Industrial Renaissance in North-West Europe The key role of Maintenance and Asset Management
‘An ounce of prevention is better than a pound of cure’ Benjamin Franklin
‘All parts should go together without forcing. You must remember that the parts you are reassembling were disassembled by you. Therefore, if you can't get them together again, there must be a reason. By all means, do not use a hammer.’ IBM maintenance manual, 1925
‘The best time to plant a tree was 20 years ago.
The second best time is now.’ Chinese Proverb
Industrial Renaissance in North-West Europe The key role of Maintenance and Asset Management
Introduction Europe is currently trying to overcome a major crisis and its long-
World-class maintenance and asset management are responsible
est-ever recession. Economic uncertainty, labor costs and energy
for optimal operations and results in terms of reliability, availability,
prices caused the delocalisation of a lot of companies, especially
maintainability and safety for production assets over their lifetime.
in industry and manufacturing. In these difficult circumstances it is
Therefore it is also a key enabler in realising Europeâ€™s Advanced
key to stress the importance of industry and manufacturing as the
foundation for our prosperity. An economy based on services alone will not be able to compete in a global marketplace with BRICS and
This importance is reflected in the economic value of maintenance
CIVETS. A modern and well-organised industry is vital for creating
and asset management. BEMAS is currently participating in the Eu-
jobs and growth in Europe.
ropean Interreg IVB MORE4CORE project. One of the major deliverables is a macroeconomic study on the impact of maintenance and
A competitive industry should be the main focus and priority for
asset management on the economy in North-West Europe. Early
European policy makers. The European Commission recently intro-
results indicate that on a European level, maintenance and asset
duced the â€˜Industrial Renaissanceâ€™ concept, which BEMAS fully sup-
management are responsible for billions of euros in turnover, em-
ports. Indeed, it is now time for action and get the industry in Europe
ployment figures in the hundreds of thousands, and production as-
sets valued at hundreds of billions of euros.
It is clear that maintenance and asset management play a vital role
With this book we are providing a forum to key stakeholders in main-
in achieving the goal of an industrial renaissance, as they are the
tenance and asset management: government officials and policy
crucial multi-disciplinary business function responsible for optimal
makers, captains of industry and high-level academics. Seeing all
operations of manufacturing processes. When industries depend on
these people making a plea for a European Industrial Renaissance
assets with a long lifetime (e.g. chemical, process and high tech in-
from different perspectives is a great start and will hopefully contrib-
dustries), maintenance and asset management are responsible for
ute to this economic turnaround.
integration of novel technologies into existing systems. It is therefore of major importance to the uptake of innovations, including those
Now let us revive industry and manufacturing, and make our
that enhance productivity or environmental sustainability.
European economy competitive again!
Foreword by the Chairman of BEMAS For several years now, we have been living in uncertain economic
The maintenance of a strong local industrial fabric of manufactur-
times. Periods of growth alternate with periods of recession and
ing, machine builders and service providers. Because without this
no one seems to be able to predict their duration or severity. While
incubation chamber of technical innovations, the industry of the
everyone longs for a new balance, it is very likely that these fluc-
future will not grow.
tuations will continue in the coming years. To find a way out of this situation, Europe has formulated a new vision with regard to
The availability of highly skilled technical professionals. In the con-
the importance of industrial activities. Policymakers increasingly
text of a global shortage of technical talent, the local availability
understand the importance of industry for the prosperity and well-
of (maintenance) technicians is an important investment criterion.
being of European citizens, and are striving for a true Industrial
In the high-tech factory of the future, these skills will be the key
instrument for efficiency and durability.
The business community must seize this momentum to break the
The transformation of existing assets. Our current installations are
trend and go for growth again. Maintenance and asset management
ageing rapidly, and threaten the competitiveness of our compa-
play a crucial role in this story.
nies on the global marketplace. Both economically (lower investment costs) and from an environmental perspective, it is wise to
Maintenance is much more than just keeping installations up-and-
upgrade our current assets to world-class performance using
running: it is the key to increasing global efficiency, safety, energy ef-
lifetime extension. In this way we will achieve more reliability and
ficiency, and production outputs. Maintenance continuously improves
(energy) efficiency and be able to produce innovative products.
availability, reliability and asset performance. The modern maintenance or asset manager controls risks and ensures a return on invest-
With this book, we want to outline the current challenges for our indus-
ment for the capital invested in production installations and assets.
trial businesses. I hope that we can inspire you to translate these poli-
For the past 25 years, BEMAS has dynamically promoted profes-
cies for achieving industrial renaissance into concrete measures in your
sional maintenance and asset management. The organisation has
own company. Let’s build a future for the industry in Europe together!
become the number one platform for sharing knowledge on these topics, across all sectors.
Philippe Deneve Chairman of BEMAS
Today, BEMAS actively contributes to the industrial renaissance in
Division Manager Maintenance, Services & Panels at
our region by providing solutions for three major challenges:
Cofely Fabricom - GDF Suez
Herman Van Rompuy President of the European Council
Manufacturing industry plays a crucial role in Europe and it is essen-
ety, where people – not just geniuses, ordinary people – would get
tial for Member States to recognise the central importance of indus-
excited about finding new ways to do things, and do them better.
try for creating jobs and growth. Studies show that every additional job created in manufacturing creates up to 2 jobs in other sectors.
When we speak about innovation, the focus is often on research, which is of course a key part of innovation, but we should not lose
In view of that, the European Commission has proposed a series
sight of the intrinsic potential of existing technologies by raising their
of measures which, if implemented, should increase GDP share
productivity, quality and reliability, as well as their commercialisation.
for manufacturing to 20% by 2020 from around 15% today. Support-
This is exactly the mind-set that has continued to thrive in the main-
ing European competitiveness, including of our industry, has been
tenance sector and needs to spread across industry for the revival
and will continue to be an important priority of the work of the Euro-
to take place.
pean Council. Finally, I cannot emphasise enough the crucial role that training and We are now ready for the European Industrial Renaissance. There-
education has to play in economic recovery. It empowers people,
fore, we must ensure that our industry is in top shape, ready for the
and especially young people, to be part of the growth. I have spoken
necessary modernisation and adjustments. To this end, the role of
many times about e-skills and the need for them in every sector, this
maintenance and asset management will continue to be critical if we
is strongly reinforced here. In a sector that prides itself on continued
are to ensure companies are in shape to step up to the challenge.
on the job training, alongside classroom training I am heartened to see that so many companies have made a major commitment to
In his recent book Edmund Phelps, Nobel laureate in economics, in
describing the century of growth leading up to the 1960s, argues that what was particularly distinctive about the drive for modernity
I wish BEMAS another successful 25 years at the heart of European
was how widespread it was. A grass-roots, innovation-minded soci-
EU Commission calls for a European Industrial Renaissance
The European Union is emerging from its longest-ever recession. EU28 GDP grew by 0.2% in the third quarter of 2013. The upturn in business sentiment and confidence indicators suggests that structural reforms, macroeconomic governance improvements and measures in the finan-
services (e.g. logistics), consumer services (e.g. after-sales services
cial sector have succeeded in stabilizing Europe’s economy. The EU is
for durable goods) or tourism. Industrial activities are integrated in
on the right track, but the recovery remains modest, with Commission
increasingly rich and complex value chains, linking flagship corpora-
forecasts of 1.4% GDP growth for the EU28 in 2014 and unemployment
tions and small or medium enterprises (SMEs) across sectors and
rates close to 11% for the next two years. That is why fostering growth
and competitiveness to sustain and strengthen recovery and to achieve
The economic importance of industrial activities is much greater than
the goals of the Europe 2020 agenda have become the top priority for
suggested by the share of manufacturing in GDP. Industry accounts
the Commission and EU Member States.
for over 80% of Europe’s exports and 80% of private research and innovation. Nearly one in four private sector jobs is in industry, often
The importance of a strong industry
highly skilled, while each additional job in manufacturing creates 0.5-
The crisis has underlined the importance of the real economy and
2 jobs in other sectors. The Commission considers that a strong
a strong industry. Industry’s interactions with the rest of Europe’s
industrial base will be of key importance for Europe’s economic re-
economic fabric extend far beyond manufacturing, spanning up-
covery and competitiveness.
stream to raw materials and energy and downstream to business
Overall, EU industry has proved its resilience in the face of the economic crisis. It is a world leader in sustainability and returns a EUR 365 billion surplus in the trade of manufactured products (EUR 1
billion a day), generated mainly by a few
tivity performance continues deteriorating in
and not lose the race against our competi-
comparison to that of our competitors.
tors, more needs to be done on the EU level.
Can EU manufacturing recover from the
Recovery uneven, Europe losing its global
aeronautics, space and creative industries
sectors, and high-end goods in many other
After a substantial recovery in 2009 -2011,
The recovery from the most severe crisis in
sectors, including food.
industry in Europe has slid downward again.
the post-war period has been uneven across
Nonetheless, the legacy of the crisis is se-
At 15.1% in the summer of 2013, the contri-
EU Member States and industrial sectors.
vere: since 2008, 3.5 million jobs have been
bution of manufacturing to EU GDP has de-
Few countries have successfully recovered
lost in manufacturing; the share of manu-
clined further and is a long way from the 20%
their pre-crisis level of manufacturing output
facturing in GDP has fallen from 15.4 % to
target for 2020 put forward by the Commis-
(Estonia, Latvia, Lithuania, Poland, Romania
15.1 % in the 2013; and the EUâ€™s produc-
sion in 2012. If we want to reach this target
and Slovakia) while the majority are far below.
They include the automotive, machinery and equipment,
Source: EU Competitiveness report 2013
Figure 1. EU manufacturing recovery by Member State Percentage change since January 2008
With the exception of necessity goods sectors and some high-tech
Even more worrisome are the data on the share of the EU manufac-
sectors, the majority of industrial sectors have not yet recovered
turing output on a global scale, which show that the share of manu-
from the crisis. With domestic demand remaining weak, the recovery
facturing in Europe has been consistently decreasing, while manu-
gains are mainly due to external demand (in particular for pharma-
facturing in China has been on the rise.
ceuticals, metal ores and transport equipment).
Source: EU Competitiveness report 2013
Figure 2. Shares of global manufacturing output
Manufacturing as a pivotal sector
higher technology content than competing North American or
Looking beyond the crisis, the report identifies main reasons for
East Asian products. The challenge for Europe in this area is that
maintaining a ‘critical size’ of manufacturing activities in European
apart from advanced manufacturing technologies, EU products
economies. It also identifies sources of EU comparative advantages
based on key enabling technologies are mature and need to com-
that need to be preserved and upgraded, as well as long-term struc-
pete on price.
tural weaknesses in manufacturing that need to be addressed. The main findings and recommendations are as follows:
coming a more important measure of competitiveness than the
the weight of manufacturing in the EU economy is decreasing in
traditional emphasis focused mainly on exports of finished goods.
favour of services.
In this respect, the technology advantage of the EU is reflected by
A critical mass in the form of a minimum production base is needed,
the fact that EU manufactured exports have less embedded for-
eign value added than exports by third countries such as China,
3. In a globalised world, so-called ‘value-chain performance’ is be-
1. Manufacturing is increasingly seen as a pivotal sector, although
A declining manufacturing share erodes the knowledge and
South Korea, Japan and USA, which need to source hi-tech inter-
technology base of the whole economy, which is crucial for
mediate goods from abroad to a greater extent than the EU. Con-
achieving sustainable development
versely, the EU has a higher share of value added in the exports
Manufacturing has strong spill-over effects on the rest of the
of these countries. According to the most recent figures available,
economy and especially on overall productivity. Each euro of
around 86 % of the value of EU exports is domestically produced,
added final demand in manufacturing generates around 50
compared to 74 % for China, 85 % for Japan, 61 % for South
cent of additional final demand in other sectors of the economy.
Korea and 84 % for the US.
2. Europe has comparative advantages in about two-thirds of the
4. It is important to make EU enterprises more competitive on the
industrial sectors, accounting for around 75 percent of EU manu-
global market. The report's findings suggest that:
facturing output. These comparative advantages are concentrat-
EU industrial policy needs to steer structural change towards
ed in complex and high-quality product segments. By gradually
higher productivity in manufacturing and better positioning
increasing the complexity of their products, EU manufacturing in-
of EU enterprises in the global value chain. In doing so, EU
dustries managed to maintain their competitive position through
should rely on its existing strengths of manufacturing, namely
the crisis. For example, the EU is a major producer of new knowl-
its advantages in knowledge and technology intensive products
edge in Key Enabling Technologies (KETs), the technological
and services. An example of this is key enabling technologies
building blocks that will be used to construct any new technology
or innovative high-tech product in the years to come. Its products based on industrial biotechnology or advanced materials have
But the EU is lagging behind in productivity gains relative to emerging industrial powerhouses and some of its major com-
petitors such as U.S. and Japan. The EU-US productivity gap,
Industry vs. services: why it is important to strengthen both
for instance, is growing wider again after years of narrowing.
Following a recovery from the middle of 2009, the EU economy and
Part of it is accounted for by an efficiency gap caused by regu-
manufacturing industries retreated into a double-dip recession since
lations, or underinvestment in ICT and intangible assets. Anoth-
the end of 2011 (Figure 3). Employment in manufacturing has been
er part is explained by slower market uptake of research output
steadily declining for decades and this decline accelerated with the
(commercialisation of research gap). Demand-led policies and
outbreak of the financial crisis. As a result, the share of manufacturing
measures to stimulate research and development cooperation
in GDP continued shrinking from 15.8 % before the crisis to 15.1 % in
can help bridge such gaps.
2013. But the share of manufacturing has long-term structural expla-
Structural change is slow, path-dependent and inefficient if it
nations as well. For instance, manufactured goods can be traded more
does not build on existing strengths. It can be fostered by hav-
easily and produced increasingly more efficiently than other outputs.
ing the right institutional framework in place covering educa-
Against that backdrop and in combination with rising incomes, the rel-
tion, research, technology and innovation policies but also the
ative price of manufactured goods is likely to fall in relation to the price
quality of governance.
of services. Thus the weight of the services sectors in the GDP has been increasing, while the weight of manufacturing has been falling.
Source: EU Competitiveness report 2013
FigFigure 3. Double-dip of EU manufacturing production Index 2010=100
16.0 14.0 12.0
Source: EU Competitiveness report 2013
Figure 4b. Changes in the share of manufacturing in the EU MS 2000-2012
2000 2001 2002 2003 2004
Source: EU Competitiveness report 2013
Figure 4a. Declining share of manufacturing in EU GDP
In spite of longer-term trends in advanced
case for preserving a ‘critical size’ of manu-
provide important inputs for manufacturing
economies of the manufacturing sector
facturing activities in European economies.
(in particular business services). Thus, man-
accounting for a shrinking share in value
There are very important ‘backward link-
ufacturing has a ‘carrier function’ for ser-
added and in employment, there is a strong
ages’ from manufacturing to services which
vices which might otherwise be considered
fect for innovation and qualitative upgrading for service activities.
increased ‘product bundling’ of production and service activities in
Because of this increasing cross-over (Figure 5), when manufactur-
advanced manufacturing activities. This ‘carrier function’ – through
ing is struggling this has a very negative impact on services sector
international competitive pressure – has furthermore a stimulus ef-
and on the overall economy and jobs.
Source: EU Competitiveness report 2013
Pulp, paper & printing
Electrical & optical equipmt
Coke & refined petroleum
Rubber & plastics
Food, drink & tobacco
0% Leather & footwear
Figure 5. Increasing share of services in manufacturing sectors
to have limited commercial value. In the same direction goes the
Focus on governance: more action needed on a European level
nologies could well form the base for a major industrial policy initia-
The preservation of the ‘industrial commons’ includes nurturing
tive. Importantly, such a strategy should not only include a long-term
manufacturing-services inter-linkages and exploiting specialisation
funding commitment for research but also needs a reliable source
advantages of different European economies. State aid measures
of demand that should be provided by public procurement of EU
to support structural change and structural adjustment have so far
Member States and the EU itself.
been used predominantly at national levels and did not rely much
The industrial policy strategy laid out in the (European Commission,
on the coordinated use of state aid tools. In a highly integrated Eu-
2012a) goes in the same direction as five of the six priority areas
ropean economy, the preservation and development of ‘industrial
(priority action lines) defined in this Communication are related to
commons’ should be seen as a joint responsibility because of strong
meeting the challenge of climate change and the degradation of the
externalities across the European economy. Such joint responsibil-
environment. It remains to be seen whether public procurement will
ity for ‘industrial commons’ includes rules for quality assurance and
have any role to play in the EU’s policy initiatives for stimulating the
recognition of qualifications, supporting the mobility of skilled staff,
commercialisation of innovations and the development of green and
learning from successful cluster policies, support for necessary
more resource-efficient products.
transport and communications infrastructure.
Furthermore, industrial policy has to be attentive to the different
Industrial policy at the EU level should ensure that Europe has a
needs of countries and regions at different levels of economic de-
broad and diversified industrial structure which is well-equipped to
be a major actor in the development of new areas of activity such as environmental technology. In this it is able to benefit from the di-
Towards a European Industrial Renaissance
versified character of European industrial and demand structures
The European Commission has been pursuing an integrated indus-
and benefit from the pooling of resources. This encourages also in-
trial policy approach and has issued growth-enhancing recommen-
novations in existing areas in which Europe draws on its specific
dations to Member States in the context of the European Semester.
comparative advantages, be they based on traditions of production
Full implementation of this policy approach at European and national
specialisation (fashion in France and Italy, high-quality mechanical
levels is critical to ensure our future competitiveness and to increase
engineering and transport equipment in Germany and in a number
our growth potential. To be effective, policy actions must be well
of the Central European economies, quality food production) or on
coordinated and consistent from regional to the EU-level. Member
a diversified pattern of private and public demand (strong position
States will play a capital role in this process of implementation of re-
of public transport, of high-quality health services or linked medical
forms to improve competitiveness,. The development of new instru-
devices and pharmaceuticals).
ments such as the “Partnerships for Growth, Jobs and Competitive-
Given the strong political commitment of the EU to environmental
ness”, can be very helpful to improve effectiveness.
protection and the mitigation of climate change, a long-term indus-
With scarce natural and energy resources and ambitious social and
trial policy targeted at the development of ‘clean’ products and tech-
environmental goals, EU companies cannot compete on low price
and low quality products. They must turn to innovation, productiv-
of the six task forces that were set up a year ago has enabled the
ity, resource-efficiency and high value-added to compete in global
Commission to identify opportunities as well as obstacles to innova-
markets. Europe’s comparative advantage in the world economy will
tion requiring further policy action. Based on this work, the Commis-
continue to lie in high value-added goods and services, the effective
sion will pursue the following priorities in the years to come:
management of value chains and access to markets throughout the
Advanced manufacturing: implementing the Knowledge and In-
world. Thus, innovation and technological advancement will remain
novation Community on value-added manufacturing and estab-
the main source of competitiveness for EU industry. For this rea-
lishing a Public Private Partnership on Sustainable Process In-
son, further efforts are needed to achieve the Europe 2020 target of
dustry through Resource and Energy Efficiency, Factories of the
spending 3% of GDP on research and development (R&D).
Future, Photonics and Robotics, upgrading innovation capacity
In particular, digital technologies are at the heart of increases in pro-
and competitiveness of Europe's manufacturing sector. The in-
ductivity of European industry. Their transformative power and grow-
tegration of digital technologies in the manufacturing process will
ing impact across all sectors is redefining traditional business and
be a priority for future work in light of the growing importance of
production models and will result in a range of potential new product
the industrial internet. The use of “big-data” will be increasingly integrated in the manufacturing process.
and notably service innovations by industry (‘servitisation of industry’). A digital transition is underway across the global economy and
Key Enabling Technologies (KETs): this task-force is working on
industrial policy needs to integrate new technological opportunities
the identification of potential KETs projects of European interest
such as cloud computing, big data and data value chain develop-
in a number of areas, e.g. batteries, intelligent materials, high
ments, new industrial applications of internet, smart factories, robot-
performance production and industrial bio-processes; facilitating
ics, 3-D printing and design.
pan-European access of SMEs to technological infrastructure; and exploiting further the possibilities of the Memorandum of understanding signed with the European Investment Bank.
Stimulating investment in innovation and new technologies Since the onset of the economic crisis, dramatically reduced levels of
Bio-based products: granting access to sustainable raw materials
investment in innovation are a major concern for Europe’s industrial
at world market prices for the production of bio-based products.
This will require the application of the cascade principle in the
The need to speed up investment in breakthrough technologies in
use of biomass and eliminating any possible distortions in the al-
fast-growing areas was the main reason the Commission decided to
location of biomass for alternative uses that might result from aid
identify in the 2012 Industrial Policy Communication the six areas in
and other mechanisms that favor the use of biomass for other
which investment should be encouraged.
purposes (e.g. energy).
These strategic, cross-cutting areas are: advanced manufacturing,
Clean Vehicles and Vessels: adoption and full implementation of
key enabling technologies, clean vehicles and transport, bio-based
the Commission’s proposal on alternative fuels infrastructure, im-
products, construction and raw materials and smart grids. The work
plementing the Green Vehicle Initiative and other H2020 initiatives
promoting clean and energy efficient transport, pursuing global
Increasing productivity and resource efficiency and facilitating
standards for electric cars and implementing the priorities identi-
access to affordable production inputs
fied under CARS 2020.
EU firms need to have access to essential inputs in a sustainable
Sustainable construction and raw materials: setting up a EUR
way and on the best possible terms, but there are still significant
25 billion EIB lending capacity for energy efficiency in residential
problems in capital, energy and raw material markets.
housing; and improving recycling and sustainable waste manage-
Access to finance: Regulatory reforms in financial markets, a ju-
ment in construction.
dicious monetary policy and the new supervisory structure pro-
Smart Grids and Digital Infrastructures: defining further targets for
vided by the Banking Union have succeeded in restoring financial
the development of smart grid components; revising and broad-
stability. But bank deleveraging is making it harder for firms to
ening standardisation mandates and development and guidance
access bank credit, especially for SMEs in Member States where
on performance indicators. The infrastructure and connectivity software for industrial internet is a priority area in the light of its
the crisis has had a particularly severe impact.
Energy: Despite efficiency gains and the progressive opening of
growing importance and should help integrate high performance
energy markets to competition that have led to reduced wholesale
processes including cloud computing.
electricity and gas prices, retail prices for these essential energy
‘The Commission considers that a strong industrial base will be of key importance for Europe’s economic recovery and competitiveness.’
inputs to industry have increased. EU retail electricity prices for industry grew on average by 3.5% a year and gas prices 1% between 2008 and 2012. As a result, EU industrial electricity prices are estimated to be twice higher than in the USA and Russia and 20% higher than in China according to the International Energy
Agency data. The price gap is greater in gas: EU gas is three to
lenge for EU industry in the coming years, especially as progress in
four times more expensive for EU industry than for US, Russian
manufacturing technologies will increase demand for specific skill
and Indian competitors, 12% more expensive than in China but
and training sets. There are significant differences in skills achieve-
cheaper than in Japan.
ments and in the effectiveness of vocational training systems across
Raw materials and resource efficiency: EU industry is mostly de-
Member States. These, as well as the high unemployment rates in
pendent on the supply of raw materials from international markets,
crisis-hit Member States require immediate action to invest more in
especially unprocessed minerals and metals. It faces a number of
education and training. It also requires improving cross-border mo-
challenges regarding access to both primary and secondary raw
bility. In emerging sectors and areas of economic activity, Knowl-
materials throughout the whole value chain (exploration, extrac-
edge and Innovation Communities will help to make available the
tion, processing/refining, recycling and substitution).
Upgrading skills and facilitating industrial change
Skills feature as a major policy element in the Europe 2020 agenda.
Europe urgently needs to strengthen the basis for post-crisis sus-
The Commission has put in place an overall strategy for improving
tainable growth and modernisation. To that end, it must send a clear
education and training systems via anticipation and investment in
signal of its commitment to reindustrialisation, the modernisation of
human capital supported by EU financial instruments, tools to moni-
Europe's industrial base and the promotion of a competitive frame-
tor skills and training needs and trends, and specific initiatives to
work for EU industry.
bring together the relevant actors dealing with apprenticeships, especially those with crucial information and communication technolo-
Sources: on a regular For a European Industrial Renaissance - Communi-
gies skills, including the social partners.
cation from the Commission to the European Parliament, the Council, the
Skills mismatches and training issues are likely to remain a key chal-
European Economic and Social Committee and the Committee of the Regions - 22/01/2014 European Commission Competitiveness report 2013: no growth and jobs without industry - 25/09/2013
Discover the hidden treasure in Maintenance 19
There is value hidden in every maintenance organization. All companies have the potential to further improve, either by reducing costs, improve safety, work on the lifetime extension of machinery or by smart maintenance solutions that improves uptime. The question is where maintenance managers should be looking to find these areas of improvement and where they need to start. You will find the answer to this question at Mainnovation. With Value Driven Maintenance速 and the matching tools like the VDM Control Panel, the Process Map and our benchmark data base myVDM.com, we will help you to discover the hidden treasure in your company. Do you want to discover the hidden treasure in your maintenance organization? Go to www.mainnovation.com
CONTROLLING MAINTENANCE, CREATING VALUE.
No innovation without production: MIT professor Olivier De Weck on the importance of local production within an economy
In the 90s, companies moved their produc-
together in the committee Production in the
were 18 million American citizens active in
tion en masse to lower income countries.
Innovation Economy (PIE). The goal? For-
the production sector, a figure which has
Along with the trend of focusing on core
mulate recommendations on the production
gone down by a third, namely to 12 million.
activities, this has resulted in current supply
sector for president Barack Obama.
“In the previous century, the production sector also went through different crises. The
chains in which research and development in particular still happen in the West. You
Three years later, Olivier De Weck is facing
question whether the production sector still
have frontrunners like Apple, which practi-
me in the Aula Magna of the KU Leuven.
has a future in the West is raised over and
cally subcontracts its entire production. But
He comes here to speak about his recently
over. Today is no different, but today’s cri-
is this favorable for Western economies?
published book Production in the Innova-
sis differs fundamentally from the previous
How much and which production activities
tion Economy before the Ekonomika alumni
ones. In past recessions, when the produc-
does a country need so as to keep on par-
in honor of the fifteen year existence of the
tion sector lost jobs, these were picked up
ticipating in the economic rat race? Olivier
Production and Logistics department. While
by other sectors. Today this accounts only
De Weck, professor at Massachusetts Insti-
the American economy is growing again,
for half of the jobs lost. It thus boils down to
tute of Technology (MIT), has occupied him-
partly thanks to the gains of cheap shale
creating new jobs. A question that we asked
self with this question for two years.
gas, the situation remains precarious for
ourselves in this connection was whether
the American production sector. The add-
the US—and by extension Western econo-
It is November 2010. The US economy is
ed value of the sector is indeed rising, yet
mies—are in a position to create new jobs
coming to a dead end. In Massachusetts,
employment in this sector has decreased
in the production sector,” Olivier De Weck
32 academics from various domains gather
drastically in the last 10 years. In 2001 there
Critical boundary The US remains the world’s most innovative nation, with 500,000 patent applications every year, but is closely followed by China, which submits about 400,000 patent requests annually. While it is beyond dispute for most company leaders and governments that investments must be made in innovation, but why the importance to likewise keep on investing in one’s own production? Olivier De Weck: “We strongly believe, and this also emerges from the PIE study, that production and innovation go hand in hand. There is a kind of critical boundary. If the production in a country goes down a particular level, designers, engineers, managers—in short people with innovative ideas, will start looking for another place or region. Great danger lurks there because that would mean that innovation in the country will ground to a halt. And lately, innovation is the engine
home. Imagine if a semiconductor manufacturer wants to radically
of a dynamic and healthy economy. For certain traditional produc-
innovate by incorporating electronics into clothes. If he is not ready
tion sectors, like the auto industry, production is easier to distinguish
to produce on his own because the know-how is lost in the produc-
from research and development of new products. The technology
tion process, then he loses speed. In a fast changing economy, this
is mature and because of this, a kind of “recipe” already exists for
the production of goods. However, if a producer really wants to innovate, then it is important to keep production, such as for instance
The PIE study shows that innovation has a huge direct and indirect
the production of goods with the greatest additional value, closer to
impact on the entire economy. O. De Weck: “Innovation has a direct impact on the economy through the creation of jobs that are immediately linked to innovative projects. At the same time, innovation also boosts the production process in companies, which in itself has again a positive effect on the service sector. Services which are necessary for the production process itself or for supporting that, like the maintenance of machines, setting up IT systems and supply chain concepts, but also services that are not linked to the production process. If companies withdraw production from a certain country, it has an immense impact on various company activities”.
‘If the production in one country goes down to a particular level, people with innovative ideas will look for other places or regions.’ Prof. Olivier De Weck Executive Director - MIT Production in the Innovation Economy (PIE) initiative
The added value of the production sector in Belgium amounted to 60
masse transferred their production to lower income countries, but
billion dollars in 2012. “That indicates that Belgium still has a rather
generally they set out on that adventure rather naively.
strong production sector. The difficult point in Belgium is that the
O. De Weck: “It is important to have good insight into the entire pro-
labor costs are extremely high. In the long term, that undermines
duction chain in order to be able to calculate the real costs of sub-
productivity and competitiveness and there is a risk of losing particu-
contracting. For certain products, it is actually disadvantageous to
lar industries. In the US, there is less consensus on this matter, but
have production in lower income countries. In this connection, it is
the idea exists that it is better to have a robust production sector on
important to consider the loss of flexibility. What if your competitor
the basis of lower salaries than to have nothing at all. At the moment
needs a mere two weeks to cover the whole process from order to
we are witnessing two movements in the US: on the one hand, there
product delivery, while your product takes four weeks to arrive from
is the high-tech industry with higher pay scales, on the other hand,
certain parts of the US are evolving, especially the South Eastern states which has more traditional production sectors, towards mid to
Innovation in production technology
higher range salary levels. That is driven by the global market,” Olivier
Olivier De Weck believes more production can take place in the West
De Weck states.
than what the case is today, but this would not mean that extra jobs will be coming. “I notice that production is “in” again, but not produc-
Salary cost is not the only factor that weighs in the decision to carry
tion in the traditional manner. The production sites of the future are
out production in a particular country. In the late 90s, companies en
high-tech, sustainable, and pose intellectual challenges.”
To get a clearer picture of the technological innovations in the pro-
paying for the product itself. Others, in contrast, think that 3D print-
duction industry, MIT researchers took an internal scan of their or-
ing will remain limited to the creation of simple prototypes,” Olivier
ganisation. On that basis, a list of seven key technologies for the
De Weck says.
production sector was drawn up: nanotechnology for materials and surfaces, supplementary precision production, robotics and auto-
The tyranny of bulk
mation, next generation electronics, biotechnological products, sus-
Olivier De Weck believes that organisations shall more and more often
tainable production technologies, and technologies that make de-
leave their centralised supply chain model and choose spread out
centralised supply chain models possible.
production. “Coordination will still happen centrally and will still be
O. De Weck: “Supplementary precision production points to the
done according to standard methods, but I think organisations will
construction of components through the addition of material layers
establish production itself spread out over the globe. Today, end prod-
in complex 3D forms. Automation and robotics will play an equally
ucts are transported over long distances, a model that can no longer
important role. Not to replace human labor—this was often the case
be maintained given the rising transport costs and growing environ-
in the past—but as its extension so that employees can work even
mental awareness. We should break free from “the tyranny of bulk.””
more efficiently. Think for instance of technologies like Google Glass. Another technology that will catch on is electronics. I’m thinking of
By the tyranny of bulk De Weck refers to the supply chain model still
new applications in particular, like printing electronics on sweaters.
current in the year 2014, which is oriented to large production move-
Also, through innovation completely new production industries can
ment delivered via container loads. “Most products are still transport-
come into existence, think of certain biotechnological applications.
ed by water because this mode of transportation is the cheapest.
Perhaps in the future we will produce organs on demand?”
This means that today it is more expensive to transport a small quantity of goods between two midsized cities than to ship large quantities
The PIE research commission subsequently interviewed, in coop-
from one global port to another.
eration with the consulting and advice office AMP, employees of the most important American universities. The question that was posed
I am convinced that more innovative ways will be developed to trans-
was which innovative technology has the potential to lead to relevant
port smaller quantities of goods in a cost efficient manner, which will
new production. “There is a consensus about the importance of au-
contribute to a more spread out production model. There will be an
tomation and robotics for the production sector, but we see stark
evolution towards spread out production on demand, flexible capac-
differences of opinions about the other domains. The respondents
ity via local networks and a kind of “design democracy,” driven by
disagree about the potential of quick prototyping, innovations in the
digital progress, which allows everyone to make their own design.
supply chain sector, and flexible electronics. Some respondents be-
Techniques like 3D printing, for example, can make the latter pos-
lieve, for example, that in the future everyone will have a 3D printer
sible. These simultaneously occurring changes will drastically trans-
at home and that we will pay for downloading the design instead of
form the current manner of production and the whole supply chain
model. The degree of decentralisation will, in
O. De Weck: â€œToday we see the production
the lines between production and assembly
my opinion, vary from sector to sector and is
chain as a linear process: you gather natural
will become more vague. A third difference is
linked to energy gains, transport possibilities,
raw materials, manufacture parts and as-
that companies will provide solutions that are
and the local labor force.
semble them into an end product. Advanced
more and more integrated, where the end
production is more comprehensive on four
product is merely a means to offer extra ser-
Advanced production model
levels. First, materials science has reached a
vices. The profit shall lie mainly in those extra
In light of the research results, the MIT aca-
point where synthetic materials of high qual-
services. Lastly, we believe that advanced
demics reflected on the shift from traditional to
ity can be designed. Companies will there-
production will be a strong recycling cycle.â€?
advanced production and the new production
fore use artificial raw materials in their pro-
model that the former brings with it (figure 1).
duction process. A second difference is that
Figure 1: From traditional to ...
recovered Recycling materials
Advanced Manufacturing is the creation of integrated solutions that require the production of physical artifacts coupled with valued-added services and software, while exploiting custom-designed and recycled materials using ultra-efficient processes.
Source: Production in the Innovation Economy
From traditional to advanced production.
The PIE commission arrived at the following definition: “Advanced
biopharmaceutical and medical sector. That’s a big difference com-
production is the creation of integrated solutions that require the
pared with 30 years ago and this shows that these technologies are
manufacture of physical artefacts, coupled to the value-adding ser-
advancing. From the pool of researched companies 4% grew into
vices and software, while designs of the client and recycled materials
an enterprise with an annual return of over 100 million euro. Most of
will be used via ultra-efficient processes.
the companies have seen only limited growth and a fifth have in the
Figure 2 shows where the seven innovative technologies named ear-
meantime been dissolved. What makes some production compa-
lier influence advanced production process.
nies successful and others not?” Olivier De Weck states.
Olivier De Weck believes in proper support, a kind of “daycare for
The MIT researchers studied 192 companies that launched in the
companies” and points in this connection to industrial ecosystems
period 1997-2008 from MIT. “Only 43% of the companies are in the
as a sort of secret formula to attract and maintain advanced produc-
raw materials from nature
Figure 1: From traditional to ...
recovered Recycling materials
Source: Production in the Innovation Economy
‘If a manufacturer really wants to innovate, then it is important to keep a part of the production close to home.’ Prof. Olivier De Weck
tion. “It is always a mix of actions, but investing in industrial ecosystems stands at number one. That is a group of companies situated within the same geographical region and which manufacture different, complimentary products. If a company makes a product prototype, then it needs the organisations around that can give form to the product. If companies do not have access to such knowledge within a few hours, and at most a day’s travel time, this slows down the whole organisation. We see today in the US that there are big gaps in the industrial ecosystems. One of the reasons for this is that large vertical organisations focus only on the core activities and operate as a global network. Small to midsized businesses, in particular, suffer because of this since there is less spillover. The most important recommendation emerging from the PIE research is for the government to invest in the strengthening of these industrial ecosystems. This can happen through the establishment of privatepublic partnerships, where the partners function as equals (ed. Not subsidized partnerships). There is reason for hope as we see today there is a renewed interest in the production sector in the US. This is attested to by, among other things, the rising number of university courses with a production background. Given that production in one’s own country is crucial in being able to stay innovative, I can only applaud this.”
Didier Herbert The industrial future of Europe from a policy perspective
Didier Herbert is in charge of the Directorate for Enterprise Competi-
pact on industrial activity. The fragile recovery hinted at by positive
tiveness, Industry and Growth Policies in the Directorate General for
growth in 2010-2011 was interrupted by a downturn in the business
Enterprises and Industry of the European Commission. Previously he
cycle. EU industries experienced a double dip but the aggregate of
was Head of Unit in the same Directorate General and worked for the
EU manufacturing masks significant differences between countries.
Vice President of the Commission, Martin Bangemann and in the Di-
Strong recoveries can be seen in some European countries, which
rectorate General for External Relations. Born in 1961, he studied law
have regained and exceeded their pre-recession peaks.There are
and economics in Belgium, Germany and the United Kingdom. In
also significant differences between sectors. Industries producing
this interview he explains how the European Commission will take on
consumer staples such as food and beverages, and pharmaceu-
the challenges in order to create a better European industrial future.
ticals, have fared relatively better than others since the outbreak of the crisis. High-technology manufacturing industries have in general
Q Industrial activity in Europe has changed a lot over the last
not been impacted to the same extent as other industries. Overall,
10 to 15 years. What has happened, and what are the conse-
services have been hit less badly than the construction, manufactur-
ing and mining industries. Nevertheless, industry in Europe has lost
In the last decades European industry has changed in reaction to a
three and a half million jobs and we are not yet back to the pre-crisis
number of structural developments at the global and European level.
level of industrial output.
Important changes in the global economy such as the emergence of new players in international production and trade and the grow-
For all these reasons and given the key importance of manufacturing
ing importance of ideas, skills and technology have become key for
for the competitiveness of our economy, the Commission launched
the international competitiveness of European manufacturing. An-
a major initiative in January 2014 with the objective of turning around
other feature of the European economy (and advanced economies
the de-industrialisation trends that we are seeing, and getting indus-
in general) is the increasing complementarity between manufactur-
try back to around 20% of the economy by 2020. It is a call for an
ing goods and services. Finally, the economic crisis also had an im-
Q Which areas are this call to action addressing?
Mainstreaming industrial policy The first element of the Commission's initiative is to take industrial competitiveness systematically into account in other policy areas. Take for example climate change policy: while some new industrial activities may emerge from Europe's actions to reduce its CO2 emissions, we also need to look at its effect on energy-intensive industries. Another example is asking "what are the positive effects that would result from a free-trade agreement with United States?" What reduction of costs would emerge from regulatory convergence, where the
USA would accept our products as safe and we would do likewise for their products? The bottom line is that we recognise the importance of industry and therefore mainstream the industrial competi-
One concrete thing the Commission has proposed is to be able to
tiveness aspects in any new policy initiative.
create a company in less than three days, for less than â‚Ź100. For the moment, the cost is more than that and it takes about five days. But
companies should also be able to have all the licenses they need to operate without delays. This is important, because in Europe, there is
European enterprises need to have a business-friendly environ-
already less tendency to become an entrepreneur. People must face
ment, SMEs even more. This means an efficient public administra-
as few obstacles as possible to become and to remain entrepreneurs.
tion, better regulation with assessments of the costs of regulation. In
Our industry policy has a strong entrepreneurial and SME dimension.
my opinion, better regulation is extremely important. It has to trickle down at all levels. This is why impact and cost assessments are
Access to Finance
not only essential for European regulations; they could also be done when national or regional parliaments are proposing legislation. It
When thinking about SMEs, we have to support their access to finance
helps to take decisions when you know their impact on business, as
and make the best use of EU financial instruments. 16% of SMEs re-
well as the social and environmental consequences.
port access to finance as their main problem. So we ask ourselves
what we can do to give the industry the means
Itâ€™s amazing to see how much energy prices
is vigorous enough to guarantee that prod-
to make the necessary investments in Europe.
have risen for our companies. For gas and
ucts on the market are safe and respect the
electricity, prices are a multiple of what they
In our European Research and Innovation
would have to pay in the United States. EU
Programmes, in our regional funds and in the
industrial electricity prices are estimated to
The internal market for services is also criti-
specific programme for SMEs (COSME), we
be twice higher than in the USA and Russia.
cal, especially as manufacturing is so closely
have secured quite a lot of money. This will
The price gap is greater in gas: EU gas is
linked to services. We need to maximise this
enable companies to gain access to finance
three to four times more expensive for EU in-
connection in policy initiatives. To that aim,
in general and have access to research and
dustry than for US, Russian and Indian com-
we have a high-level group on business ser-
innovation in particular. It will also enable
petitors. We need a fully integrated internal
vices which is going to issue recommenda-
regions to finance investments in industrial
market for energy and an efficient pan-Eu-
tions this year.
competitiveness. We are talking here about
ropean infrastructure for gas and electricity.
almost 100 billion euro from our regional
On the other hand, access to raw materials is
funds, and 40 billion euro for industrial re-
also critical and a welcome recent emphasis
search and development programmes.
in the Commission's trade policy. Resource
We also want to look outside Europe. A re-
efficiency is of course part of the solution.
cent survey showed that only one in four
Another point is receiving payments from pub-
Itâ€™s about using things more than once and
companies is active outside the borders of
lic authorities more quickly. According to offi-
getting the raw materials that you need from
its own country within the European Union
cial data, public authorities spend around 18%
existing waste streams if you canâ€™t get them
and only one in eight companies is active
of GDP on works, goods and services. This is
from China or the Ukraine.
outside Europe. If we consider that in the coming years 90% of growth will be outside
why the European Commission proposed the famous late-payments directive which obliges public administrations to pay in less than 30
Maximising the potential of the European market
European markets this means that seven out of eight companies are not benefiting at all from that potential.
days. You can imagine that for a construction company being paid in 30 days rather than in
It remains necessary to maximise the po-
100 days is a big difference in terms of liquidity.
tential of our European internal market. Be
This is why we really want to focus on the
it in transport, energy or ICT: we still need to
internationalisation of companies. You may
adopt a number of initiatives to complete the
negotiate trade agreements, but companies
internal market. When we have the neces-
need to know how to get to these markets,
But access to production factors is also key.
sary framework for the internal market, we
how to exploit the opportunities of these
On the one hand there is access to energy.
need to make sure that market surveillance
markets and how to protect them against is-
Access to production factors
sues like counterfeiting. Many services are available, but do compa-
The German apprentice system is a good model, a kind of dual-track,
nies know about these services to get access to countries outside
where you are a student but you also learn to work in a factory.
the European Union? And can Europe play a role to help them play in the first division alongside the Americans and Chinese?
Weâ€™ve also launched an Erasmus programme for Young Entrepreneurs (EYE). The Commission supports young entrepreneurs who
We recently started to organise the Missions for Growth. These are
are interested to go and work for six months in another country with
missions of Vice-President Tajani accompanied by 50 to 80 com-
a more experienced entrepreneur. More than 3,000 people have al-
panies from all over Europe. We were recently in Vietnam, Thailand
ready benefited from this programme.
and Myanmar with companies from more than 20 different countries it makes a difference. Our counterparts from these countries tell us
Q Some people say that manufacturing in Europe is dead and
they like Europe because of quality - Europe is quality. So we have
we should shift to services. You donâ€™t seem to agree with that.
to use trade negotiations, our economic diplomacy and the good
No, I don't. Manufacturing is the source of 80% of our exports.Be-
reputation of our industry to get access to these growing markets.
tween 70% and 80% of all investments in research and development come from manufacturing. Nearly one in four private sector jobs is in
Education and training
industry, often highly skilled.
I want to stress the importance of education and training. At a recent
Of course, a general feature of the European economy (and ad-
conference on the European Industrial Renaissance chief executives
vanced economies in general) is the structural shift to the services
were asked "what is the main short-term message and what is the
sector.There is a whole series of explanations for this such as the
main message for the long-term?" For the long-term, the three chief
higher productivity growth in manufacturing than in services, out-
executives said education, education and education. Education of
sourcing processes and vertical disintegration (with more service
students but also education of young, willing, dynamic entrepreneurs.
activities provided by external firms rather than produced internally
by manufacturing firms). In my youth, I used to go into my father’s
lieve that both attributes are important in order to really bring the inno-
textile factory and I talked to the truck driver. Then I visited the guy
vation to the market. This is where we come in as DG Enterprise and
dealing with marketing, and after that I made some calculations with
Industry to ensure we don't stop at the innovation level but help getting
the accounts. Today one company does the accounting, another
it to the marketplace.
does the transport, and perhaps an agency does all the marketing. These tasks are all by definition services but in the 1960s and the
We are concentrating on a number of domains where we think there
1970s they were part of the factory.
might be a huge demand in the coming years: advanced manufacturing, clean production, ecological construction, bio-based products,
But I don’t see a conflict between services and industry. Industry
smart grids, raw materials and clean mobility. For all these domains
needs services and services need industry. Indeed, manufacturing
there is a part of manufacturing, a part of services and it also includes
products are used for producing services.Every job in industry is
asset management. There is a lot of push for innovation and policy-
responsible for between 0.5 and 2 jobs in other sectors, namely in
makers can try to set the right framework, but the private sector needs
services. And more than a third of the value of a European manu-
to take the money and invest it. It's up to industry to make the choices.
facturing product sold to final users is created in the services sector.
The innovation performance across Europe is quite diverse. We can-
Services such as maintenance and training are very important ele-
not put all industries in all countries in the same basket. European
ments in the delivery of complex manufactured products. Did you
policy makers are trying to do the utmost to push innovation, reduce
know that the maintenance of airplanes creates more returns than
its cost and maximise the incentives to innovate. For example, the
building them? These elements explain that there is a high degree of
European patent system has finally been adopted. This is going to
complementarity between manufacturing goods and services. You
reduce the cost of patenting and the time to acquire the patent.
can't really separate industries from services,when you're dealing with the industrial policy. I recently heard Professor Hüther from IW
For us the regional dimension is also important. I was recently at an
Koln explaining that while industry represents 16% of the economy,
event where 16 regions got together to talk and to advance the con-
you get to just over 24%, if the joint production elements such as
cept of smart specialisation. We see that it is in the regions that indus-
services coming from industry are included.
trial specialisation and industrial manufacturing are taking place. The specialties in Rhone-Alpes are different to the specialties in Lombardy.
Q What about the role of research and innovation in Europe?
Perhaps the missing link in the value chain in one region can be found
The European Programme for research for the next seven years (Ho-
in the region next door and doesn't have to be reinvented because it’s
rizon2020) is now focusing on both research and innovation. We be-
just across the border.
Performance Improvement When you need a trustworthy partner to keep your equipment in good shape and improve your productivity www.abb.be/service
Wouter De Geest Donâ€™t be afraid of what lies around the corner
As the CEO of BASFâ€™s second largest integrated production plat-
Q. What do you see in the future for the manufacturing industry
form in the world, Wouter De Geest and his colleagues bring the as-
sets on the Antwerp site to their fullest potential. At BASF, everyone
As always there are challenges for our manufacturing industry: com-
is expected to contribute, either directly in operations or indirectly
petitiveness issues concerning labour & energy costs, regulatory
through e.g. HR. Developing new concepts and improving overall
requirements, etcetera. Yet these are not new: historically we have
effectiveness and efficiency in maintenance is a key focus of their ef-
always seen these, but we still managed to thrive as an industry.
forts. Wouter De Geest talks about taking risks, seizing opportunities
We should pay attention to these issues and aim to increase com-
and innovation as a key factor in the manufacturing business.
petitiveness where feasible, however I see one more important challenge. The key is to not become too cautious in Europe: sometimes
Q. How do you think the role of manufacturing industry in
we seem to be afraid of anything new â€“ be it GMOs, shale gas, or
Europe has changed over the last decade?
whatever lies around the next corner. We should be open to new op-
For some time, certain countries believed that industry was outdat-
portunities, and able to handle well calculated risks as we did before.
ed, and they had to focus fully on developing the service sector. In
Otherwise we will ignore important innovations and cripple our own
recent years this has turned around: whether it is the European gov-
ernment, countries or regions, everyone is developing new industrial policies, recognising the importance of the manufacturing industry
Q. What are the factors that will allow manufacturing to stay
for the economy and society at large. The important thing is that we,
competitive when labour costs increase?
as industrial leaders continue on realising the transformation towards
The key factor for our competitiveness is innovation: banking on
more sustainable, innovative and society oriented industry.
continuous improvements in areas as energy efficiency, overall pro-
ductivity, as well as on more disruptive innovations as new products,
also measure our performance in this area through a dedicated set
solutions & entire businesses models. Both are equally important for
of KPIs, both on site and at plant level. For some products (e.g. hy-
a company. Yet for a production environment, I believe continuous
giene sector) we also interact intensely with our clients to guarantee
improvement should always be in the focus. Which tools you use
very high and stable product quality.
matter less than actually installing a culture of continuous improvement throughout the organisation.
Q. Is your maintenance team an internal team or is the activity
Secondly, it would of course help if the regulatory framework would
be stable and conscious of the specific needs of the manufacturing
At BASF Antwerp, we have a strong internal maintenance team, as
community, especially for energy-intensive and globally competing
we think it is key to have this core competency for our operations in-
house. At the same time we do of course add capacity and expertise by outsourcing tasks to a certain degree, but you do need a certain
Q. Having a reliable production line is essential for quality as-
critical mass internally to be able to execute, assess and steer main-
surance, could you describe an example of where this proved
tenance activities efficiently.
to be critical for business continuity? As a commodity chemical site, reliability is the core of our success.
Q. In the maintenance industry, it is possible to consider two
On top of that, our integrated Verbund structure also makes that
models, the Fail and Fix approach, and the Predict and Prevent
we are dependent on our own plants within different value chains,
approach. How do you think the tendency to choose either of
making business continuity a part of everyday business. In recent
these was affected by the economic situation?
years we invested strongly in our asset management competencies,
We are convinced that in both economically good or bad times, the
enabling long-term asset strategies to ensure required reliability. We
maintenance strategy chosen should be based on truly good risk
â€˜The maintenance engineer himself is becoming a strategic asset to the company.â€™ Wouter De Geest CEO of BASF Antwerpen
management. When margins are under pressure, there is indeed a
a standard, but as a strategic and operational necessity. Concerning
tendency towards the â€˜run to failureâ€™ strategy. However, we continu-
certification, we only plan to do this when we see value in it towards
ously try to rationalise this reflex by actively questioning our risk matrix
and optimising the according maintenance strategy on an equipment level. This approach is in accordance with the idea that our main-
Q. Finally, what would be your advice to young people who are
tenance strategy should be directly derived from the asset strategy
now considering their future career and are looking as mainte-
which is developed in close cooperation with the business. The asset
nance as an option?
strategy has a truly long-term perspective in it and offers the frame-
Maintenance is getting ever more attention within the chemical in-
work to diversify between more and less critical equipment. In this
dustry, up to board level. This is because it is essential for the overall
way both maintenance approaches will always be applied at the same
strategy in an asset-driven business as ours. A career in mainte-
time within one plant.
nance allows to develop and apply technical and methodological expertise, as well as personal and social skills. The latter are needed
Q. With ISO 55000 there are now standards for Asset Manage-
more and more given the competitive environment we currently ex-
ment. Is BASF going to adopt them?
perience, which requires the maintenance engineer to sell and de-
We are fully aware of this standard, and the asset management prac-
fend his plans and budgets up to the highest level. This means the
tices we developed and apply would allow for certification of our ac-
maintenance engineer is becoming a strategic asset to the company
tivities. However we do not invest in asset management because of
BEMAS 25th anniversary
Koenraad De Backere No innovation without manufacturing
The economic crisis of the last few years has
Q. We have seen many changes in indus-
shows that production and innovation are
made it painfully clear that an economy can-
trial activity and manufacturing in Europe
quite intimately linked. This means that if you
not thrive on the service industry alone. Af-
in recent years. What are your thoughts
don't have manufacturing activity, then your
ter decades of outsourcing and offshoring,
on what has been happening?
innovation activity will suffer. It is also clear
European governments agree that it is high
There have been many changes, and I hope
that services are much less productive than
time for a reversal of these phenomena: re-
to soon start to see change for the better.
manufacturing, so if you really want to inno-
industrialisation, industrial renaissance and
Some economists are saying that we are
vate on the productivity side, for instance,
reshoring are the terms used to describe the
moving away from a production economy
you need to have a manufacturing capability
ambitious goals in their policy papers.
and that we should become a service econ-
and a manufacturing industry.
What measures need to be taken to ensure
omy because that is the future. They say
It has been “le bon mot” in many Europe-
a healthy European manufacturing base that
manufacturing is not the primary activity of
an countries to look upon this evolution as
can compete on a global basis? We asked
industry anymore, and when we talk busi-
something inevitable and that industry would
this and other questions to Koenraad De-
ness we talk service; we don't talk products
leave. Luckily, I see that the academic world
backere, Professor in Technology and In-
and we don’t talk production.
really emphasizes the intimate links between
novation Management & General Manager
I have always been pretty amazed by this
production and innovation – in particular the
at KU Leuven, lecturer at various European
type of statement, not just because of my
PIE (Production in the Innovation Economy)
business schools and adviser for govern-
common sense but also because all the
report from MIT, which also contains a very
ments and multinationals.
research I did on innovation management
strong message to the US economy that
industrialisation is an extremely important topic. I think there is al-
These are manufacturing revolutions. You will see a lot of innova-
most a one-to-one transfer of this message to Europe, because we
tions both on the product and equipment side that will revolutionise
also need reindustrialisation. There is obviously a good reason why
the way we think of supply chains and the way we think of proximity.
the European Commission, in its Strategic Innovation Agenda, put
Today, mass production is not yet possible in additive manufactur-
value-added manufacturing as one of the top priorities for the Hori-
ing. But this will happen in the next five to ten years and there is
zon 2020 program.
definitely a market for this type of application. This will revolutionise
The fact remains, however, that if we want to have a thriving manu-
the way we think of transport and transport economics. I think there
facturing sector in Europe, we also need to take care of the other
are nice things happening, and we should capitalise on it as a new
factors that support the industry. This means labor costs, energy
industry base. Consequently, the assets you need in manufacturing
costs, and all those cost components which make or break your
and production will have to be considered as part of that revolution.
competitiveness as a company and as an industry on a global basis. I do think the reindustrialisation in the US is helped tremendously by the shale gas and shale oil boom, where you now have lots of
How Europe can compete
cheap energy available. As a consequence, industry is starting to move back to the States. So instead of offshoring or outsourcing,
Q. Do you think the capability to make the change is starting to
we talk about reshoring, industry coming back into the country. Eu-
exist in Europe?
rope of course doesnâ€™t have the same energy drive yet, but we need
Just to give you a few examples, in Flanders we are close to starting a
to think about our competitiveness and should maintain a healthy
strategic research center with the industry on manufacturing issues,
advanced manufacturing mechatronics, additive manufacturing, pre-
Of course the nature of that base will change; in fact it is changing all
cision manufacturing, human-centered manufacturing systems, etc.
the time. We see changes, for example, in advanced manufacturing,
If you go to Germany and look at the role of, for example, Fraun-
precision manufacturing, additive manufacturing and 3D printing.
hofer in Aachen, it is tremendously important. We are closely linked
from Leuven to Eindhoven. We have the
a steel producer, car producer etc.; every-
in a much more specialised and focused
ELAt triangle, Eindhoven-Leuven-Aachen.
thing was integrated. Then, during the time
way,” which was to some extent true. So
The whole Eindhoven region – the Brainport
of outsourcing, this vertical integration was
what happens is you stop your center for
Region – is a leading world center in terms
torn to pieces – I call it de-verticalisation –
fabrication technology, you offshore your
of precision engineering. This is not just due
where the integrated companies cease to be
mass production activities, and there is then
to Philips, but also ASML, a world leader in
a disconnect between equipment develop-
semiconductor production equipment R&D
Philips was a good example of the verti-
ment and production. You move to Asia with
and production. You have a whole produc-
cally integrated company. They had an im-
your large-scale production facilities, and
tion ecosystem that is developing and that
portant internal center called the Center
because you need localness, equipment de-
really comes very close to what the re-
for Fabrication Technology. This developed
velopment starts over there. So, not only do
searchers in the PIE report describe.
the manufacturing equipment and process
we have de-verticalisation, but we also see
They say that in the ’ 50s and ’60s you had
equipment, etc. Of course, with the de-ver-
that part of the supply chain for components
the big companies, which were typically ver-
ticalisation, people asked, “Why should we
and equipment has disappeared too.
tically integrated – so, for example, Ford was
do this? There are suppliers who can do it
If you want to have a thriving manufacturing
‘If you really want to innovate on the productivity side you need to have a manufacturing capability and a manufacturing industry.’ Koenraad De Backere Executive Director - KU Leuven Research & Development
industry, you must not only focus on the asset base of your produc-
lots of software, lots of communication technologies. It is now all inte-
tion system, but also on the competencies and the assets you need
grated – electronics, mechanics, mechatronics; we see an evolution
to be able to come up with this production system: equipment, parts,
towards all kinds of photonics in the manufacturing industry, so you
subparts, modules, etc. The PIE report notes that if you lose these
see a whole set of new technologies coming into those innovation
competencies, you are not just losing your production capability, but
and production activities. That's also the reason why the EU has, as
also the capability to develop new production capability and new
part of the strategic innovation agenda, referred to the “key enabling
technologies.” This includes photonics and manufacturing. This is a
So, what we have to look for in Europe and the US is how we can
skill base we need to develop.
reconstruct this de-verticalised chain. One of the ways to do this is
We also need the soft skills: people need to understand how you
through clustering. By establishing strategic research platforms, you
work in a cluster, rather than a vertically integrated company.
try to encourage equipment developers to come here, stay here, and thrive here. They are not vertically integrated, but they are suppliers
Q. Do you think that the tendency of young people to be more
to other companies, so you create a kind of interaction – with the
mobile will be beneficial?
best points of both systems. That's why, when you look at your pro-
I think that the best way to transfer knowledge and technology is
duction asset base, it's not just the production systems, but you also
through the movement of people. There is a lot of evidence that
need to look at all of the suppliers to those systems, and you need
shows that this mobility is advantageous in the innovation system.
geographical proximity. For the best level of interaction, companies
So, this means the younger generation being more mobile can be a
need to be 30-50 km from each other. That's what you now see in
healthy evolution, as long as there is a continuous flow, and as long
this region, in this country.
as people continue to be willing to move, and as long as it’s more than just job hopping. You still need a couple of years in a job to be
Q. Will this require a new set of skills on the workforce?
really productive and innovative on the job. If you hop from job to job
Yes, people need to be trained; technical training will be required, to
every two or three years, then you will not have the same beneficial
enable them to understand the new technical environment. The new
effect as people who stay five, six or seven years and then move on.
manufacturing environment, for example, is not just machines; it is
That’s the better way for them too, as it increases their value.
Q. Do you think models like lean manufacturing will continue to be relevant? Of course; it has been around for some time and is showing us the way to be more efficient in the way we operate. We have efficient production systems today, and will still need them tomorrow. Lean thinking will never disappear; it will be there and we need it. But of course new advanced manufacturing technologies can throw an-
â€˜Additive manufacturing will happen in the next 5 or 10 years and it will revolutionise the way we think of transport and transport economics.â€™ Koenraad De Backere
other perspective on how you work in a lean environment.
A changing role for maintenance Q. We will then have a set of more complex machines and tools, and possibly a major initial investment with great flexibility. So, how will this change the maintenance environment? Will it be outsourced to some highly specialised group, or will it be kept inside to ensure innovation in production. I think it will be a mix of both. You have to do some of it in-house as it allows you to be efficient and innovative. But some may be so complex and specialised that it needs special firms to do it. This means the whole concept of maintenance will be much more holistic. It will not just be about keeping the machine up and running, but also the whole software environment of the machine. It means physical maintenance, but also the maintenance of the software versions. It also means making sure the next generation versions are still fully backward-compatible with the machine. So the maintenance environment becomes more technology-driven than it was in the past and you need, for example, ICT people in your maintenance teams, even in a production environment.
‘We have moved dramatically from fail and fix to predict and prevent. I think the amount of data available and the detail of that data will allow us to move even further in that direction.’ Koenraad De Backere
Q. Do you see this as a competency area for Europe?
Q. Is this becoming a new science?
I don't know if Europe will be able to differentiate itself, because you
Yes. There are people already starting to work in this area at engi-
have to differentiate on the basis of your manufacturing competen-
neering schools. They look at the cost benefits, but the next step will
cies. But to sustain the differentiation you need a good maintenance
be coming up with hybrid maintenance concepts.
competence. Without this, Europe will not be able to differentiate itself. Q. Will there be a change in the way asset performance will be Q. You said maintenance is changing, what about the balance
measure in the future?
between Fail & Fix vs Predict & Prevent?
I am convinced that the digital revolution, the availability of cheap
We have moved dramatically from fail and fix (F&F) to predict and pre-
sensors, ubiquitous sensors, means that performance insights and
vent (P&P). I think the amount of data available and the detail of that
performance drivers will only increase. We can measure at more
data will allow us to move even further in that direction.
points than in the past and then add data-mining capability; the re-
Also, P&P may allow us to use F&F in a more intelligent manner. In the
sult is that more and more will be possible.
past, we waited until it failed and then fixed it, but in the world of P&P for some parts we may opt to just fix it when it breaks, but do it in a much
Q. So who will oversee all this?
more proactive manner - knowing exactly when it will break. Conceptually,
We need good engineers. More and more engineering schools are
I can imagine that when you are good at P&P, you will not replace a part
starting to refocus on engineering systems, because you need to
when it is 90 percent worn out, but be ready and waiting when it breaks.
look at the system – the machine, the control environment, etc. You need supply-chain integration. It’s systems engineering with the need to have a holistic approach.
The Power of Knowledge Engineering Delivering profit through reliability
• Asset Management • Global Maintenance Benchmarking • Maintenance Strategy Review (RCM) • Engineering Consultancy • Condition Based Maintenance • Spare Parts Optimization • Lubrication Management
THE POWER OF KNOWLEDGE ENGINEERING
Wim De Clercq The future of energy generation in a changing landscape Itâ€™s an understatement to say that the energy landscape has been
Q. What is happening with the energy market in Europe?
changing in recent years. The liberalisation of the European electric-
"It has changed very much recently. This started in the electricity
ity and gas market in 2004 coincided with the (subsidised) dawn
business about ten years ago with the liberalisation, which intro-
of the renewables such as wind, solar and biomass. Fueled by the
duced a completely different business-model in the energy market.
Kyoto Protocol and the Europe 2020, targets national governments
In the recent years, the massive introduction of renewables made
created legislation to push energy efficiency and adoption of renew-
that the energy generation landscape has changed again."
able energy. Following the nuclear disaster in Fukushima in 2011, Germany has
Q. So, what are the factors that most affect the use of the dif-
permanently shut down eight of its reactors and pledged to close
ferent energy sources?
the rest by 2022. The incident highlights the concerns about nuclear
"Europe will focus much more on renewables. Solar panels on roofs,
power and underwrites the current phase-out of nuclear power gen-
onshore wind, but also huge offshore wind farms in countries with
eration in countries as Sweden, Italy and Belgium. Add to this the re-
extensive coasts, like UK, Denmark and Germany. Together with
cent rise of shale gas production in the United States, and the result
new developments in storage capacities, the landscape of electricity
is a huge gap in the energy prices between both sides of the Atlantic.
generation will change completely.
What will the future of energy look like in Europe? How do energy
In a recent past, nuclear generation and fossil-fired power plants
producers anticipate in this fast changing landscape? In what way
provided grid base load but nowadays, when weather conditions
will maintenance & asset management help to cope with the chal-
are favourable, sun and wind become the primary energy sources.
lenges ahead? As Executive Vice President Generation and Pur-
This means that for Belgium at some days in summer or during holi-
chasing for Belgium and Luxembourg at Electrabel â€“ GDF SUEZ,
days, when electricity off-take is low, a surplus in electricity genera-
Wim De Clercq is a well placed specialist and the ideal person to
tion compared to the demand occurs and this due to the combined
shed some light on these questions.
renewable and nuclear generation. During that period, no gas or coal
â€˜With the renewables, the whole energy landscape has changedâ€™ Wim De Clercq Manager Generation and Procurement BeLux - Electrabel (GDF Suez)
fired plants are necessary to cover the electricity demand! On the other hand, during wintertime, when it’s cold and the electricity consumption is much higher, our gas plants are running and are even essential for answering the demand. For our country, studies are showing that due to the closure of a large amount of electricity gen-
‘Some years ago, a gas powered station would easily run 5000 hours a year. Today operating hours may get down to 500 or 600, as a result, the plant is not viable and is closed down.’ Wim De Clercq
eration capacity, there is an increased risk of generation shortages. But, increased risk does not mean that it will really happen. Since 2008, energy prices on the market are going down. The reasons? The rise of renewable with a strong subsidies-mechanism and very low variable costs, the declining consumption in our countries because of the economic downturn and the fact that in the last two years in our neighbouring countries, lots of new capacity has been commissioned. All these factors together give that the European electricity business is in crisis. This results in a difficult situation for the existing, older gas power stations, not only in our country but in whole Western Europe. They are less efficient than new ones, and because of the overcapacity on installed generation, they are the first to be shutdown. This is what happens on the Western European market : all utilities already announced the closure of some of their gas power stations for financial reasons. Why operators are building new ones ? These new gas stations that are commissioned in the last few years, were ordered about 5 years ago. That’s the time you need for permitting, designing and constructing these assets. But in the meanwhile the economic crisis stopped the increase of electricity consumption, and wind and solar boosted ... All this results in an overcapacity, and to keep the company profitable in this changed settings, one needs then to shut down the plant with the highest cost ...
Q. Is there no future for these elder stations ?
will be running prior to the older ones. And
Today, the approach is a little bit different for
For some of them, there is ! You can inte-
that is why all operators are shutting down
some units. We are looking very closely to
grate these older units in your global asset
their older gas plants.
the maintenance costs, and we are striving
portfolio as a peaking power plant. That
to have the most cost-efficient maintenance
means that an operator keeps in his genera-
Q. Do these old stations still need to be
plan. A maintenance intervention can be
tion fleet some units that can be on the grid
kept in working order?
scheduled in a different way, without overtime
very quickly, with a short start-up time, and
"Yes, as a peaking power unit ! And, with the
or weekend work, or replacing an equipment
an important start-up rate. They can be at
new regulation the government recently put
can be avoided by repairing it, or â€Ś . It de-
full power within some minutes ! Interesting
in place, to remunerate the stand-by capac-
pends on the situation : is the plant absolutely
when there is a drop in wind, or a sudden
ity, there can be a new future for our existing
necessary for the grid, or can it be replaced
shutdown in a nuclear power plant.
gas stations as back-up capacity to support
by another unit ?
the electricity grid in case of high demand
The availability of a plant is important, but
Q. Were the new stations brought online
and to avoid a total or a partial electricity
the reliability is perhaps of more importance
because the old ones were redundant or
blackout of the country.
: if you declare your unit available, it should
be reliable !
The existing gas stations were commis-
Thatâ€™s a global fleet approach : availability and
sioned at the end of the â€™90ties, beginning of this century. They have a lower efficiency
The future of maintenance in power generation
than the more recent combined cycle power
reliability are key, but always in regard to the operational costs. And let us be clear : safety is a key driver; we will never take a safety risk
plants. In the previous years, they ran easily
Q. All these changes must have a signifi-
by reducing the maintenance costs.
over 5000 hours a year. But, with the rise
cant implication on the way to manage
The newer gas plants need less mainte-
of renewable energy, and lower energy con-
and maintain plants ?
nance; a more global fleet approach is ab-
sumption, they are running less.
Yes and no. For our fossil fired plants, it did.
Taking into account the current gas prices,
For our nuclear fleet, it did not.
And for our nuclear fleet, the message is
their low efficiency and the fixed costs like
For our fossil-fired units, in the previous
clear. We continuously improve our main-
taxes and contributions, these gas plants
years, the objective was to have the highest
tenance plans and our maintenance pro-
are not longer viable. You can easily un-
availability at all the time, and to maintain the
cedures to have the best availability of our
derstand that the newer gas power plants,
plant in that perspective : strong preventive
units. With one priority driver : nuclear safe-
with a higher efficiency (that means that they
and predictive maintenance plans, and im-
ty. All our decisions are taken in regard to
have a higher electricity output for less gas)
mediate corrective maintenance.
the highest level of nuclear safety.
‘I genuinely believe that a good maintenance technician with a good set of skills from a nuclear power station should easily be employable in another industry.’ Wim De Clercq
Q. What about maintenance for renewables?
Q. Why is it you can do that?
plans and procedures. They should be fol-
These new installations need another ap-
Simply, the approach changed because the
lowed very strictly. When we talk about “Inno-
proach. Wind farms do have maintenance
reality changed. Where people used to see
vation in maintenance”, and more specific “in-
routines fixed by the manufacturer and they
a plant was running for 7000 hours per year,
novation in maintenance of a nuclear power
need to be followed.
now it may be running for 2000 per year. You
plant”, innovation takes another dimension !
We are not performing the preventive main-
have more data, forecasts for when you need
What we expect of our maintenance techni-
tenance programs by our own maintenance
to be available, and information on what the
cians, is maintenance regarding all aspects
teams. But we have strong knowledge in per-
financial impact is if you are not available. So
of nuclear safety. Can you be innovative in
mitting, building, operating and maintaining
because the market model is different you can
nuclear safety ? Yes, but let us call it “Innova-
the wind farms. In maintenance, our teams
see precisely when it is viable to switch on.
tion through Operational Excellence” !
are strongly challenging the manufacturers.
We have high expectations about the way a
When there is an incident, we have techni-
maintenance job, or a test should be realised.
cians in our teams with high skills in problem-
Training and innovation
solving. And that is certainly an important
A detailed prejob-briefing before starting the work, with an analysis of the technical and
competitive advantage on the whole market !
Q. How important do you think innovation
safety risks and scenarios “in case of …”,
Our strong competencies are not limited to
is at the generation site ?
executing the job using a detailed procedure
the maintenance area of the renewables. We
Let us talk here about innovation in mainte-
with hold-points, witness-points and data-
have in our teams strong competencies in
nance at the nuclear units. For all our equip-
sheet, a preparation of tooling and measur-
the whole value chain.
ments, we have very detailed maintenance
ing equipment with individual data-sheet and
traceability. While executing the job, a strong questioning attitude is a sign of nuclear safety, and in the post-job briefing, if technicians see some room for improvement, they should take it into account and bring the idea up. These attitudes are signs of a strong nuclear safety culture. And that is our first driver in operating and maintaining our nuclear plants.
but not in nuclear. This demands an important training program on the nuclear specific aspects of the job !
Q. Training and development are essential for companies that
are going to succeed over the long term. Are there specific is-
Q. Is your maintenance team an internal team or is the activity
sues you have faced with finding qualified team members for
maintenance teams or do you depend on internal training and
We have in our company a clear policy about outsourcing of main-
development programmes to guarantee the skills are available?
tenance activities. Our key maintenance activities are kept in-house.
We have a strong internal training program. Definitely in nuclear,
We want at any time be able to challenge the manufacturer or the
where very specific training sessions are organised for new hired
maintenance company. That means that the key competencies and
engineers and technicians.
the knowledge are absolutely to be kept in our teams.
The previous years, we hired some hundreds of new technicians in
To give you an idea of it, lots of non-core business related jobs are
our nuclear facilities. In Doel and Tihange, looking over the last 10
outsourced, like scaffolding or painting.
years, new hires make up 50% of the staff.
During outages, recurrent maintenance activities based on very de-
It is not so easy to recruit well-trained technical people. That is why
tailed procedures are outsourced to external companies. Modifica-
we put a special effort on in-house training. After their initial training
tions in the installations or new-build activities are outsourced too,
program, our technicians are integrated in a team, assigned a coach
but always under the supervision of our technicians and in close
-a kind of mentor-, and they work together for an on-the-job training.
collaboration with our engineering office Tractebel Engineering.
Today, we are facing a huge internal mobility of technicians from one
The latter engineering company has hundreds of people expert in
plant to another. As we are shutting down fossil-fired power stations,
all areas of electricity generation, from fossil-fired plants to nuclear
the technicians move to other plants, and many of them move to a
units. Specific competencies we do not have in-house, are covered
nuclear power station. That means that they have already well-devel-
by Tractebel Engineering with whom we have a partnership. Togeth-
oped skills in maintenance or in operating an electricity power plant,
er with them, we always keep the oversight and technical competence in-house. When there is a specific job we canâ€™t do it ourselves, due to the need for specific tools, special procedures or qualifications, we still aim to keep the knowledge in-house and to technically challenge the contractor.
An example of this approach is the hiring of companies specialised in nuclear reactor maintenance, inspections and works. These companies are often the Original Equipment Manufacturers (OEM), and these specific jobs are their core business. Outsourcing some activities gives us more flexibility. Do not forget that in nuclear, the workload is not stable and depends if a unit is running or in outage. Every 12 months for some units, or 18 months for other ones, there is an outage of 4 to 5 weeks for standard main-
competencies of our teams. Maintenance and operations work very
tenance and refuelling, with a huge increase of activities. Lots of
closely together. In day-to-day business, nor the site manager, nor
work is then outsourced ! You can easily have some thousands of
the entity-manager nor me intervenes with the teams. Of course,
external contractors coming in. This is a combination of experts and
when there are key issues, I am informed. Also on major technical
general maintenance technicians.
events. Yes, there is still a technical part in my job ! My technical background helps me a lot to understand the event, to
Q. How closely are you able to follow the maintenance activity
challenge the teams with some adequate questions, and to under-
across your plants? What types of tools allow you to do this now?
stand the difficulties the teams are facing in solving the issue.
Personally, I have a daily overview of the operation of all the units of
Keeping in touch with the people in the field is also an important
our fleet. Our teams are performing a great job, and I fully trust the
part of my job. I insist to visit on a regular basis the different plants of our fleet, to keep in touch with the managers and the technicians. It takes some kilometres, but it is really worthwhile ! To guarantee a close oversight of what is happening in the power stations, we implemented a formal technical briefing between the management of each entity and Corporate management. Four times a year, each management team is presenting the performances of their unit, the challenges they are facing, the technical and safety events of the previous months, the financial and organisational overview, with in depth discussions between the colleagues. Very interesting meetings for me !
Managing valuable assets
From a technical point of view, we imple-
way so that that they can take up new chal-
mented three levels of indicators : global in-
lenges when needed.
Q. You are responsible for a huge amount
dicators on corporate level, identical for all
This is really an issue for our business ! We
of assets. Do you use a specific metric for
units, indicators on the level of an entity (a
face here in Belgium the limited future for nu-
measuring asset performance?
power plant) and last but not least, indicators
clear energy. Government decided to shut
Of course the value of the assets we operate
at a departmental level.
down all nuclear power stations by 2025.
is huge. Different key indicators are used to
Does this mean the people who are special-
have a good overview of the performances
Q. If you were talking to someone who is
ised in maintenance of a nuclear power sta-
of our plants.
graduating now, what would you say re-
tion should be out of work within 12 years ?
The availability of our stations, the reliabil-
garding maintenance, asset management
No, they will move on to a new career by 2025,
ity of our safety equipments in the nuclear
as a career?
thatâ€™s right. However, I genuinely believe that a
plants, the outage duration, the number of
There is a clear future for good maintenance
good maintenance technician with a good set
open work orders, the number of reworks
technicians ! Whatever the industry they
of skills and abilities from a nuclear power sta-
within the maintenance department, these
work in, maintenance skills and competen-
tion should easily be employable in another
are some examples of technical indicators
cies are very valuable on the market. From
industry. This thanks to their strong technical
we follow. And there are much more indi-
this perspective, employability is important.
competence, ability to work with procedures,
cators that gives us an overview on what is
Business and technologies are changing fast
a questioning attitude and a strong culture
happening at the stations. Safety indicators
and machines they work on today may dis-
towards safety. These are competencies that
are very closely followed too, and of course,
appear. So, I would advise them to develop
are easily translated to other industries like
the financial indicators.
their knowledge, skills and abilities in a broad
pharmaceutical or food or automotive.
Long term energy outlook by the International Energy Agency
Technology and high prices are opening up
in Southeast Asia take the lead in driving
“Major changes are emerging in the ener-
new oil resources, but this does not mean
consumption higher. The Middle East also
gy world in response to shifts in economic
the world is on the verge of an era of oil
moves to centre stage as an energy con-
growth, efforts at decarbonisation and tech-
abundance, according to the International
sumer, becoming the world’s second-largest
nological breakthroughs,” says IEA Execu-
Energy Agency’s (IEA) 2013 edition of the
gas consumer by 2020 and third-largest
tive Director Maria van der Hoeven. “We have
World Energy Outlook (WEO-2013). Al-
oil consumer by 2030, redefining its role in
the tools to deal with such profound market
though rising oil output from North America
global energy markets. Brazil maintains one
change. Those that anticipate global energy
and Brazil reduces the role of OPEC coun-
of the least carbon-intensive energy sectors
developments successfully can derive an
tries in quenching the world’s thirst for oil
in the world, despite experiencing an 80%
advantage, while those that do not risk tak-
over the next decade, the Middle East – the
increase in energy use to 2035 and moving
ing poor policy and investment decisions.”
only large source of low-cost oil – takes back
into the top ranks of global oil producers.
its role as a key source of oil supply growth
Energy demand in OECD countries barely
The availability and affordability of energy is a
from the mid-2020s.
rises and by 2035 is less than half that of
critical element of economic well-being and,
non-OECD countries. Low-carbon energy
in many countries, also of industrial com-
The 2013 annual report presents a central
sources meet around 40% of the growth
petitiveness. Natural gas in the United States
scenario in which global energy demand
in global energy demand. In some regions,
currently trades at one-third of import prices
rises by one-third in the period to 2035. The
rapid expansion of wind and solar PV raises
to Europe and one-fifth of those to Japan.
shift in global energy demand to Asia gath-
fundamental questions about the design of
Average Japanese or European industrial
ers speed, but China moves towards a back
power markets and their ability to ensure ad-
consumers pay more than twice as much for
seat in the 2020s as India and countries
equate investment and long-term reliability.
electricity as their counterparts in the United
States, and even China’s industry pays almost double the US level. In
Action to reduce the impact of high energy prices does not mean
WEO-2013, large variations in energy prices persist through to 2035,
diminishing efforts to address climate change. Energy-related car-
affecting company strategies and investment decisions in energy-
bon-dioxide emissions are projected to rise by 20% to 2035, leaving
intensive industries. The United States sees its share of global ex-
the world on track for a long-term average temperature increase of
ports of energy-intensive goods slightly increase to 2035, providing
3.6 °C, far above the internationally-agreed 2 °C climate target. The
the clearest indication of the link between relatively low energy prices
report emphasises the importance of carefully designed subsidies to
and the industrial outlook. By contrast, the European Union and Ja-
renewables, which totalled $101 billion in 2012 and expand to $220
pan see their share of global exports decline – a combined loss of
billion in 2035 to support the anticipated level of deployment.
around one-third of their current share. An in-depth focus on oil in WEO-2013 looks at how technology is
“Lower energy prices in the United States mean that it is well-placed
opening up new types of resources, such as light tight oil and ultra-
to reap an economic advantage, while higher costs for energy-inten-
deepwater fields, that were until recently considered too difficult or
sive industries in Europe and Japan are set to be a heavy burden,”
expensive to access. Despite new resources being unlocked, na-
says Fatih Birol, IEA Chief Economist.
tional oil companies and their host governments still control 80% of the world’s proven-plus-probable oil reserves. The pace of oil de-
Among the options open to policy makers to mitigate the impact of
mand growth slows steadily, from an average of 1 mb/d per year to
high energy prices, WEO‑2013 highlights the importance of energy
2020 to just 400 kb/d thereafter, as high prices encourage efficiency
efficiency: two-thirds of the economic potential for energy efficiency
and fuel switching, and the decline in OECD oil use accelerates. The
is set to remain untapped in 2035 unless market barriers can be
shift in the balance of oil consumption towards Asia and the Middle
overcome. One such barrier is the pervasive nature of fossil-fuel
East is accompanied by a continued build-up of refining capacity in
subsidies, which incentivise wasteful consumption at a cost of $544
these regions. However, in many OECD countries, declining demand
billion in 2012. Accelerated movement towards a global gas market
intensifies pressure on the refining industry: in the period to 2035,
could also reduce price differentials between regions. Gas market
nearly 10 mb/d of global refinery capacity is at risk of low utilisation
and pricing reforms in the Asia-Pacific region and LNG exports from
rates or closure, with Europe particularly vulnerable.
North America can spur a loosening of the current contractual rigidity of internationally traded gas and its indexation to high oil prices.
Source: IEA press release on World Energy Outlook © OECD/IEA - 12/11/2013
Markus Berger Operational excellence in a high-voltage world
Markus Berger has served as Member of the Management Com-
ous century we see the electrification really started in the late 40s,
mittee and Chief Officer Asset Management of Elia System Operator
beginning of the 50s. This happened because you had industrial
SA since November 15, 2010. He earned his degree in Civil Electro-
growth in car manufacturing, petrochemicals and pharmaceuticals
mechanical Engineering from the UniversitĂŠ Libre de Bruxelles (ULB)
across Europe. They really needed a lot of energy, so this became
and in 2002 he earned executive Master's degree in Management
the first driver for the development of the systems.
and Business Administration from the Ecole de Commerce E. Solvay
Now, 60 years later, from a European perspective we face two big
(Solvay Business School). He began his career in 1988 with Labore-
challenges. Firstly to renew our assets which on average are 50-60
lec as System Engineer and in 1996 was appointed Project Engineer
years old. Fortunately, this is not the case for industry as they have
at Electrabel. He joined the organisation that was put in place in 1999
renewed their installations more frequently due to the need to follow
to prepare the creation of Elia (June 2001) and from 2001 to 2002 was
the technical evolution and to stay competitive
in charge of the Maintenance Services for the Southern part of the
Secondly, with the evolution that Europe wants toward renewables,
country. From 2002 to 2003 he was Head of the Sales Department.
you have to follow the pace at which the European Commission
From 2004 to end October 2008 he was Chief Officer Grid Services.
wants to implement this new way of living. It becomes a challenge to
As from November 2008 he heads Elia Engineering. He also sits on
guarantee security of supply and at the same time a challenge for the
the Investment Committee and the Board of Eurogrid International,
industry to be cost effective.
the holding company created by Elia and Industry Fund Management
I am also involved in the consulting business in the company, and we
for their joint acquisition of 50Hertz. He explains us how operational
now find that other countries are facing the same issues that we have
excellence makes sure the light doesnâ€™t go out in Belgium.
faced during the last 10 years. For example, in the Middle East, they are also going to face potential shortfalls of primary energy resource
Q. From your perspective what have been the biggest changes
by 2030. This means they will need to change their portfolio of energy
in your field in the last 10 years?
to include for example solar. They are looking to what we did here in
I have two views on that, one with European glasses, one with inter-
Europe and want to ensure they don't make the same mistakes. They
national glasses. In a certain way, when you look back to the previ-
want to draw out the positive things that we did and avoid any pitfalls.
â€˜Our children will have to live with the consequences of the choices we make today.â€™ Markus Berger Chief Executive Officer Elia Group International - Elia
Operational excellence at Elia
expansion of the grid. This was fine in 2006
even before we begin to buy equipment. In
and 2007, and the mind-set had moved to one
our business it is an investment in the long
Q. You have to manage hugely expensive
of operational excellence.
term, we are investing for more than 30-40
equipment, what is your basic approach
So, thinking of maintenance and asset man-
years. Our children will have to live with the
to maintaining these assets?
agement, in the beginning we were really
consequences of the choices we make to-
At the beginning of 2000 we were a compa-
only looking at maintenance activities. We
day. That's the reason why we said we have
ny oriented on one side toward maintenance
were aware that we had to do something
to change our mind-set from just mainte-
activities, and on the other side investment
about replacement. Then in 2007/2008 we
nance to looking at the whole process - the
was only provided in relation to the expan-
realised that we had to look at the lifecycle
whole asset management approach. This
sion and evolution of the consumption in the
of our equipment because we had the ad-
included the risk models but also new ways
country. But the two activities were really not
ditional challenge of renewables to deal with.
to carry-out maintenance because the re-
enough synchronised with each other.
So, the financial and human resources that
sources we had were limited. We had to
Then we were confronted with the first new
were required to be able to deal with renewa-
make some choices. This is why we tried to
element, namely aging assets. Due to these
bles were huge, and it meant we needed to
extend the lifecycle of the existing assets to
we had to change our approach. It was not al-
make some choices in the investments that
keep everything in balance.
ways obvious to get people to understand that
we were going to make.
in our investment portfolio we had to change
Consequently, we introduced more risk re-
Q. Are there new tools that have allowed
the main drivers, and that one of the main driv-
lated models, and we evolved from a pure
you to do that efficiently?
ers had to be replacement. We then needed
maintenance approach to a global asset-
Yes, in 2007 we recognised the need for this
to find human and financial resources to com-
based approach. This meant we looked at
and we then internally developed our own
pensate for the need for replacement but also
the whole lifecycle starting with written defini-
approach. This meant we could develop our
be able to make the needed investment for the
tion of the specifications of what we required
own risk model, we did this over about three
years. We looked at new ways to manage Assets, and with the help of our engineers developed a number of models. Other companies in Europe also had similar issues, but the speed of liberalisation was not even which made things far more complicated.
Five pillars, one vision
If we consider the ACC-concept for example, we recognised that we needed closer monitoring of our assets. We also needed to shift
Q. Clearly asset management has a crucial role to play in Elia,
to a forecast based approach, what is often called the Predict and
how is this role defined?
Prevent approach. An Asset Control Center consists of processes
Three years ago, we started to develop our vision for asset manage-
based on experience and data, and leading to conclusions impact-
ment. This vision will support us in the development of a sustain-
ing the maintenance, replacement and exploitation of our assets.
able and liable power system for the community and will offer our
For New Technologies, there are a couple of aspects, one is the fu-
company the opportunity to enter into partnerships to acquire the
ture more towards DC (direct current) technology, and another is the
knowledge of new technologies and working methods on the one
requirement for offshore grids to bring the energy back ashore from
hand and to offer services on the external market on the other hand.
offshore generation platforms.
Our vision is based upon a five pillar approach. The pillars are, Qual-
Then there is the pillar of New Technologies that aims to map and im-
ity, External Orientation, Asset Control Concept, New Technologies
plement the new technologies that will be necessary in the upcom-
and People & Technical Skills.
ing years, we also need to modernise our existing working meth-
With the pillar External Orientation we aim to offer, on a recurrent
ods to upgrade our efficiency, enabling us to take up the challenges
base, technical and operational services to clients regarding the
regarding investments, maintenance and exploitation. Therefore we
management and maintenance of installations, infrastructure pro-
created the pillar People & Technical Skills, which aims to provide
jects and consulting services based on our expertise.
a process covering several concerned departments to sharpen the technical competencies of our employees. Finally one can never forget the importance of Quality throughout his organisation. Quality checks must be part of and integrated in all our processes. In order to upgrade this quality level and to position ourselves as a qualified service provider, Elia aims to acquire the PAS55 certification.
Q. Are your maintenance teams all internal, or do you also have an outsourced component? More or less half of our maintenance activities are outsourced. Here you will find for example painting works to protect the high voltage towers against corrosion, pruning, ... Interventions on high voltage or low voltage equipments for maintenance reasons are done by internal teams.
â€˜We look globally to identify the best practices and new ideas that we can learn from.â€™ Markus Berger
Q. What is the role of R&D or innovation in the organisation? What we do is not fundamental R&D, it's a different kind of innovation. Looking across the organisation, we see that operational excellence is the key. We try to also look globally to identify the best practices and new ideas that we can learn from. For example, in the US, this means net balancing, in the EU this is using reserves in the best possible way. In terms of new ideas, I heard recently about the use of large flywheels being proposed in the states, these would allow a new form of load balancing to be implemented. Q. What would you say to a young person who is now considering their future career? Looking to the future, I do see opportunities in the areas of engineering, and I believe they will have a crucial role to play in the future. However, that being said, my daughter chose to move in to the areas of bio-medical sciences, and I think there is a huge potential there too.
Congratulations BEMAS on your 25TH Anniversary
Alain Lycops Manufacturing excellence makes the difference
With almost 150 plants worldwide and a
of the chemical industry, but more focused
the content of our maintenance excellence
turnover of more than 12 billion euro, the
on specialty chemicals and high-value prod-
program. With the rest of the team we imple-
Solvay Group is an important player in the
ucts and not on commodities like Solvay.
ment best practices in the plants where the
chemical industry. Managing and main-
This means it is less sensitive to variations in
business decides to start an improvement.
taining a global asset base creates several
the economy and also less energy depend-
This means we have to travel all the time.
challenges. Alain Lycops is member of the
ent. In order to implement a company-wide
reliability and maintenance team within the
manufacturing excellence program, we have
Q. What impact did the economic crisis
Manufacturing Excellence Group Service.
also created a service group for mainte-
have on the company?
We discover how his work contributes to the
nance and reliability.
The crisis made us realise that it is of cru-
bottom line of the Solvay Group.
Q. How is this service group organised?
cial importance to have excellence in manu-
This new group is active worldwide. Today,
facturing. Luckily, this vision is now broadly
Q. You have been involved in mainte-
the Solvay Group has almost 150 plants
shared on all management levels. We took
nance at Solvay for more than 25 years,
around the world. Most of them are still in
this challenge as an opportunity to imple-
what are the biggest changes you have
Europe, but we have over 30 plants in the
ment a model for sharing best practices be-
US, and a presence in South America and
tween all our plants and use matching man-
Our strategy at Solvay is to try and avoid
Asia-Pacific. A highly specialised team of
the cycles in the economy and the depend-
seven people is responsible for them at the
We did this not only in operations, but also in
ency on energy. This is why we bought the
corporate level. My boss Dominique Bau-
maintenance. Before this project, it was very
Rhodia Group two years ago, doubling the
duin (WW Reliability and Maintenance Man-
difficult for us to demonstrate that mainte-
overall size of the company. It is also part
ager) and I define the group strategy and
nance is not a (fixed) cost, but a real provider
of added value. We also encountered difficulties in convincing our colleagues of the business side of this view. It helps that good maintenance also has a great impact on safety. In fact, safety is a key topic for us, since most of our plants fall under the Seveso Directive. If you are producing potentially dangerous chemicals, you always need to keep this top of mind. Q. Why did the board start recognising the importance of in-
Q. How do you organise the implementation of best practices?
vesting in maintenance?
It's really a discussion with the plant manager based on the goals of
It is our CEO that began sharing his vision of manufacturing excel-
the business. Our organisation consists of business units, which lead
lence, which is recognised today as a big contributor to our profit-
and decide using roadmaps. We provide support and services to the
ability. Maintenance is seen as an integral part of this strategy, and
business units, but they decide what they want to do. In some cases
there are great expectations at the company level for the benefits of
they will ask us to focus on fixed costs, in other plants they may ask
us to focus on the machines availability optimisation to maximise their throughput, because every tonne they produce is immediately sold.
Q. How do you monitor the activity of 150 different plants?
We help identifying what we call the "hidden factory" to minimise ad-
We use a group level corporate dashboard with 15 mandatory main-
ditional capital expenditure. So before implementing a new reactor
tenance performance indicators. Every plant has the same defini-
in a plant they ask us to first extract the maximum capacity from the
tions and uses the same KPI’s. This is filled out once a year giving
us the complete overview. Naturally, individual plants will use other KPI’s if they do specific changes, but the group level information is
Q. Maintenance is moving away from the fail and fix approach
used right up to the board level.
in favor of prevention and prediction. Do you follow this trend
Besides this we do a summary forecast of the evolution of the indica-
tors and provide best practices and targets. Every three years we com-
We developed a specific maintenance excellence model called SOL-
plete a global assessment of the maintenance function in each plant
MAX (Solvay Maintenance Excellence). In it, we start with the ef-
where we look at all of the maintenance and management systems.
fectiveness of the maintenance strategy (doing the right thing), and
The idea is to identify improvement possibilities for each individual
then adapt it based on the criticality of the asset and the goal of the
plant. We evaluate the opportunity to do those improvements, and
business. We improve efficiency by using work-order management
identify best practices that should be shared.
systems that reduce losses and increase the ‘wrench time’.
â€˜The crisis made us realise that it is of crucial importance to have excellence in manufacturing.â€™ Alain Lycops Industrial Manufacturing Excellence Maintenance & Reliability Manager - Solvay
Q. Is this Value Stream Mapping?
Q. Do you notice big differences from country to country on
Yes. We start with a brown paper system, going through the pro-
their willingness to take advice from the corporate center?
cesses and asking about all the details of how they are doing things.
To be successful you need to have strong and detailed processes
Then we can analyse it and define the room for improvement and im-
and standards, and then examine every case. You also need to bring
plementation of best practices. We have moved away from a system
value! If you come with something wrong, they will know straight
which was just to "maintain" to a real asset management system.
away, but if you come with good practices and clear benefits, this will help with the buy-in. We have a worldwide overview of best prac-
Q. Have the skills required in your maintenance team changed?
tices, so if there is an issue we can quickly compare with the previ-
It even goes beyond the skills: the new model demanded a change of
mindset and behavior. We ask people to be proactive in order to avoid breakdowns. They need to anticipate, look at the curve between the
Q. Does lean manufacturing affect you in your maintenance ac-
potential failure and functional failure and have a good questioning
mind. Going from 60% of high priority breakdown maintenance to
Yes, we have a team dedicated to lean maintenance, with many Six
50-60% predictive and preventive maintenance means a big change
Sigma black belts. One of our challenges is to convince our col-
in the approach. This is really the key to our success. We cannot con-
leagues from production that they actually have an important role
tinue production with a high number of priority breakdowns.
to play in early detection. Very simple first level maintenance op-
erations, starting with applying 5S, can be done in the plants for example. Our program for excellence is relevant to everyone, it is
criticality, planning, scheduling, everything
a holistic approach based on three pillars:
was done by the external company. We
mindsets and behaviors, technical systems
analysed the results, and after one year we
fact that in maintenance a lot of activities are
and performance management.
changed it completely. Of course in execu-
really core for the company.
tion there are always activities that are not Q.How do you see the role of outsourcing?
core, like painting or scaffolding, which can
Q.Are you also experiencing the talent
Fifteen or twenty years ago, maintenance
be done by an external company. But all
shortage in maintenance management?
was seen as a cost with no added value, and
managing, planning, scheduling and super-
It is very difficult to attract new talent in
the vision was to outsource. In some cases
vising was brought back into the organisa-
maintenance. People do not really seem
maintenance had been totally externalised.
tion. Now we have created benchmarks for
to be interested in working in industry any-
Two years ago I was asked to go to Brazil
the best equilibrium between internal activity
because there were 5 people from Solvay
and outsourcing. This is really based on the
and 130 from an external company doing everything: defining the strategy based on
more. Teenagers are more interested in IT and less in production where you never know exactly what will happen that day and when
‘We have created benchmarks for the best equilibrium between internal activity and outsourcing, based on the fact that a lot of maintenance activities are core for the company.’
you will be able to go home. In my sort of role, you are typically here
again that maintenance and reliability engineers really cost nothing,
for three to five years, and then you need to go abroad. Mobility is important in industry and not all people are willing to do that. Q. With more sensors and ways to monitor the manufacturing process, are you benefiting from the availability of more data? The amount of data has increased, but also the capacity of hardand software. This helps us to demonstrate things we were not able to demonstrate before, such as the maximum daily capacity of a plant, or if the production losses are coming from operational problems or from maintenance. So now we can implement a more predictive approach, and even have expert systems to analyse the data. This can merge very different types of data such as tube thickness, temperatures, acidity of the fluid, in ways we previously couldn’t do. In fact we now find we can often even produce more than the original engineering specification – even up to 20 or 25% more. This proves because they will create a return on investment worth many times their salaries.
Goedele Heylen Switching on innovation at Niko Goedele Heylen is Director of Operations at Niko, the Belgian pro-
looking for new opportunities, new possibilities and innovations that
ducer of switches, socket outlets and home and lighting control sys-
bring added value to our customers. People start realising that it is
tems. She is responsible for the manufacturing plant in Sint-Niklaas,
important to have a large manufacturing base in Europe.
including planning, engineering and maintenance. Q. There is much talk about Lean Manufacturing these days.
Q. All companies want to be innovative. How important do you
Has Niko adopted it?
think innovation on the production line is for profitability?
We realised that if we wanted to remain competitive, we need to
At Niko, innovation really is the key. We are always looking for better
adopt this philosophy, because it is exactly about creating more
and smarter ways to organise our production. We try to implement
added value for your customer.
this on all aspects of manufacturing: coming up with better and more reliable products, really knowing what the customer wants, empow-
Q. How is market demand affecting maintenance?
erment of all our people to help improving efficiency, quality, flexibil-
In situations where there is less, little or no certainty or belief in the
ity, and at the same time increasing the quality of our workforce by
market demands, and where we made our decisions on a cost driv-
providing training and development programmes.
en base, there was a tendency to follow the fail and fix approach. We didnâ€™t want to invest in machinery that was unlikely to produce profits
Q. How do you think the role of manufacturing industry in Eu-
in the coming period. But we also realise that when our equipment
rope has changed over the last decade?
is not properly maintained, we can never guarantee a stable produc-
In the past, the focus was on the competitiveness fight with the low
tion, which we require. Certainly in times of crisis this is important,
cost countries. Everything was driven by cost and the number of
because the actual cost per product dramatically increases when
companies that moved production there proves that we were losing
you have unplanned downtime. That is why we do a weekly follow up
this fight. Nowadays, we are evolving towards a situation where we
on KPIâ€™s on preventive and corrective maintenance.
are looking for ways to keep manufacturing here again. This means
Didier Leroy Investments in maintenance and asset management crucial in order to remain competitive
Toyota, the world’s largest automobile manufacturer, is known for its
say, “If you want to achieve top-class level for some kind of equip-
managerial values and business methods. Practices such as lean
ment, we need to spend a lot of money.” For me, this is poor man-
manufacturing, just-in-time production and kaizen have been adopt-
agement because if you spend your money on time and don’t cut
ed by numerous other companies worldwide.
maintenance and asset-management costs, you are investing in the
With assets worth billions of euros and intense competition calling
future of your installations. Cutting these costs is sometimes the
for supreme efficiency, how does Toyota organise its maintenance
easiest way to balance your budget, but this is only a short-term
and asset management? We ask these questions to Didier Leroy,
CEO and President of Toyota Motor Europe. Mr Leroy is responsible for overseeing all of the European operations including manufactur-
Q. It is known that when companies are struggling during tough
ing, engineering, sales and marketing.
economic times, some will be tempted to cut the maintenance budget.
Q. How would you describe the role of asset management and
I know this happens but for me this is just poor management. The
the possible influence it may have on a company's decision on
role of management is to find the right way to achieve competitive-
(re)locating their production?
ness. You do this not by cutting costs on asset management or
We should always note that asset management and maintenance
maintenance activities on the equipment, or in the factory. These are
activities are two of the key elements to achieving competitiveness.
actually things on which we should consider that there is a chance
This remains true no matter where you are located. Some people
to continue to improve competitiveness.
Q. So by investing in maintenance and
the first thing they should do as soon as they
But there is another kind of innovation. This
asset management you can ensure that
can, is restart the maintenance, because the
is based on two other pillars:
the production line keeps going in a reli-
impact will be very big.
Firstly, the innovation that can be generated
able, quality-producing way?
by the people in the company at every level.
Yes, because when a company is in trouble,
All personnel have the opportunity to come
the easiest thing to do is to say, “Okay, let’s
cut this kind of activity.” Everybody can de-
up with innovative ideas. It may be small, but it can have an impact. This continuous improve-
cide these kinds of things - my kids could
Q. How would you describe the role of in-
ment is called kaizen at Toyota. It’s a mentality
do the same; we don’t need any expertise
novation in production and the relation-
under which our people are thinking, “What
to do this.
ship with the development process?
can I do better than I did yesterday?” Natural-
Some companies made this their strategy,
You have two kinds of innovation. The first
ly, you cannot come up with new ideas every
but this is just because they had no other
one is innovative technology. If you develop
day, but as long as people ask themselves the
ideas at the time. They are facing an emer-
something totally new, creating a competi-
question every day, they should bring some
gency and have to decide on a quick ac-
tive advantage, you can then develop it fur-
innovative ideas in the long run.
tion. I can understand this if at the end of
ther. But frankly speaking, if a company is in
Secondly, we have innovation on the man-
the month you cannot pay the invoices, but
trouble and is obliged to stop asset-manage-
agement level: I mean the way managers
management needs to think about how to
ment and maintenance activities, I struggle
create innovation which will generate strong
protect the future; ask themselves, “Is this
to believe that such a company would spend
motivation within the company. This influ-
the way back to profitability?” If they do stop,
a lot of money to innovate.
ences directly the way in which the first pillar
‘Cutting maintenance costs is sometimes the easiest way to balance your budget, but this is only a short-term advantage.’ Didier Leroy CEO and President - Toyota Motor Europe
will be applied. When people trust their manager, trust the fact that the company will listen to them and support them, they will want to implement new and innovative ideas. What we do is apply this mentality to maintenance and asset management, which are key priorities for us. So blind cost-cutting in these fields is not an option for us. We need to ask ourselves if we can get even better results at a lower cost: which kind of innovation, from management or other employees; which daily improvement will ensure this? This is the way to improve competitiveness.
Sharing best practices
Q. Yokoten is the term used to describe the sharing of your best
innovation, always believe that what they are doing is better.
practices. Can you give some examples?
So we decided to give the president of each plant full power to
In the past, we had what we call a shop-by-shop activity, which was
“yokoten” a best practice for one specific topic at the pan-European
not always successful at a company-wide level in Europe. We re-
level. So it’s not just a kind of information sharing between the differ-
started this almost two years ago, but there was one major issue:
ent companies, but a way to manage the process of yokoten.
many people, when they themselves haven’t come up with an idea/
Let’s take a practical example. The president of the French plant is in charge of the safety. So all the different items to improve the safety in the different factories in Europe are under his responsibility, and his role is to ensure that every best practice we can find anywhere, every best practice we can find in the different factories, is immediately yokotened at a pan-European level. By working like this, we can speed up the yokoten activity and reap the benefits of actual practical implementation of these best practices, rather than just information sharing. Q. How do you manage your assets in a way that they remain viable for the next five to ten years? We have strong cost-control management for all the different com-
panies. I maintain a personal focus on these topics to ensure there is no cost-cutting activity without a clear strategy. If one plant tries to improve their results by cutting maintenance, this is a strong warning for me. So I personally ensure there remains a clear logic between the trends of the maintenance cost activity at the different factories.
â€˜We cannot expect to achieve high performance and competitiveness by waiting until a breakdown happensâ€™
When the maintenance in the factory is not done properly, this be-
that I am able to visit very often but I really try to visit every single fac-
comes very clear in less than six months. In order to follow up on the efficiency of the maintenance activities, I watch the key numbers closely. Problems in maintenance have an immediate impact on the pure performance of the factory. If they stop or neglect their maintenance activity, there will be a drop in the operational ratio (OPR) of the factory in less than two weeks. After that you will quickly see a further decrease. From my office I can be connected to every plant and check the performance. I receive daily and monthly reports of the OPR of every plant in Europe and I can cross-reference that to the maintenance cost factory by factory. Apart from the numbers, when you visit a plant with poor maintenance in less than six months of activity, it becomes very visible. With responsibility for nine factories and 56 markets, I cannot say tory as often as possible. So, last week I was in Turkey, this week in France, and Iâ€™m going to the UK soon. This means that at least two to three times a year I have the opportunity to go to each factory and to observe firsthand. So from my perspective, with the level of performance of OPR, the monthly report on maintenance costs and genchi genbutsu (go and
see) on a quarterly basis, I have a strong
down. As a result, you need another sensor
ensure the upkeep of our equipment.
overview of what the plant is doing and how
to double-check that the first one is working
This also means we can minimise the level of
well they are doing it.
well and so on. It becomes a never-ending
investments, and that we have to be much
more serious than others when it comes to
So for me, the most logical approach is to
the maintenance activity. You need to find a
secure very efficient preventive maintenance
good balance between the cost of the main-
activity. We cannot expect to achieve high
tenance and the cost of the equipment. You
Q. Maintenance has evolved from a fail-
performance and competitiveness by wait-
will always have to do some maintenance,
and-fix approach to a predict-and-pre-
ing until a breakdown happens and then
so a good balance means that you will not
vent approach. What is your view on this?
trying to find a way to repair it as quickly as
need to make a huge investment. Our level of
Firstly, we have to consider a couple of things
possible. This is not efficient. If you don't
investment for the same kind of equipment
here. It's possible to have a very sophisti-
check the oil in your engine and just wait and
is very often cheaper than that of our com-
cated level of control monitoring. You can
see, what happens? You can drive 10,000
petitors, but our maintenance organisation is
remote control all processes in the factory,
km, probably 20,000 and maybe 30,000, but
but we should remember that this is very ex-
one day your engine will be totally ruined and
pensive. So if you want to control the level
you will have to spend a lot of money to fix it.
Q. It is clear that Toyota has a very spe-
of investment, you must have some limitation
It is the same for equipment when people
cific corporate philosophy. How do you
on this monitoring and you cannot have full
stop maintenance. They don't understand
make sure this mentality is shared by
how big the problems will be if they stop
everyone? And how do you manage con-
Secondly, we should never forget that auto-
maintenance. They also don't realise how
mation is sometimes the first cause of break-
many months it will take to get back to the
First of all, the number of subcontractors
down or failure. I have encountered many
initial performance of the equipment. So,
we use for maintenance is very low. Main-
times the situation where we have one sen-
honestly speaking, at Toyota, this is not at all
tenance is part of our core business and we
sor to ensure a part is fine, and one to en-
our way of thinking. We always believe that
are convinced we must do it ourselves; how-
sure that the position of the part is fine â€“ but
the very strict, very serious, very efficient
ever, if we know that we lack knowledge for
in the end it was the sensor itself that broke
preventive maintenance is the best way to
some specific and new equipment, we ask
A strict preventive maintenance approach
‘We believe that the very strict, very serious, very efficient preventive maintenance is the best way to ensure the upkeep of our equipment.’ Didier Leroy
the equipment maker to provide us with sup-
coaching for our maintenance members
to fix the problem more quickly, they coach
port and to coach our employees.
on the shop floor in a very practical and ef-
our members and increase their technical
For our employees, we have some class-
ficient way. Furthermore, any time something
skills. At the same time, they are able to see
room training, but the focus is to train them
happens in one plant, they have to yokoten
firsthand the day-to-day problems we face,
on our equipment directly. A small group
immediately to all the other plants. We also
which provides them with feedback for the
of trainers will also be part of our organisa-
have the added value of the support from
next generation of equipment, enabling them
tion in Europe for six months to a few years.
the equipment maker. It’s good for every-
to make sure that the same problems do not
Their responsibility is to ensure continued
body. It’s good for us because they help us
A complete product range, for each application
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We con grat BEMAS ulate on its 25 year anniver sary
Sven Pieters A sweet future for chocolate production?
Belgium is known around the world for the quality of its chocolate.
players were bought up by the bigger players, and at the same time,
1000 tons of it is produced every day at the largest Barry Callebaut
a lot of the activity moved to lower-cost countries like Egypt and
plant in Wieze. This fully integrated factory, starting with the roasting
Turkey. This shift was mainly driven by a difference in labour cost.
of the cocoa beans and ending with the finished chocolate prod-
For chocolate, this is different. Labour cost is still an important factor to
ucts also employs over 1000 people. Sven Pieters, plant manager
deal with for us, but the proportion of the total production cost is lower
in Wieze, explains the changes and challenges associated with the
than in textiles. Also, being close to our customers is an advantage.
production of our favourite sweet indulgence.
A lot of our customers are looking for Belgian chocolate! Chocolate is still associated with Belgium. A number of our partner customers
Q. What do you do at Barry Callebaut?
only use Belgian chocolate for their products. This preference gives
I am plant manager, responsible for everything related to the fac-
the factory Wieze a strong strategic importance.
tory in Wieze: manufacturing, maintenance, safety and quality. We
Then there is also our long history and comprehensive expertise in
are the biggest chocolate factory and the flagship plant of the Barry
making chocolate. It goes back to 1911 when the family Callebaut
Callebaut Group, with more than 1000 employees in Wieze. 550 of
first started making chocolate in Wieze. Over the last 100 years the
them are employed in the factory. The rest of our colleagues work in
site has grown organically to what it is today. Many people here in the
regional or corporate functions such as R&D, finance or sales.
neighbourhood have worked here for generations: father, son and grandson. This means there is a lot of knowledge.
Q. What is your view on the changes in manufacturing in Europe
Finally there is transportation. We produce liquid as well as solid choc-
the last decades?
olate. In liquid form, you are limited as to the transportation distance,
I have worked for more than 10 years in the textile industry. We saw
so you can only serve customers in a limited range. Solid chocolate is
two things happening: consolidation and relocation. The smaller
different. You can ship it further away, even all over the world.
â€˜The strategic advantage of building a factory in another country solely driven by costs is not so clear anymore.â€™ Sven Pieters Plant Manager at Barry Callebaut
Q. What broad changes do you notice in
Focus on innovation
well-maintained machines, you simply avoid other costs. Not just the costs of technical
the nature of manufacturing industry in Europe?
Q. So innovation is important at Barry
repair, but also waste and downtime cost. Of
Beginning of 2000 the trend to relocate pro-
course you have to find the right balance be-
duction abroad was still really strong here in
Indeed, yes! Not only when it comes to new
tween reliability and maintenance costs.
Belgium. I feel that the last couple of years,
products, but also innovation in the way of
Thirdly: availability. Our factory in Wieze does
the enthusiasm has been tempered some-
manufacturing processes. Over 70% of the
not have a high and a low season. This fac-
what. Companies discovered that managing
products we currently sell are developed in
tory is running at more or less the same ca-
a factory in another country is not always as
the last five years.
pacity all year round, so it's essential to have
easy as it seems. And you can add to that
Wieze is the home of our global research and
very reliable installations. This is especially
the fact that countries with previously lower
development activities focusing on the de-
true for liquid chocolate which is for us a day
cost structures like in Eastern Europe are
velopment of new chocolate products. Over
to day business: our customers can call to-
catching up with us. The strategic advantage
200 researchers work in very close collabo-
day for a delivery within 2 days.
of building a factory in another country solely
ration with our customers, looking at finding
driven by costs is not so clear anymore.
solutions to their needs and challenges.
Investing in maintenance knowledge
panies strongly focused on innovation and
Q. How about reliability and quality?
Q. How do you monitor what is happening
the development of new products. For this
Quality and food safety is key to Barry Calle-
in the plant?
you need to maintain modern research and
baut, and there are very good reasons for this.
We use KPI reporting systems. On a daily,
development structures. Also at Barry Calle-
First of all: our quality level is non-negotiable.
weekly and monthly basis we can track our
baut, innovation is engrained in the DNA of
In the food industry you cannot make conces-
downtime on the lines and the exact reason
the company â€“ it is actually one of the four
sions when it comes to quality and food safety.
codes. This means we have a good follow-
strategic pillars of Barry Callebaut.
Secondly: costs. When you have reliable and
up on the performance. Our key objective for
Furthermore, the last couple of years com-
â€˜We work very closely with local schools by facilitating internships for students. This has the advantage of building our image as an attractive employer.â€™ Sven Pieters
the coming years is to move away from the emergency maintenance
year we promoted two operators to the technical team. Today, they
and move towards reliability maintenance, preventive maintenance
contribute with their knowledge and commitment to great effect! We
and predictive maintenance. Although I am satisfied about the level
also work very closely with local schools by facilitating internships for
of reliability of the factory I believe we can still improve.
students. This also has the advantage of building our image as an attractive employer.
Q. To get there, will it require a lot more knowledge on reliability and the equipment in the plant?
Yes, but I believe we have to do it in a pragmatic way. We give some of our team members advanced training in maintenance manage-
Q. Do you practice lean manufacturing?
ment. Because maintenance today is not the same as it was 15 years
Two years ago we launched our continuous improvement program
ago. It has become much more sophisticated. The management and
at Barry Callebaut, it is called One+. We aim to deploy it globally, and
budget control aspect of this has also come into play. Overall, what
since we are the biggest site it has already been started here. One
we do, we aim to do thoroughly. Nevertheless, we need to continue
of our strategic pillars is Cost Leadership. Using a lean production
to broaden our scope and see how are other companies are doing
methodology we try to further optimise our cost base.
it, what the latest trends are and then pick what we can use to our benefit.
Q. What are your experiences until now? We are constantly looking for opportunities to improve. One big ad-
Q. Do you recruit directly for your maintenance team, or do you
vantage is that we have a comprehensive monitoring system with
rely on internal promotion?
regards of all of our losses. With One+ we monitor all of our losses,
Both. More and more, we need to recruit on competence instead
not just technical, but also the losses due to planning and quality.
of degree, but there are functions where the technical knowledge
This helps us to put the right focus on things. A lot of progress has
is 90% of the job so you need the right fit. It is very challenging to
been made, but as the name of the program suggests, itâ€™s a contin-
find technicians with good skills on the market at the moment. Last
Q. What about the sharing of best practices between the plants? Yes, we do have a formal program to share experiences between all our factories. Q. How do you keep an overview of the maintenance activity across your plant? First of all, every day I spend time in the factory. It's important to talk to the team members. Secondly, every week I have a staff meeting with my direct reports looking at the performance of the week before. This is a good follow-up system on efficiency, volumes, manhours, yields, and energy consumption. We have standardised reports we discuss. We agree on actions and at the same time we share information over all departments. Q. What would you say to a young person thinking about their future career?
‘When you have technical skills you can build a great career in a factory doing something you like to do.’ Sven Pieters
Use your talent! I struggle to understand why it is frowned upon to stop studying at 18 and start working. Many young people keep on studying even though it doesn’t work for them. When you have technical skills you can build a great career in a factory doing something you like to do. Also, personally, I think the industry can do more in marketing itself as an attractive employer and excellent place to work. We have to appeal to young people and make them want to come and work with us. In our Wieze factory have – what I feel – a happy workforce. We have a very low turnover rate. People have a lot of pride in what they do and the role they play in the whole organisation.
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Ruud Krinkels Seeing the full picture
Ordinarily, Maintenance & Asset Manage-
ed Kingdom. The Belgian branch has 500
sible for managing our machines. Some our
ment is associated with large production
employees who work every day to maintain
technically high-skilled employees simply
companies; however, it does not require
and update the public living environment,
add this task to their work tasks. The pro-
an investment of millions in production ma-
such as parks, sports fields and green strips
ject leaders are responsible for the plan-
chines in order for an organisation to worry
along the motorways. Krinkels has several
ning of the machines. In a planning meeting,
about their asset management. Landscap-
hundred machines for maintaining the land-
they discuss which machines can be used
ing contractor Krinkels is a prime example:
scaping areas, ranging from chainsaws to
when. In the past, we tried housing Mainte-
the organisation not only manages its own
large mowers and excavators. Not consider-
nance & Asset Management under one job
assets, it also made maintenance and man-
ing the vehicle pool, the machine costs are
position, but that was not successful. The
aging public areas its core tasks. Ruud Krin-
over 12% of the total fixed assets. Half of
project leaders kept exchanging materials
kels, CEO of the Krinkels Holding, shares his
this is invested in the purchasing of the ma-
among themselves, which meant the asset
experience with both ends of the spectrum.
chines, the other half is spent on expenses,
manager was unable to keep proper track
such as fuel, repairs and insurance.
of everything. Of course, technology is now
Ruud Krinkels is the third generation of Krin-
so advanced that the question of where the
kels at the helm of the Dutch family company. In sixty years' time, the Krinkels Hold-
machines actually are barely applies. Our
ing grew to become a company with 2,500
main machines are equipped with track and trace technology so we know where our
employees, with branches in Belgium, Ger-
Q. Who manages Krinkels' machine pool?
machines are at all times. Our clients also
many, France, the Netherlands and the Unit-
We do not have one person solely respon-
always expect more transparency; for ex-
ample, they want to know if we truly used our ecologically-friendly weed killing machine. They can go online and see which route the machine took. Q. In Belgium, Krinkels has its own warehouse and workshop where about twenty people are responsible for the mainte-
nance and management of the vehicle and machine pools. Did you ever think about outsourcing the maintenance and management of the machine pool?
Q. The employees are the focus at Krinkels; machines have a
Yes, and for a large part of the maintenance of our vehicle pool, we
supporting role. Capacity planning of the employees is given
do. However, we would rather maintain the machine pool ourselves.
priority over machine planning, yet Krinkels does link people
The optimisations we apply to our machines give us a strategic ad-
with machines. Why?
vantage with respect to our competitors and thanks to our organisa-
By letting employees work with the same machines as much as pos-
tion's size, we also have a much larger, more diverse machine pool
sible, we wish to create a sense of responsibility with those employ-
than the other parties in the field, which are usually garden contracts
ees. After all, they are responsible for preventive maintenance on
with a limited number of employees. Having our own workshop for
the machines, such as replacing filters, etc. If you always work with
maintenance also provides flexibility in the organisation. If a machine
the same machine, you get a better feel for it. In the past, this link
is broken, it will be repaired at night so it can be used again in the
between people and machines did not need to be emphasised as
morning. Large maintenance works are performed by the dealers,
strongly, because most of our workforce consisted of farmers' sons.
because having this knowledge in-house provides few advantages
They were raised in a machine environment and had a natural feel
for it. Nowadays, we see that transferring knowledge from one gen-
â€˜Whether it involves a machine that is on our cost balance sheet or a machine pool on the municipality's balance sheet; the thought process is the same.â€™ Ruud Krinkels CEO - Krinkels
87 eration to another generation of employees
sion to buy a machine. Some machines can
In the Netherlands, there is a change in
is more and more critical. This is indicated
be more expensive to purchase, but thanks
policy: the performance contracts are mak-
by the machine use: if we do not assign
to the manufacturer's innovative capacity,
ing way for visual contracts. This indicates a
newcomers to experienced foremen, we will
the machines have lower fuel consumption,
transition from a descriptive policy, in which,
have damaged machine upon damaged ma-
better usability, lower maintenance costs
for example, a detailed list of the number of
and are less susceptible to damage.
times and the dates on which the grass has to be mowed, to visual contracts. The Dutch
Q. How does Krinkels manage to balance
The clientâ€™s assets
public councils expect that we submit a plan of approach on how we wish to create a
preventive and curative maintenance? When purchasing new machines, we base
Q. As one of their core activities Krinkels
specific streetscape. It might be better not to
ourselves on the data generated in our sys-
manages the public space for public
mow in a specific month, because it is bad for
tem regarding using the machines. This
councils. Is there an evolution in the way
specific animals, for example, and so that we
means that we take the full life cycle of the
government institutions handle their as-
can mow more frequently in other months.
machine into account when making a deci-
This means we have to be more pro-active
regarding an assignment and our client, and be able to create added value, which changes our role. Your processes are also looked at in more detail, which requires organisation of a more academic level. In time, Belgian boards will copy this way of thinking as well, but the social-economic framework slows down this process. Q. Do you rely on your own Maintenance & Asset Management experience when managing your clients' assets? Whether it involves a machine that is on our cost balance sheet or a machine pool on the municipality's balance sheet; the thinking process is the same. I suspect that, in the future, we will apply our expe-
â€˜In the future, we will apply our experience in Lifecycle Management to managing our clients' assets.â€™ Ruud Krinkels
rience in Lifecycle Management to managing our clients' assets. In the past, we only bought the cheapest machine without charging the total cost price. But you can also look at a machine park differently. Some types of trees are more expensive in purchasing price, but are easier to maintain and will not blow over so easily. A contractor who only has a short-term performance-based contract is less inclined to think about this. If you can enter into a 15 to 25 year management contract as a landscaping contractor, you zoom in more on the optimisation possibilities. It is also easier to justify investments which only provides added value in the longer term and leads to a win-win situation. Unfortunately, such a mindset is in direct conflict with the political short-term thinking. So, it will require quite some work before we arrive at that stage.
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Jacques Marbehant There is still a future for manufacturing in Europe
In the heavily regulated pharmaceutical industry, safety and reliability
major manufacturing investments at its sites.
are crucial to ensure the production of high quality products. Jacques
In the past years, we have been through a specific program to align
Marbehant, Vice President, Head of Braine Technical Operations &
our manufacturing footprint on UCB strategies and we have refo-
Global Engineering at UCB explains how the company achieves this.
cused our activities on 5 sites; 2 manufacturing sites have a global reach and are located in Europe (Belgium, Switzerland), the others
Q. Please tell us a little about yourself, your role and the respon-
sites have regional or local specificities. (Ireland, China, Japan)
sibility you have for the plant and assets of the organisation. Owning a master in Bio-Engineering, I spent my whole career in a
Q. How do you think the role of manufacturing industry in Eu-
manufacturing environment, or close by, in Belgium, Luxembourg,
rope has changed over the last decade?
Germany or Switzerland, in the food, fine chemicals and finally for the
The manufacturing industry in Europe has changed drastically. The
key to success today is to look at niche markets, to specialise in high
I joined UCB at our site of Braine Lâ€™Alleud in 2002. After leading the
value adding activities and to be excellent in everything we do.
Site Quality Assurance department until 2007, I took charge for the manufacturing site of Bulle in Switzerland. Since 2011, I am head-
Q. What do you see in the future for manufacturing industry in
ing the Technical Operations in Braine Lâ€™Alleud, covering the various
commercial and pilot manufacturing activities and their support func-
I strongly believe there is still a future for manufacturing in Europe
tions i.e. quality control, Quality Assurance, Supply Chain, qualifica-
where innovation, differentiation, high tech or high value added ac-
tion/validation, Technical support, maintenance, engineering, â€Ś I am
tivities, operational excellence, efficiency and supply chain agility will
also in charge of the Global Engineering department, covering UCB
play a major role.
The importance of innovation
ate and discover new solutions. The ‘Post-it’
tives, we had to ensure 100% reliability of the
from 3M is an example of innovation coming
bottle-neck equipment while concurrently re-
Q. What are the factors that will allow
from the product line!
ducing maintenance downtime. We could not
manufacturing to stay competitive when
I don’t believe that sustainable manufactur-
afford any batch loss or delay, or even any
labour costs increase?
ing can survive, especially in Europe, if we
maintenance unplanned downtime. We made
We must continuously innovate and strive for
are not constantly re-inventing ourselves, our
it. This was an exciting challenge and at the
operational excellence and efficiency well be-
products and solutions to our patients. Inno-
end, our teams learned a lot about the critical
yond quality in an agile supply chain. ‘Waste’
vation in everything we do and how we do it,
maintenance parameters of the equipment.
of resources because of wrong quality, not-
with the patient at the centre of our preoc-
Since then we have applied those learnings
adapted solutions, being too confident or
cupation, is therefore key.
to many of our product lines, so reliability of
complacent will bring you out of business,
the manufacturing has continuously evolved
quickly and quicker than in the past.
since. This is now measured in terms of OEE
As an industry leader, we will continuously
High equipment efficiency
invest into people development to reach our
or Overall Equipment Efficiency, and contributed to UCB service level reaching 99,5%
goals, to stay focus on our niche markets and
Q. Having a reliable production line is es-
become the leader in those.
sential for quality assurance, could you
Q. Training and development are essen-
describe an example of where this proved
tial for companies that are going to suc-
Q. How important do you think innovation
to be critical for business continuity?
ceed over the long term, are there spe-
on the production line is for a profitable
It is indeed. The products or solutions offered
cific issue you have faced with finding
by UCB are improving patient ‘lives’ around
qualified team members for maintenance
Our industry is heavily regulated, for good
the world every day. Quality Assurance, Ef-
teams? Or do you depend on internal
reasons, requiring the innovation to be some-
ficacy and Safety are as important of having
training and development programmes
what controlled. Innovation can help us
the product available in our patient’s phar-
to guarantee the skills are available?
produce our products differently by doing
macy. Back in 2008, the growth of one of our
This has indeed become more and more a
cheaper, faster or of better quality. Innova-
product was so important that, although we
challenge, having access to skilled techni-
tion on the product line can help us differenti-
had a number of yields or cycle time initia-
cians or specialists. We therefore focus on 3
axes. We have developed internal programs with specialised partners to train our teams. We are also working with local employment agencies and high schools to develop win-win solutions with trainees. Furthermore, we’ve established 2-years contracts with students who work part time at UCB. In some instance where we need very skilled and experienced people, we either hire talents who possess the technological skill sets used at UCB or we develop a partnering approach with a specialised firm.
‘Sustainable manufacturing can only survive in Europe if we are constantly re-inventing ourselves, our products and our solutions.’ Jacques Marbehant Vice President, Head of Braine Technical Operations & Global Engineering - UCB
Q. There is much talk about Lean Manufacturing these days, have you adopted it? Yes, we have. For the manufacturing plants, this is even considered a strategic driver where we continuously invest in training, promote internal best practices, benchmark within the industry or across industries and report results. In recent years, we have hired specialists from other industries who have already adopted lean techniques –such as the automotive industry. This allowed us to speed-up our transformation journey and change the internal mind-set. At local level, each site is participating into programs that intends to avoid ‘waste’, save money or develop efficiency. This is naturally part of their DNA! Q. Is your maintenance team an internal team or is the activity outsourced? Each of our plant has its own maintenance team. Our industry is heavily regulated and therefore so is the maintenance. In general, we apply maintenance at 3 levels:
‘easy’ maintenance such as change-overs are performed by the line operators themselves, trained by the maintenance team.
Standard and non-specific maintenance (corrective and preventive) are performed by the local maintenance team
Specific maintenance requiring unique expertise and non-strategic is outsourced, coordinated by the local maintenance team. Q. New standards for Asset Management (ISO55000) are soon
Q. In the maintenance industry, it is possible to consider two
to be introduced. Have you heard about this? And if so, do you
models, the Fail and Fix approach, and the Predict and Prevent
plan to adopt them and why?
approach. How do you think the tendency to choose either of
Yes, indeed. Our purchasing team, along with our global engineering
these was affected by the economic situation?
and finance departments, are currently in the appropriation mode of
UCB is more in the “predict and Prevent approach”. It is a general re-
such new standard with the support of an external partner. We are
quirement and regulator view point that helps us to ensure quality and
looking at piloting it through one dedicated equipment or production
safety for our patients, our final customers. In addition, our products
line so that we can demonstrate, or not, the benefits of it.
tend to be extremely expensive, failure is therefore not an option. We are continuously monitoring our ability to manufacture ‘right the first
Q. How closely are you able to follow the maintenance activity
time’ and prevention still appears to be the best solution. Fail and Fix
across your plants?
approach, alike counting on luck, is definitively too expensive.
Local management, quality assurance and cost control are accountable for management of those activities. The performance indicators are reviewed monthly at the plant level. These are recorded into an ‘off-the-shelf’ software tracking and globalizing performance. At the yearly board meeting of each legal entities, this is a recurrent topic of discussion and challenge.
‘We are continuously monitoring our ability to manufacture ‘right the first time’ and prevention still is the best solution.’ Jacques Marbehant
95 Q. Do you use a specific metric for measuring asset perfor-
Q. Finally, what would be your advice to young people who are
mance? (e.g. RoNA, RoCE, or EVA)
now considering their future career and are looking as mainte-
Those metrics are indeed used at Company level to assess and plan
nance as an option?
Company performance. However, at plant level, this is mainly used
Think beyond the maintenance: someone may think he is a stone-
in establishing investment business case . In routine operations, the
cutter, a few will understand that they are building a cathedral. Sim-
UCB manufacturing plants have implemented the Balanced Score
ply put, be engaged and understand the big picture in your environ-
Cards (BSC) model with a set of agreed performance indicators,
ment ! Behind a product sold on any shelf, somebody had to create
which are cascaded down the departments. As examples, UCB
it: those are production and maintenance people. This is a great and
manufacturing plants are continuously measuring OEE, ratio preven-
solid career choice, made of daily challenge where we can still do
tative/corrective maintenance, on-time maintenance and adherence
better with available and new technologies. There is much more to
to plan, capacity utilisation, …
Rudi Maerschalck Using lean to keep Brussels on the move
In 2017 MIVB/STIB will enable 415 million
pean cities, we have one of the highest levels
we now do a complete analysis of the life
rides by bus, tram and metro. This number
of growth. We see that in the â€˜capitalâ€™ of Eu-
cycle, total cost of ownership and the end-
has risen by 70% in the past 10 years. This
rope more and more people are using public
to-end asset management. This is why we
impressive growth requires a matching in-
transport daily, either by choice or by neces-
started investing in more than just the rolling
vestment rhythm and ever improving opera-
sity. Since we provide an essential service
stock itself, but also extensive documenta-
tional efficiency. Rudi Maerschalck, Senior
to keep Brussels moving, we are also one
tion and maintenance contracts. So itâ€™s a
Vice President of Transport Systems ex-
of the few privileged parties that has been
whole package: the vehicle plus the value
plains how the introduction of the lean meth-
spared from budget cuts.
Q. This growth also means you have to
Q. Will you continue the current invest-
establish a matching maintenance and
ment pattern, or do you consider radical
Q. According to some analysts we are fi-
nally seeing modest economic recovery
Certainly. In the past we had some spare
By definition it will be more of the same. We
in Europe. Did the crisis affect the public
capacity on our tramways, buses and met-
will always have our three modes of opera-
ros. With this continued growth we project
tion: bus, tram and metro, so this is where
To be honest, these changes in the econom-
a certain saturation level for our vehicles and
our investments will be. However we cer-
ic climate did not have a negative impact on
infrastructure. In order to retain the level of
tainly follow up on the latest technological
us. On the contrary, we have seen a growth
service and safety people expect, we focus
advances. We must always remember that
rate in the number of passengers of around
on investing in and improving our asset man-
every decision we take has consequences
6% each year for the last 10 years, and our
agement. To do this in the most economical
for at least the next 30 years.
forecast for the next 10 years is similar. Com-
way we apply lean management principles.
If we decide that our next generation of bus-
pared to public transportation in other Euro-
For example when it comes to rolling stock
es are going to be hybrid, then due to the
odology helps the organisation achieving its ambitious goals.
vehicle’s life cycle that’s a choice for the next 15 years. In the case of the metro we are investing in automated (unmanned) vehicles. There are a huge amount of choices related to that but we can’t make mistakes because that’s a mistake for the next 40 years. For infrastructure, in order to maintain this safely, we are also looking at an investment horizon of 40 years. So we can’t just buy a fleet, invest in the infrastructure and then switch to a new technology
have in 2025. We then also know the number of working hours we
because the original assets are still there. Everything needs to be
will need to maintain our fleet up and running, and consequently the
skills we need our employees to have. Naturally, we realise that we need to plan well ahead to ensure these skills are acquired on time
Q. All these decisions probably also have consequences for the
by the right amount of people. So right now we are working on mak-
ing sure we are prepared for 2016: deciding who needs what kind
Yes, that's right. Not only when we adopt a new technology like hy-
of training, technical or managerial, in order to execute all our tasks
brid, but also because we need to keep up with the changing regula-
tions, for example regarding vehicle emissions. Change means that
The result is a whole program that is reviewed on a quarterly basis
we need to invest heavily in training, but also sometimes find another
and that results in a daily training schedule. This is also linked to
role for employees that have difficulties moving from the mechanical
certification, since some of the maintenance requires that the person
to the electrical world. In this domain our decisions also have long-
performing it is certified to do it according to the specifications of the
Q. Preparing for the future also means investing in training. How do organise this?
Lean technical teams
Our basic approach is to create master plans, which are detailed 10 year projections. So we know exactly the number of vehicles we will
Q. You’ve referred earlier to a lean approach. How is it applied at MIVB/STIB? We introduced lean by explaining 5S to all of our teams in technical areas. This means at least 700 people! They are currently applying this, and about half of the teams are in what we call the first level of lean. We use a simple 4 star system to represent the maturity. You could do this in a more elaborate or comprehensive way, but for us this works best.
‘Every decision we take has consequences for at least the next 30 years.’ Rudi Maerschalck Senior Vice President of Transport Systems - MIVB/STIB
We have internal people guiding the teams
see that if we start a new team and inform
will begin the reconstruction phase for this
in their efforts, and helping them meet a set
them about the lean and 5S philosophies,
of criteria for competencies, quality, security
we don’t need to convince them. They have
The layout of the new building is based on
and so on. The results in each domain are
heard from colleagues that it’s a very nice
our four part matrix principle. We have flex-
then audited regularly by an internal special-
working environment and they are more pro-
ibility in all the zones for our professionalised
ist, and if they score above the quantifiable
ductive, without the sense that they need
services (which are our core business activi-
threshold, they get a first lean star. If you
to work harder. From the managerial level,
ties and where we are best-in-class) . The ar-
walk around our workshops, you see that
the main reason to do this is that due to our
eas where we go for cost management (non-
every team has a blackboard and all the fig-
growth we can’t find the right technically
core, but best-in-class) are limited in terms
ures are there.
skilled people on time. So for us it’s a matter
of square meters. Those in which we partner
For the second level it's up to the team to
of being more productive, doing more with
(core, but not best-in-class), there are a few
decide when they want to do it. Of course
the same people.
hundred square meters available but if we
the ultimate goal is the fourth level, but that's
partner correctly we don’t need that space.
world-class. While the first star is about really
Then there is space to outsource (non-core,
working together with a number of people in
the team with a team leader, and under in-
not best-in-class), but again, if we do it correctly, we don’t need those square meters
struction, the second level is about the entire
Q. Are you working on a specific project
team being involved and saying "we want to
The whole new setup is to bring everything
get the second star!"
Yes, today we have five major maintenance
together. But in reality this is only for our
The blackboards are very visual so if a team
halls in Brussels. Each of them is special-
professionalised services and cost-manage-
gets a star, it is announced to the whole or-
ised: bus, tram, spare parts, the body shop,
ment. All the rest is simply not present any-
ganisation. There is an element of competi-
etc. We are working on bringing them to-
more. In order to achieve this, it really helps
tion to it, but it’s a healthy competition. We
gether on one 32.000 m2 site. This year we
to apply the principles of lean, because we
‘By applying the principles of lean we have become much more productive.’
have to put all our machinery and employees in this limited area. Introducing lean has worked fantastically for us! As our first step, for one year, we didn’t apply anything. We just made sure everyone understood the importance and the benefits. Lots of training, even playing games to explain lean. Then we started with a pilot project, and after this we elevated lean to the whole organisation. Now people are asking us "when will you involve us?" and "What’s the next step for us?”
Q. What have been the organisational consequences of starting with lean? We have enough knowledge and experience to get teams to their first star. In order to get to the second lean star, we needed to employ a number of lean specialists, because there we lacked the understanding of making this transition. This really is something you need to have done already. This is why we hired specialists with 10 to 15 years of experience in lean management. They are helping us bridging the gap between 1 star and 2 stars.
Practicing lean also means your processes need to support it. We
with suppliers. Then we will be able to really calculate the life-cycle
are adapting our SAP systems to make sure that at every process
cost or total cost of ownership of our activities.
step all the data is available in SAP. This includes the complete man-
agement of maintenance and planning. As a result of these efforts
Q. What’s your metric for measuring your asset performance?
93% of the work planned today to be executed tomorrow is actu-
If you look at it in a financial way, the metric is life-cycle cost. Howev-
ally performed. Five years ago this was less than 50%. So it’s really
er, there is also another dimension to our business. It’s about using
about creating a culture of planning. Our next step in this is getting to
capital in an efficient way which is not exactly the same as a life-cycle
weekly and monthly planning within this system, done by our opera-
tors, and not by management.
Let me illustrate this with our project on the last generation of EURO6 diesel buses. We are buying these now and they will come into ser-
Q. Does this mean that there is more room for innovative think-
vice beginning of next year. The choice for these diesel buses is
ing within the teams?
based on life-cycle cost, combined with the necessary investments
Yes, you need to understand that when we move the team from its
in infrastructure. This expansion will add approximately 150 buses
traditional way of working to a lean philosophy, we work for at least
to the 650 we now have. This has a huge impact on the number of
four months together to really try to help them to improve or even
parking spaces, the number of drivers, and the amount of space
reinvent the processes. If that means investment in new machinery
needed for maintenance. We have to manage all these aspects and
and new tools, we do it because you have to show the same level of
ensure that everything is available at the right moment.
commitment as the team.
If we have the extra 150 buses next year but we don’t have the driv-
Our goal is that in a couple of years and we'll all work with lean logic,
ers, its unused capital. The same goes for the buildings, parking
we'll all have performant planning tools and integrated SAP systems.
spaces, and so on. At the moment the real complexity in our busi-
Those systems are also ready for PAS55 and ready for connecting
ness is the combination of these elements.
Liliane Pintelon An academic perspective on Maintenance and Asset Management
Liliane Pintelon is one of the few academics in Belgium focusing on
solution. Of course there is monitoring and ‘e-maintenance’, but a
maintenance and asset management. She is professor at KU Leuven
failed motor cannot fix itself. You need to have a questioning mind for
where she teaches logistics courses including maintenance man-
these complicated issues.
agement. Her research interests are in technology and asset man-
I think it's interesting to see the role-reversal with the highly trained
agement. She recently published the book ‘Asset Management - The
people in maintenance. I think that companies are becoming more
and more aware that maintenance is important. Unfortunately, it is still sexier to talk about marketing and innovation then to do things
Q. What is your view on the current state of maintenance and
in maintenance and technology.Many managers seem not to be fully
asset management in Europe?
aware yet and I do think they sometimes forget the impact of main-
When I first started doing research in maintenance, nearly 25 years
tenance can be quite large.
ago, one of the things that surprised me the most, was when people introduced me to their maintenance department. The produc-
Q. What about innovation on the production line, inspired by
tion departments usually had highly skilled technicians, whereas the
maintaining those assets. Is that becoming more important?
maintenance department consisted of people who were not "good
I think it certainly should be. Some companies take the total life-
enough" for production. This mentality has completely shifted since
cycle cost of ownership of a machine into account. And then you
then. With the rise of automation, the role of production has changed
start looking at energy consumption, occupational safety and main-
to keeping an eye on things and controlling the machines but in many
tenance. If I am an asset owner I need to take this into account, be-
cases they have skills that are no longer needed for production. In-
cause if I limit my budget now for a certain machine, in the long run
stead, maintenance is where we need our highly trained people be-
I may be disadvantaged because I will have to replace components
cause they have to make a good diagnosis for problems that occur
more often, or it is not as energy efficient as it could be.
in mechanics, electronics or hydraulics, and then come up with a
From manufacturing to logistics
Asset Management standards
Q. What evolution did you see in manufacturing in Belgium?
Q. The ISO5500X standards on asset management have finally
We used to tell our mechanical engineering students, "automotive
arrived. How do you feel about them?
is the place to go", but discrete manufacturing is moving away. As
The great thing about ISO5500X is that it brings everything together.
a country, we are becoming more of a distribution and logistics hub
You get a lot of guidelines and boxes to check, but in the end, it’s still
instead of a manufacturing nation. We still have some small com-
just an ISO. On the shop floor you will have to do it yourself.
panies, they haven't disappeared completely yet. But you cannot compare the current situation to when Renault, Ford, Opel and Vol-
Q. Could it start as an internal check and later become some-
vo were all producing at full capacity. Chemical and petrochemical
thing that companies talk about?
manufacturing are an exception, as they seem to currently be doing
Like most new ISO norms it will be something like that. But it’s nice
ok. Just take a look around the Port of Antwerp.
that it’s there, it means that people actually care about maintenance
When it comes to maintenance, I think besides aviation and nuclear
and maintenance is considered to be important and it's coming up
power plants the chemical industry is still the place where there are
on the agenda. Especially in the boardroom they will realise that
more advanced applications of maintenance management. This is
maintenance is not just a cost factor but a profit contributor. Good
also true in terms of the important area of risk analysis, something
maintenance execution contributes to the profitability, because mon-
that smaller companies often forget.
ey you don't have to spend is in effect money earned!
Q. Has quality assurance changed a lot or do you think it’s be-
The rise of condition monitoring
come sort of a baseline? There has been a big change in quality control. In the late 1980’s,
A recent evolution is the growing importance of condition monitor-
with ISO1900, the reaction was: "wow they have a certificate!". Now-
ing. For a company this is interesting, because you can really opti-
adays, if you don't have one, you can't play. Preventive maintenance
mise your maintenance efforts. If you monitor the condition of your
plays a big role in this as well. If your installation is not properly func-
equipment, you can apply the most urgent maintenance and avoid
tioning, this has an impact on the product quantity and also on your
unnecessary preventive and corrective maintenance
But if you introduce this, invest in the tech-
mation you collect. Making intelligent deci-
just like failure modes: if you really want to
nology and the training, hire (expensive) con-
sions based on all your data.
optimise your maintenance, you should be
sultants to interpret the results, management
However, data is still a very touchy subject
aware of all the different failure modes, and
may question it. "It's expensive and there are
because a lot of companies have a lot of
know how they are connected to the main-
no failures, why do we need this?” It can be
data but they are not collecting or storing it in
tenance actions that you are taking. I haven’t
difficult to grasp that this is really due to the
the most useful way. For example, we looked
seen anybody doing that yet.
condition monitoring, and you are most likely
at a given company. They were measuring
saving a lot of money.
the temperature of their machines and they
New skills for technicians
knew that if it was higher than 70 degrees
Q. What was the main reason for the rise
then they had to stop, or otherwise they
Q. Do you think companies need to invest
of condition monitoring? Where will it go?
would have problems. Besides this, they
in these skills?
It started with the technology of course:
were measuring maintenance interventions:
Definitely. Maintenance software is often
the sensors and software that allows you to
when they did preventive maintenance,
used just for recording and accounting pur-
monitor the health status of the machines.
when they did corrective maintenance, ...
poses: how many hours spent on this and
But what is making the difference is not the
But this data was stored all in different data-
how many spare parts used. But this is
technology but what you do with the infor-
bases and using different time buckets! It's
not enough, we need information on failure
‘Unfortunately, it is still sexier to talk about marketing and innovation then to do things in maintenance and technology.’ Liliane Pintelon Head of the Subdivision Maintenance and Health Care Logistics - KU Leuven Centre for Industrial Management / Traffic & Infrastructure
causes, failure modes, etc. â€“ both qualitative
and ultimately make money. That kind of
carefully. For example, they don't realise that
and quantitative analyses are needed.
long term thinking is definitely getting there
there are different techniques for cost esti-
However, there are not many courses around.
and more and more companies are aware of
mation. Students are able to grasp it if you
In engineering education for example we
the importance of it.
explain well, they do understand, but it takes
don't give it a lot of attention. We do have
an extra effort.
one course in maintenance management
Q. Do you think engineering graduates
at KU Leuven, but reliability and availability
are missing the financial aspect and the
Q. Have you seen a change in the way
are not considered to be very important. It's
ability to communicate that to their man-
companies are developing their people?
more about innovating and inventing.
There are more and more institutions like BE-
The other problem is time. If you want to do
We used to have a Master's degree in Indus-
MAS (The Belgian Maintenance Association)
a serious root cause analysis, it takes time.
trial Management, where we tried to fix that
that are organizing courses. I think compa-
Itâ€™s not something you do overnight. The
problem. So you have an engineering back-
nies start paying more attention to this. They
same goes for a failure mode effect analysis
ground and you know everything about de-
know that maintenance technicians benefit
(FMEA). These are very powerful, but you
signing but you donâ€™t know anything about
from extra training.
need people, you need data and it takes time.
economic impact so we tried to have some
In the past, when a new installation was in-
Luckily, things are changing, and more
courses in between, but the program has
stalled there was training from the supplier
and more people are becoming aware that
unfortunately been cancelled.
just for production personnel. The mainte-
these things are important. They realise that
I teach a course in engineering econom-
nance team would have to find it all out by
instead of having quick fixes, a root cause
ics and even there, simple things like fixed
themselves. Now there is definitely more
analysis can help you to prevent the failures
and variable cost have to be explained very
awareness that people in maintenance need
‘We are becoming more and more a distribution country and a logistic hub in Europe and less and less a manufacturing nation.’
lifelong learning. There are a lot of techniques they should know like root cause analysis. It’s good that they have, for instance, some background on that, on these optimisation models. They don't need to be financial specialists but must be aware that costs associated with what they do or don’t do. Q. Have companies become more open to participation with your department in recent years? They are open but still it’s difficult to get funding. Projects on inven-
tion and innovation or marketing are easier to do. When it comes to asset management, there definitely is some progress, they find it interesting, and are willing to provide data, but once you ask for a
requisite for lean manufacturing. Interestingly, in lean maintenance,
contribution to pay for the research it becomes difficult.
many of the things that are now proclaimed as being brand new,
It's also tough to get federal funding because maintenance and asset
were already done by Toyota in the 1950’s and even by Henry Ford
management are not yet seen as distinct fields. For a lot of people
long before that. So I think there are only a few things that are really
the image of a man in an overall, walking around with a wrench and
new, like value stream mapping. This technique is useful e.g. to map
a grease can still persists. When one of my colleagues looked at our
the process of spare parts procurement, storing, picking and using..
work, he was very surprised to see the formulas, and the rigorous
The map you create allows you to consider every step and whether it
academic approach. I'm sure it changed his opinion on the subject.
adds value to the process or not - which is key to lean management.
Academic research and improvement
Q. Are there obvious areas of possible improvement that you see?
Q. What about lean manufacturing and its relationship with
First of all: knowledge management. There is a huge amount of im-
maintenance and asset management?
plicit knowledge with technicians, very good at fixing things, very
I have been looking into lean maintenance, which is in fact a pre-
good at predicting that something will go wrong. But they can have
‘Good maintenance execution contributes to the profitability, because money you don't have to spend is in effect money earned!’ Liliane Pintelon
108 difficulty explaining why they did what they did. Moreover, a lot of
ficult because with an automated production line, if something goes
them are approaching the end of their career, and if they leave, most
wrong the whole line stops. So maintenance becomes very critical
of the time their knowledge is gone too. But it is good that new
because you can’t afford to have that happen.
comers to maintenance have more of an academic background. The problem is that there are not enough newcomers: there is a dire
Q. There are various metrics that are now being applied for
lack of skilled technicians, all over the world in fact. Maintenance is
measuring asset performance, what are your thoughts on this?
still not the first choice of most engineers. Most of them want to go
I think OEE (overall equipment effectiveness) is still a very important
into manufacturing, R&D or production.
measure. It is nice because you integrate production issues, quality issues, and maintenance issues. Also, for the management it’s easy
Q. Will software become more important?
as you just have to concentrate on one number. I don't know what
With more automation, maintenance becomes easier and more dif-
the best measure is. Ultimately, you should be able to measure the
ficult at the same time. Easier because you have more data to predict
impact maintenance has on the bottom line - making money.
and to make prognosis on the machine's health status. More dif-
KPMG Global Asset Management Competence Center
ISO 5500x: It’s happening! Get your physical assets on the right track in 2014. A global standard for Physical Asset Management has been released: As a subject expert, the KPMG Global Asset Management Center has been involved formally in drawing up the ISO 5500x standard from the beginning of the process. What is happening? For the first time an ISO standard on Asset Management has been launched. The new standard explicitly places assets in a value context, widening the definition of ‘asset’ to include: “Something that has potential or actual value for an organization”.That value can be tangible or intangible, financial or non-financial and includes consideration of asset risk and liabilities. A focus on value: We expect the new standard will accomplish several key goals that are important to asset intensive companies: global benchmarking, integration with finance and accounting, creating value for the bottom line, transparency, board-level awareness and competitive advantage. Companies that are ISO 5500x-compliant may use their accreditation to differentiate themselves from competitors in new business opportunities. A five-step action plan Step 1: Step 2: Step 3: Step 4: Step 5:
Understand why you want to comply Assess your current operations against the standard Create an implementation plan Implementation Accreditation
Even if you have no intention of applying for accreditation, using the guidelines to optimize the whole asset life cycle will help achieve a healthy balance between investments, maintenance, © 2014 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
asset performance and asset risks that can generate real value for the organization. We can help you to implement the new ISO 5500x for a robust, valueadding Asset Management plan, or we can audit your compliancy against the ISO 55001 standard for attestation. To join one of our future information sessions and learn more about the new ISO 5500x, contact one of our experts today. Get your physical assets on the right track! kpmg.com/amcc
Daniël Pairon Global Head of KPMG AMCC T: +32 3 821 17 36 E: firstname.lastname@example.org
Herman Baets Moving towards more European cooperation in terms of maintenance and asset management
After a long career in maintenance and asset
our aim to strike a balance between availabil-
an increase of the federation's power due to
management in the chemical industry, Her-
ity, reliability, productivity, utilisation rate and
having a smaller organisation. The released
man Baets is the chairman of the European
additional costs. In order to achieve this, the
budget can then be used to outsource part
federation of national maintenance societies
right maintenance tasks - every aspect - must
of our activities and to hire professionals; af-
(EFNMS) since October 2013. Baets func-
be defined. The focus lies on efficacy.
ter all, all of us are volunteers and this is our
tions perfectly in this role to shine his light
Maintenance management is about correctly
hobby. This means that the professionals we
on the future of the industry in Europe and
executing the required actions: do the things
hire can truly get things going.
the role of maintenance and asset manage-
right! Emphasis lies on efficiency: appropri-
Furthermore, I would like to focus on our
ment in it.
ate use of people and means so that the
power at the European level. By participat-
actions are performed 'right the first time'.
ing in (subsidised) European collaboration
Q. What is your vision on maintenance
Simply said, maintenance management has
projects, we can achieve part of our objec-
and asset management?
one job: executing the maintenance plan as
I can define both terms in one sentence: 'Do
drawn up by asset management.
the right things right'. Asset management is
Q. Which benefits do the national main-
about 'doing the right things' in managing
tenance federations have when joining
physical assets. When managing high-capital
Q. How do you intend to increase EFNMS'
your European umbrella organisation?
installations for the purpose of making an op-
The foremost benefits are coordination and
timum contribution to the production process,
I intend to reduce the number of board mem-
networks. A European federation has a
reliability and cost-efficacy play a big part. It is
bers drastically resulting in lower costs and
prime part in formulating and recording defi-
nitions. There is a lot of business terminology, but it is important that
long before it will become a problem on the maintenance market in
everyone is on the same wavelength with respect to the definition of
the Netherlands and Germany; especially with respect to the rising
specific terms. EFNMS can then present a standard formulation that
states from the east. Moreover, ageing is one of the biggest threats.
can be translated into the various national organisations. The biggest
I view ageing as a two-fold problem. There is a generation of baby-
benefit still is that you meet other federations and people to compare
boomers about to retire and the fact that the intake of young people
to. For instance, how are things done in Germany or England? How
in technical professions is much too low.
do they operate? Things do not go as well everywhere, but it is a
Moreover, I also see that maintenance is becoming an increas-
ingly high-tech field. Maintenance works that used to take brawn
The federations should not view the EFNMS as an expertise group,
now requires brains. Moreover, the machines are becoming better
but as the access gate to a network of experts. An example of this
and better, thus requiring less and less maintenance. Sometimes,
is BEMAS, the Belgian Maintenance Association; one of those local
maintenance is only required every seven years. This means that
gates. This also makes it a two-way process: give and take.
the chance you have as a maintenance worker on that machine is reduced. Young maintenance workers have less chances to learn in
Q. What is your mission during your chairmanship?
With the arrival of the ISO 55000 standards, the time has now really
Ageing also draws in more maintenance workers from other regions
come to bring maintenance and asset management to the level of
(Eastern Europe) to Western Europe. In that case, one validation sys-
policy decisions. Thus, maintenance must find its way in at compa-
tem is required for the knowledge of maintenance from the different
nies' boardrooms. Currently, maintenance much too often is an art
regions in Europe; a kind of Maintenance Skill passport. Currently,
for art's sake enterprise. We will try to show that maintenance is not
it is extremely difficult to obtain this with a degree or certificate from
just a cost item, but an added value. Moreover, I want to make sure
another country. It is not valid here and these people cannot work
that larger companies will put EFNMS realisations into practice. We
at all, even though they have to do work identical to work they did
want to draw these large companies to Europe. The universal knowl-
in their homeland. Every time, they have to run through enormous
edge they posses could also benefit smaller companies, because
administrative hassle to prove this, which costs enormous amounts
that is the only way the entire industry can move forward. It is this
of money. Thankfully, there is now a collaboration project between
branching of companies that can keep the industry in our region. '
the Netherlands, Belgium, France and Germany to circumvent this and find a solution (MORE4CORE).
Q. How can the challenges for an industrial future best be handled?
Source: article 'Over de grenzen heen' - Josefien D'Haene -
As everyone knows, wage costs are a very big problem; one we
Sectorlink Magazine September - November 2013
certainly cannot ignore in Belgium. However, I believe it will not take
Wim Vancauwenberghe Maintenance and asset management as key enablers of the Industrial Renaissance To wrap up the interviews in this book, Wim Vancauwenberghe, Di-
service providers and equipment manufacturers, but also the gov-
rector of BEMAS, talks about the exciting developments in the world
ernment as a regulator, and education, preparing the maintenance
of maintenance and asset management. He explains how world-
professionals of the future.
class maintenance can turn into reality some of the most important ambitions put forward by EU policymakers.
Q. Nowadays, we are hearing more and more about asset management; how is it different from maintenance?
Q. You have been Director of BEMAS since the year 2000. How
With the arrival of the ISO 55000-standard series, asset manage-
would you describe the field of maintenance?
ment (AM) is getting more and more attention from asset owners,
The first thing you need to realise is that maintenance is every-
not only in the field of infrastructure, where the AM concepts origi-
where, and everybody does it. A lot of things need to be maintained:
nated, but also in manufacturing and process industries. Asset man-
houses, cars, public buildings, infrastructure, manufacturing equip-
agement is looking to optimise the benefits of an asset in each phase
ment, trains... Some estimate that on average about 10 percent of a
of its lifecycle. This is achieved by defining clearly the asset policies
countryâ€™s GDP is spent on maintenance. But maintenance is in most
throughout an organisation. Of course maintenance is a major point
cases not a cost for society, but an investment in order to prevent an
of attention. About 80 percent of future maintenance costs are de-
avoidable early replacement. In that sense, maintenance is a major
termined during the design and selection phase of an asset. Then of
contributor to the sustainability of our society.
course maintenance policies need to evolve during the operational
At BEMAS we focus mainly on technical maintenance. The mission
phase in function of the needs of the organisation, which can vary
of this activity is to ensure the highest possible reliable use of an as-
according to external factors (economic, environment, regulationsâ€Ś)
set or equipment per euro invested, and to prevent technical failures
and the age and lifetime of the asset.
causing safety and environmental incidents.
When you consider all these issues, the maintenance and asset
A lot of stakeholders are involved in these MRO (maintenance, repair
manager becomes a type of risk manager, ensuring that the capital
and overhaul) activities: asset owners across all economic sectors,
invested in equipment is used in the desired way. The bank crisis
has taught us that we need transparency
at a vital point where decisions need to be
Q. Europe is striving for an industrial
and clear policies on how investment risks
taken as to the next stage of a major part of
renaissance. What is the role of mainte-
are managed. We see that shareholders in
the installed base: decommission and close
nance and asset management in this?
companies with important tangible assets
down, replace with new equipment, or invest
BEMAS of course applauds the renewed
on the balance sheet are increasingly calling
in measures to upgrade the equipment and
interest in manufacturing from policymak-
for the same transparency and risk manage-
extend its lifetime. This third option could
ers on all levels. Europe has identified sev-
ment for their invested capital.
prove very beneficial: it requires less invest-
eral strategic areas of innovative investment.
ment capital, saves on natural resources,
Maintenance and asset management are
Q. What are the current challenges in
and allows companies to continue with lo-
highly concerned in several of those. As ex-
NW Europe for maintenance and asset
cal production. In that way, lifetime extension
plained earlier, maintenance is a key enabler
could prove to be the key enabler for the in-
in order for factories of the future to grow.
Due to the economic crisis in recent years,
dustrial implementation of innovations cur-
Furthermore, good maintenance means less
many companies have gotten into a “survival
rently developed in Europe, and the gradual
energy wasted and as such contributes sig-
mode.” They are limiting capital investments
transformation of the current asset base into
nificantly to overall energy efficiency.
in new assets and reducing maintenance
factories of the future.
budgets. Although this strategy is helping
A first area of interest is advanced manufactur-
these companies to remain profitable in the
A third challenge is the ageing technical work-
ing. New production technologies as 3D-print-
short term, they may lose their competitive-
force. In the coming years, technicians from
ing could for instance be used to create spare
ness due to reduced production reliability in
the baby boom generation will retire, taking
parts on site, reducing downtime and eliminat-
the long term. Decisions on postponing or
with them crucial experience and skills. This
ing the necessity to keep spares in stock.
not executing necessary maintenance activi-
evolution will only increase the already large
ties have almost no immediate negative im-
shortage of technically skilled people in our
In the factories of the future, robotics will play
pact, but the buildup of lagging maintenance
field. This shortage is apparently a global
an important role. Low cost but high-tech ro-
and decrease in reliability may prove to be
phenomenon. The availability of a large talent
bots will increasingly replace
very counterproductive in the long term. Be-
pool of highly skilled technicians will become
non-value-adding repetitive labor. As with
ing stuck with unreliable equipment can be-
an even bigger factor in future investment
any other equipment, this next generation of
come even more painful if market conditions
decisions. I am personally convinced that
robots will also need to be maintained, and
change and demand is up.
Europe could compensate handicaps such
continuously improved. The technical de-
as higher labor costs and energy prices if it
partments that are able to achieve the high-
Another concern is the average age of the
invests heavily in STEM education (science,
est “overall robot effectiveness” will generate
assets in European industry. We are now
technology, engineering and mathematics).
an important competitive advantage.
‘Maintenance and asset management will play a crucial role on the economic battleground of the third industrial revolution.’ Wim Vancauwenberghe Director - BEMAS
Q. Europe has a strong focus on innovation. What is the role of maintenance in innovation projects? First of all, it has become clear that innovation requires a strong manufacturing base. The first priority is to keep manufacturing activity here. This is only possible if the European manufacturing sites stay competitive in a global market. As explained before, world-class maintenance and asset management can contribute significantly to achieving this goal. Breakthrough innovations developed in R&D departments need to be manufactured and produced in the end. This means that existing equipment needs to be adapted, or new equipment needs to be installed. The technical department plays a key role in getting this new equipment up and running as soon and as reliably as possible. As we see product lifespan getting shorter and shorter, the availability of a flexible technical team capable of reliably implementing an innovation on
the manufacturing floor becomes an important competitive advantage. Another trend in advanced manufacturing is the use of “big data.” Manufacturing equipment today already generates huge amounts of
A lot of innovations go hand in hand with innovative engineering. We
data, and this will increase even further in the future. Unfortunately,
see that maintenance technicians frequently contribute to in-factory
in a lot of cases the available data is left unattended. Exploiting it
innovation because of their in-depth knowledge of production equip-
with the newest big-data techniques to support maintenance and
ment. As they are continuously present on the manufacturing shop
reliability decisions would result in a higher uptime and lower overall
floor, maintenance technicians are ideally placed to detect opportu-
manufacturing costs. The development of dedicated data standards
nities for improvement and find breakthrough solutions when con-
in the field of maintenance could create a significant synergy for the
fronted with practical manufacturing challenges.
entire European manufacturing industry. Europe also wants to focus on key enabling technologies (KETs).
Q. How is BEMAS contributing to the Industrial Renaissance in
High-performance production is one of them. It goes without saying
that this is impossible without high-performance production reliability.
We work on creating more awareness about maintenance. Ignorance
Final conclusion: maintenance and asset management will play a cru-
of the impact of maintenance is unfortunately quite widespread. As
cial role on the economic battleground of the third industrial revolution.
a consequence, decision-makers in companies don’t always opt for
the best solution; policymakers do not dedicate enough attention to the important economic impact of maintenance; and the general
‘Lifetime extension could prove to be the key enabler for the industrial implementation of innovations currently developed in Europe, and the gradual transformation of the current asset base into factories of the future.’
public is unaware of the exciting career possibilities in our field. We
To sum it up, BEMAS wants to play a modest, but very significant
are currently participating in the MORE4CORE (M4C) Interreg IVBproject. The most important work package is led by BEMAS and will reveal the economic impact of maintenance and the MRO sector. In order to address the scarcity of highly skilled maintenance professionals, we also intend to create a “maintenance skills passport.” This passport will allow an individual to prove his or her set of clearly defined skills and competences in the field of maintenance. This should increase the mobility of maintenance technicians throughout Europe and also help to identify training needs for the individual in question. The skills passport initiative is also a part of the M4C project and uses, amongst others, the learning outcome competence definitions as developed in Pile-UP, a Leonardo Da Vinci Lifelong Learning program. Finally, we want to continue to inspire and to educate the maintenance and asset-management community in Belgium and Europe. We want to help and motivate them to tackle the challenges they face in managing their current and future assets.
role in turning into reality the ambitious goals of an Industrial Renaissance in Europe.
2rent congragulates BEMAS with its 25th anniversary 25
2rent your full service provider for maintenance shutdowns Call our rental helpline +32 (0)70 220 440 for more information.
25 Years of BEMAS Looking back and looking ahead
During its initial years, BEMAS was run entirely by volunteers. Nev-
BEMAS, the Belgian Maintenance Association vzw-asbl was found-
ertheless, the group succeeded by participating in trade shows and
ed on March 20th 1989 by 10 enthusiastic professionals from dif-
organizing company visits and lectures. These initiatives found fer-
ferent corners of the Belgian maintenance community. We take the
tile ground within the maintenance world. The number of members
opportunity of the publication of this book to celebrate the 25th an-
started to grow.
niversary of the creation of the first Belgian professional association in the field of maintenance.
Professionalisation TIn 2000 Mr. Johan De Coster, the new chairman, decided together
During the 1970s and ’80s, the association ABICE (Association Bel-
with a renewed board to attract Wim Vancauwenberghe to become
ge des Ingénieurs et Chefs d’Entretien - Belgian Association of En-
BEMAS’s director and first full-time employee. This marked the start
gineers and Maintenance Managers) was active, but was abrogated
of a much more professional approach: corporate sponsors were
following the death of its president. For almost a decade, Belgium
found, the number of initiatives grew, and consequently the number
lacked an umbrella organism for professionals and companies ac-
of members started to climb. Cooperation at the European level was
tive in the different fields of technical maintenance. This unfortunate
strengthened when BEMAS took on an active role within the Euro-
period came to an end with the establishment of BEMAS.
pean Federation of National Maintenance Societies (EFNMS).
The constitutive general assembly appointed Professor Robert Lee-
In addition to the conventional study sessions, company visits and
naerts (UCL) as the first chairman of BEMAS. He was later succeed-
trainings for Belgian professionals in technical maintenance, BEMAS
ed by Mr. Roland Vervrangen, at that time maintenance manager at
introduced its Award for Maintenance Manager of the Year, which rap-
the Caterpillar plant in Gosselies.
idly became a coveted award in the maintenance world. Since 1998,
BEMAS has been granting this award for the
This resulted in a new design of the logo and
At the end of 2013, membership had reached
most meritorious maintenance manager and
branding of BEMAS. Also in 2011, BEMAS
almost 750, a new record. In addition to these
his or her team. Every year, this Thursday in
organised the first edition of its Innovation
primary contacts, over the years BEMAS has
June is the meeting date of choice for hun-
Award. With this award, BEMAS promotes
built up a database of several thousands of
dreds of maintenance professionals.
innovations in technical maintenance, and
companies and professionals. To increase
In 2008, BEMAS hosted the EuroMainte-
generates positive momentum with a focus
the efficient management of this database
nance event in Brussels. With the support
on the future of maintenance.
and to make further growth possible, a new
of easyFairs, this edition of this biannual Eu-
website with an incorporated CRM package
ropean maintenance fair became one of the
A stronger back office, extensive commu-
most successful ever, with an exceptionally
nication online and offline, and investments
high turnout for the workshops and lectures
in the further development of activities in
In the beginning of 2014, under the initiative
by international top speakers. The success
Wallonia make BEMAS the cornerstone for
of Vice-Chairman Daniel Vandendaul, BE-
of this event further enhanced BEMASâ€™s im-
every company and professional active in
MAS has opened an additional office in
age and base.
maintenance and asset management. The
Gosselies, next to an office in Gent, while
association now organises over 50 activi-
the social seat remains in Brussels. With the
ties throughout Belgium. Many hundreds of
support of the members, corporate spon-
Under the chairmanship of Mr. Patrick De
members and non-members take part in
sors, devoted volunteers and a motivated
Groote, the number of members grew to
these, thereby fulfilling BEMASâ€™s main mis-
team of 6 professionals, the board and the
600. In 2011 former chairman Marcus Berg-
sion: to act as the connecting bridge be-
current chairman, Philippe Deneve, want to
er, initiated the new mission and constitution
tween the various stakeholders in the world
set BEMAS on a continued path of growth.
of BEMAS introducing asset management
of maintenance and asset management. By
This will enable BEMAS to fulfill its mission to
next to maintenance as a key point of inter-
sharing knowledge, BEMAS aims to improve
help all stakeholders in the maintenance and
est for BEMAS. The second step was a joint
the professionalism and ultimately the per-
asset management community to tackle the
effort by BEMAS staff and members of the
formance of industrial companies and other
challenges of operating and maintaining as-
board to better define the DNA of BEMAS.
asset owners in Belgium.
sets in the 21st century.
MRO for competitive regions in North-West Europe International collaboration has always been
Why this project?
Limited transnational worker mobility reduces
an important part of the BEMAS DNA. By
Global competition is tough and investments
access to expertise. Differences in national
participating in relevant European projects
in European manufacturing facilities are gen-
maintenance norms and standards further
overarching goals can be reached. This is
erally declining. North-West Europe tradi-
fragment markets. The MORE4CORE project
why BEMAS is a partner in the MORE4CORE-
tionally has been the powerhouse of a large
partners jointly represent over 7,000 compa-
number of industries, including Automotive,
nies (EFNMS is representing already 6,500
Chemical and High tech. Production assets
companies) which account for more than
MORE4CORE (abbreviated as M4C) is an
and the workforce are ageing, while invest-
500,000 jobs, and maintain over 57 billion Eu-
International collaboration to strengthen in-
ments shift increasingly to low wage coun-
ros worth of assets. MORE4CORE is the first
novation in the Maintenance, Repair and
tries. Maintenance, Repair and
such integrated partnership in Europe.
Overhaul industries. Partners from four
Overhaul is the multi-disciplinary business
European countries will collaborate to ac-
function responsible for optimal operations (in
celerate innovation, education and support
terms of Reliability, Availability, Maintainability
MRO is the key to modern industry. Beyond
policy development in Maintenance, Repair
and Safety) of production assets over their
maintaining productivity, MRO is the enabler
and Overhaul (MRO). The project will bring
for a fast and widespread uptake of smarter,
together industry, service providers, educa-
cleaner, more efficient, higher effectiveness,
tion and government to jointly set out strat-
Maintenance has a key function to enhance
and more sustainable or low energy con-
egies to strengthen the sector and improve
productivity and environmental sustainability.
suming technologies in existing processes.
cross border cooperation. MRO is crucial to
There are barriers to fully use the potential of
Such upgrade of existing systems is increas-
maintain competitiveness of our industries
MRO. Innovation in maintenance of complex
ingly important as manufacturing facilities
and improve sustainability of production pro-
systems lags behind and transnational inno-
as well as infrastructural assets in NW Eu-
vations and R&D cooperation is too limited.
rope are ageing, while economic circum-
PDM congratulates BEMAS with her
anniversary! 123PDM, your partner within fields of: • • • • •
(Risk Based) Asset Management Turnaround Management Design & Engineering Performance Improvement Change Management (OEE improvement/cost reduction, Lean, OpEx. etc)
PDM has a history of more than 40 years experience providing: • • •
Performance Improvement & Change Management Programmes Engineering & Maintenance Support Project Management Services
“Industrial excellence can be attained by combining excellent manufacturing with asset integrity. PDM has developted a continious improvement method and has several proven cases to realise your turnaround! We improve industrial compagnies to become more efficient within the operational costs.” Carlo Schildermans Account Director PDM
stances demand longer and more competitive asset lifecycles. The
often changes need to be made at European level, either between
MORE4CORE project results will contribute to an improved global
public institutions or between industry associations. The partners
competitiveness of key industries in North-West Europe when real-
will work together to increase capacity of MRO industry representa-
izing it’s strategic goals.
tion at international level, with the aim to grow an organisation with permanent representation.
Strategic goals The MORE4CORE project (MRO for COmpetitive REgions) unites in-
Work Packages of the project
dustry, service providers, education and governments to implement
To realise the strategic goals of MORE4CORE, six interrelated work
coherent actions in the field of Maintenance, Repair and Overhaul
packages will be executed in the 2.5 year period January 2013 –
accelerated (transnational) innovation
improved maintenance technicians
mobility (human part, e.g.qualifications, permits)
more standards and regulation to execute maintenance (hardware part, e.g. tooling certificates)
WP1: Cluster Development; transnational overview of main stakeholders including triple helix (public-private) best practices.
WP2: Transnational MRO insight development; (trans)national MRO Status and Vision at macro level including policy white papers.
WP3: Technology & Process Innovation; transnational Research
improved market integration on a European scale
& Innovation landscape and joined MRO technology requirement
MRO recognised in EU R&D agenda / roadmaps and represented
at EU level
WP4: MRO Human Capital Mobility; Development of an EU qualification framework for Maintenance and ECVET pilot.
What is needed to improve
Transnational cooperation is needed to provide insight in the most
MRO standards and create common categorisation for MRO ser-
impactful differences and set in motion the process of alignment (industries, education institutes and government together). It is also
WP5: Market Integration; Prioritise cases for normalisation of vices across NW Europe.
WP6: Anchoring the MRO agenda; create and implement organi-
needed to develop a common framework to assess skills without
sational model and transnational activities per country (decentral-
changing the national education systems. To achieve these goals,
ised) as well as at EU / EFNMS level (centralised).
Acknowledgements We would like to thank the interviewees and contributors for their insights: Herman Baets - Efnms
Ruud Krinkels - Krinkels
Markus Berger - Elia
Didier Leroy - Toyota
Wim De Clercq - Electrabel (Gdf Suez)
Alain Lycops - Solvay
Wouter De Geest - Basf
Rudi Maerschalck - Mivb/Stib
Olivier De Weck - Mit
Jacques Marbehant - Ucb
Koenraad Debackere - Ku Leuven
Sven Pieters - Barry Callebaut
Philippe Deneve - Cofely Fabricom (Gdf Suez)
Liliane Pintelon - Ku Leuven
Didier Herbert - Dg Enterprise & Industry
Herman Van Rompuy - European Council
Goedele Heylen - Niko
Wim Vancauwenberghe – Bemas
We would also like to thank the writers and editors for their contributions: Leontien De Vos
Bavo Van Eyken
Piet Steel We thank the Board of Directors of BEMAS for aiding and supporting in the creation of this book, as well as our partners in the MORE4CORE-project: BOM, Development agency of the province of Noord-Brabant, the Netherlands DI-WCM, Dutch Institute – World Class Maintenance MEC, Maintenance Education Consortium VOKA, Chamber of Commerce Antwerpen – Waasland WVIS, German Economic Association for Industrial Services AFIM, Association of French Maintenance Engineers EFNMS, European Federation of National Maintenance Societies
We would like to thank the following companies for their valued support: 2rent
Cofely Fabricom (GDF Suez)
This book is co-financed by:
Colofon BEMAS The Belgian Maintenance Association vzw-asbl
Kim Speleman – Elma Multimedia
Bd. A. Reyerslaan 80
015 55 88 88
Concept & lay-out
EDITORS at BEMAS
Colin Hensley – Hensley Partners
Leontien De Vos
Maaike Thoen – Mauhaus Communications
Bavo Van Eyken
Josefien D’Haene – Sectorlink Magazine
‘Special thanks to all the technicians that maintain the equipment used to produce this book.‘ the BEMAS-team
Anniversary book commemorating the 25 year jubilee of BEMAS Belgian Maintenance Association vzw-asbl
The economic crisis of the last few years made it painfully clear that an economy cannot thrive on a service industry alone. After decades o...
Published on Mar 25, 2014
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