I just ran across this video - please watch it when you have the opportunity.
https://www.youtube.com/watch?v=Wpzvaqypav8&feature=youtu.be&t=17m26s
With the passage of ISO-55000, infrastructure is clearly becoming a serious issue. This video gives us a humorous - yet pointed look at the topic of asset care.
Maybe we should make a movie... :)
Did you ever have one of those mornings when your alarm clock was your worst enemy? It is going off and all you can do is think about sleeping a little longer. If it has one, you are repeatedly hitting the snooze button, trying to make the reality of morning go away. You know that one more tap on the snooze button will make you late for work.
On Wednesday, September 24, 2014 Frank Jordans of the Associated Press set off the alarm clocks of the industrialized world. He wrote an article “German Employers Struggle to Find Apprentices”. The tag line for the article read “More Young People Choose Education over Vocational Training”.
The article contained some alarming statistics, such as:
There are 120,000 vacant apprenticeships in Germany
This is an increase of over 14,500 in the last year
The problem is partly caused by Germany’s strong economy and low birth rate, resulting in demand for new apprentices outstripping the number who enter the workforce each year. Clearly the number of openings in the skilled trades are growing and will continue to grow at an accelerated pace.
What were some of the proposed solutions? One was a TV commercial that portrayed craftspeople as attractive super-heroes in a bid to raise the profile of apprenticeships among young people who would otherwise go to university.
I could already see a story arc of the Super Electrician and the Super Mechanic against the arch enemy “The Asset Destroyer”! The possible number spin off series would be unimaginable. I can already see people lining up to see this one.
However, the problem is not really humorous. It is very real and very serious. Germany is the most apprentice friendly country in the world. If they are having growing problem with new apprentices entering the skilled trades, then every industrialized country in the world will also be experiencing it.
In the United States, it is not uncommon for recruiters to pay signing bonuses to highly skilled technical employees. The demographics show that this problem is only going to worsen in the next few years as the “baby-boomers” continue to retire. Edward Gordon’s book “The 2010 Meltdown” provides a final quote. He said “If each of us is not willing to invest something in gradual, systemic changes now, we will all pay very dearly 10 to 20 years from now”. It has been 11 years since that was written.
It is more than being late for work. It is now about companies being able to survive the next decade.
The alarm clock has gone off – How long can we continue to hit the “snooze” button?
Once upon a time there were procedures. These procedures were tied to the company’s overall business objectives, so it was important for the health of the company’s business for these procedures to be accomplished. If these procedures were not properly accomplished, there was a risk that something bad could happen to the company. These procedures were documented to insure employees could understand them and could accomplish tasks repeatedly and consistently. The various functional departments in the business could now prosper and all of the stakeholders would be satisfied.
However, next came the management optimization philosophies. Departmental managers liked these philosophies and started to determine how to develop them for their part of the business. These philosophies focused on point solutions for each department, so that the optimization of the individual department’s goals and objectives became more important than the overall business objectives. In fact, some departments made their goals and objectives proprietary and did not share them with the other departments in the same company. They then developed internal policies and procedures to be followed, rather than the overall good business procedures they used to follow. This led to the company being divided up into functional silos. This led to battles between the functional silos, since they all felt they were the most important “fiefdom” in the company. (consider: maintenance vs. engineering vs. operations vs. purchasing vs. sales vs. projects, and everyone was vs. accounting) Departmental managers tried to garner all available resources so their department would have the most people, which provided the manager with the greatest financial rewards. This led to the squandering of the companies resources and lower profitability. The stakeholders often took their investments elsewhere and the company’s overall valuation dropped.
How could this company be salvaged? It must take senior leadership developing a management system and enforcing this system throughout the company. But what is a management system, you ask? A management system is a collection of processes and procedures that all departments in an organization must utilize to support the company’s overall business objectives. This is nothing new for we are all aware of quality management systems, environmental management systems, risk management systems, project management systems, property management systems, etc. In fact there are existing management standards for most business functions in a company. Is it possible that all of these “management systems” turn out to be contributing to the very problem we are trying to solve? Unfortunately, this has proven to be the case for most organizations.
Now we have the opportunity to try again. This time it will be with an asset management system. ISO-55000 was published in January 2014. It is a second generation standard, building on the principles and concepts found in PAS-55, which has existed for a decade. As an ISO standard that is late to market, those deciding to implement ISO-55000 can learn much from the history of implementing previous ISO standards.
Companies that have been successful implementing ISO-9000 and ISO-14000 understand that these standards require the development of processes and procedures. These same types of processes and procedures will need to be developed if they are to be successful with ISO-55000.
Where will companies start with ISO-55000? The definition for asset management says we should focus on deriving value from the company’s assets. In my opinion, it should have said “Maximum Value”. Why? If not we risk developing asset management processes and procedures that are going to optimize the various “fiefdoms” that already exist in companies. From purchasing always buying “low bid” spare parts to engineering developing “non-standard” asset designs for plant equipment, each department will develop its own processes and procedures. These processes and procedures will be optimal for the department, but will negatively impact the overall value the asset will deliver for the organization’s stakeholders.
To be successful implementing ISO-55000, organizations will need to take a holistic view of the value an asset can deliver during its lifecycle. They will need to have this value proposition for the asset very clear in mind. Then, they will have to develop the processes and procedures that will maximize the value they will derive from the asset. If maximum is not the focus then they will be at a competitive disadvantage when another company with a more competitive focus moves into their marketplace.
Once this value proposition is understood, a line of sight document needs to be developed hat clearly shows how each functional department in the company affects the value that the asset can deliver throughout its life cycle.
If this is not done, then we might want to start buying fencing material – we will need it to protect our fiefdoms and territory during the new asset management war. Oh – we might also want to start recruiting more employees, it will likely have an impact on our future compensation.
Once upon a time there were procedures. These procedures were tied to the company’s overall business objectives, so it was important for the health of the company’s business for these procedures to be accomplished. If these procedures were not properly accomplished, there was a risk that something bad could happen to the company. These procedures were documented to insure employees could understand them and could accomplish tasks repeatedly and consistently. The various functional departments in the business could now prosper and all of the stakeholders would be satisfied.
However, next came the management optimization philosophies. Departmental managers liked these philosophies and started to determine how to develop them for their part of the business. These philosophies focused on point solutions for each department, so that the optimization of the individual department’s goals and objectives became more important than the overall business objectives. In fact, some departments made their goals and objectives proprietary and did not share them with the other departments in the same company. They then developed internal policies and procedures to be followed, rather than the overall good business procedures they used to follow. This led to the company being divided up into functional silos. This led to battles between the functional silos, since they all felt they were the most important “fiefdom” in the company. (consider: maintenance vs. engineering vs. operations vs. purchasing vs. sales vs. projects, and everyone was vs. accounting) Departmental managers tried to garner all available resources so their department would have the most people, which provided the manager with the greatest financial rewards. This led to the squandering of the companies resources and lower profitability. The stakeholders often took their investments elsewhere and the company’s overall valuation dropped.
How could this company be salvaged? It must take senior leadership developing a management system and enforcing this system throughout the company. But what is a management system, you ask? A management system is a collection of processes and procedures that all departments in an organization must utilize to support the company’s overall business objectives. This is nothing new for we are all aware of quality management systems, environmental management systems, risk management systems, project management systems, property management systems, etc. In fact there are existing management standards for most business functions in a company. Is it possible that all of these “management systems” turn out to be contributing to the very problem we are trying to solve? Unfortunately, this has proven to be the case for most organizations.
Now we have the opportunity to try again. This time it will be with an asset management system. ISO-55000 was published in January 2014. It is a second generation standard, building on the principles and concepts found in PAS-55, which has existed for a decade. As an ISO standard that is late to market, those deciding to implement ISO-55000 can learn much from the history of implementing previous ISO standards.
Companies that have been successful implementing ISO-9000 and ISO-14000 understand that these standards require the development of processes and procedures. These same types of processes and procedures will need to be developed if they are to be successful with ISO-55000.
Where will companies start with ISO-55000? The definition for asset management says we should focus on deriving value from the company’s assets. In my opinion, it should have said “Maximum Value”. Why? If not we risk developing asset management processes and procedures that are going to optimize the various “fiefdoms” that already exist in companies. From purchasing always buying “low bid” spare parts to engineering developing “non-standard” asset designs for plant equipment, each department will develop its own processes and procedures. These processes and procedures will be optimal for the department, but will negatively impact the overall value the asset will deliver for the organization’s stakeholders.
To be successful implementing ISO-55000, organizations will need to take a holistic view of the value an asset can deliver during its lifecycle. They will need to have this value proposition for the asset very clear in mind. Then, they will have to develop the processes and procedures that will maximize the value they will derive from the asset. If maximum is not the focus then they will be at a competitive disadvantage when another company with a more competitive focus moves into their marketplace.
Once this value proposition is understood, a line of sight document needs to be developed hat clearly shows how each functional department in the company affects the value that the asset can deliver throughout its life cycle.
If this is not done, then we might want to start buying fencing material – we will need it to protect our fiefdoms and territory during the new asset management war. Oh – we might also want to start recruiting more employees, it will likely have an impact on our future compensation.
Now that ISO-55000 has been published, many individuals and organizations are questioning if they should adopt it. Here is one more reason for companies to investigate ISO-55000 and see if it has application in their business. It is Office of Management and Budget (OMB) Circular No. A-119 (http://www.whitehouse.gov/omb/circulars_a119) .
What is the purpose of this document? It clearly states in section 1 that “this Circular directs agencies to use voluntary consensus standards in lieu of government-unique standards”. ISO-55000 is considered a voluntary consensus standard.
Some other points in the circular that I found interesting:
1. Section 6 – “All federal agencies must use voluntary consensus standards in lieu of government-unique standards in their procurement and regulatory activities, except where inconsistent with law or otherwise impractical.””
Consider OSHA, EPA, FDA, etc.
2. Section 6a – “Your agency must use voluntary consensus standards, both domestic and international, in its regulatory and procurement activities in lieu of government-unique standards”
Again, consider OSHA, EPA, FDA, etc.
3. Section 6e – “When properly conducted, standards development can increase productivity and efficiency in Government and industry, expand opportunities for international trade, conserve resources, improve health and safety, and protect the environment.”
Very similar to the goals of ISO-55000
4. Section 9b – “Your agency must report to NIST, no later than December 31 of each year, information on the nature and extent of agency participation in the development and use of voluntary consensus standards from the previous fiscal year.”
It appears that they are required annual updates on the Government use of voluntary standards. Since ISO-55000 was just released in January 2014, they have until the end of the year to investigate the use of the standard.
While there are many steps that must be taken before ISO-55000 is adopted by US Government entities, it is worth noting that the basis for their adopting it exists. The real question is “Are YOU getting educated about ISO-55000 in order to help your company navigate its course into the future?”.
Regulatory Agencies, Insurance Companies, and Lawyers.
Almost everyone is familiar with the way the Jeopardy game is played. The answer to a question is given and it is up to the contestants to figure out the real question. While this may seem easy, it often is quite difficult.
For example, consider the three entities listed at the start of this blog. What do regulatory agencies (OSHA, EPA, FDA, etc.), insurance companies, and lawyers have in common? On the surface, one might say not much. However, that is about to change. Sometime about January 15th, 2014 the ISO-5500X series of standards will come into existence. While this is an asset management system standard, it impacts how any organization that owns, leases, or utilizes assets will be doing business in the future.
Some will develop the thought that this is a voluntary standard and no company is going to be required to adopt or meet this standard. And this is true. Unless customers, suppliers, or perhaps investors require a company to become ISO-55000 certified, many will not adopt the standard. Even though adopting an asset management standard will likely improve a company’s business, many companies (if not most) will develop a “wait and see attitude”. There will be early adopters; and these companies will likely gain a competitive advantage in their respective markets.
The “wait and see” companies are likely to fail to notice the relationship between the three entities mentioned at the start of this blog – regulatory agencies, insurance companies, and lawyers. Since momentum began around the development of ISO-55000, these entities have been watching the progress of the standard’s development.
Regulatory agencies do not like writing their own standards. They would prefer to use existing standards that fit their needs. So how many OSHA, EPA, FDA, etc. regulations impact or are impacted by a company’s assets? Would the regulatory inspectors like to develop their own standard, or would they simply like to show up at a company and ask to see their asset management documentation and asset management system?
How many insurance companies are concerned about accidents that can harm a company’s personnel or damage the surrounding community? How many of these accidents would have an asset malfunction as a root cause? Again, it will be very easy for an insurance investigator to simply ask to see the asset management documentation and the company’s asset management system?
Finally, if an accident were to occur at a company, how long will it take before someone files a lawsuit? How long will it be before a lawyer asks for the company’s asset management documentation and asset management system? And we are only one step removed from an investor wanting this information before funding a company, trying to insure they would not lose their investment if there was an asset related problem.
2014 is going to be an interesting year. At the start of 2015, as we reflect back on the events of 2014, ISO-55000 could be one of the most important developments in the business community of the past several decades. Even if it isn’t, it should have forced most companies to review how they manage their assets. That action itself will help most companies improve their asset related business policies and practices.
So the final Jeopardy question should have been, “What three groups are going to be extremely interested in ISO-55000 in 2014?”. However, the real question for each company is whether or not they are going to use the ISO-55000 standard to improve their asset related business processes to improve their competitive position in 2014...
Recently I was engaging in some mindless entertainment watching “Dances with the Stars” on the television. An interesting event took place, a favorite dancer of the judges was voted off. The dancer that stayed (Bill Engvall) was less skilled, but hugely entertaining, and clearly a fan favorite. The judges and those who appreciate skilled dancing were outraged – the rest of us were entertained.
Now why mention this in a “Maintenance/ Reliability” blog? Because there is an interesting lesson here. On the dance show, the contestants are given two scores – one by the judges for their actual dance. The other score comes from the fans, who are told by the announcer “vote for your favorite, if you want them to stay in the competition”. So do the dancers with a larger fan base have an edge over those who are the better skilled dancers, but have fewer fans? Apparently so. Poor dancing can be rewarded if you are humorous and engaging while doing it (and it is what the audience wants to see).
In maintenance and reliability, how often do we ask for our organization to behave one way, yet reward a different (sometimes contradictory) behavior? For example, as managers (judges) do we encourage skillful repairs and appreciate the fact that a technician is so skillful that there is never any rework to any assignment that we give them? Yet when there is a breakdown, it is duct tape and bailing wire, just to make the equipment run a little longer. We don’t have time to let the skillful technician make a permanent repair. At times, it is almost entertaining to watch technicians scramble as if imitating the “Keystone Cops” from the silent movie era.
When we have a repetitive failure, managers express the same outrage as the judges on the dancing show did. Yet the managers had previously rewarded the “firefighting” mentality when the original failure occurred. And we wonder why our organizations are confused as to what type of behavior we want…
To borrow a line from Bill Engvall – “Here’s Your Sign”…
I am just getting ready to conduct the Benchmarking workshop for the SMRP conference Indianapolis on 10/14. As I am reviewing the workshop content, I ran across an interesting point in the “Best Practices Benchmarking” textbook written by Sylvia Codling. In setting the stage for the rest of the book’s content, on page 10, she makes this point –“The advantage of benchmarking, which looks at processes rather than outputs, is that many diverse businesses share a certain number of processes”.
So reflecting on that point for a moment, how often do we find benchmarking effort that focus solely on numbers? Some benchmarking projects focus on meeting some industry standard (a number) rather than an understanding of how the processes enable reaching that number. How many organizations really document their business processes, such as maintenance work order processing, issuing a spare part, conducting an RCA analysis, etc.? The point Codling is making is without clearly defined processes, a company will never gain the true benefits of benchmarking.
Codling continues on the same page “Although hard processes are compared, an essential part of the approach is to analyze the management skills and attitudes that combine to make the systems operate effectively”. So, in addition to defining the processes, we need to understand how the processes are executed, including the management direction and support that enable the processes to work effectively and efficiently. How often do organizations have really great looking process flow diagrams on the conference room walls, yet when you examine the organization, you find that it really doesn’t quite work that way. Why? Because the management direction and support does not encourage the process execution. So the process may be partially executed, but a few key steps get left out – in other words shortcuts are taken – and performance gaps appear. This leads to uncompleted process and a failure to achieve “Best Practice” results.
Codling closes the thought with this statement – “Often it is a combination of similar processes/ different attitudes that determines "best” practice and may lead to new ways of operating, better use of resources and even process innovations”. So even if organizations have identical processes, it is the focus on execution of the processes with the thought of “how to improve them” that leads to best practices.
In other words, the real secret to being the best is execution.
(To be continued)
In my last blog, I referenced a recent Harvard Business Review Blog,
While discussing being inspirational as applied to maintenance and reliability managers, one might question whether they must “have” or can develop inspirational skills? The article indicated that being inspirational can be a developed leadership skill. For example, the article pointed out that the 310 leaders who set out to improve their ability to inspire, the group raised their overall test scores from the 42% level (below average) to the 70% level. This provides evidence that being
inspirational is a leadership skill that can be developed.
The article also included a list of ways that a leader can be inspirational. They are:
So while the “enthusiast” approach (aka the Locker Room Coach) is the inspirational behavior that most leaders are familiar with, there are other inspirational techniques that can be utilized. The message is, not all leaders have to lead the same way. Each leader can develop their own skills that will allow them to develop a leadership style that best fits them. In developing this personalized skill, the leader improves, the employees are increasingly motivated, and the company benefits. The end result is that by developing this leadership quality, maintenance and reliability managers will spend more time “inspiring” and less time “perspiring”.
In a recent Harvard Business Review Blog,
leadership traits were examined in an attempt to find out what made some leaders more effective than others. Many common traits were typically found in good leaders, such as:
They set stretch goals with their team
They spent time developing their subordinates
They engaged in highly collaborative behavior
They encouraged those about them to be more innovative
I had to stop at that point in the blog and wonder how many maintenance and reliability managers display just these four traits?
For example, how often do maintenance and reliability managers share departmental goals with their team members? How often do they solicit input from their team members about what realistic goals should be set and then what would be a reasonable stretch goal for the department?
Consider if the goal was to improve PM compliance. If the current compliance metric showed 50%, what would be a realistic goal? What would be the timeframe? The manager may want 95%+ compliance and have that goal achieved in a year – but is that realistic? By consulting with the maintenance and reliability team members, the consensus may be to achieve the 95% compliance; the goal should be 2 years. The team members may feel that 75% should be the goal for year one and the 95% should be the goal for end of year two. The maintenance and reliability manager may want results delivered faster than that, but are they willing to compromise and use the team’s input?
Perhaps the maintenance and reliability manager would use the team’s input for the goals, but set a stretch goal of 75% in 9 months and the 95% as a stretch goal of 18 months. This would indicate to the team members that the maintenance and reliability manager had accepted their input and reset the goals to something that the team felt would be achievable.
The issue here now becomes management style. How many maintenance and reliability managers have a collaborative maintenance style versus a “command and control” or “dictatorial approach”? With the changing of the maintenance and reliability workforce from the “baby boomers” to the “Generation X and Y”, how many managers are willing to adapt or change their management styles to be more effective leaders.
More to come in Part 2…
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