Link Reliability Into Supply Chains

By Dr. Klaus M. Blache, Univ. of Tennessee Reliability & Maintainability Center

Increasingly, companies are viewing reliability and maintenance (R&M) challenges as part of their corporate goal to improve overall operations. This includes continuous improvement in familiar processes such as lean manufacturing, total productive maintenance (TPM), six sigma, and reliability-centered maintenance (RCM). It also covers all associated tools and techniques, including 5 whys, 5S, fishbone diagrams, Kaizen events, root-cause analysis (RCA), and, mistake proofing. Conversely, a frequently overlooked area of R&M involves possible improvements in logistics and the supply chain.

Most plants strive to lower inventories, reduce lead time, and attain perfect on-time delivery. Moving beyond that, however, and toward top-quartile performance, isn’t possible without reliable people, processes, and equipment. Everyone and everything must be reliable to provide a highly reliable supply-chain process.

From a logistics perspective, we want to optimize lead-time in every step of the supply chain. Just as important is the ability to know how long products will last. (Warranties are based on that knowledge.) From a management perspective, we want to achieve maximum return on investment (ROI). All of this requires a comprehensive approach that involves these factors:

Safety-incidence-rate reductions are directly affected by decreasing reactive maintenance.

Small, engaged, continuous-improvement teams are the engines that move groups/departments/plants/organizations to better plant-floor practices. They’re among the key gateways standing between good and great organizations.

The quality system needs to be stable over the life of a product, from cradle to grave. Too often, manufacturers don’t engage in sufficient, if any, design and process failure mode and effects analysis (FMEA). So they start out with inadequate design-in capabilities, and weaknesses show up in various places throughout the product’s life cycle.

Throughput is directly affected by the level of reliability-process maturity (implementation of key elements). Top-quartile R&M performers only have 25% of their total maintenance cost tied up in MRO spare-parts inventory.

Companies that focus on just reducing maintenance cost rarely reach long-term success in R&M processes. The biggest savings (10 to 15 times greater than any maintenance-cost reduction) comes from increased throughput. An operation can’t cost-save its way to increased mechanical availability and higher R&M.

All of these factors hold true for the entire life-cycle-management process in logistics/supply chain.

Product reliability and quality are the main metrics that define customer satisfaction. Reliability and maintainability of the manufacturing process make possible a cost-competitive product. The logistics/supply chain makes sure that a quality product is delivered in a timely and cost-effective manner. Working together, reliability and the logistics/supply chain can improve availability and on-time delivery.

Some supply-chain engineers are already being trained as reliability engineers. They’re not merely replacing spare parts, but also tracking component-reliability growth, replacing some parts with more reliable items, and, thus, generating greater asset availability.

No longer can R&M be something we “do” to tactically fix issues. To achieve the level and rate of improvement that local challenges and global competition demand, R&M must now be integrated at the strategic level to attain sustainable competitive advantage.

In the era of the Internet of Things (IoT), mobile-workforce solutions, big data, enterprise systems, computerized maintenance-management software, and other technological advances, everything needs to be integrated for best chances of success. The resulting collective insight must then be transformed into tactical daily direction toward best practices.

R&M teams and logistics/supply-chain engineers share many of the same overall interests. It’s what they specifically focus on and how they achieve their goals that are somewhat different. Working separately, both groups can be efficient. Working together, they can be efficient and effective. EP

Based in Knoxville, Klaus M. Blache is director of the Reliability & Maintainability Center at the Univ. of Tennessee, and a research professor in the College of Engineering. Contact him at kblache@utk.edu.