Are you Enthusiastic about Your Product? – Terry Wireman Blog Series
Terry Wireman – In reviewing some of the texts on my bookshelf, I pulled down “8 Patterns of Highly Effective Entrepreneurs” By Brent Bowers. Thumbing through the text, I remember that I always felt pattern # 6 – “A Natural High” should apply to many people in the maintenance, reliability, asset management, or EAM community. It was titled “Enthusiasm that Borders on Delusional for a Product”. As you reflect on the maintenance, reliability, asset management, or EAM communities one would have to reflect on the two questions: (1) What is our product? and (2) are we enthusiastic about the product?
Let’s take the product question first. What is the product that is produced by the maintenance, reliability, asset management, or EAM organizations in most companies? I have asked that question to attendees of scores of workshops over the years and I get responses like uptime. This is a good response simply because it beats out the negative spin of downtime. However, the product is more than uptime – it also has to be uptime coupled with a design performance rate. All of the equipment/ assets are purchased based on a designed performance rate. It does little good for an organization to have high uptime but run at only 50% of the performance rate. So the true product of the maintenance, reliability, asset management, or EAM organization is more than uptime.
A second common answer is the product is reliability. A common definition of reliability is the probability that the equipment/ asset will perform its design functions under specified conditions for a certain time period. Now this gets interesting. There are entire textbooks written on the concept of reliability, but what happens when the equipment/ assets exceeds the time period for operations and actually fail? It was reliable – we just exceeded the “certain time period”. How many companies defer maintenance and pay the price with unreliable equipment/ assets?
Now another term comes into play – maintainability. Maintainability can be defined as “common sense in design with the maintenance technician in mind”. (“Maintainability” by Blanchard, Verma, Peterson, John Wiley and Sons. How long does it take to make a repair/ replacement when an equipment/ asset component has reached the end of its life cycle? Some equipment/ assets appear to be designed to be unmaintainable. It does little good for an equipment/ asset to meet its design reliability only to lose large amounts of productive time due to a poor maintainability design. The analogy would be for a team to have a great car in a NASCAR race only to see pit stops that take 5 minutes. The team will never finish the race.
We could go on with the words that have been used to describe the product of the maintenance, reliability, asset management, or EAM organizations. However, I would like to propose a word for your consideration – CAPACITY. Capacity is the maximum output that can be achieved from a given equipment item/ asset. Capacity combines uptime, reliability, maintainability, and other design and operational parameters. Capacity allows us to have a more holistic view of the equipment/ assets. (We could discuss Overall Equipment Effectiveness [OEE], but we would need more space than I have in this blog.) Now if insuring capacity was the stated responsibility of the maintenance, reliability, asset management, or EAM organizations, it would lead us to the second question; Are you enthusiastic about this product?
Operating equipment at its design capacity for a specified period of time maximizes the value that can be obtained from the equipment/ asset. Obtaining the maximum value leads us to the asset management focus of value from assets. Does knowing that your organization is maximizing its investment in its assets make you enthusiastic about your contribution to achieving the organizations objectives? (This is Question 2) I would imagine it would make your owners/ shareholders enthusiastic about your stock as you outperform your competition.
This may not be the complete answer to the product/ enthusiasm questions, but is sure beats working in a maintenance, reliability, asset management, or EAM organization that only does firefighting. I don’t think any of us are enthusiastic about working in an organization whose sole purpose is to run their equipment/ assets to failure.
So according to Mr. Bowers, when we want to be enthusiastic about our role in our organizations, we need to understand what product our department produces and communicate that value to everyone in the company. As we outperform our competition, we will be enthusiastic about our maintenance/ reliability/ asset management/ EAM product.
How to calculate the ROI on your next Maintenance Project.
“In an effort to become more competitive, companies have found that maintenance represents from 15 to 40% of the total product cost and dollars saved in maintenance are a cost avoidance. In larger companies, reducing maintenance expenditures by $1 million contributes as much to profits as increasing sales by $3 million. Improving maintenance and decreasing unnecessary maintenance expenditures by $1 million is considerably easier and more likely to occur than obtaining $3 million in new sales.
In this article, guidelines are presented for calculating possible savings that may be achieved by investing in improved maintenance policies and practices, including a computerized maintenance management system. (Click HERE to download the free ROI Calculator)
The objective is to present a different method for examining the effect of maintenance on a company’s costs. The material is divided into sections to allow various parts to be used where applicable and omitted where not.
STANDARD COST JUSTIFICATION
Standard cost justification is composed of four main parts:
Maintenance labor costs.
Maintenance materials costs.
Project cost savings.
Maintenance labor costs – Maintenance productivity in most American companies averages between 25 and 35%, which is equivalent to less than 3-hr/8-hr shift of hands-on activities. Most lost productivity can be attributed to:
Waiting on parts.
Waiting on information, drawings, instructions, etc.
Waiting for equipment to be shut down.
Waiting on rental equipment to arrive.
Waiting on other crafts to finish their part of the job.
Running from emergency to emergency.
While 100% productivity is an unrealistic goal for any maintenance organization, a more realistic percentage of 60% is achievable.
The productivity of maintenance technicians can be improved by concentrating on basic management techniques, such as:
Planning jobs in advance.
Scheduling jobs and coordinating schedules with operations.
Arranging for parts to be ready.
Coordinating availability of tools, rental equipment, etc.
Reducing emergency work below the 50% level by preventative maintenance.
With computer assistance, planning time per job is reduced, resulting in more jobs planned and coordinated. This results in more time for preventative maintenance activities which, in turn, helps to reduce the amount of emergency and breakdown activities. This results in fewer schedule changes and increases productivity by reducing travel and waiting times. Successful users of computerized maintenance management systems have indicated an increase in productivity of 28%…”