Develop Leadership Skills by Mentoring

Article extract from ReliablePlant newsletter:
http://reliableplant.com/Read/29332/mentoring-develops-leadership

Mentorship refers to a personal developmental relationship in which a more experienced or more knowledgeable person helps a less experienced or less knowledgeable person. The receiver of mentorship was traditionally referred to as a protégé or apprentice. Today, the term "mentee" is gaining acceptance and becoming widely used.

There are several definitions of mentoring. Foremost, mentoring involves communication and is relationship based. In the organizational setting, mentoring can take many forms. The formal definition that best describes mentoring is as follows:

"Mentoring is a process for the informal transmission of knowledge, social capital and the psychosocial support perceived by the recipient as relevant to work, career or professional development; mentoring entails informal communication, usually face-to-face and during a sustained period of time, between a person who is perceived to have greater relevant knowledge, wisdom or experience (the mentor) and a person who is perceived to have less (the protégé or mentee)." (Bozeman, Feeney, 2007)

Organizations have started to see the value of mentoring for enhancing work life, performance, commitment and job satisfaction. When mentoring is implemented successfully, there are measurable improvements in employee performance, retention, employee commitment to the organization, knowledge sharing, leadership growth and succession planning.

A mentor is a person who gives another person the benefit of his or her years of experience and/or education. This experience is shared in such a way that the mentor helps to develop a mentee's skills and abilities, benefiting the mentee and the organization.

A good mentoring relationship is identified by the willingness and capability of both parties to ask questions, challenge assumptions and disagree. It’s important to note that there's no one way to mentor. Every mentoring relationship is as unique as the individuals involved.

The mentor is far less likely to have a direct-line relationship with the mentee, and in a mentoring relationship this distance is desirable. Mentoring is rarely a critical part of an individual’s job role, but rather an extra element that rewards the mentor with fresh thinking as well as the opportunity to transfer knowledge and experience to a less experienced colleague, peer or employee.

The Difference between Mentoring and Coaching

Coaching is not the same as mentoring. Mentoring is concerned with the development of the whole person and is driven by the person’s own work/life goals. It is usually unstructured and informal. Mentors focus on the person (the mentee), that person’s career, and support for individual growth and maturity.

Coaching is much more about achieving specific objectives in a particular way. Coaching also is more formal and more structured, usually around a coaching process or methodology. Typically, coaching is job focused and performance oriented.

The Mentoring Process is a Two-way Street with Mutual Responsibilities

For mentoring to be successful, the mentor and mentee must collaborate on the process. The first meeting should be a face-to-face meeting where the following criteria are determined:

• The goals for the mentee
• The scope of responsibilities each person is assuming
• Time commitments agreed to by both parties
• Logistics of the process (how, when and where meetings and communications will take place)
• Agreement on the definition of confidential information and how that information will be addressed throughout the process
• Topics or issues that are outside of the mentoring boundaries
• The process for dealing with conflicts and/or obstacles that may arise during the mentoring process
• How and when to end the relationship

Effective Mentoring

The following guidelines describe an effective mentoring relationship

• The mentee has no direct-line reporting to the mentor. This fosters trust, and the mentee feels more comfortable in sharing uncertainties about his or her abilities, creating free-flowing, open communication.
• The mentor/mentee relationship is mutually satisfying. The mentor gets the satisfaction of watching someone grow who values his or her insights. The mentee gains a feeling of being valued, receiving beneficial direction and attention from someone who he or she respects and admires.
• The intensity of the relationship is matched. It is taking up actual and mental time in proportions with which both people are comfortable. This time commitment is flexible as the mentee's needs change. Sometimes several meetings are necessary during a very challenging period, then none for months.
• At any time, either party can stop the relationship and the mentoring process. There is no obligation for continuance.
• An effective mentor gives wise counsel, and the mentee feels comfortable speaking on issues that may be sensitive. Once this trust is developed, the mentor can give advice or assist with tough recommendations.
• The mentor is not mentoring two people at the same time who have a close working relationship. Discretion and confidentiality are paramount. The rules of engagement are stated up front with an agreement between the mentor and the mentee on who should be aware of the mentoring relationship.
• The obligation for continuing is two-sided. When the mentor feels he or she has value to add and the mentee is getting something from the relationship, the mentoring may go on indefinitely, or either side can end it without justification.
• Mentoring programs are about guidance and facilitation rather than formal training.

How Mentoring Relationships Go Wrong

There are several reasons that a mentoring relationship may fail. Since a successful mentoring relationship is built on trust and the mutual commitment for both parties to hold up their end of the agreement, it is not surprising that the circumstances for failed mentoring are directly related to the failure in the relationship between the mentor and the mentee.

The following is an excerpt from a Wall Street Journal report in collaboration with MIT Sloan Management Review dated Monday, May 24, 2010.

• Conflict in values: This type of conflict creates a lack of trust or rapport between the two parties. If neither the mentor nor the mentee is able to bend or compromise, they may find themselves unable to work together effectively.
• Neglect of the mentee: If the mentor does not show an active interest in the mentee and act in positive ways to advance his or her career, this neglect can erode the mentee’s trust and faith in the mentor. Most mentors go into the relationship sincerely intending to give the mentee what he or she needs to succeed. It may be that the mentor’s schedule interferes with his or her availability, or the mentor may be experiencing excessive challenges with his or her own career, creating the feeling of neglect and frustration on the part of the mentee.
• Mentors who manipulate the mentee: Mentee manipulation is most common when the mentor is the mentee’s direct supervisor or an upper supervisor from the same department. Manipulation comes in three forms:
  • Tyranny – This form of management by intimidation is a complaint that is often heard from mentees. For example, a mentor may threaten to demote a mentee unless he or she pulls an all-nighter to fix a problem created by the mentor.
  • Inappropriate Delegation – This includes requiring the mentee to do work that the mentor should be doing or withholding assignments that are coveted by the mentee and that would promote the mentee’s growth and development.
  • Politicking – This involves malicious acts like sabotage and taking undue credit with the intention of harming the mentee’s reputation, usually with the intention of making the mentor look good.
• Mentees who manipulate the mentor: Although mentees have fewer resources at their disposal, mentor manipulation is not unusual. For example, the mentee may be attributing failures to the mentor and success to himself or herself in order to look good to senior management. This form of manipulation allows the mentee to use the mentor to forward his or her own advancement at the expense of the mentor.
• Sabotage against mentors: When a mentee attempts to damage the career of the mentor, it is often revenge motivated. The mentee may be trying to retaliate for being passed over for promotion, for example. The mentee may blame the mentor for failure to achieve his or her goals. At times, the sabotage may be unintentional, e.g., the mentor may have stepped up to recommend the mentee for a higher or more responsible position. If the mentee fails, this may reflect poorly on the mentor.
• Submissive mentees: This is usually a case where the mentee relies too heavily on the mentor, and the mentee’s abilities for independent thinking and growth are stifled. This situation also may cause the mentor to inadvertently take control in an effort to ensure the success of the mentee. In either case, the mentee’s ability to grow and prosper can be hindered.

So, how do you avoid the pitfalls of bad mentoring relationships?

1. Provide support and training for mentors and mentees: Whether the company has a formal or informal mentoring program, mentors should go through a training program prior to taking on mentoring responsibilities. Support must be provided where the mentor or mentee can seek advice or assistance if either party feels that the relationship is not progressing in a positive way.
2. Recruit right-fit mentors: People who volunteer to be a mentor are more likely to put in the time and effort and have the right skills for mentoring. Mandating that a person take on a mentoring role is a sure way to create failure.
3. Match the mentor with the mentee: Make sure that the mentor and the mentee have things in common and have shared values, creating mentoring relationships that are more likely to succeed.
4. Provide feedback: Mentors can share appraisals and progress with the mentee’s supervisor, who has a vested interest in the mentee’s progress and development. Someone from human resources also should be in the loop in the event that problems arise.
5. Prepare for the end: To avoid hurt feelings, everyone should be prepared to understand that mentoring eventually ends. When the mentor has shared all he or she can share and/or the mentee has learned all he or she can from this mentor, it is time to end the mentorship. Preparing in advance will help to avoid hurt feelings when the time comes.

If you are considering seeking out a mentor, here are seven tips for maximizing your mentoring experience:

• Know your goals.
• Choose the best mentor to meet your goals.
• Begin your mentoring relationship by discussing mutual goals and expectations.
• Practice the highest standards of professionalism.
• Learn to accept and give feedback.
• Practice good communication.
• Recognize that your success is your responsibility.

If you are considering becoming a mentor, below are some of the benefits of mentoring:

• Learning new things about yourself: The self-reflection that can result from a mentoring relationship can be a powerful growth experience, giving you new and revealing insights about yourself, your skills and your experience.
• Satisfaction of passing on knowledge
• Contributing to the success of your organization by developing others
• Acquiring new knowledge: Often, the mentor also learns new skills and ideas from his or her mentee.
• Expanding your networking contacts
• Building confidence
• Assists you in staying current with issues and developments in the next generation of professionals and within your company

In today’s business environment, everyone has more work to perform, more responsibilities and more stress. Given this, you may ask yourself, "Why would I want to create additional time commitments on my schedule to become a mentor?" The simple answer is that mentors, through the process of mentoring, learn to be stronger leaders by developing exceptional interpersonal skills. Through the mentoring relationship, mentors often discover new resources in the form of innovative and creative ideas that are presented during the mentoring learning process and improved human resources through the development of promising new talent.

About the Author

Debbie Zmorenski

Deborah K. Zmorenski, MBA, is the co-owner and senior partner of Leader’s Strategic Advantage Inc., an Orlando, Fla.-based consulting firm. During her 34-year career with the Walt Disney ... Read More

3 Important Benefits of CMMS

Article extract from ReliablePlant newsletter:
http://www.reliableplant.com/Read/29878/3-cmms-benefits

Companies need many things in order to run properly, including cash flow, a well-oiled marketing and sales staff, and a good production team. One element that businesses, especially manufacturing companies, often overlook is management and maintenance software. That's where computerized maintenance management system (CMMS) and enterprise asset management (EAM) software comes in. These programs can help your organization run smoothly and save money. Following are some of the most important benefits of CMMS.

Increased Productivity

Good CMMS software not only will enable you to schedule preventive maintenance but also let you see instructions for a specific job, what is needed for the job and whether you have the parts on hand to complete the job. A CMMS should also be able to show other pertinent information including service histories, warranties, etc. In addition, some software packages offer extra features, such as the ability to configure and manage reports and key performance indicators for presentations. Most CMMS software on the market includes mobile data capability. This allows you to connect to the cloud for easy sharing and access from wherever you are for enhanced flexibility.

Longer Equipment Life

No matter what kind of equipment or assets you have, they will require some sort of maintenance. Performing routine and preventive maintenance will help your equipment last longer and save you money in the long run. Regularly scheduled maintenance not only will result in longer equipment life but also fewer equipment purchases and replacements. CMMS software can lead to a decrease in unplanned repair costs by enabling you to see the repairs made to a component during its lifetime so you can decide if it should be replaced.

Less Downtime

When a machine breaks down, downtime usually occurs while the machine is waiting to be fixed. This downtime can be even longer if all the parts required to fix the machine are not on hand. With CMMS software, you are alerted when parts need to be ordered before a machine breaks down so downtime is reduced. Being able to schedule and plan day-to-day maintenance also makes it easier on the maintenance team.

With the possibility of achieving less downtime, longer equipment life and increased productivity, CMMS can be a great investment for organizations looking to become more cost-effective and efficient. With all of these benefits, why wouldn't you want CMMS to help run your company? 

About the Author

Brett Chesney writes about the tech industry, CMMS and startups. He also occasionally writes for AssetPoint, which provides CMMS and its innovative TabWare software. In his free time, Brett talks about Crossfit and researches new technologies entirely too much. 

Getting Better Returns from EAM Software

Article extract from ReliablePlant newsletter:
http://www.reliableplant.com/Read/29299/eam-software-returns

Nobody implements enterprise asset management (EAM) software without an idea of what return they expect on the investment, but too often either due to the selection of inadequate software, subpar implementation or poorly articulated goals, EAM software projects do not deliver a measurable return.

This article will examine a few of the specific ways that EAM software can deliver that sought-after return on investment (ROI) so you can plan your selection and implementation around these deliverables. These five tips should help you take advantage of the cost savings and revenue-enhancement features EAM has to offer while avoiding the pitfalls associated with an overly complex or problematic implementation.

Reduced Maintenance Inventory

As is the case with other types of enterprise software, including enterprise resource planning, inventory reduction is a key area where EAM can deliver a return. Maintenance inventory is just like any other type of inventory. A balance must be struck between excess inventory that ties up capital and outages and downtime that result when a part, consumable or subassembly is required but not available.

Maintenance inventory can be a real challenge to master because in most industrial environments some parts require a long lead-time and cannot be obtained on short notice. That heat exchanger, compressor or motor may be very specific to your individual piece of equipment. So during software selection and implementation, very close attention should be paid to purchasing functionality. Is the purchasing functionality robust enough for advanced and proactive inventory planning and management?

For organizations with multiple locations, special attention should be paid to the extent that inventory can be optimized through standardized part identification and intersite planning. Oftentimes, different locations have different part-naming nomenclatures. Consider the challenge presented a plant manager by a high-value part like a motor that must be stocked at a level of about 0.2. He needs to stock at least one, but if numerous locations around a region require the same part, that one motor could be shared across locations, saving money and preventing unnecessary downtime.

So it should be no secret that inventory reduction is one way the right EAM software can deliver a measurable ROI to your organization.

Manage Cash with Contract Management

Potentially reducing cash tied up in parts is one way the EAM can deliver an ROI, but real-time cash management in general ought to be a top priority. Even when an asset is delivering a positive return in the intermediate term, business still operates on a month-by-month, quarter-by-quarter basis. Real-time information on what it costs to operate a plant or a portfolio of plant assets allows an executive to manage the present rather than adjust for the past.

A significant portion of the variable cost of maintenance operations consists of the cost of contracts for supporting services and materials. EAM ought to take this into consideration and offer integrated contract management. Cash outlays necessary under each contract will be planned as the contract is finalized so cash-flow decisions can be made accordingly.

Some EAM packages allow you to open portals to suppliers like engineering firms and maintenance contractors. As you plan maintenance work for the weeks ahead, if your contractors have visibility of your plans through your EAM system, they can be informed of the upcoming work, schedule their people and ensure that they have the right tools and materials available. This also reduces the amount of time necessary to manage those outside contractors by phone and email.

The lifecycle of a contract with a supplier should be encompassed entirely within the EAM application, starting with the call for bids on the project, acceptance of the bid and then the projected cash outlays and associated work performed by the contractor. This has benefits far beyond cash and contract management.

This also means you save the time involved in entering the record of that work back into the EAM, enterprises resources planning (ERP) or computerized maintenance management (CMMS) software. Moreover, that real-time data could allow for more efficient use of the asset, as in the resumption of a production schedule immediately after a contractor finishes work.

It can also give management notification of when various milestones in a contracted project are completed – milestones that may constitute liquidity events when the contractor is paid. The ability to track these liquidity events is crucial from a cash-management standpoint and contributes to ROI.

Asset Integrity Management and Permitting

EAM can drive cost and risk reduction by acting as a centralized location for all asset data over the entire asset lifecycle. Most managers instinctively know that an as-designed drawing of an asset is different from the as-built drawing. Similarly, the as-maintained drawing will be different from the as-built version. Changes are made during maintenance, refits, lifecycle extensions and repairs just as they are made during construction, and those changes need to be reflected in the asset management system.

An EAM software application should ideally be used to support asset design and construction, enabling the asset data to flow directly into the systems that will be used to sustain, maintain and operate the asset. This approach, known as “Design, Operate, Maintain,” really involves a single asset management system that supports the asset over its entire lifecycle.

The contract-management tools referred to in the section above have a role in true cradle-to-grave support because they ensure that the same enterprise system and data set is used regardless of who is making alterations to the asset.

EAM software must also include integrated permit and incident tracking. For a typical maintenance technician, this level of integration expedites the work that needs to be done and pulls information directly from the EAM system that is necessary to complete a formal work permit. Many EAM applications might not have such a tightly integrated permitting process, forcing technicians to take the time to use a separate system and creating a silo of data that is not reflected in your enterprise application. 

Furthermore, someone may forget to get that permit and go into an enclosed area where there may have been a gas leak that was already reported. Eliminating death and disfigurement is certainly one more way EAM software can deliver ROI.

Leverage Integrated Document Management

In order to truly manage the asset lifecycle and maximize value realized from that tremendous capital investment, it is critical to have all of your asset data in a single repository. EAM software needs to have integrated document management so as assets are set up in the system, all of the relevant CAD drawings, contracts, maintenance schedules, testing reports and other documents are stored in a central repository. These individual documents must also be linked to the asset object in the EAM system.

Embedded document management with hooks into 3-D CAD drawings allows EAM to be the true central repository for asset data. Courtesy IFS North America

In a perfect EAM world, as process manufacturing equipment, oil and gas drilling equipment or other assets are commissioned, managers would be able to take the CAD serialized assets from the builder and pull them directly into their own EAM and document management system. Some EAM packages may be able to import the asset data but lack the hooks into CAD and 3-D CAD systems necessary to fully build those assets out into the system. 

This allows the EAM application to be the repository for all asset information over the asset lifecycle. Without that CAD integration, there is still a separate silo for a lot of key asset data that will hamper visibility and decision-making. This really is not in the true spirit of asset lifecycle management, which would keep all asset information together in an organized asset structure.

So apart from ensuring adequate asset integrity management and compliance measures are in place, integrated document management delivers an ROI by reducing the time it takes to find, manage and update documents relating to the asset.

Ease of Implementation and Usability Affect ROI

Fighting human nature is never a smart business strategy, and technicians and other front-line employees will not use a system that is confusing or presents functional barriers to their individual jobs. Therefore, ease of use is critical for an EAM software package. In addition, there is no way anyone can use a system until it has been implemented, so EAM software products that have a history of lengthy or failed implementations are to be avoided.

In many manufacturing environments, EAM software is a secondary or tertiary priority. There is an interest in increasing uptime and efficiency, but in industries like the chemical industry, nuclear power or oil and gas, it is a top priority because you cannot operate assets in a mission-critical environment without absolute control over asset integrity. In these industries, tracking maintenance work is not just about cost or even maximizing asset profitability. You need to be able to mitigate risks by preventing asset failures that could cost lives or cause environmental impacts. Maintenance is critical, and ensuring that the system used to manage and record maintenance work is just as critical.

If EAM software is too convoluted and byzantine, maintenance technicians will not use it, which will present challenges as you will not have visibility into the state of the asset and may not complete essential scheduled maintenance projects. Even a manufacturer in a standard manufacturing environment will realize that an opportunity for ROI is lost if the software that has been licensed and implemented is not broadly used.

EAM deployed across mobile apps can increase real-time visibility of asset integrity and technician productivity. It can also make for more efficient maintenance routes. Courtesy IFS North America

One way to increase ROI through usability is to deploy EAM functionality across mobile devices like tablets or through native apps for smartphones. This will allow technicians to update the system in real time, increasing visibility and reducing time spent at a terminal at the end of a shift.

Opportunity for ROI is also increased, and that return can be realized sooner through an EAM application that allows a phased approach to implementation. There are mission-critical elements like work orders, document management to track the specifications of the asset as it is maintained and inventory that can be implemented immediately, allowing safe asset operation. Once that functionality is familiar and absorbed by the operation, additional functionality including permitting, health and safety and even full-blown reliability centered maintenance (RCM) functionality can be implemented. 

So it becomes clear that implementation and usability are both potential barriers to realizing ROI on an EAM software investment.

Conclusion

EAM can provide real and measurable cost savings and competitive advantages for companies that select the right set of applications and plan their implementations intelligently. In general, an implementation of EAM software that addresses more of the business functions that support the asset (contract management, inventory, document management and even human resources and finance) will offer a greater return than can be achieved by simply addressing maintenance needs. Care must also be taken to plan the implementation in such a way that it minimizes business disruption and leaves end users with a system they can use comfortably and capably.
About the Author
Patrick Zirnhelt is the director of sales for asset-intensive industries for IFS North America. He has more than 17 years of experience working with enterprise systems, which includes software development, implementation and sales. He is a professional engineer who holds a master’s degree in business administration, specializing in management information systems, from the York University Schulich School of Business in Toronto and a bachelor’s degree in mechanical engineering from Queens University in Kingston, Ontario. For information about IFS’ EAM offering, visit www.ifsworld.com/en-na/solutions/enterprise-asset-management-software/.

About the Author

Patrick Zirnhelt

Patrick Zirnhelt is the director of sales for asset-intensive industries for IFS North America. He has more than16 years of experience working with enterprise systems, which includes software ... Read More

Strategies for Inventory Optimization

Article extract from Reliable Plant newsletter:
http://www.reliableplant.com/Read/29885/inventory-optimization-strategies

Inventory management and procurement compliance often present a difficult challenge for any manufacturing organization, regardless of how strict and disciplined it may be. While many procurement teams feel they have effectively leveraged spending through preferred supplier negotiations and strategic purchasing processes, the reality is that they have only hit the tip of the iceberg. The main factor that holds many organizations back is data quality or lack thereof. Some parts, and their associated description, radiate with accuracy and attribute information. Unfortunately, this only represents about 10 percent of the items in a given database. More realistic are items that barely have a part number or any type of description that would allow the preferred supplier to accurately provide a replacement part.

Without clean data, there is a good chance that the agreement, which was originally negotiated with the preferred supplier, doesn't accurately represent the organization's true spending. In most cases, the majority of companies can't tell definitively what they bought, who they bought it from and how much they bought it for in the past week, let alone the past 12 months.

Progression Model

Implementing a successful inventory optimization program involves several phases, none of which can be completed effectively without first having quality data. The following cost-savings progression model illustrates the critical tasks necessary to achieve maximum success.

Data Cleansing

Let's face it; manufacturing companies specialize in producing finished goods, not in cleaning data. Perhaps this is why their data has become so corrupt in the first place. In any case, it is always best to leave this task to the subject-matter experts who specialize in the field of material and vendor master data cleansing.

Prior to project commencement, a standard operating procedure will be developed to clearly articulate the naming convention, abbreviations, policies and formatting requirements that will be used to consistently structure data throughout the organization moving forward. Next, legacy data will be cleansed, standardized, enhanced and validated to provide an item master that is consistent among product groups while containing accurate and attribute-rich descriptions.

Once clean, the data will be formatted to meet the specific configuration requirements of the chosen enterprise asset management (EAM)/computerized maintenance management system (CMMS), including field type, character limitation and data arrangement. During the cleansing process, potential duplicate records will be identified at both the local (plant) and corporate level. The newly cleansed item master will provide detailed visibility and reporting at the stock keeping unit (SKU) level.

In addition, data cleansing and classification will enable items to be segmented into common product groups or commodities. On average, a typical item master houses 30 percent original equipment manufacturer (OEM) items versus 70 percent standard maintenance, repair and operations (MRO) items. From there, these two categories are broken down into seven or more parent product groups, as shown below. These common categories can be further segmented into subcategories and analyzed throughout the item and spending analysis phases.

Catalog Management

Immediately upon completion of a data-cleansing project, a catalog-management strategy must be implemented to maintain ongoing consistency, integrity and sustainability of the item master. The catalog-management task can be performed manually by internal resources, using automated software or through a third-party service provider. Regardless of which method is chosen, a data governance team must be formed in order to restrict enterprise resource planning (ERP) access and create a corporate internal workflow for requesting additions, modifications, extensions and suspensions to the item master.

During the catalog-management process, all item master updates and entries will be standardized and formatted according to the standard operating procedure, which was developed during the initial data-cleansing project. An effective catalog-management strategy will therefore maintain consistency and accuracy while preventing future duplication within the corporate item master moving forward.

Item Analysis

Now that you've implemented a data-cleansing project and finally have quality data to work with, the inventory optimization process can begin. The first phase dives deep into the transactional history of each data record to segment items into three distinct usage categories. Those categories are defined as follows:

• Required Active – Items that have been purchased and/or issued at least once during the analysis period and do not have an on-hand quantity that exceeds the recommended maximum stocking level
• Excess Active – Items that have been purchased and/or issued at least once during the analysis period and have an on-hand quantity that exceeds the recommended maximum stocking level
• Inactive – Items that have not been purchased and/or issued during the analysis period, which must further be identified as critical spares, obsolete or slow-moving

Of the total on-hand inventory, industry standards suggest that required active items represent 25 to 30 percent, excess active items represent 10 to 20 percent, and inactive items represent 50 to 60 percent. The excess active category represents a safe inventory reduction opportunity with immediate cash-flow generation potential, which can often be used to fund the initial data-cleansing project and build a solid business case for finance.

Stock Level Optimization

With excess inventory now identified through item analysis, the stock level optimization process can begin. After all, the last thing you want at this stage is to continue overstocking inventory due to inaccurate and outdated minimum/maximum or reorder-point/reorder-quantity (ROP/ROQ) levels. Using a complex formula, which considers variables such as criticality, issue quantity, issue frequency, average lead time, etc., optimal minimum/maximum levels can be calculated to minimize on-hand inventory while safeguarding against future stock outs and unplanned equipment downtime.

In the example above, the blue-shaded fields represent existing inventory values, while the red- and gray-shaded fields represent calculated values. Based on the existing inventory information and client requirements, it was determined that the average lead time for this particular bearing sample was 3.5 days, and the new minimum/maximum level was to be adjusted to 2 and 4. Using the new minimum/maximum values, it was calculated that four of the eight current on-hand items were actually required, while the remaining four represented excess stock.

To take inventory safeguarding one step further, a stock status report can be performed to identify part availability and lead time at the preferred vendor's local branch, regional branch and corporate distribution center.

Inventory Disposition

So it's time to generate some cash flow and free up valuable warehouse space that is currently occupied by excess and obsolete inventory. There are several strategies for disposing of inventory based on timeline, desired payback and available resources. Here are a few of the common disposition strategies that produce quick success and great returns:

• Vendor buy-backs
• Third-party liquidation
• Auction
• Corporate internal redeployment/depletion
• E-commerce (eBay, Amazon, etc.)

Of the above-mentioned strategies, third-party liquidation often provides the quickest and easiest success for companies, as it requires few resources, payment is immediate, and inventory is removed from the site within a short period of time. The downfall to this strategy is that it may not provide the payback for which you were hoping. In many cases, third-party liquidation will deliver 10 to 30 cents on the dollar, which for some organizations is simply a bonus just to get the unused inventory off their shelves. However, if you're looking for larger returns, you may want to consider an e-commerce solution or discuss vendor buy-back opportunities when negotiating your next supply contract.

Spending Analysis

Perhaps one of the most critical phases in the overall inventory optimization program, a spending analysis is performed to identify how much money is being spent, with whom it is being spent and on what it is being spent. With a consistently cleansed item master now enabling detailed visibility at the SKU level, the results of a spending analysis can be quite eye-opening for the procurement team. It is often at this point that procurement managers realize they have only leveraged a portion of their actual spending while missing out on several cost -savings opportunities along the way. Based on vendor name, last price paid, issue frequency, issue quantity and additional analytics, a successful spending analysis should reveal the following statistics:

• Total number of vendors
• Number of vendors per product group
• Dollars spent per vendor
• Dollars spent per product group
• Dollars spent with preferred vendor(s)
• Maverick purchases
• OEM purchases
• Price variances between OEM and MRO items
• Price variances through a preferred vendor
• Price variance between preferred and non-preferred vendors

No matter how staggering the results may be, these data-driven statistics will become the foundation for leveraging spending and achieving cost savings during the strategic sourcing and negotiation phase of the procurement process.

Strategic Sourcing

Now we're getting down to the fun part, strategic sourcing and negotiating. It's often surprising just how many companies have never tendered their MRO spending or have only focused on a small portion of it, especially considering the competitive nature of the industrial distribution space and multitude of cost-savings opportunities that are available. With accurate spending analysis reports now available at your fingertips, it's time to create an RFx to identify and select the best-suited vendor(s).

Once again, the RFx process can be performed by internal resources or through a third-party service provider. In either case, be sure to leverage your spending analysis reports and provide a quality market basket to obtain the most accurate product quote. Keep in mind that price isn't the only factor to consider during an RFx. While it may be one of the most heavily weighted components of your RFx, other factors such as lead time, availability, terms and conditions, guaranteed cost savings, and special incentives should also be taken into great consideration. Remember, if you have important requirements that are non-negotiable, make them known to bidders and don't just ask — demand them. The better you outline your requirements within the RFx, the more likely capable bidders are to meet them.

Once you've narrowed it down to a short list of vendors, the real negotiations begin. Be creative with the things you want, firm with the things you need and know when it's time to walk away. Chances are you'll be entering into a long-term contract, so it is important that the final agreement be mutually beneficial to all parties.

Compliance

Compliance is the last remaining piece of the puzzle to ensure ongoing procurement success and maximum operational efficiency. Traditionally, strategic sourcing and compliance has been based on preferred vendor programs and lenient purchasing procedures, which as we know, were driven by poor data. Too often buyers disregard preferred vendor programs with no repercussions just so they can buy from the local supplier with whom they have an existing relationship. Nowadays, as competition becomes stronger, budgets continue to shrink and technology advancements are a daily occurrence, companies must tighten up their processes to ensure that every dollar is spent wisely. How you ask? The answer is in this article, yet everything you've read thus far means nothing if it is not enforced down to the finest detail and end users do not comply with the cost-savings programs that have been negotiated.

Let's be honest, there's no point in establishing a preferred vendor program if you're not going to honor the contract. The key is not only to enforce compliance at a high product group level through the preferred vendor, but also down to the individual SKU level (by manufacturer). With outsourcing and contract work now trending throughout industry, third-party procurement companies are often a great solution to manage purchasing and compliance. If you choose to use internal resources, you may want to consider a software solution, which will force users to purchase only from preferred vendors.

Of course, there are exceptions such as catastrophic breakdowns and part unavailability through the preferred vendor, in which case the user must specify a reason as to why the part is being purchased from a non-preferred vendor. If nothing else, this process instills ownership and accountability, as end users are aware that upper management is monitoring their purchasing habits.

Moral of the Story

To summarize, achieving cost savings is not a quick, single step task. It is an ongoing process that requires a number of phases, beginning with data quality. Whether you choose to perform the above-mentioned tasks internally or through a third-party service provider, the process and cost-savings opportunities remain the same. For your organization, the best option may be to perform a select group of tasks internally for which you have adequate resources and expertise. As for the remaining tasks, build a relationship with a third-party service provider who specializes in the field and is flexible to meet all of your business requirements and objectives. Every company specializes in something, and for most that something isn't data cleansing or inventory optimization. Stop spinning your tires. Stick to your specialty and let the subject-matter experts perform theirs. It's a win-win situation in the end, which will see you achieve your cost-savings and procurement objectives within a much more reasonable timeline and scope.

Don't Forget People in Strategic Planning

Article extract from ReliablePlant newsletter:

http://www.reliableplant.com/Read/29303/strategic-planning-people

It has been the norm for decades that organizational strategic plans have been created by upper levels of management. Annually, the best and brightest division heads come together to brainstorm the company's strategic challenges and solutions, articulate the vision for strategic growth, and formulate the plan for optimizing organizational resources. They will spend days conducting a strengths-weaknesses-opportunities-threats (SWOT) analysis, identifying critical success factors, analyzing the market and formulating the execution process for the new plan.

Yet with all the time and money spent on strategic planning, often there is a lag in putting the plans into action, or the execution fails to achieve the desired results. All managers know that execution is critical to the success of the strategic plan, but making the plan work is an even bigger challenge than creating the plan, in large part because execution requires a disciplined process or a logical set of connected activities that enables the organization to successfully integrate the strategies into the operation. Many factors inhibit the successful execution of the strategic plan, and all of them are tied to the people of the organization.

Below is a short list of factors that inhibit successful strategy execution:

• The culture of the organization does not support the challenges presented by the plan (includes organizational politics and structure).
• Incentive programs reward people for seniority rather than results.
• Departmental and divisional silos in the organization inhibit the sharing of information and teamwork.
• There is resistance to change.
• The vision for the plan's impact on the future of the organization is not clearly articulated.
• There is a failure to clearly describe the employees' role in the implementation of the plan.
• Employees implementing the plan are lacking the tools, knowledge and skills.
• There is a failure to hold people accountable for their part in successfully implementing the plan.
• Execution takes longer than planning, so managers who are caught up in the daily challenges of running their operations may lose focus and/or interest.

The Harvard Business Review (HBR) recently conducted a study of 1,075 people from the HBR Advisory Council asking about strategy and execution in their companies. The results, which were printed in the July-August 2010 edition of HBR Magazine, showed that the obstacles to executing strategy in the current economy included being too busy/lack of time and resource constraints, while the obstacles to executing strategy in general were making it meaningful to front-line employees, translating strategy to execution and aligning jobs to strategy.

As for the most important aspect of strategy execution, clear communication was rated highest by most respondents (72 percent). One respondent said, "Failure to communicate strategy causes front-line workers to invent their own strategy."

Other high priorities identified were effective leadership and a commitment to putting the right people in the right jobs.

One of the biggest roadblocks to successful strategy execution, as stated by the respondents, was "encouraging managers to make decisions in line with the strategy."

Unfortunately, when the strategic plan is not successfully executed, it is the employees who come under fire. It is usually assumed that the plan failed because the employees do not care enough about the company and/or are not smart enough or dedicated enough to make it work. In actuality, the root of the problem is that managers still don't know a great deal about the execution of strategy. Management training in the past has had a strong focus on teaching managers strategy formulation, but very little is taught about strategy execution.

The question then is "Why don't more companies spend more time and money training managers to successfully execute?" The answer is that execution is very difficult. Complicating the difficulty of the logistics of execution is the unfortunate idea by many C-level and upper-level managers that they (the "smart" people) plan the strategy, while the underlings (the front-line, "not-so-smart" people) execute the strategy.

This difficulty can be mitigated by remembering that planning and execution are interdependent. Successful strategic results can be gained when the people responsible for execution are involved in the planning and strategy formulation process. According to the survey by HBR mentioned above, 59 percent of respondents said there is an imaginary line in their company between the thinkers and the doers, and only one-third said that strategy creation is part of everyone's job.

Additionally, managers should keep in mind the process for execution as they are planning the strategy. Simultaneous strategy formulation and planning for execution will help to remove many roadblocks by anticipating the potential barriers prior to execution of the plan, providing savings in time and money.

The following strategies and tactics will help to ensure that strategy execution in your organization is successful and effective, delivering the expected results to meet the company's goals:

Develop a Plan for Execution with the Strategic Plan

Remember that strategy formulation and execution are interdependent. Simultaneously create your strategic plan and plan for execution to minimize roadblocks and barriers such as:

• Cultural elements that conflict with strategy processes and procedures
• Reward and recognition practices that inhibit rather than promote effective strategy implementation
• Job descriptions that do not align with skills necessary for plan implementation
• Interdepartmental/divisional silos that restrict or inhibit communication and/or teamwork
• Current policies and/or processes that are in conflict with actions necessary to successfully implement the plan

Involve Key Players

Be sure to involve the key players from all levels of the organization who will be responsible for execution of the plan.

Communicate

You must effectively communicate the vision for the expected results from the plan, the intended goals for the plan, including a comprehensive timeline, the employees’ role in implementing the plan, the "what's in it for me?" to make it meaningful to the employees and gain commitment to the goals, as well as the parameters for follow-through and accountability.

Set up Employees for Success

Finally, it is critical to provide the skills, knowledge, tools and resources to ensure employees are set up for success in execution of the plan.

About the Author

Debbie Zmorenski

Deborah K. Zmorenski, MBA, is the co-owner and senior partner of Leader’s Strategic Advantage Inc., an Orlando, Fla.-based consulting firm. During her 34-year career with the Walt Disney ... Read More

Building the Business Case for Maintenance Planners

Article extract from ReliablePlant newsletter:
http://conference.reliableplant.com/maintenance-planners/

Good maintenance planners can have a significant impact on the bottom line, yet many companies don’t pay adequate attention to this role. With 18 percent of a typical maintenance technician’s day spent looking for parts and 24 to 26 percent walking to and from the job site, almost 50 percent of each day can be wasted doing non-value added activity. This article will address the financial impact of maintenance planners on an organization and will provide a clear understanding of how to improve this function and yield better results.

The term “world-class” is thrown around like Scotch Tape, Xerox, and Kleenex. It has lost its true meaning. Many believe that world-class is being the best in what you do and how you do it. When I visited different organizations around the world I used to explain that world-class meant being in the top quartile in your industry but it’s more than that now, I believe. I have discovered working in so many different industries that the best of the best exhibit common fundamental attributes that separate them from the pack regardless of industry and therefore positioning themselves as true world-class organizations. There are eight characteristics that I’ve identified:

• Commitment to safety
• Robust and well-defined training program
• TPM/Operator Care/Autonomous Care program
• Daily cross-functional department meetings
• Root Cause Analysis (RCA) as a team effort
• Well-defined defect elimination process
• Consistent supply chain that incorporates life cycle costing
• Time

Time being the subject of this paper, it amazes me that organizations have time to do things over but never enough time to do it right the first time. There are many factors that contribute to this but maintenance planners play a large role.

What Separates the Best from the Rest?

When it comes to separating typical maintenance practices from those that are considered world-class, there are certain areas that the best organizations excel in. The ability to plan and schedule work that achieves the minimum impact on production or operations is a key factor.  The best performing companies migrate to proactive maintenance activities to realize greater than 65 percent preventive maintenance and predictive technology utilization. They establish and consistently achieve a better than 90 percent compliance record.

80 percent or higher in pre-planned work and exceeding 85 percent overall schedule compliance is yet another indication of proactive maintenance. For every hour of effective planning, the typical return is three hours in maintenance activity reduced or an equivalent avoidance in materials and lost production downtime. Planning has the most profound effect on timely and effective execution of maintenance work and resources. A solid maintenance planner has direct impact on these numbers.

What Makes Good Maintenance Planners?

There are certain common qualities among the best maintenance planners. Experience is a must. Typically planners are promoted within the trades to a planning position. They have key skills that will aid them in developing job plans. I would hope it would be intuitive that they read prints as well. Planners must have the capability to become “super users” of their respective Computer Maintenance Management System (CMMS). They need to be very comfortable navigating around the system and be just as comfortable with spreadsheets and word documents. Working well with co-workers is a must. I’ve witnessed some very good planners who were not respected because but they didn’t work well with others. They were reduced to being good clerks. I have never met what I would consider an excellent planner who wasn’t self-motivated. Supervisors or managers should never have to ask a planner what they’re working on. These individuals tend to be the “Get Her Done!” type.

What Do the Numbers Tell Us?

Organizations are in business to make money. There are very few individuals who have any direct impact on the selling price of their products in the open market. That pricing is determined by supply and demand. That’s Economics 101. Yet every individual contributes to the cost of producing that product. That’s called Cost of Goods Sold (COGS). So all things remaining the same, if we reduce the cost of producing our product in theory, our margins or profits increase.

How can a maintenance planner possibly have an impact on the profit or margin of a company?  The simple answer is to plan maintenance activities. My definition of maintenance activity is defined as the following:

Successful execution of a planned work order in the safest manner, in the shortest period of time, that is least disruptive to Operations, at optimal cost.

Here are some things to think about:

• The average maintenance operation experiences 30 to 33 percent waste in their budget because of poor maintenance practices
• 18 percent of the typical maintenance technician’s day is looking for tools or parts
• 24 to 26 percent is spent walking to and from the job site
• 63 percent of maintenance activity is self-induced
• Reactive maintenance is three to four times more expensive than planned activity

A good maintenance planner will have well-written job plans with correct sequencing of tasks along with materials, tools, and safety or other special considerations included in work packs. It is not uncommon for maintenance organizations to be functioning at less than 20 percent utilization or “wrench-time”. As stated before, for every hour of effective planning, the typical return is three hours in maintenance activity reduced or an equivalent avoidance in materials and lost production downtime. These costs are directly associated with the cost of producing the product or service. If we can increase the utilization or wrench-time of our maintenance group to restore, rebuild and maintain the assets producing those products and our unscheduled breakdowns decrease then our margins increase correspondingly.

Planned and scheduled work has shown exponential improvements in safety, uncovering hidden capacity, and costs. Look at the following case study assumptions:

• 22 technicians averaging $42.24/hour
• Overtime averages 18 percent with four percent absenteeism and tardiness
• Each person averages three weeks of vacation and five days of sick leave
• Work week is eight hours x five days
• No maintenance planner on staff
• Total available capacity: 45,760 man-hours

We need to take the vacation and sick leave out of our maximum capacity – 3520 hours. We also need to include the average absenteeism – 1830 hours. Our available hours are now 40,410 (12% less than capacity). These are considered uncontrollable loses.

Based on observations, the following are averages for each individual in a typical eight-hour shift. These are considered controllable losses (Figure 1).

Figure 1. Controllable Losses.

As you can see, out of the 45,760 available hours only 10,102 are actual direct hours. Notice the average hourly cost of our technicians now. Average hourly rate is $42.25 but the actual cost to turn wrenches is $285 per hour. That falls directly to the bottom line. This comes straight from the COGS line and decreases the opportunity to improve margins or profits.

There are two activities that have the potential to increase wrench-time by 50 percent: plan maintenance work and kit planned maintenance work. Let’s look at the numbers after we’ve implemented planning and kitting into the process (Figure 2). The maintenance techs no longer have to plan their own jobs (which brings consistency) and they no longer have to spend time looking for parts or tools because they now are kitted and ready for the planned job.

Figure 2. Controllable Losses after Planning and Kitting.

The results are staggering. Not only did we increase direct labor by 50 percent, we actually improved it by greater than 100 percent. The average hourly costs were reduced by a whopping 200 percent. That’s the impact that maintenance planners can have on an organization.

Summary

The case study exhibited is an actual organization that made the leap of faith to create a position to plan all maintenance activity. The organization also introduced the kitting process. This resulted in a significant improvement in both the efficiency and effectiveness of maintenance activities. Furthermore, there was a direct improvement to the bottom line and a reduction in production cost.

I consider a good maintenance planner someone who is self-motivated and respected; someone who has the experience and works extremely well with his co-workers. I also strongly recommend that a good planner spends 50 percent of their day on the floor. This time is spent scoping jobs, estimating, gathering information, tools and materials, addressing safety concerns and determining outsourcing or subcontracting needs. They must talk to the operators and lead technicians to help them develop the best possible job plan. A professional maintenance planner is not a clerk. They are an integral part of any world-class organization and are treated as such.

This article was previously published in the Reliable Plant 2013 Conference Proceedings.

By Andy Gager, Life Cycle Engineering

Proactive Lubrication in Practice

Article extract from ReliablePlant newsletter:
http://conference.reliableplant.com/proactive-lubrication/

Several reliability studies have identified that approximately 70% of all equipment failure is attributed to lubricant contamination. What this is really telling us is that approximately 70% of all potential equipment reliability gains can be obtained with a proactive lubrication program. One of the biggest opportunities for increasing equipment up time and reducing maintenance cost is in the field of lubrication.

What is proactive lubrication? We are all aware of the critical roll lubrication plays in equipment function, but what is the meaning behind proactive lubrication? Below is a common definition of proactive:

[Pro + reactive]: acting in anticipation of future problems, needs, or changes.

Given the definition of proactive, I believe it would be accurate to say that proactive lubrication is the application of lubricants with the intent of reducing or eliminating future failures or faults that could be addressed through lubrication. This does not mean simply checking fluid levels, performing the required oil changes and putting a shot of grease in a bearing when it is starting to make noise, but actively seeking ways to extend equipment life and improve its function.

Most machinery rides on a film of lubrication. Theoretically if we can provide a film of oil that will never allow metal to metal contact and is free of contaminants that can abrade and wear on opposing surfaces, the machine should run forever. Well theory is nice to talk about, but we don’t live in a perfect world. Contaminants do get into oil and we have operating conditions that constantly challenge the integrity of the lubricants we use. If we refuse to accept the common mentality of good enough and focus on improving fluid cleanliness, there is big money to saved everywhere!

This article will first discuss filtration, followed by a real life case study supporting the argument that improved fluid cleanliness is a big hitter when it comes down to cost savings and the bottom line.

Filter Ratings

When considering filtration choices don’t be fooled by the advertising. Filter manufacturers have one goal, to sell their filters! Salesmen are not commonly concerned about which brand of filter is best for your application; they are determined to convince you that their brand of filters are the best thing since apple pie and baseball.

Be careful when looking at filter specifications. Some filter manufacturer’s rate filter performance with a simple micron rating, like “3 microns”. A rating such as this actually tells the consumer very little about how the filter will perform in a real life application. Another ploy in advertising is to advertise an efficiency rating in percent of efficiency at a certain micron. The better quality filters are commonly advertised with a Beta Ratio rating.

Beta Ratio

The beta ratio rating of a filter is be expressed something like this “β3µ=1000” which means the beta ratio for 3 micron sized particles is 100. What this is saying is that for every 1000 particles 3 microns in size, that enter the filter, only 1 will pass through. Likewise, if a filter is rated β3µ=200, for every 200 particles 3 microns in size, that enter the filter, only 1 of those particles will pass through the element. Below is a visual representation of beta ratio that effectively illustrates the meaning.

(Courtesy of HY-PRO)

The test for beta ratio ratings is effectively standardized, but not absolute; what I mean to say is that the test cannot emulate the varying operating conditions a filter will encounter in real life applications, but it does provide a standard for comparison.

To illustrate the significance of beta ration ratings, the following case study is provided:

The test was conducted on a 300 gallon rolling oil system that is used to flood work rolls as material is passed through a cold rolling mill. The oil drains into an open sump and is returned to the reservoir by a transfer pump. The particle count was conducted in house, through a minimess port, with an on sight particle counter. Both test were taken under similar operating conditions and are representative of the average from several test that were conducted. The first test report represents the performance of a name brand filter element with an advertised performance rating of β3=75 and the second test was taken after replacing the original element with one that has a rating of β3=1000. (The particle count represents the number of particles per milliliter of fluid)

Thinking back to when I started my career as a maintenance lubricator I did not fully understand the significance of filter ratings and in no way would not have expected such a difference between two filters with the same micron rating. Obviously the results identify significant disparities in the single pass efficiency of the two filters.

This presents a common problem for many trained lubricant professionals when it comes time to order filters through the purchasing department of their companies. If the call out is for a 3 micron filter, the purchaser will first look for a 3 micron filter rating and then (commonly from pressure to reduce cost) look for the cheapest 3 micron rated filter they can find. The problem is that you commonly get what you pay for! In the above case study, the β3=75 filters cost about $50 each and the machine takes 6 filter elements per change out, for a total change out cost of $300. The elements were changed semi annually, on a scheduled PM work request, for a yearly total of $600. The β3=1000 filter elements cost around $130 each and are changed out 3 times year (change out intervals were modified as determined through condition based monitoring) for a total annual cost of $2340.00. So what is the company gaining for the extra annual expense of $1740.00?

Within 6 weeks of implementing the filtration system upgrade, the department engineer approached the lubricators and asked if we had implemented the proposed upgrade yet? Management was seeing a 10% product yield increase through final inspection due to surface quality improvement, but could not identify where it was coming from. It was from improved lubricant cleanliness and saves the $100,000.00 a year! As an added benefit, the bearings that support the work rolls are also lubricated by the rolling oil. Work roll bearings have customarily been changed out at six month intervals, the current set of bearings have exceeded twice the life expectancy and are still going strong. If this pattern of increased bearing life repeats, there will be a verifiable reliability improvement with a cost savings of $140,000.00 a year. That is a total savings of $240,000 a year!!

In a nut shell, the purchasing agent can save the company $1740.00 a year by buying cheaper filters, but a pro active lubrication strategy saved the company just under a quarter million dollars a year by identifying an opportunity for improvement and spending a little more on filtration.

The above case study is not an isolated occurrence or the largest realized savings we have seen from employing a proactive approach to lubrication. We have realized significant decreases in mean time between failures, increases in equipment uptime due to improved reliability and in some instances product improvement due to better responsiveness from the machines controls.

When initiating a lubrication improvement, please take every opportunity to measure the fluid condition before and after the modification. Document the gains, work with production, engineering, purchasing and management to document, implement and measure the improvements. If you can’t show a gain, you will not invoke the support of your company and there will likely be no opportunity to prove and advance proactive lubrication practices in your facility. The value of proactive lubrication practices is largely overlooked and until you can document gains, management will not be able to realize the value added.

Training

Lubrication is a maintenance trade, without the proper training it is difficult to become proficient at it. A facility that is serious about equipment reliability will seek to train their lubricators and recognize the value in a skilled and dedicated lubrication program. From a professional standpoint, seek to obtain all of the training that is offered. I am fortunate to work in a facility that believes strongly in the value of pro active lubrication techniques and has eagerly encouraged and supported advanced lubrication training to anyone that is willing to work at it.

Because of the opportunity afforded to me by my employer, I have benefitted by receiving training from top notch companies like Noria, Lubrication Training Consultants (LTC), SKF, Chevron University and The Society of Tribologist and Lubrication Engineers. (STLE) With the training I’ve received, I have been able to obtain numerous certifications that have significantly improved my knowledge, enhanced my skill level and helped me to advance within my company. To an employer that may be reading this article, I would like to say that if you have a maintenance employee who wants to put the extra time and effort into training and certification, it will likely pay big dividends. If you are an employee reading this article and your employer is willing to invest in training and certification, jump on it!

This article was previously published in the Reliable Plant 2013 Conference Proceedings.

By Dale Jones, Allegheny Wah Chang