Volvo bets massive growth drive on maintenance

Spare a thought for production maintenance. Volvo Cars has at its massive Torslanda plant near Gothenburg, Sweden, and the firm reckons machine availability, already at 93% in the assembly shop, will rise to 96.4% this year, and continue on up. “That is world class,” comments Håkan Berndtsson, general maintenance manager at Volvo – and with its new focus on the equipment and the systems and processes critical to production, he says it translates to extra capacity way greater than the apparent 3.4%. Indeed, Berndtsson says it’s the foundation for Volvo’s aggressive plans to grow output at Torslanda by more than 50% by 2004. Because this capacity gain is not going to be achieved by more machinery or plant; it will be done by adding a third shift to the existing two and intelligent production plant management to strip out downtime. Berndtsson says, putting the health of the plant infrastructure at the heart of its manufacturing business management strategy is key. Volvo has invested $1 million in MRO Software’s Maximo asset management system and services over the last 18 months, following parent Ford’s earlier MRO implementations in the US. And with Maximo in place, a programme of plant analysis and ongoing maintenance improvement, led by Berndtsson, is ensuring that the plant constraints are better geared for uninterrupted operation. “It’s all about getting the right resources to the right equipment to keep the heart beat of the plant going,” he says. The firm also expects to achieve serious cost cutting: Volvo had committed itself to a 5% annual reduction, and the high budget maintenance of its production plant was an obvious target. Berndtsson says Maximo is making a considerable contribution through cutting and optimising maintenance inventory, minimising engineering labour and improving on procurement processes and costs. In fact, Volvo says return on investment will come in well under two years. Independent analysis shows savings in maintenance materials, labour and equipment alone of £840,000 in the first year, rising to an “extremely conservative” $1.3 million in the second and $1.6 million in the third year, and increasing sharply thereafter. Big figures, but then Torslanda, as one of the most modern automotive plants in Europe, has a multi-million dollar investment in production equipment. Impressive and sophisticated This is the centre of the Volvo Cars empire, employing some 3,500 and home to its design, wind tunnels, test track and so on. The 1.5km long factory makes Volvo’s V70, S80 and S60 luxury models, as well as the V70XC four by four, and is currently in pre-production with the new XC90, due for launch next month. It’s make-to-order mixed flow line production (all models being manufactured simultaneously on one line), with all the sophistication of just in time deliveries from Tier one suppliers’ local satellite plants and line side operations, flexible robotic handling – and welding and initiatives spanning lean manufacturing, TPM (total productive maintenance) and TQM (total quality management). Sheet steel goes in at one end, through pressing and forming, the paint shop and the impressive assembly lines and the rest, and finished cars pop out at the other – one every 70 seconds. Last year, Torslanda produced 136,700 cars; by 2004 that should be 230,000. Berndtsson argues that maintenance, if considered as part of the production business, can deliver for all manufacturers. He came from Sweden’s forestry industry where integrated maintenance management is a long accepted maxim – just as it is throughout the high value process sector. “It’s fundamental to providing information to map plant running. It wasn’t key in Volvo before I came; now it’s a key management issue.” Volvo accepted that achieving a 50% increase from its existing plant meant doing something special. Production machines were already running near capacity, so there was a clear need to improve on uptime and to get smarter about repair times when stoppages did happen. Moving up to three shifts, with less time to effect maintenance, would only exacerbate this. Hence Maximo. Since April 2001, the system has been collecting data on equipment health and helping managers to analyse everything from reliability, to which production systems are line-stoppers and which non-critical due to buffers and stocks. It’s also been central to analysing the impact of introducing new models in maintenance terms, and to determining the relative cost of materials and labour per asset. And it’s been instrumental in assessing which of the critical machines are faced with the greatest demands as production rises, and thus where to prioritise improvement programmes and focus on optimising the maintenance materials supply chain and labour and skills locations. Berndtsson says it is the transparency of critical information across departments and its provision in real time to maintenance operators that make it so powerful. So far, around 200 Maximo ruggedised PC workstations have been distributed around the plant, with 500 operators on line and a further 25 harnessing data for analysis and process improvement. The networked PCs provide all maintenance data, from equipment and parts hierarchies and locations, to works orders and instructions, and on out to trend analyses, probable problems, locations, material requirements and so forth. They’re transforming operations away from the old ‘walk and wait’ approach, because everyone who needs to knows what’s wrong or going wrong, what’s needed, what’s in stock, what has to be ordered or repaired, the tools required, the methods, the safety and risk hazards involved and so on. Think of it thus: the system adds productivity to maintenance engineers’ days. In Torslanda’s body shop, integration of the automated systems with Maximo is via the plant PLCs which automatically raise electronic maintenance works orders in Maximo when out of limits conditions are recognised. Meanwhile, in the assembly plant, the system provides automatic notification of equipment failure to maintenance planners who in turn direct staff to the Maximo workstations for instructions via pagers. And it works both ways, with maintenance personnel also logging their observations and actions so that parts can be ordered, repairs done, etc by the appropriate departments. Says Berndtsson: “Maximo provides us with all the information we need to take the right decision for the equipment at the right time… It allows us to focus on our weaker spots – our bottleneck facilities, where we hold resources and making improvements… Before April last year we had nine different systems. We had to do the analysis through data extraction and spreadsheets. Now it’s all on one system… We have that feeling in the stomach [sic] that this will give us a lot of knowledge for the future.” Meanwhile, on the procurement and inventory management sides, as Torslanda migrates from its existing SAP and Oracle ERP mix to all Oracle, the system is also providing the links to improve efficiency and reduce costs. Mats Eliasson, who runs the Scandinavian office for MRO Software, says that currently the link is with SAP, but this will move over to procurement through Oracle, “although it will feel like you’re in Maximo. They’ll be able to go out on the web to vendors’ illustrated parts catalogues and order parts through Maximo. It will be transparent.” For the future, Eliasson says Volvo will also move on to integrate maintenance scheduling more tightly with production scheduling as three shift working forces tighter integration. “This hardly exists at all in our manufacturing clients,” he says, “although the new release of Maximo 5.0 provides technology to ease integration.” Volvo is clearly committed to MRO throughout the organisation. Two more projects are due to start this month – at Volvo’s Skövde engine plant and the Köping fabrication and assembly facility, followed by Uddavalla (the C70 production factory) and Olofstrom fabrication plant later in the year. Chip Drapeau, president and CEO of MRO Software, insists: “Volvo is using maintenance as a competitive weapon – as a way to directly impact the bottom line. It’s creating a virtuous circle of improvement. This is not a back office thing you have to do any more. Enlightened manufacturers are recognising that it’s actually very strategic.”