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11 evaluation indicators for equipment management: 1. The equipment integrity rate is the most commonly used among these indicators, but its role in facilitating management is limited. The so-called integrity rate refers to the ratio of devices in good condition to the total number of devices during inspections (Device integrity rate = Number of devices in good condition/Total number of devices). Many factories manage to achieve an integrity rate of over 95%. The reason is simple: at the time of inspection, if the device is running and not malfunctioning, it is considered to be in good condition, so this indicator shows a good value. If it looks good, that means there isn’t much room for improvement; it means nothing can be improved further, and it also means it’s difficult to make progress. To this end, many companies have proposed modifying the definition of this indicator; for example, they suggest conducting inspections on the 8th, 18th, and 28th of each month, and using the average of the good rate values obtained from these inspections as the good rate for that month. This is of course better than checking once, but it still represents a good rate on a point-by-point basis. Later, it was proposed to use the ratio of available machine hours to calendar working hours, with the available machine hours equaling the calendar working hours minus the total hours spent on failures and their repairs. This indicator needs to be as realistic as possible. Of course, there are again issues related to the increased workload in statistics and the accuracy of those statistics, as well as debates over whether deductions should be made when it comes to preventive maintenance. Whether the integrity rate is an effective indicator of equipment management depends on how it is applied; different people may have different opinions on this. 2. The metric of equipment failure rate is easy to confuse, as there are two definitions: First, if it refers to the failure frequency, it is the ratio of the number of failures to the actual number of times the equipment was in operation (Failure frequency = Number of failures due to downtime/Actual number of operating hours of the equipment) ； Second, if it is the failure downtime rate, then it is the ratio of the time the equipment is down due to failures to the sum of the time the equipment is actually in operation and the time it is down due to failures (Failure downtime rate = Time down due to failures / (Time actually in operation + Time down due to failures)). Clearly, the failure downtime rate can more accurately reflect the condition of the equipment. 3. The equipment availability rate is more commonly used in the West, while in China there are two different terms: planned time utilization rate (planned time utilization rate = actual working time/planned working time) and calendar time utilization rate (calendar time utilization rate = actual working time/calendar time). By definition, the availability rate as defined in the West is actually the calendar time utilization rate. Calendar time utilization reflects the full utilization level of the equipment; in other words, even for equipment that operates on a single shift basis, we calculate the calendar time based on 24 hours. Because whether the factory uses this equipment or not, it still consumes the company’s assets in the form of depreciation. The planned time utilization rate reflects the planned usage status of the equipment; for single-shift operation, the planned time is 8 hours. 4. Another term for the average time between failures of a device, MTBF, is average time without failure (MTBF = total time the device operates without failure during the statistical period / number of failures). It reflects the frequency of failures, that is, the health status of the equipment, in a complementary manner to the failure downtime rate. It is sufficient to use one of the two indicators; there is no need to measure something using related indicators. Another indicator reflecting maintenance efficiency is the Mean Time To Repair (MTTR) (Mean Time To Repair = total time spent on repairs during a statistical period / number of repairs), which measures the improvement in the efficiency of maintenance work. With the advancement of equipment technology, due to differences in complexity, difficulty of maintenance, locations of failures, the average technical skill level of maintenance technicians, and the age of the equipment, it is difficult to determine a fixed value for maintenance time. However, we can use this to measure the average conditions and levels of improvement. 5. Overall Equipment Effectiveness OEE is an indicator that provides a comprehensive reflection of equipment efficiency; it is the product of availability, performance, and quality factors. Just like a person, the time utilization rate represents the attendance rate; the performance utilization rate indicates whether one works hard after starting work and achieves the desired efficiency; the quality rate reflects the effectiveness of the work – whether mistakes are made frequently and whether tasks can be completed with both quality and quantity ensured. The simple formula for OEE is: Overall Equipment Effectiveness OEE = Output of qualified products / Theoretical output for the planned working time. 6. Total Effective Productivity TEEP is the formula that most comprehensively reflects equipment efficiency, rather than OEE. True Effective Productivity TEEP = Output of qualified products / Theoretical output based on calendar time; this indicator reflects various deficiencies in the systematic management of equipment, including upstream and downstream impacts, effects related to the market and orders, imbalances in equipment capacity, and unreasonable planning and scheduling. This indicator is usually very low, which doesn’t look good, but it is highly accurate. Regarding maintenance and its management, there are also relevant indicators. 7. The first-pass quality rate for maintenance is measured as the number of times the equipment after maintenance meets the product quality standards upon a single trial run, divided by the total number of maintenance sessions. It is worth examining whether the factory uses this indicator as a performance metric for the maintenance team. 8. The repair rate is the total number of repairs performed after equipment maintenance divided by the total number of maintenance sessions. This reflects the maintenance quality more accurately. 9. There are various definitions and calculation methods for the maintenance cost ratio. One is the ratio of annual maintenance costs to the total annual output value; another is the ratio of annual maintenance costs to the total original value of assets for that year; yet another is the ratio of annual maintenance costs to the total replacement cost of assets for that year; there is also the ratio of annual maintenance costs to the total net value of assets for that year; and finally, it is the ratio of annual maintenance costs to the total production costs for that year. The author believes that the last algorithm is more reliable. Even so, the magnitude of this repair cost rate figure does not tell us anything. Because equipment maintenance is a form of investment, and investment generates value and output. Insufficient investment and significant production losses affect output ； Of course, investing too much is also undesirable; this is known as over-maintenance and is a waste. Appropriate investment is ideal. Therefore, factories should explore and determine the optimal ratio of inputs. High production costs mean more orders and a greater workload, which in turn increases the load on the equipment and raises the need for maintenance. Making investments in the right proportions should be the goal that factories strive to achieve. With this benchmark in place, the further one deviates from this indicator, the less ideal it is. There are also many indicators related to spare parts management. 10. The spare parts inventory turnover rate (Spare parts inventory turnover rate = Monthly cost of spare parts used / Average monthly value of spare parts inventory) is a relatively representative indicator. It reflects the liquidity of spare parts. If a large amount of capital is tied up in inventory, it will be reflected in the turnover rate. Another indicator reflecting spare parts management is the spare parts capital ratio, which is the ratio of the total funds allocated to spare parts to the total original value of the enterprise’s equipment. This value varies depending on whether the factory is located in a central city, whether the equipment is imported, and the extent of the losses caused by equipment downtime. If the daily downtime cost of a piece of equipment amounts to tens of millions of yuan, or if the failure poses serious risks to environmental pollution and human safety, and the lead time for obtaining spare parts is long, then a higher level of spare parts inventory is necessary; otherwise, the capital investment associated with spare parts should be kept as low as possible. 11. Intensity of maintenance training (Intensity of maintenance training = Hours of maintenance training / Hours spent on maintenance work). The training covers topics such as specialized knowledge of equipment structure, maintenance techniques, professional ethics, and maintenance management. This indicator reflects the degree of emphasis and investment companies place on improving the competence of their maintenance staff, and it also indirectly reflects the level of their maintenance technical skills. It is very helpful for factory managers to be aware of these key performance indicators, as they assist in evaluating and driving progress in equipment management. Some factories feel upset when they see the maintenance staff often idle, drinking tea, smoking, and resting. They tried to evaluate maintenance staff based on the amount of work done, but it had the opposite effect. The equipment repaired by maintenance personnel always has lingering issues and side effects. New repair tasks keep cropping up, leaving the maintenance staff as busy as a fire brigade. As a result, the condition of the equipment deteriorates further, and the production losses caused by downtime actually increase. How to evaluate the performance of maintenance organizations becomes another complex and worthy of study issue. The system is like a ball: if one side is flattened, it bulges out on the other side. The design of KPIs for equipment management also affects whether a company operates smoothly. Seven common misconceptions about equipment management. Equipment management constitutes the material foundation that enables enterprises to carry out production and reproduction, and it is also the basis of modern production. Due to the long-term influence of traditional maintenance models and a reactive approach to maintenance, there are currently seven common misconceptions in equipment management among domestic enterprises, which severely hinder the improvement of their equipment management capabilities and the process of modernization. To meet the requirements of modern equipment management models, equipment managers must move beyond misconceptions and establish a new framework of understanding. Myth 1: All equipment will fail. Correction: The reliability-centered maintenance approach shows that by relying on reliability data analysis and utilizing advanced testing techniques and diagnostic methods, it is possible to achieve zero equipment failures. This mindset makes maintenance work more targeted, aligns the subjective and objective aspects better, enhances its scientific nature, and reduces impulsive actions. Myth No. 2: Equipment must undergo regular major repairs. Correction: Research in recent years has shown that with the use of new materials and new manufacturing processes, the reliability of equipment is increasing, while its intangible wear and tear is accelerating. For over 60% of the equipment, the failure rate curve shows only an initial failure period, with no wear-related failure period. Blind overhauls will introduce a new initial failure period, increasing the equipment’s failure rate. Due to the different movements of various components of the equipment, varying loads, and different operating environments, wear and degradation as well as damage occur in different ways; therefore, local repairs, such as minor repairs, component repairs, or repairs of assemblies, are more economical and reasonable. Myth 3: It’s difficult to find the cause of a fault when there are no issues. Correction: Faults don’t appear out of nowhere; they develop over time. Problems such as dust, oil contamination, stress, microcracks, corrosion, loosening, poor contact, and aging are all causes of failures. Therefore, there are numerous underlying problems associated with the fault that we need to carefully observe and identify; this is also the purpose of team-based maintenance. By strengthening the foundation and starting with minor tasks such as inspection, cleaning, maintenance, corrosion prevention, vibration reduction, and balancing, it is possible to prevent problems before they occur; this is also the most cost-effective strategy for equipment maintenance. Myth 4: It’s difficult to manage spare parts effectively while balancing the need for repairs with the goal of reducing spare parts inventory. Correction: By properly categorizing spare parts, storing critical ones in excess quantities, keeping ordinary spare parts at normal levels, allowing a shortage of less important spare parts, and eliminating inventory for many other spare parts, it is possible to reduce inventory costs without facing emergencies due to shortages. For example, equipment, components, and parts are classified into A, B, and C categories based on their level of importance, ranging from AAA to CCC. Depending on this level of importance, a management system is implemented that involves maintaining redundant inventory, regular inventory, inventory that can be depleted, or even no inventory at all – in which only information is kept rather than physical parts. Myth 5: It’s impossible to involve operators in equipment maintenance. Correction: Operators come into contact with the equipment daily and know best its various functions ； Abnormalities in sounds, temperature, movements, odors, colors, etc., during equipment operation are also the first things noticed by on-site operators. Therefore, whether the operator can perform the tasks correctly and is responsible for the equipment makes a big difference in the outcome. As equipment becomes more automated, operations become simpler and easier, which also makes it possible for operators to take on more responsibility for the equipment. Myth 6: The organizational structure for equipment management in enterprises cannot be changed. Correction: Equipment management organizations should strive continuously toward a more flat structure, with better specialization, process prioritization, streamlined management processes, reduced division of labor, and blurred boundaries between different responsibilities. The reason is: there are too many layers, which creates more problems rather than solving them; it also prolongs the management cycle and reduces efficiency ； The production site is like a battlefield; following the principle of prioritizing processes, those at the same level can give orders to one another, enabling streamlined management and rapid responses ； Reducing rigid divisions of labor and blurring boundaries can turn shirking responsibilities into proactive support ； Always adhere to the principle of establishing positions based on needs and assigning people to those positions accordingly. Myth 7: Companies need a maintenance team capable of handling all equipment issues. Correction: The conflict between advanced equipment and inadequate maintenance teams will always exist. Socialized maintenance is the trend for the future, and what companies need to do is focus on integrating maintenance resources and improving maintenance management. The six basic characteristics of equipment management: 1. The productivity of production equipment for enterprises is self-evident. Therefore, preventive measures and maintenance should be carried out for key equipment ； For ordinary equipment, maintenance can be carried out after the fact, with the focus on how to reduce the equipment failure rate. As long as maintenance and production are closely integrated, smooth production can be ensured to the greatest extent. 2. Comprehensiveness: By comprehensiveness is meant the management of equipment throughout its entire lifespan. That is, it manages the entire lifecycle of equipment, covering all stages such as planning, design, manufacturing, installation, operation, maintenance, and disposal of the equipment. 3. The purchase of cost-effective equipment represents an economic expense in itself, and the maintenance costs incurred during the equipment’s operation are also significant financial burdens for businesses. Additionally, the losses resulting from equipment downtime are expenses that companies must bear as well. Therefore, from an economic perspective, team leaders must strike a balance between the costs associated with equipment downtime and the expenses required for repairs. 4. In the production maintenance of systematic modern equipment management, a holistic system approach has been established that integrates preventive maintenance, corrective maintenance, and maintenance prevention. In other words, team leaders can use system management to improve the feedback on maintenance prevention, thereby enhancing the reliability and maintainability of equipment. 5. Comprehensive equipment management is not the responsibility of any one individual; it requires the participation of all employees. Many companies adopt the approach of applying theories from behavioral science to boost the enthusiasm for equipment management among all employees, from managers down to staff, and to establish a robust system of self-management in order to facilitate the smooth implementation of equipment management. 6. Scientificity: From a scientific perspective, equipment management has gradually emerged on the basis of the development of various scientific theories. In other words, equipment management utilizes many theories from modern management science, making its management methods more scientific.