Measuring overall craft effectiveness

This is the first part of a three-part series. What is overall craft effectiveness or OCE? It is very much like the concept behind the OEE factor for the calculation of overall equipment effectiveness. But OCE applies specifically to the productivity of craft labor resources. We will get to the practical concept and details of OCE later in Part II, but let's first talk about contract maintenanc...
By Ralph W. "Pete" Peters, President, The Maintenance Excellence Institute, Raleigh, NC October 10, 2003

This is the first part of a three-part series.

What is overall craft effectiveness or OCE? It is very much like the concept behind the OEE factor for the calculation of overall equipment effectiveness. But OCE applies specifically to the productivity of craft labor resources. We will get to the practical concept and details of OCE later in Part II, but let’s first talk about contract maintenance providers.

There are hundreds of large maintenance service providers. And then there are literally thousands of small providers down to that one person in a van with tools and work order/invoice forms that you and I typically call to fix things around the house we can’t accomplish. Maintenance is forever, and as a result, there will forever be new business opportunities for the true value-added contract maintenance provider.

A look into the future

All contract maintenance providers clearly understand profit and the importance of overall craft effectiveness and quality service. Their goal is to perform services equal to and with lower cost than inhouse maintenance while making a profit and creating potential savings for you. The future will see third-party maintenance continue to replace inhouse maintenance operations that have priced themselves out of the marketplace due to low craft labor productivity, poor service and technical skills, lack of internal leadership, and, of course, declining physical asset reliability.

Are you a takeover target?

The inhouse maintenance operation that continues with rising craft labor costs, no productivity gains, and marginal-at-best customer service will be an easy takeover target. Low craft labor productivity coupled with declining asset reliability, along with marginal safety and regulatory compliance, are a big gamble.

The Maintenance Excellence Institute recommends that “the overall maintenance process should be viewed and operated as an internal business and considered as a profit center.” We certainly believe that inhouse maintenance operations can be competitive, with the proper leadership, equipment, tools, and application of today’s maintenance best practices.

The good, bad, and really ugly

Personally, I am pulling for the home team: the internal maintenance operation. But only if there is still hope for them. I have seen the “good, bad, and really ugly” side of contract maintenance starting with really ugly providers of contract repair service. More personal data comes from my experience doing very comprehensive maintenance excellence assessments at more than 200 sites around the world. I have seen expensive contract maintenance being wasted due to poor planning, being under used and stifled because of poor inhouse practices as basic as store-room operations, and lack of written PM/PdM procedures.

As a manufacturing plant manager, I have seen good inhouse maintenance operations and have personally experienced the benefits of increased capacity and reliable throughput. Now as a “consultant,” I have also seen the good and bad examples and the really ugly ones where core competencies for accomplishing core requirements for maintenance were not present.

Core requirements for maintenance of physical assets will never go away. But, core competencies to perform inhouse maintenance can vanish overnight. Small operations are the most vulnerable. The loss of your only trained and certified instrumentation technician, for example, is a serious loss of a core competency.

In some plants, immediate attention may be needed to correct conditions having an adverse effect on life, health, safety, and regulatory compliance. Or a plant may need to place immediate priority and focus toward key issues, major production assets, or facility conditions, building systems, and other equipment where increasing costs and deferred maintenance are having a direct impact on the immediate survival of the business.

If the capabilities for critical assets to perform their intended functions are being severely limited by the current state of maintenance, then the plant should consider immediate contract services as required for business survival and for achieving the core requirements for maintenance services if necessary investments for internal maintenance improvements are not going to be made.

The core requirements for maintenance of each physical asset must come from somewhere even if leaders have given up on in-house maintenance.

Think like a business owner

It is important for maintenance managers to forget the past, and think like a business owner. Think about this one important question and “color it green” for increased profit and service from maintenance: “If I owned my maintenance operation, what would I do differently to make a profit?”

Second, think about, “What will it take to regain or increase my core competencies, be competitive against contracted services, and keep more work inhouse or avoid a complete takeover?”

Today we can choose the attitudes for our own minds. You must see the finished product of your vision of maintenance excellence in your own mind first.

The profit-centered maintenance leader (whether inhouse or contractor) must consider total asset management in terms of improvement opportunities across all assets and resources. There are many questions to be asked about how you can improve the contribution that each of these resources makes toward your goal for maintenance excellence:

  • physical assets — equipment and facilities

  • people assets — craft labor and equipment operators

  • technical skill assets — craft labor that is enhanced by effective training

  • material assets — MRO parts and supplies

  • information assets — useful reliability information, not a sea of useless data

  • team processes — teams working as a true people asset multiplier.

    • One key question must be: “How can we get maximum value from craft labor resources and achieve higher craft productivity?”

      Maintenance operations that continue to operate in a reactive, run-to-failure, fire-fighting mode and disregard implementation of today’s best practices will continue to waste their most valuable asset and very costly resource — craft time.

      Overall equipment effectiveness

      We must clearly understand the elements of OCE and how the OCE factor relates to better use of our craft work force. We all understand the world-class metric, OEE (overall equipment effectiveness) that measures the combination of three elements for the physical asset: equipment asset availability, performance, and quality output.

      The OEE factor is defined as:

      OEE = Availability x Performance x Quality

      Where each factor is a percent.

      An OEE Factor of 85% is recognized as world-class. Therefore, an OEE of 85% requires at least the 95% level for each of the 3 elements (OEE = 0.95 x 0.95 x 0.95 > 85%).

      Elements of OCE factor

      The OCE factor focuses on craft labor productivity and measuring/improving the value-added contribution that people assets make. Just like OEE, there are three elements to the OCE factor:

    • effectiveness factor

    • efficiency factor

    • quality factor.

      • The formula for OCE thus becomes:

        OCE = Craft utilization x Craft performance x Craft service quality

        However, only two elements of OCE can be as well defined as all three of the OEE Factors. Typically, craft utilization and craft performance can be easily measured. Craft service quality is somewhat harder to measure and can be more subjective.

        OCE focuses on craft labor resources

        I strongly believe in basic maintenance best practices as the foundation for maintenance excellence. There must be what I call continuous reliability improvement (CRI). CRI is about maintenance business process improvement that includes opportunities across all maintenance resources, equipment, and facility assets as well as people resources — our crafts work force and equipment operators. CRI must also include MRO materials management assets, maintenance informational assets, and the added value resource of synergistic, team-based processes. Continuous reliability improvement improves the total maintenance operation and can start with measuring and improving OCE.

        Where to start

        Do not take a piecemeal approach that focuses only on physical assets and equipment resources. Often, for example, the maintenance information resource piece, among others, is a missing link for the successful reliability centered maintenance (RCM) type of process. RCM alone can often become “analysis paralysis” with no data or bad data.

        Your approach should be about improvement opportunities across all maintenance resources. Of course, there must be priorities as to where we start and where we make investments. For example, with the craft labor resource we can easily measure the three elements of OCE.

        But, we can start the journey to maintenance excellence by just helping to achieve pride in maintenance from within the crafts work force and among maintenance leaders at all levels.

        It is very often your own internal people who will add greater value to their own maintenance operation with a profit-centered attitude about their job and the profession of maintenance.

        Overall Craft Effectiveness Overall Equipment Effectiveness Elements of OEE and OCE
        1. Craft utilization or pure wrench time (CU) Asset availability/utilization (A) Effectiveness
        2. Craft performance (CP) Asset performance (P) Efficiency
        3. Craft service quality (CSQ) Quality of asset’s output (Q) Quality
        Author Information
        As founder of The Maintenance Excellence Institute and President of Ralph W. Peters and PEOPLE Inc. Peters has over 30 yr of practical engineering expertise, operations management, and maintenance responsibilities in both the public and private sectors. He can be reached at 919-270-1173 or .