Maintenance Management for Effective Operations Management at Matimba Power Station
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Maintenance management for effective operations management at Matimba Power Station by Oufa Ernest Mutloane 20391765 Mini-dissertation submitted in partial fulfilment of the requirements for the degree of Master in Business Administration at the Potchefstroom Campus of the North-West University Supervisor: Mr Henry Lotz November 2009 ABSTRACT Effective and efficient operations management is the cornerstone of any company's success. Presently, because of cost-cutting pressures, all investors look out for companies' operations before making any investment commitment. The South African Government (through the Department of Public Enterprises), as an owner and investor in Eskom, is looking at optimising operational excellence within state-owned enterprises like Eskom. Eskom is presently experiencing problems with increased electricity consumption which it cannot meet due to the limited plant capacity it presently has. These challenges are forcing Eskom to be more efficient and effective in management of the present plant assets (like Matimba Power Station) it presently operates. Matimba Power Station has consistently shown improvement in the areas of plant, financial and operations performance over the last three years. It is presently the standard bearer for the whole Eskom in terms of plant and operational performance. Asset management (through maintenance and management thereof), especially preventative management with in a power utility like Eskom, is a critical factor because supply (generation of electricity) has to meet demand (consumption of electricity) instantaneously as electricity cannot be saved . The planning, scheduling and execution of maintenance (through a work management process) to ensure success of business operations are very critical. An Eskom document titled Routine Work Management Manual emphasised the criticality of preventative management and included a six-step process of work management within the power generation business. The Japanese success in ensuring that operations costs are limited by implementing total productive maintenance (which includes work management) is suggested in the study as a way to go for operational success at Matimba Power Station. Many of the research studies done at Eskom in regard to maintenance were based on and confined to a sampling population of senior staff members like managers, engineers and supervisors. Experience has shown that progress of implementing change (whether in systems or structures) is slow if there was no proactive involvement of all participants and stakeholders, especially employees at lower levels involved in operations. A work management process, which is one of the pillars of total productive maintenance , was ii recently implemented at Matimba and is currently experiencing teething problems which are being attended to. Employee involvement in making sure of the success of work management is critical. The study investigates the implementation of work management from the employees' perspective in order to address problems for possible full implementation of total productive maintenance. Key words: Operations management; maintenance management; power station; work management; total productive maintenance; preventative maintenance Ill ACKNOWLEDGEMENTS I would like to acknowledge the following persons for making th is study a reality: • My deepest gratitude is to my Heavenly Father, who took me from nothing to great heights. • I would like to thank my supervisor, Mr Henry Lotz, for his guidance throughout the research . • I am grateful to the staff at Potchefstroom especially Wilma Pretorius for the passion for her work and assistance to all MBA students throughout the years of our studies. She is a real example to us. • My deep appreciation is to my children, Mpho, Katlego and Tshiu, for their support through the most stressful period. • My wife, Pinky, who has been a rock for the foundation we are laying. • To my mother, who fought for 42 years of being a widow to make sure that her children go through life's challenges. • Mrs Antoinette Bisschoff, for editing the text. iv TABLE OF CONTENTS Abstract ii Acknowledgements iii List of figures ix List of tables X List of abbreviations XI CHAPTER 1: NATURE AND SCOPE OF THE STUDY 1 1.1 INTRODUCTION 1 1.2 PROBLEM STATEMENT 3 1.3 OBJECTIVES OF THE STUDY 3 1.3.1 Primary objectives 3 1.3.2 Secondary objectives 4 1.4 SCOPE OF THE STUDY 4 1.5 RESEARCH METHODOLOGY 4 1.5.1 Literature study 4 1.5.2 Empirical study 5 1.6 LIMITATION OF THE STUDY 5 1.7 LAYOUT AND STRUCTURE OF THE STUDY 6 1.8 SUMMARY 7 CHAPTER 2: LITERATURE REVIEW 8 2.1 INTRODUCTION 8 2.2 DEFINING OPERATIONS MANAGEMENT 9 2.3 BRIEF OVERVIEW OF MATIMBA OPERATIONS 9 2.3.1 Structures and responsibilities at Matimba 10 2.3.2 Processes at Matimba 13 2.3.3 Operations challenges at Matimba 15 2.4 OPERATIONS MANAGEMENT 17 2.4.1 Quality controls in operations 18 2.4.2 Production and productivity within operations 19 2.4.3 Departments' integration within operations 20 2.4.4 Maintenance management within operations 22 v Table of Contents (continued) 2.4.5 Operations performance 22 2.4.6 Employees' involvement in operations change initiatives 23 2.5 MAINTENANCE MANAGEMENT 26 2.5.1 Defining maintenance 26 2.5.2 ~ypes of maintenance 27 2.5.3 Tools and systems used for maintenance management 29 2.5.4 Current state of maintenance at Matimba 31 2.6 TOTAL PRODUCTIVE MAINTENANCE (TPM) 32 2.6.1 Defining TPM 32 2.6.2 Background information on TPM 32 2.6.3 Pillars of TPM 34 2.6.3.1 Autonomous maintenance pillar 34 2.6.3.2 Preventative maintenance (work management) pillar 35 2.6.3.3 Focused improvement (reliability optimisation) pillar 36 2.6.3.4 Quality pillar 38 2.6.3.5 Training and skills development pillar 38 2.6.3.6 Five-S pillar 38 2.6.3.7 Work management pillar and its implementation at Matimba 40 2.7 SUMMARY 42 CHAPTER 3 EMPIRICAL ANALYSIS 41 3.1 INTRODUCTION 41 3.2 SAMPLE SELECTION 44 3.3 MEASURING INSTRUMENTS 44 3.4 DESIGN OF RESEARCH AND QUESTIONNAIRE 45 3.5 STATISTICAL ANALYSIS AND RESULTS 46 3.5.1 Mean values 46 3.5.2 Standard deviation results 48 3.5.3 Test of significance 49 3.6 QUESTIONNAIRE ANALYSIS AND RESULTS 51 3.6.1 Communication and employee involvement in work management 51 3.6.2 Performance and effectiveness of work management 52 3.6.3 Team integration 52 VI Table of Contents (continued) 3.6.4 Sharing of responsibilities 52 3.6.5 Training 52 3.6.6 Work practices within Matimba 52 3.6.7 Experience and expertise on equipment and plant 53 3.6.8 Interference of work management on existing processes 53 3.6.9 Support for change 53 3.6.10 Implementation of TPM 53 3.7 SUMMARY 54 CHAPTER4 CONCLUSION AND RECOMMENDATIONS 54 4.1 INTRODUCTION 54 4.2 CONCLUSION 56 4.3 ACHIEVEMENT OF THE STUDY'S OBJECTIVES 56 4.4 RECOMMENDATIONS 57 4.4.1 Structures and responsibilities 57 4.4.2 Challenges facing Matimba 58 4.4.3 Quality management 58 4.4.4 Integration between departments 58 4.4.5 Employee involvement in change initiatives 58 4.4.6 State of Maintenance at Matimba 59 4.4.7 Total productive maintenance 59 4.5 SUMMARY 60 REFERENCES 61 APPENDIX A: QUESTIONNAIRE 65 VI I LIST OF FIGURES FIGURE 1.1 : STUDY PROCESS LAYOUT 6 FIGURE 2.1: DEPARTMENTAL STRUCTURES AT MATIMBA POWER STATION 10 FIGURE 2.2: MATIMBA OPERATIONS STRATEGY 10 FIGURE 2.3: A PRODUCTION SYSTEM MODEL 13 FIGURE 2.4: MATIMBA OPERATIONS STRATEGY 15 FIGURE 2.5: PROCESS CONTROL AT MATIMBA 15 FIGURE 2.6: QUALITY CONTROL THROUGHOUT PRODUCTION SYSTEM 18 FIGURE 2.7: EFFECTS OF SEPARATING FUNCTIONS IN PRODUCTION ENVIRONMENTS 20 FIGURE 2.8: INTEGRATING MAINTENANCE WITH PRODUCTION 21 FIGURE 2.9: COMPARISON OF ESKOM POWER STATIONS' OPERATING COSTS IN RIMWH 22 FIGURE 2.10: BEHAVIOUR/PERFORMANCE MATRIX 24 FIGURE 2.11: DIFFERENT TYPES OF MAINTENANCE STRATEGIES 28 FIGURE 2.12: ASSET MANAGEMENT PROCESS 35 FIGURE 2.13: SIX-STEP PROCESS FOR ROUTINE WORK MANAGEMENT 36 FIGURE 2.14: ASSET MANAGEMENT PROCESS (WITHIN ESKOM GENERATION) 37 FIGURE 3.1: VIEWS OF OPERATING AND MAINTENANCE EMPLOYEES (MEANS) 48 FIGURE 3.2: VIEWS OF OPERATING AND MAINTENANCE EMPLOYEES (STANDARD DEVIATIONS) 48 viii LIST OF TABLES TABLE2.1: IMPROVING MEAN TIME BETWEEN FAILURES 25 TABLE 2.2: PRIORITY TABLE 39 TABLE3.1: MEAN VALUES OF THE EMPLOYEES' VIEWS ON WORK MANAGEMENT 47 TABLE 3.2 STANDARD DEVIATION VALUES OF THE EMPLOYEES' VIEWS ON WORK MANAGEMENT 49 TABLE 3.3: MATIMBA EMPLOYEES' VIEWS ON WORK MANAGEMENT (TEST OF SIGNIFICANCE) 50 ix LIST OF ABBREVIATIONS BTL Boiler Tube Leaks BU Business Unit CBM Conditioned Based Maintenance CM Corrective Maintenance CMMS Computerised Maintenance Management System ERA Electricity Regulation Act ERP Enterprise Resource Planning (system like SAP) ERP Enterprise Resource Program EPRI Electricity Power Research Institute GO General Overhaul HMI Human Machine Interface JIPM Japanese Institute of Plant Management JIT Just in Time KPA Key Performance Area KPI Key Performance Indicator LOPP Life of Plant Plan MW Megawatt MTBF Mean Time between Failures OEE Overall Equipment Effectiveness OEM Original Equipment Manufacturer OHS Occupational Health and Safety Act OMS Occurrence Management System OPSLOG System used by Operating Department to log in daily Plant incidents OTS Operating Technical Specification PCLF Planned Capability Loss Factor PM Preventative Maintenance POP Process Quality Plan QCP Quality Control Procedure RCM Re liability Centred Maintenance RFID Radio Frequency Identification RPL Recognition of Prior Learning X SAP PM Module ERP sub-module used in Eskom generation for maintenance management SAP System Application ERP System used by most companies in South Africa TPM Total Productive Maintenance TPS Toyota Production System TPS Toyota Production System UCF Unit Capability Factor UCLF Unplanned Capability Loss Factor WM Work Management xi CHAPTER 1 NATURE AND SCOPE OF THE STUDY 1.1 INTRODUCTION It is the first time in Eskom's 80 years' history as a public services utility to attain such media scrutiny regarding operational performance of its power stations.