Here is a great ebook full of tips to help you make a difference to your operational results in 2011. The team at ReliabilityWeb.com has recently released the 2011 version of their popular ebook Things to Think About (and Do).
Each year Reliabilityweb.com and Uptime Magazine, invite thought leaders in the maintenance and reliability community to contribute a single tip to help motivate readers to create a new idea or action that will make a difference in that year.
This year’s edition features tips from industry practitioners such as Mark Brunner (OneSteel), Cliff Williams (Erco Worldwide), Abayomi Carmichael (BELCO), Derek Burley (Rio Tinto), as well as experienced consultants such as your truly (the full list is at the beginning of the book). My contribution relates to the management of repairable spare parts (see page 33).
Best of all this ebook is FREE!
Get your copy at http://uptime4.me/uptime2011
Leverage my experience!
Phillip Slater
Google Tracking Code
The Biggest Problem in Engineering Spare Parts Management
What do you think is the biggest problem in engineering spare parts management? In my view it’s guesswork! That is, identifying the problem is not guesswork, the problem itself is guesswork. In fact, it’s even worse than that because it is actually guesswork cloaked in the disguise of management science.
How often have you heard someone justify a position on inventory levels by saying:
- It’s based on the formula
- It’s based on our existing data
- Our forecast shows…
Each of these things may be true but they also each involve guesswork in order to give a result. Many people use the wrong formula (they are guessing that they should use say a Gaussian function when it should be Poisson based). Many people have data that doesn’t actually reflect the real demand history (they are guessing that it does). By their nature all forecasts are based on assumptions (which are a guess). But perhaps worst of all, many people don’t even try to determine the likely basis of future demand for the item.
I am thinking here about engineering spare parts that we use to support operations through returning failed equipment to a fully operational state. It is fundamental to establishing a reliability/maintenance system that you consider the likely cause of failure and from that the appropriate course of management. Having done that it ought to be possible to state the basis of future usage of a part - whether that is condition monitoring, time based replacement, or random failure. Yet is seems that the maintenance teams that complain the most about spare parts management issues are the same ones that seem to base their own activities on guesswork.
Why is this so? Well one answer is that it is easy (or is that lazy). But a better answer might be that they just haven’t thought it through and as long as the spare parts warehouse is overstocked they can get away with this. It is when you tighten up on the wasted expenditure on spare parts that the failure of the maintenance system really comes to light.
There is a saying along the lines that identifying a problem is half the solution. In this case it requires identifying the basis of future use of a part and if that basis is unknown or just a guess then let’s be clear about that. Then we can get on with filling in the real data gaps.
Leverage my experience,
Phillip Slater
The Flip Side of Accountability
Establishing appropriate accountability is one of the key actions required for achieving lasting success in any management activity. This is especially the case in activities aimed at creating lasting change in the way things are done - like in an inventory optimization project. To achieve lasting and sustainable inventory optimization you need to establish the appropriate accountability for those undertaking the review actions and those responsible for implementing the change.
Recently I encountered a situation where some of the team were very keen to avoid any direct accountability. No real surprise there as this is often the case. What did surprise me was the effort they put in to ensure that they could not be held to account for making the necessary changes (if only they had worked so hard on actually undertaking the required tasks!) . One specific avoidance action was to reject attempts to install any system of measurement that showed what progress was being made with their efforts at inventory optimization and executing the requires changes.
But here is the catch. Now that there is real progress and genuine early success with the inventory reduction those same people now are concerned that they are not getting recognition for their work! The have undertaken the inventory optimization tasks from our training but now complain that there is a lack of transparency showing how much good work they have done.
That is the flip side of accountability - recognition. If you do not have the necessary transparency to indicate who has done what, then you don't have the transparency to show who to reward for their good efforts. We are now working on changing this at that company but it is a lesson that team has learned the hard way.
Leverage my experience,
Phillip Slater
Recently I encountered a situation where some of the team were very keen to avoid any direct accountability. No real surprise there as this is often the case. What did surprise me was the effort they put in to ensure that they could not be held to account for making the necessary changes (if only they had worked so hard on actually undertaking the required tasks!) . One specific avoidance action was to reject attempts to install any system of measurement that showed what progress was being made with their efforts at inventory optimization and executing the requires changes.
But here is the catch. Now that there is real progress and genuine early success with the inventory reduction those same people now are concerned that they are not getting recognition for their work! The have undertaken the inventory optimization tasks from our training but now complain that there is a lack of transparency showing how much good work they have done.
That is the flip side of accountability - recognition. If you do not have the necessary transparency to indicate who has done what, then you don't have the transparency to show who to reward for their good efforts. We are now working on changing this at that company but it is a lesson that team has learned the hard way.
Leverage my experience,
Phillip Slater
Inventory Optimization – What’s In It For Me?
If you have ever read a book on selling or marketing, you will know that one of the key tenants of those disciplines is to describe the major benefits for the buyer. From the buyer’s perspective this is literally translated into ‘what’s in it for me?’. Similarly, ask any consultant involved in ‘change management’ about the requirements for generating lasting change and they will say something similar. That is, that you must answer the ‘what’s in it for me?’ if you want to get ‘buy-in’ from the people impacted by the change.
Recently, when discussing a spare parts inventory optimization project with a company, a senior manager asked me to describe ‘what’s in it’ for the maintenance/reliability people. He was adamant that this is critical if we are to get their ‘buy-in’ and co-operation. Now stop for a minute and consider what is wrong with that statement.
Here’s what: the concept of getting ‘buy-in’ has become almost like having to gain permission from everyone before we make any changes or even talk about what to change. This is crazy. By its nature some change will upset some people and they will not ‘buy-in’ to it no matter what you say or do. And anyway, since when did we need to get ‘buy-in’ on every single company policy?
Did we seek ‘buy-in’ when we said that personnel protective equipment is mandatory? Did we seek buy-in when we established housekeeping standards? Did we seek ‘buy-in’ when we rolled out the new company-wide ERP? Did we seek ‘buy-in’ when we determined the new work flow for procurement? Did we seek ‘buy-in’ when we reviewed the procurement authority limits? In my experience the answer to all of the above is a resounding ‘no’. (How many other areas can you think of where we don’t seek ‘buy-in’ before we make the change?)
Yes, we involve people in the process of development. Yes, we train them in the use of the tools. Yes, we explain what we were trying to achieve and why it is important to the company. Yes, we support them through the initial stages where it is all a bit new and foreign to them. But, again in my experience, we have never made adherence to company policy discretionary and it was never dependent upon the 100% approval of everyone involved.
I know that this is contrary to what all the ‘change managers’ will say but I think that the idea of ‘buy-in’ is taken too far these days. Since when was it OK to spend money on purchases that are unjustified, to all intents and purposes un-scrutinized, with no real accountability and no KPIs, and with no defined or auditable decision making process? It’s not, and never has been. Yet, in my experience, this is what the vast majority of companies do. Their approach allows them to buy stuff they don’t really need or in quantities that are excessive, and then leave it all to degrade or rust. A few years later they throw it all away. Sometimes this involves millions of dollars, spent on the basis of a ‘what if’ that no-one ever tested.
To my mind, establishing appropriate inventory management policy and process is not a matter of getting ‘buy-in’, it’s your job!
Recently, when discussing a spare parts inventory optimization project with a company, a senior manager asked me to describe ‘what’s in it’ for the maintenance/reliability people. He was adamant that this is critical if we are to get their ‘buy-in’ and co-operation. Now stop for a minute and consider what is wrong with that statement.
Here’s what: the concept of getting ‘buy-in’ has become almost like having to gain permission from everyone before we make any changes or even talk about what to change. This is crazy. By its nature some change will upset some people and they will not ‘buy-in’ to it no matter what you say or do. And anyway, since when did we need to get ‘buy-in’ on every single company policy?
Did we seek ‘buy-in’ when we said that personnel protective equipment is mandatory? Did we seek buy-in when we established housekeeping standards? Did we seek ‘buy-in’ when we rolled out the new company-wide ERP? Did we seek ‘buy-in’ when we determined the new work flow for procurement? Did we seek ‘buy-in’ when we reviewed the procurement authority limits? In my experience the answer to all of the above is a resounding ‘no’. (How many other areas can you think of where we don’t seek ‘buy-in’ before we make the change?)
Yes, we involve people in the process of development. Yes, we train them in the use of the tools. Yes, we explain what we were trying to achieve and why it is important to the company. Yes, we support them through the initial stages where it is all a bit new and foreign to them. But, again in my experience, we have never made adherence to company policy discretionary and it was never dependent upon the 100% approval of everyone involved.
I know that this is contrary to what all the ‘change managers’ will say but I think that the idea of ‘buy-in’ is taken too far these days. Since when was it OK to spend money on purchases that are unjustified, to all intents and purposes un-scrutinized, with no real accountability and no KPIs, and with no defined or auditable decision making process? It’s not, and never has been. Yet, in my experience, this is what the vast majority of companies do. Their approach allows them to buy stuff they don’t really need or in quantities that are excessive, and then leave it all to degrade or rust. A few years later they throw it all away. Sometimes this involves millions of dollars, spent on the basis of a ‘what if’ that no-one ever tested.
To my mind, establishing appropriate inventory management policy and process is not a matter of getting ‘buy-in’, it’s your job!
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