MRO Magazine

Maintenance Management: big savings at big steel

When, in the late 1980s, Dofasco Inc. realized that its maintenance costs were rising, despite the introduction of PM and CMMS systems in the '70s and '80s, it scoured the industry and its own mainten...

February 1, 2000 | By Carroll McCormick

When, in the late 1980s, Dofasco Inc. realized that its maintenance costs were rising, despite the introduction of PM and CMMS systems in the ’70s and ’80s, it scoured the industry and its own maintenance operations to find out why. The Hamilton, Ont., based steelmaker decided there was an optimum way to monitor and maintain equipment, and set out to entrench these methods with a new kind of software program and maintenance culture. And this year Ivara Corporation of Burlington, Ont., a Dofasco business partner, will begin marketing a commercial version of the company’s internal maintenance software, under the title Ivara Expert Maintenance Program.

Dofasco, Canada’s largest, fully integrated producer of flat rolled steel, has $3 billion in annual sales and has hundreds of thousands of pieces of equipment, serviced by 1,700 maintenance people. Its steel products are used in a wide range of finished goods throughout major North American markets, including: automotive, construction, energy, manufacturing, appliance, consumer and industrial packaging, and steel distribution.

“There were four things we were unhappy with,” says Gino Palarchio, Manager, Equipment Reliability at Dofasco. “Maintenance costs continued to rise; 75 per cent of maintenance was reactive; product quality remained relatively flat; and the parts inventory for maintenance was relatively high.” Today Dofasco is the most profitable steel manufacturer in North America and was recently ranked by Dow Jones as the best steel maker in the world.

In the late 80’s and early 90’s Dofasco decided to do some benchmarking with other industries in other countries. “We concluded there was no country or company that was better than another,” explains Palarchio. “But we found pockets of excellence within our company.”


These pockets of excellence displayed “best practices” methods. Furthermore, says Palarchio, “We realized that the number of best practices we had were not well supported by CMMS. Sometimes CMMS was a barrier.

“In order to leverage the required best practices, we had to develop something that allowed us to be more effective at what we did.”

The goal was to develop a system that would let Dofasco know the condition of equipment at any given moment, allowing maintenance people to know exactly when to intervene. The goal is to have maintenance identify in advance the potential functional failures that could occur with equipment. They would also have identified in advance the appropriate maintenance at the right time to mitigate those functional failures. “As we take that approach to maintenance it turns out that a very large amount of maintenance becomes condition-based,” explains Palarchio.

Next, he asks, “How do you go about knowing what the condition of your equipment is? You become very reliant on data such as temperature, speed, vibration…. Data can be scattered across the company and inconsistently recorded. We wanted to gather it in an organized and efficient way to turn it into actionable knowledge.”

For example, he says, Predictive Maintenance will get readings and give data back, but then an expert needs to interpret it. Also, inspection information from Preventive Maintenance entered into a CMMS is text-oriented, not allowing it to be tracked or trended so it could be turned into actionable knowledge. Palarchio says, “If you have hundreds of thousands of pieces of equipment, who is going to go in and read all this?”

What followed was a decision to build software that would automatically analyze equipment performance data, identify potential failures and give recommended corrective actions. Called the Intelligent Condition Monitoring System (ICMS), the software was conceived in 1993, beta tested in 1995 and distributed around the company in 1998.

The maintenance savings at Dofasco attributable to the ICMS software are now in excess of $5 million annually; the actual figure is confidential, says Palarchio. “The best part is all the savings can be factually supported from day one, given that the software keeps track of every functional failure incident that has occurred and when and how it was rectified.”

The definition of potential failures in Dofasco equipment, and setting standards for the equipment, was arrived at by meeting with the people who work with the equipment, including vendors. Technicians and other people familiar with the equipment play an important role in itemizing the ways in which the condition of equipment components should be described.

The methodology used to capture this knowledge was Reliability Centred Maintenance (RCM); for example, asking questions such as: What is the function of this asset? In what ways might this function fail? What is the failure mode, i.e., what part will fail and what are the symptoms of an impending failure?

RCM identifies what type of work should be done. The majority of it, says Palarchio, becomes condition monitoring and failure finding. Without a methodology on what maintenance should be done and at the right time, says Palarchio, you either do too much too early or too little too late.

The usual data sources such as inspection results, operator rounds, vibration, lubricant tests and thermography can be used and fed automatically or manually into the ICMS software.

The next piece in the puzzle was to do something useful with the data. “If you are going to do condition monitoring and failure analysis, what are you going to do with the data to make it help you?” asks Palarchio. The software had to be designed to allow maintenance personnel to develop rules and alarm limits. Then the software has to alert maintenance when something goes wrong, and suggest corrective action.

To illustrate how this works, Palarchio refers to how Dofasco’s maintenance department dealt with an actual problem the ICMS software detected with a compressor. As a result of applying RCM methodology, an “on condition” task called the steam-to-wind ratio efficiency had been identified. (The compressor is run by a steam turbine. If it is using more steam than required to get X amount of wind, this is an inefficiency.)

The function and failure modes had been established in the ICMS software and an alarm had been set to certain parameters. One day the alarm for that compressor went off. “ICMS told us [the alarm indicated] fouled condenser tubes. This piece of equipment was not scheduled [for maintenance] for another eight months, but we went in and did one small job which resulted in $2 million in annual energy savings,” explains Palarchio. Sure, he says, the compressor would have continued to run and run, but it would not have been efficient.

Operators can see the failure modes associated with alarms. They can see the data points as well as the corrective actions associated with those alarms. “Failure to perform the intended function is core to ICMS. The failure mode is way before the impending breakdown,” says Palarchio.

“We are saying that we take (RCM) a step further because when we get the alarm, it is associated with a specific corrective action.” Maintenance does not have to send someone out to see what the problem is as the system tells them in advance. At the beginning of a shift, maintenance personnel can ask ICMS to bring up all of the equipment with readings outside pre-established norms and therefore have triggered alarms. They indicate that the equipment is beginning to operate in a manner that is below what the operator wants. The alarms are associated with the appropriate, pre-established, corrective maintenance.

ICMS not only makes equipment problems visible, it allows maintenance personnel to trace the alarm back to the equipment data that triggers it.

Commercial product developed

The seeds for the commercialization of Dofasco’s ICMS software were planted by companies from around the world–some 60 of them between 1995 and 1998–that came to Dofasco to benchmark their own maintenance. “They all wanted access to the software and the practices,” explains Palarchio.

Dofasco hired an organization to do market research. “Our goal was to capture 8 per cent of
the market; the market research came back with an “interested” response rate of over 76 per cent,” he says.

In 1999 Dofasco formed a business partnership with Ivara Corporation, a company which provides advanced maintenance software and services. Dofasco assigned five employees to work with Ivara to start with a clean slate and come up with new advanced software that will work with any company and industry in any country.

The commercial version of the software, called Ivara Expert Maintenance Program (Ivara.EXP), will be available sometime early this year. Dofasco’s development of its ICMS software also led to it being a 1999 Main Event conference award winner for “Best use of Innovation and Technology in Maintenance.” Ivara will also be providing to the marketplace training and consulting on best maintenance practices like RCM that earned Dofasco a second award of “Best Maintenance for a Large Plant.”

Montreal-based Carroll McCormick is a senior contributing editor for Machinery & Equipment MRO.


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