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$12MM INCREASE IN PROFITS THROUGH A RISK-BASED RELIABILITY IMPROVEMENT PROJECT


Contributing Re.engineer Partner:

Pinnacle, www.pinnaclereliability.com


Challenge:

A U.S. Lubricant Manufacturing and Packaging facility blends and packages various engine oils, process oils, and industrial lubricants to be distributed worldwide. In order to meet output goals, the facility identified the need to optimize its Preventive Maintenance (PM) program and identify reliability gaps preventing it from achieving desired output.


Solution:

To address these challenges, Pinnacle facilitated a comprehensive risk-based reliability improvement process, using Reliability- Centered Maintenance (RCM) as the core-driver. RCM, with its emphasis on functionality and effect of failure, provided the foundation to build a proactive maintenance program that would ensure the equipment’s reliability and availability were able to meet performance objectives. RCM’s systematic approach also allowed a broader vision of opportunities to be evaluated, beyond what would typically be addressed by RCM.


For this reliability-based improvement process, Operations and Maintenance processes, practices, and historical performance were comprehensively assessed. The objective was to develop an optimum maintenance and monitoring program for the operation of both of the packaging lines, and to additionally identify recommendations for improving process reliability gaps not directly related to maintenance. The scope of work included all significant mechanical, electrical, and instrumentation equipment on the lines, from the introduction of bulk lubricants and packaging materials, to the palletizing and warehousing of packaged retail product.


Pinnacle’s facilitation of this analysis included significant input from the client’s operations, maintenance, and engineering personnel to execute the following steps:


Results:

As a result of Pinnacle’s facilitation of the RCM-based reliability improvement project, the client received a complete and thoroughly documented proactive maintenance plan, as well as a list of recommendations to address gaps in performance and reliability. Each of the recommendations were verified by the client to be applicable and cost-effective—each recommended task addresses only the dominant failure modes identified for each piece of equipment and each task focuses on preventing the significant effects of equipment failure, mitigating or reducing the impact of the equipment failure, extending the mean time between failures, or identifying hidden failures.


Overall, the client received the following business benefits:

  • Reduced planned and unplanned downtime

  • Better utilization of assets

  • Optimized maintenance program, driven by risk

  • Identification of “bad actors”

  • Long-term cost savings through the reduction of planned downtime

  • Maximized uptime

  • Increased availability and speed of line

  • Higher production rate

  • Increased profitability based on reduction of third-party bottling and production

Pinnacle conducted a follow-up assessment of the improvement recommendations against the pre-project performance level of the lines. Due to essentially sold-out market conditions, it was estimated that the client will potentially realize an approximate 20 percent improvement in capacity utilization, resulting in a greater than 12 Million USD annual increase in profitability through corresponding reduction in more costly third-party packaging demands. This utilization will result from decreases in both planned and unplanned downtime. In addition, planned maintenance costs will be significantly reduced due to the optimization of proactive activities resultant from the RCM analysis. Although a significant step-change improvement will be realized in the first six to nine months, the expected time period required to fully achieve the potential ROI is expected to be 18-24 months.


Impact:

$12 Million USD annual increase in profitability

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