Professional Documents
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The Future of Asset Management Any useful model to guide action will have several
by S. Bradley Peterson characteristics:
• Simplicity. All of the greatest ideas are simple
in concept. If not kept simple, they are not
ABSTRACT fully understood or remembered, and fail as
guiding principles.
This article explores a broader vision for asset • Intuitive. Readers should be able to
management than has been previously articulated understand the underlying principles without
and brands this vision Strategic Asset guidance.
Management (SAM). Based on successful • Utility. The model should work consistently in
experience with our clients, SAM is an integrated application.
set of processes that systematically derive the • Completeness. All necessary elements of
highest value from plant assets, through a success should be contained.
consistent philosophy, plans and objectives, and
cooperative involvement by everyone in the plant. Our experience with the Strategic Asset
SAM represents a higher level of performance Management (SAM) model indicates these criteria
than is currently practiced or even recognized by are met. However, you as the reader will need to
the manufacturing community today. make your own judgments.
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The Future Of Asset Management
• Reward systems. Each plant rewards set of things the company can do with its resources.
behavior in subtle ways. It may promote the That means a real and compelling business case for the
overbearing craftsman to a supervisor position senior executives. For plant executives it means
because “he gets people going”. We may working on those things which are most practical,
reward equipment breakdown with money which make a difference in daily control of the work
and admiration (overtime and “attaboys”). and reduction of variance. For the staff functions it
We may reward production achievement at means an understanding of the support they must
any cost to people and asset condition. We render to enable the plan to be successful.
reap what we sow, so we must be careful that
our reward systems actually encourage The elements of the Strategic Plan are these:
proactive behavior. Proactive maintenance
can’t happen in a reactive managing 1. Benchmarking the function. Where are we
environment. today? What are the measures saying?
• Roles, responsibilities and accountabilities are 2. Developing a vision for the future of plant
clear. If job expectations are not clear and operations. Difficult to do, sometimes requires
results measurable, we have muddled “Industrial tourism” to see the bigger picture,
accountability. Fingers point in all directions, and using outside help to understand what’s
and the blame game goes on all day. Being possible. This part has to be done right, or the
proactive in such a system takes more courage plan will fall apart. Our clients have found the
than most people will risk. Clarifying jobs and Execution Triangles (Production, Logistics and
accountabilities is a leadership function. Asset Healthcare) to be valuable to setting the
• Feedback. This is part of the Plan-Do- vision. See Figure 3.
Review process, but gets special emphasis. 3. Identify Gaps. Where do we fall short of the
We shape behavior by giving honest feedback vision?
without punishment. Under the right 4. Identify Strategies to close gaps. It would be
circumstances people want to improve. easy to shortcut this task. But one may find
Leadership fails if it doesn’t capture that spirit. that, for instance, a distributed control system
may be a strategy that helps with product
Strategic Planning. In every plant environment we quality, product mix direction, faster
encounter we hear the same (legitimate) complaints: changeovers, and equipment condition
“Improving maintenance is important, but we just monitoring. So one strategy covers several
don’t have time. We have 4 major plant initiatives and gaps.
5 corporate initiatives, and don’t know how any of 5. Describe Projects to implement strategies.
them are going to get done!” Or, “Everything we do is This can get creative, and will be an integrating
a ‘flavor of the month’. We seem to start lots of stuff, force. For instance, a planning and scheduling
but never finish”. project may be combined with a safety
improvement initiative. Preventive
How do you set a plan that is timeless? One that has maintenance improvement may combine with
approvals all the way to the top of the company? an ISO calibration standard.
How do you assure you have a single initiative instead 6. Develop the implementation plan. It will
of 20? Through the act of strategic planning! require resources, so don’t shortcut or lowball
what the implementation will require.
The product of functional strategic planning is Remember that training won’t create new
alignment around a multi-year improvement plan. behaviors. People need to be coached for
To get alignment requires more than a few words in a new behaviors, and measures put in place to
book. It requires that every level of the organization determine success.
believes the content of the plan is the most important
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The Future Of Asset Management
Stage 5
Operational Excellence
Asset
Management
Equipment Stage 4
RAM Standardization Engineered Reliability
Life
Vendor
Cycle RCM
Reliability
Analysis
Maintenance/ Stage 3
Craft Operations External Organizational Excellence
Benchmarking OPM
Flexibility Integration
Figure 3: The SAMI Asset Healthcare disintegrated goals. Safety, reliability improvements, 6
Triangle Sigma, Lean Manufacturing, Supply Chain
rationalization, etc. These are often presented to the
Note: Please see www.samicorp.com for details of the SAMI plant as a series of corporate staff visits, all requiring
Production and Logistics triangles as well as the the plants time and attention. If the plant acted on the
corresponding maturity matrices detailing the
characteristics of an organization at each stage of the
sum of these “required programs” with full gusto, they
models. would quit producing product. Their time and
attention would be taken in team meetings, developing
ENABLE. Many programs for change are viewed as procedures, and trying to rationalize the differing
a simple matter of documenting procedures and demands of each program.
providing training. If these things are done, change
should happen, right? Fortunately, plant personnel know their jobs are tied
to making budgeted quantities of quality product. So
Wrong. Human nature doesn’t work that way. their view of change is to ignore these directives until
Prescriptive formulations may work for machinery, but they evaporate from lack of momentum and
(fortunately) the human machine is more complex! commitment. Their approach is well-rewarded; most
programs do indeed get replaced by the next wave of
First, why do I say this is fortunate? Most of our “best practice” from corporate. I apologize to readers
corporate clients have a large number of related but who have corporate development roles, as I may
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The Future Of Asset Management
relationship by making it not-optional, then you will Empowerment. The “E” word has lots of bad
believe it is a worthy change. Our consultants support connotations from the failures of quality programs in
the client in making the changes, not the other way the 80’s and early 90’s. The popular method of
around. empowerment was a week’s worth of training in “soft
skills”, and an admonition that they should step up and
You may note that most of SAM description thus far is be their own bosses. The result was lack of direction,
about enabling change, not about the core anger, disempowered supervisors and management,
maintenance or production process. We assure that and a decrease in productivity. Lee Solomon, founder
we have qualified experts in the work processes on of Solomon Associates who benchmark most of the
the teams. Our clients seldom fail because they don’t world’s refineries, once told me: “There is a high,
understand best practices, but because they can’t get negative correlation between implementation of
them implemented. We have learned to focus on self-managed work teams and performance”.
change because it is the critical barrier for success! Empowerment as implemented not only didn’t work,
but it made things worse.
Development. It is possible that your people can
work at much higher levels than they are today. In a What is empowerment? It is enabling a worker to do
reactive environment vs. a proactive environment these more, and to take responsibility for his own
are frequent roles: performance. How can this best be done? First, by
250.0
200.0
150.0
$MM
100.0
50.0
0.0
FY FY FY FY FY FY
02 03 04 05 06 07
-50.0
Gross Capacity Gross Efficiency Cost
benefit analysis detailing financial benefits from Figure 4: SAM Cost/Benefit Analysis
increased efficiency and increased plant capacity
versus the costs of implementing the SAM model over
a period of a number of years.
SUMMARY
Strategic Asset Management is the systematic
process that enables the dream of Operations
Excellence. It emphasizes a logical approach to best
practices through the developmental stages of the
EXECUTE Triangles. Functional excellence will never
be enough, however, to be the best. LEAD functions
are the glue that bring all the pieces together in an
optimized set of systems, especially through the
mechanism of the Managing System and Strategic
Plan. Finally, we can only be as successful as our
workers’ endorsement and participation in these
functional excellence practices. We must ENABLE
our people to bring us the success we all desire.