Contributing Re.engineer Partner: Paul V. Arnold, Noria Corporation (Complete article found here)
Challenge: This site, part of Alcoa’s massive Warrick Operations, was constructed in the late 1950s and began producing raw aluminum for the can sheet industry in the early 1960s. It’s an old plant in an age- and technology-sensitive industry. There were 33 American smelting plants operating in 1980. Today, there are 13.
The challenge was and is to be cost-competitive in spite of declining health and condition of the assets.
Solution: In order to drive down maintenance costs, the Alcoa Maintenance leaders teamed up with consultants from Life Cycle Engineering (LCE) and the Ron Moore Group in early 2003 to create an approach called the Reliability Excellence Process, which was deployed in three “waves.” The process is based on the belief that a formalized, well-defined partnership is imperative between maintenance and operations. In this partnership, operations owns the equipment and has a primary stake in reliability. Maintenance is an equal partner dedicated to provide timely and effective methods, skills, expertise and support.
In Wave 1, Ron Moore challenged the age-old paradigms. ‘You need to take more of an asset-owner philosophy.’ ‘You’re wasting money.’
In Wave 2, begun with a full Reliability Excellence assessment by LCE. Over a two-week period, the firm conducted lengthy interviews with 90 operations and maintenance employees (hourly and salary), as well as the plant controller.
The information led to:
Results: Maintenance and operations worked together to define peak performance for plant functions (for example, anode assembly), processes (ore unloading), outcomes (scrap) and individual pieces of equipment (ring furnace).
With the background information, current states were defined and target conditions established. Activities – work projects utilizing lean manufacturing tools such as Kaizen and Continuous Improvement – took place. Progress was measured and analyzed. And, tangible benefits were calculated. In 2004, $2.4 million in improvements were linked to OEE gains. Looking deeper and taking actions also led to decreased maintenance expenses in the smelting plant. In the first year after beginning the reliability initiative, expenses dropped $1.9 million, from a baseline figure of $32 million to $30.1 million. In 2004, the figure fell another $700,000. The ratio of maintenance expenses per metric ton produced also dropped from $137 to $109 in 2004.
Impact: $5 million