What is the Plan? – A Terry Wireman Blog Series

There has been a lot of buzz on the internet (particularly in the LinkedIn groups) about the number of maintenance / reliability initiatives available to companies today. There are multitudinous questions arising, such as how to know which initiatives to implement, support, or even ignore.  When considering the potential maintenance/ reliability initiatives we really need to stop and ask “Which ones are going to make an impact on the profitability of the company?”  These are the ones that should be given the priority.  Then, to prioritize the initiatives that are going to make the company more profitable, you should prioritize them by the amount of profit that is projected.  Some companies will focus on whether the improvement initiative is going to increase profitability by increasing sales/ revenue or by decreasing expenses.

While this seems to be rather basic, how many companies really prioritize their maintenance/ reliability improvement initiatives by a projected return on investment? In many cases, they decide by looking at their competitors.  You may hear statements like “Company A is doing this, we should too.”  Or “Our competition is implementing this, we should too.”  In other situations, the maintenance and reliability initiatives are decided upon by the “C” level person in the company reading a book about the latest management fad (whether it applies to maintenance and reliability or not) and wants to implement it.

Even in the maintenance/ reliability community, managers get enamored by a presentation on an improvement methodology in a presentation or an article and they want to solely focus on it. We cannot fall into the “Acronym of the Month” trap.  If the maintenance/ reliability organization wants to make process improvements, they have to have a process FIRST; then they can improve it.  Having a defined process will also allow them to understand the changes that need to be made and track the financial improvements.

At a recent conference, one of the keynote presentations was a CFO of a company, who appeared to have a “real-world” perspective on how companies should be run. One of his most profound statements was “In any business, it is all about the return”.

Do we make improvements in our companies for the sake of just doing something – or do we really calculate the return on investment and then use that to sell the improvement program to the rest of the organization? Perhaps if we had to put a return on investment “sticker” on each of the improvement initiatives that are being promoted throughout companies today, the choices would be easier to make, implement, and support into the future.

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