assume. Always verify that work has been completed as reported and that inspections generate the appropriate action.

TT Club has produced an advisory Handbook entitled ‘The Importance of Maintenance - a handbook for non-engineer’ which can be obtained via the TT Club website in PDF or printed format for the price of £36.

Case Study: Budgetary Constraints

A quick and easy way to cut costs is to defer or reduce the maintenance budget.  If this must be done it should be viewed as a short-term solution.  If extended it affects reliability and cost incurred to restore necessary reliability of performance may substantially exceed any expense previously saved.
Having lost business and revenue, the maintenance department at a terminal in Australia was told to cut its budget by 20%. This, initially, helped finances, but, instead of being a temporary measure, the cost reduction was continued for over six months.

Due to planned maintenance jobs being deferred and repetitive tasks and inspection frequencies being extended, the number of equipment breakdowns increased dramatically. This severely reduced ship loading rates and more business was lost. Due to pressure from the operations department, access to equipment for repair and maintenance was further reduced due to the reduced operational availability of equipment resulting from the increased breakdowns.

In the end, the only way to bring the equipment back to acceptable availability levels was to engage numerous contractors and additional staff for nearly a year to address the maintenance backlog. The actual maintenance budget for that year was 200% above the norm.

With the added impact of lost business, the total cost to the terminal was enormous. This could all have been avoided if senior management had a better understanding of the need and importance of maintenance.

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority. 

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.

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