Metals firm outsources maintenance
A Canadian aluminum extrusion plant has gained control of maintenance costs and reduced downtime by outsourcing its maintenance management....
December 1, 2004 | By MRO Magazine
A Canadian aluminum extrusion plant has gained control of maintenance costs and reduced downtime by outsourcing its maintenance management.
Almag Aluminum Inc. of Brampton, Ont., is an ISO 9001:2000 certified aluminum extruder, specializing in complex products and difficult extrusions requiring quick turnaround. With four presses and flexible production, the family-owned company is able to provide some of the shortest lead times in the industry and enjoys a high level of satisfaction from Canadian and international customers.
Almag employs 180, up from 140 two years ago, working in a pair of side-by-side factories totalling 150,000 sq ft. The plants operate three shifts a day, five days a week. Once its business reached a certain size, Almag began experiencing management and control problems relating to costs and organization in its maintenance department. These difficulties were having a direct impact on its bottom line.
Almag’s maintenance costs had risen significantly over the past few years but there were no procedures in place to measure, reduce and manage them. Vendor management was also a concern as contractors would arrive and no one would know who had called them or why they were there. This practice made it even more challenging to manage both maintenance costs and vendor quality. The lack of control in the maintenance department meant that proper preventive maintenance (PM) procedures were not in place and there was a significant amount of maintenance-related downtime.
The challenges Almag was experiencing stemmed from the fact that maintenance was not one of its core competencies and it did not have the expertise that it needed on staff. The company realized, however, that maintenance did have a tremendous impact on its business.
“Almag really needed the control and cost management of our maintenance department,” said Bob Peacock, president of Almag Aluminum. “We needed a professional to help add structure and properly manage maintenance, rather than flying by the seat of our pants.”
Another insight added to the realization, he said. “We are not in the maintenance business, we are in the extrusion business.”
One supplier to Almag was Ainsworth Inc. of Toronto, which had been providing a variety of services to the company, including electrical installation and industrial electronics services. Ainsworth proposed the application of its Total Plant Maintenance (TPM) solution (the name is not to be confused with the usual definition for this term of Total Productive Maintenance).
Almag agreed, and now provides the full-service, outsourced maintenance management program. It is designed around Almag’s Key Performance Indicators, such as reducing costs of operation and increasing equipment uptime. TPM is a performance-based solution where Ainsworth takes accountability for all aspects of Almag’s maintenance management and jointly shares in the goals of the Almag organization.
“Performance is central to our TPM solution as it drives financial results for both Ainsworth and Almag, as well as ongoing customer satisfaction,” said Carl Rennick, P.Eng., manager of the Total Plant Maintenance business unit at Ainsworth.
Ainsworth put together a TPM solution for Almag’s maintenance problems that included:
* Recruitment and placement of a technical maintenance specialist with extensive experience both in the aluminum extrusion business and the daily management of maintenance departments. Ainsworth hired Frank Urbanski for this position; he works full-time at the Almag facility and is treated like a regular employee of the company.
* Placement of an Ainsworth person, Albert Cheng, who is responsible for the overall performance of the agreement, ensuring that the agreed-to Key Performance Indicators (KPIs) are monitored and met and that the ongoing continuous improvement process is implemented and effective.
* Supply, implementation and operation of a computerized maintenance management system (CMMS). Almag now uses Datastream’s web-enabled 7i Asset Performance Management system.
* Outline, formalization and implementation of preventive maintenance processes and procedures.
* Vendor management services to ensure cost control and quality vendors.
* A detailed implementation plan to achieve the KPIs.
“The implementation of the TPM program has been very smooth and there have been no surprises,” says Peacock. “During the first couple of months there was occasionally awkwardness in terms of getting used to who was doing what — what Ainsworth was responsible for versus what Almag was looking after. But things were sorted out and minor problems were dealt with quickly.”
Almag is also getting positive feedback from its employees in the plant on the success of the program. Inevitably there were some who were not originally in favour of the program, but “within the first three months we were getting positive feedback from our team that this was the way to go,” says Peacock.
“In addition, we assured people that nobody would lose their job through this program — that was important to Almag. There may not always be a job available in maintenance but there would be a job. And that has been the case.” In fact, Almag recently added two more employees to its shop-floor maintenance team, bringing the total to six.
The timing for implementation of the program was very quick. Ainsworth was first on-site at Almag in January 2003 and by August 2003 the Total Plant Maintenance program, including the CMMS system, was up and running. Ainsworth is now seen to be a true part of the Almag organization. That, according to Rennick, is what this program is designed to do — be a true partnership between Ainsworth and its customers.
Almag’s two main objectives when they decided to work with Ainsworth on the TPM program were control of maintenance costs and improving downtime. Both objectives have been delivered.
At the beginning of the process, Ainsworth and Almag agreed on a cost base and Ainsworth worked to manage to this cost base. The results in terms of cost control are very good and one year into the program, Ainsworth is running 14.6% below plan on the cost base (part of the savings are shared with Almag). In addition, Almag’s maintenance costs are now 23.6% below 2002 levels. That’s despite the fact that business is up 30% this year alone, says Peacock.
Although specific numbers are not yet available, Peacock estimates the improvement in maintenance-related downtime is around 6%.
“Overall, we are very satisfied with the program,” says Peacock. “At this point, we are getting better quality maintenance at a lower cost. This helps us and, ultimately, helps our customers. We can focus on what we do best, supplying top quality aluminum extrusions quickly and reliably, and let Ainsworth focus on what they do best, effective Total Plant Maintenance.”