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A Framework for Achieving Best Practice in Maintenance
A FRAMEWORK FOR ACHIEVING BEST PRACTICE IN MAINTENANCE
A Conference Paper presented to the West Australian Maintenance Conference
There is nothing permanent except change - Heraclitus (Greek Philosopher - 6th Century BC)
One of the paradoxes of today's business world is that one of the few things that we can rely on to remain constant is the need for change. Yet today even that need for change is itself changing. As technology advances, and what used to be enormous distances are shrunk to insignificance, as national borders diminish in importance, as we are forced to battle in increasingly competitive global marketplaces, the pressures to strive for constant improvement and change in what we do and the way that we do it are increasing in intensity.
Australia's mining houses are facing increased price pressures due to increasingly sophisticated competition from cheaper economies - Brazilian iron ore, Indonesian coal, Russian diamonds. The gold price continues to drop, with only the perpetual optimists forecasting a turnaround. In the public sector, Government commercialisation and/or privatisation policies are putting huge change pressures on those in the Water, Power and Transport sectors.
On the other hand, this globalisation of business presents great opportunities for Australia's larger organisations in the capital-intensive industries who are up to the task. Today we see significant offshore investments being made by organisations such as BHP Minerals, BHP Petroleum, Mount Isa Mines, CRA-RTZ and others. The opportunities for growth are currently limited only by the availability of capital to fund that growth. Globally, research among the boards of major multinational organisations is showing that one of their greatest concerns is the availability of capital to fund their continuing growth. One of the attractions of the CRA-RTZ merger to both parties was the increased ability to attract capital funding that would result from such a merger.
So what has this got to do with Maintenance? Quite simply,
More effective Maintenance works on both sides of the Return on Asset equation. Improved maintenance helps to increase revenues by increasing equipment performance. It also helps to improve ROA by reducing the need for expensive capital upgrades to increase output. It directly and indirectly releases scarce capital funds to fund growth.
This vital strategic importance of Maintenance in the Capital Intensive industries is increasingly being realised at senior levels in Australia's more progressive organisations. This presents both great opportunities and great challenges for Maintenance professionals. Pressure is increasing for change in the way most organisations go about their maintenance. For those that succeed, their efforts will increasingly be noticed at board level. Are you ready for the challenge?
"They say that time changes things, but actually you have to change them yourself." -Andy Warhol.
This paper outlines the key factors that you should consider when establishing a Maintenance Change program in your organisation. In doing so, it provides a framework which you can apply to increase the chances of success in your change efforts. The paper draws heavily on Price Waterhouse experience in implementing Maintenance change at many major organisations throughout WA, as well as our international experience in implementing change as articulated in our book "Better Change"
THE SIX LEVERS OF CHANGEIn developing ideas for solutions to address Maintenance issues, often promising new solutions are rejected out of hand or not seriously studied because the change team imagines that the solutions are "out of bounds", or because the scope that the team has established for itself is not wide enough. Similarly, the team may choose not to look in directions that its members consider "out of bounds".
Large scale change in Maintenance can only be successfully implemented
by focussing on all the key "pressure points" in your
organisation that will repay your efforts. These can be conceptualised
as lying along several dimensions. We have found it useful to
formalise these dimensions through the concept of the levers
of change, as outlined below.
Customers and StakeholdersYour vision of the present and future may include differences in the way that the Maintenance function, or indeed your entire organisation, will (or should) view and segment its customer base.
Products and MarketsThe refined focus on customers you envision may be accompanied by changes in the scope and variety of Maintenance services that you are providing to your customers.
Business ProcessesThere will probably be a gap in the way your Maintenance processes operate now and the way they will need to operate in the future in order to provide better service to your organisation. You may already perceive the need to introduce a new set of pointedly relevant performance measures to measure Maintenance efficiency and effectiveness.
People and CultureYour vision may include differences in the kinds of people you will need, systems and measures for rewarding them, and the culture that sends them daily signals concerning "how we do business" and "what we are all about" in a Maintenance context.
OrganisationThere is probably a gap between the organisation structure today and its best future configuration. New workshops and other facilities may also appear in your vision of the kind of future worth having.
TechnologyFinally, your vision may reveal a gap between the information-based technologies in place today and those needed to remain competitive in the future. These could include your choice of Computerised Maintenance Management System, and any other information systems that you may use to support your maintenance efforts.
It is common in change efforts to fail to focus on all the levers of change rather than the one or two that, due to their backgrounds, team members may regard as their province. We have found that successful Maintenance change programs consider all of the levers of change, and implement change in an integrated way, pulling all of these levers in a co-ordinated and balanced fashion.
Strategic Levers of ChangeOf these levers of change, the first two - Stakeholders and Customers and Products and Markets - can be considered as being the Strategic levers of change. As such, they should be assessed before considering the other four, as they set the general strategic direction and focus with which changes in the other dimensions must align.
In a Maintenance environment, these strategic levers involve asking questions such as:
At an even higher level, you may wish to consider the question:
There is currently a trend towards outsourcing of many, if not all, maintenance services to contractors. It is beyond the scope of this paper to discuss this trend in detail, or to provide guidance to those currently considering this option within their own organisation, but beware conventional wisdom (see below). It is important that this decision be made by your organisation alone, based on your situation, and with full consideration of all of the details that are specific to your situation. However, questions that you may want to ask when considering this decision include:
Operational Levers of ChangeIf you want the best results from your change effort, it must have the right scope. This may seem obvious, but setting scope and securing freedom of action appropriate to that scope are not simple matters. Is it the Maintenance process, the Maintenance department, or the whole company that needs to be retooled? We will discuss this issue further a little later.
One-dimensional change typically generates either modest improvement in the bottom line, or outright failure. Better change is always multi-dimensional.
If you ask people for better work performance, you must improve their work processes, give them access to the right tools and information, give them the authority to make decisions, measure performance in new ways, and reward them for higher performance.
If you restructure the organisation, you must also rethink processes and the line of command, ensure the systems and technology infrastructure supports the new configuration, and revise performance evaluation and compensation to motivate adherence to the new structure.
If you redesign processes, you must also redesign jobs and procedures, change the systems and technologies that support these processes, train people to perform new or different tasks, and remove barriers to change.
If you invest in technologies such as information systems, you must also consider whether they support customer-critical processes, and integrate with technologies now in place that you do not intend to upgrade. Further, you must prepare people to use the new technologies in their new or different jobs.
High performance organisations address change in all of its dimensions. They involve parties not only within their organisation, but also those outside its boundaries. An integrated solution will lower costs across the entire system from material supply and work identification, to successful work completion and recommissioning.
In a Maintenance environment, because we come from a technical background, we often focus on the Technology or Processes levers of change, and underestimate the importance of ensuring that the changes made in these dimensions must be balanced with corresponding actions in the other levers of change if the full potential benefits of the change are to be realised. For engineering folk like us, issues of organisation structure, people and culture are often seen as being the "soft" issues. While we recognise that they need to be addressed, we do not see them as being ones that deserve major focus, or that provide significant opportunity for improvement in Maintenance efficiency and effectiveness. Consistently we underrate their importance - to our detriment. My colleague Steve Starling will be presenting a paper later in this conference which considers these "soft" issues in more detail.
NINE REASONS WHY BAD THINGS HAPPEN TO GOOD MAINTENANCE CHANGE PROJECTS
1. Failure to Create a Powerful Mandate for ChangeIn our experience, the biggest barrier to change is simply that the organisation is simply not ready for it. Accordingly, it is best to start any Maintenance change project with the assumption that the case for change has not yet been made.
A Case for Change is a reasoned, yet powerfully persuasive justification for the changes targeted by your change effort. To be effective, your case for change should be:
Above all it must build a strong sense of urgency.
When we are involved in a Maintenance change project, we often find that employees' perceptions of what will change vary significantly. Very few perceive change in multiple levers of change. It is important, in communicating the case for change, to let them know the scope of the change that is expected.
Benchmarking is an extremely valuable, if not essential, tool in building the case for change. However, to support a sustainable case for change, it is no longer sufficient to collect a few, barely relevant productivity statistics. Balanced and complete benchmarking measures will consider the following factors:
2. Failing to Deliver Early, Tangible ResultsSome would say that the half-life of a major Maintenance change project is six months; that is, if you are not showing tangible benefits in six months, expect support to halve, and the barriers to double. On the whole, we endorse this view. The worst thing you can do is design a change program that requires a major up-front investment, but offers no evidence of improved performance until a "big bang" implementation is finally put into place. It is vital to come up with a series of short-term, demonstrable wins. Publicise those wins at the time that they happen, to build momentum and support.
This need for quick results is important if for no other reason than to keep hope alive. The discomfort of change eventually reaches everyone, and as it does, you can expect resistance to increase. Unless tangible benefits can be demonstrated early, you can expect that even those who started the project as enthusiastic supporters can become sceptical, even cynical, about whether the changes can, or even should be achieved.
3. Failing to "Connect the Dots"Ideas compete in business just as they do on the field of battle and in politics. Business journals are rich in competing management techniques to improve organisational performance. While there is no single "magic bullet", most techniques, such as RCM, TPM, TQM, VAM, and so on, are legitimate; they just need to be tuned to your organisational needs to be put to work. However, failing to integrate and reconcile potentially competing projects, particularly when these projects are all competing for the same, scarce, internal resources, can exhaust your organisation, and result in none of the projects delivering its full promise.
Co-ordinating multiple, concurrent change projects is, ultimately, a leadership issue. Someone at a senior level within your organisation must take responsibility for this role. It is more than just evaluating the benefits of anyone program, and ensuring that this represents a proper application of organisational resources. The challenge is to ensure program congruity. To do this, this senior executive must:
At one of our clients, a major Maintenance Improvement Program was being conducted at the same time as a Reliability Centred Maintenance initiative was being started. Simultaneously, development of operating and maintenance procedures to obtain quality accreditation under ISO9000 was under way. All of this was happening shortly after a significant workforce downsizing. Needless to say, while some good results were achieved out of all of these initiatives, none of the improvements were as great as had been predicted at the commencement of the change programs.
4. Old Performance Measures Block ChangeIt is an old, but true saying that "What gets measured gets done". All significant change efforts require reshaping the performance measures that guide manager and employee actions. Think about the measures that drive the actions and affect the attitudes of your employees. Is behaviour likely to change if they are not reshaped?
For example, if you are trying to encourage responsiveness to production needs, does a focus on Maintenance costs help to foster this new environment? Is it possible that a high level of focus on equipment availability might encourage Maintenance personnel to return an inefficient piece of equipment to service?
Few policies are more effective in focusing employees energies and attention than a properly designed and implemented performance reporting system. This performance reporting system should contain a small, balanced set of measures that are strongly aligned with your strategies and goals. When your measures are aligned with your strategies and goals, then your ability to drive change is greatly enhanced.
5. Failure to Pull all the Levers of ChangeAs mentioned previously, implementing change in only one or two of the dimensions of change will, at best, lead to only modest performance improvement, or, at worst, to no improvement at all. Successful change programs consider all of the levers of change, and implement change in an integrated way, pulling all of these levers in a co-ordinated and balanced fashion.
6. "What's in it for me" is unclearPeople change when the case for change becomes a personal matter. Too many change initiatives are naively based on the premise that changes in employee behaviour will occur "for the good of the enterprise". This is extremely unlikely. An employee will change his or her behaviour when management honestly promises to make things better, and communicates persuasively that the forthcoming change program is part of the solution for that individual. The values in play are financial rewards, self-esteem, recognition, job satisfaction, career growth, pride and numerous other personal tangibles and intangibles. It's only human; when we cannot see what is in it for us, we are unlikely to change.
For any Maintenance change project, therefore, it is vital to consider each of the stakeholder individuals and groups from which support for the change is essential, and ask the question - what is in it for them? If the answer is "nothing", then think again, because your Change project is unlikely to be successful. If you think again and the answer is still "nothing", then you had better create something that will be in it for them. Once you have identified the potential benefits for those involved in the change, then emphasise these frequently. One word of warning, however. Be careful not to build up expectations to an unreasonably high level, only to find that you cannot deliver at the end of the day. For more on this topic, see Managing Stakeholder Communications below.
7. Inadequate Scope for the Maintenance Change ProjectIn considering a Maintenance Change project, it is vital, if significant organisational improvement is to be achieved, to have a clear understanding of what is meant by the word "Maintenance".
The Oxford dictionary defines "maintain" to mean "to cause to continue". In the context of plant and equipment maintenance, we could therefore define maintenance to mean "to cause plant and equipment maintenance to continue to perform its intended functions", or in plain English, "to make sure that equipment continues to do what its users want it to do".
It follows then, that any activity which is performed which fulfils this criteria is part of the maintenance process, regardless of who performs it. Activities such as adjusting pump glands, detecting whether equipment is running unusually noisily or rough, notifying maintenance of equipment defects, routine equipment cleaning, and so on, are all part of the maintenance process, even though, in many plants, these activities are actually performed by the equipment operators.
Any Maintenance Change project which does not deliberately include within its scope the potential for changes in those maintenance activities that are performed by production operators and others within the organisation is, therefore, destined to be less effective. The key thing to realise here is that Maintenance is a process, not a function or a Department. The most effective changes to this process will be those that address those issues that inevitably arise when processes cross departmental boundaries.
Without exception, those Maintenance change efforts that we have been involved in that have been less effective than we would have liked, have been those in which Production managers, supervisors and operators have had minimal involvement in the change process. The challenge is in building a case for change that motivates them to become involved, and in constantly communicating with them the vision for the future and how that will benefit them.
Determining and revising the routine maintenance activities to be performed on a regular basis is also a vital part of the maintenance process. The maintenance process can be visualised in the following diagram.
The loop on the right hand side of this diagram could be considered to be the short-term control loop. It is the loop that most traditional Maintenance Change exercises focus on. This loop primarily deals with Maintenance Efficiency, in the sense that, by closing this loop, you will ensure that the most productive time is spent by tradesmen, with less time being spent waiting for parts, for equipment to be made available, and so on.
The loop on the left hand side, in contrast, can be considered the Continuous Improvement loop. This loop focuses primarily on Maintenance Effectiveness, in the sense that in this loop, Maintenance activities are being analysed to determine whether the routine Maintenance activities being performed are optimal for the current operating context of the equipment. This loop is frequently ignored in many Maintenance Change programs, yet for many organisations, this loop represents their greatest opportunity for improvement. Few organisations have in place effective, proactive processes for analysing their Maintenance activities and optimising their routine maintenance activities. Indeed, a recent study tour to Best Practice Maintenance organisations in Hong Kong, the USA and Canada came to the conclusion that the prime difference between those organisations and the others was that these organisations did have these processes in place and under control.
A further possible refinement is to include in your Maintenance Change project those activities and processes relating to Maintenance Engineering - modifying plant and equipment to make it easier to maintain, or to design out the causes of repetitive failures. Effective systems and procedures for prioritising the many opportunities that abound in this area are essential to ensure that full value for money is obtained from these scarce engineering resources.
8. Failure to Manage Stakeholder CommunicationsStakeholders are those individuals or groups who, at some time during the Maintenance change cycle, will affect and be affected by what is happening. Obvious stakeholders are those directly involved in the changes, but you may need to consider others outside this group. Stakeholders include Production Managers, Production Supervisors, Production Workers, Maintenance Supervisors, Maintenance Tradesmen, Engineers, Suppliers, members of the change team etc. You need to think about how, in your own way, you can bring them on board to support change. Experience shows that this is a major hurdle standing between your change project as an idea on paper, and your change project as implemented reality. All of the good ideas in the world go nowhere if the people affected by them and affecting them do not give them their support.
Motivating stakeholders to make their agenda yours is no easy task. One reason for its difficulty is that so many stakeholders are involved in complex change. Adding to the complexity, each of these stakeholder individuals and groups perceives themselves as having different stakes. Further, their views of the project, and what it all means is likely to evolve during the course of the project - implying that you will need to revisit stakeholders from time to time, listen to their hopes and fears and to reinstill the positive change message. Finally, your biggest obstacle to successful change could be your organisation's past experience with change. That experience is likely to be mixed at best.
The more specifically you know your stakeholder groups and individuals, the better you will foresee how to influence them. To develop an effective communication plan, you will need to consider each one so that you have a credible map of their perceived interests and levels of influence. For each group you will need to tackle two issues:
Newton's Third Law was never so true: An object at rest tends to stay at rest until acted upon by external forces. In change projects, inertia is to be avoided. It is too easy for stakeholders to remain right where they are; especially if they are anxious about the change project. Stakeholders need continuous invitations to become involved, constant reassurance that they will get their wins.
9. Too Much Conventional WisdomSuccessful change programs require a solid foundation in fact, and one company's facts will be quite different from another's. This means that exemplary solutions, even if they are reported in the most trusted business journals, or Maintenance conferences, may not work for you. Your facts may be different. Better change means better facts, better judgement.
Currently, as mentioned before, conventional wisdom has it that contracted maintenance is more efficient and effective than inhouse maintenance. It also maintains that information systems that offer total integration between Maintenance, Supply, Accounts, Human Resources and Payroll are more effective than "best of breed" packages in each of these areas that do not integrate as well. Conventional wisdom says that multi-skilled workers are more valuable than specialists. These may be generally true, but they may not be true in your specific circumstances. Be wary of following the latest trends without full consideration and analysis of your facts.
IS YOUR ORGANISATION READY TO CHANGE? - A DIAGNOSTICThe following framework provides a simple but effective way of looking at current or planned change in order to assess its viability. To achieve this, we use fifteen factors that influence the success of major change projects - these are drawn from a combination of research and our consulting experience. These factors are grouped into three broad categories: risk, rate of return and latent opportunity.
Look through each of the fifteen factors. Use a scale of 1 to 5 (1=Very Low, 2=Low, 3=Medium, 4=High, 5=Very High) to measure how each factor pertains to the situation in your organisation. Jot down a few facts to support your assessment. When you have finished, total the points, and use the notes that follow to help you draw conclusions and action items from your analysis.
Risk Factor 1 - Adequacy of Risk Management ProcessRisk Management processes need to be well articulated and effectively deployed. Very low adequacy indicates that risks and issues are discussed infrequently and response to issues is very often delayed. Very high adequacy indicates that risks and issues are debated fully, issues are predicted well in advance and responses to mitigate their impact are swift.
Risk Factor 2 - Adequacy of Change Program DefinitionAn ill-defined change program will be fundamentally unstable - having a tight definition is not the same as being inflexible. Very low adequacy indicates that plans are not baselined and few people are clear about the scope of the changes required. Very high adequacy indicates that comprehensive and integrated plans are available and that dependencies are defined.
Risk Factor 3 - Effectiveness of Change Management ProcessesThe processes that are put in place for management review of progress rarely bite - this is a key opportunity missed. Very low effectiveness indicates that the focus is on paper, not people - there is little individual accountability to the change program. Very high effectiveness indicates that meetings are restricted to collective issues and that face-to-face accountability is required.
Risk Factor 4 - Adequacy of Sponsorship and ResourcesThe absence of adequate change program sponsorship and appropriate resources are major risk factors. Too often change programs are resourced by those who happen to be available. Very low adequacy indicates that the sponsorship is narrow. Cynicism and inertia are openly displayed and tolerated. Very high adequacy indicates that executives dedicate large amounts of sponsorship time and the best and brightest resources.
Risk Factor 5 - Adequacy of Communication and InvolvementThese are often seen as soft issues. However, they are widely recognised as critical for engineering a receptive and lasting environment for change. Very low adequacy indicates that communication is random and driven from the top down; key groups re left outside the change process. Very high adequacy indicates that communication is open, direct and regular; stakeholders are identified and tracked.
Risk Factor 6 - Range of linked/consequential actions identifiedOrganisations tend to become preoccupied with one dimension of change. However a successful implementation will require a serious look at strategy, processes, organisation, culture and systems. Very low adequacy indicates that change plans are prepared with little reference to consequential changes that are required to make proposed changes stick. Very high adequacy indicates that consequential changes are well-defined and rooted in fact-based analysis - thus few unanticipated problems arise.
Risk Factor 7 - Coherence in the sequencing of linked actionsInadequate attention to this issue significantly increases the risk of failure. Very low coherence indicates that changes appear disjointed with no apparent rationale for the sequencing of change actions. Very high coherence indicates that changes are built into a sequence that is logical and that the rationale is well understood and communicated.
Rate of Return Factor 1 - Extent and Timing of BenefitsFew major change programs are supported by a sound business case. This is as true for hard changes, like implementation of CMMS systems, as it is for soft changes like culture and organisational change. Very low extent and timing indicates that business benefits from the change are ill-defined and subject to change. Very high extent and timing indicates that benefits are crystallised from the outset and revisited at regular checkpoints.
Rate of Return Factor 2 - Economy in Change Program BudgetsMany executives are ill-equipped to challenge budgets proposed for change projects, often because they have limited experience in understanding what is required in a new, unique situation. Very low economy indicates that budgets are well padded with little challenge of the details. Work often expands to fill the available budget. High economy indicates incentives for project managers to deliver under budget; executives challenge the budget detail.
Rate of Return Factor 3 - Extent to which Project Time, Specifications and Costs are ManagedFor a few, plans and budgets indicate a statement of intent. For many, they are merely a projection of what may be possible. Very low extent indicate that projects suffer persistent time overruns which are accepted as inevitable; scope is not firm. Very high extent indicates that time and cost objectives are very high priority and never compromised; scope is set.
Rate of Return Factor 4 - Degree of focus on business resultsLooking beyond the front-end business case, many organisations do not look at business results until a change program is in the post-implementation review; too late in the process to make changes that will produce the desired results. Very low degree of focus indicates that the targets for improvement are difficult to measure and lack precision. Very high degree of focus indicates that the targets are well thought out and result in relevant measures.
Latent Opportunity Factor 1 - Program ScopeSome programs get stuck in ever finer iterations of design and planning. Others take a narrow view of the potential sources of business improvement. Very low scope indicates that the change program is based on a single primary thrust - other opportunities for improvement are ignored. Very high scope indicates that the change program is deep and wide; all major improvement opportunities have been identified.
Latent Opportunity Factor 2 - Linking Change Drivers through Actions to Performance ImprovementLooking both ways down the tunnel can be helpful in surfacing missed opportunities. Are we responding to the things that prompted change? Very low linking indicates little confidence that changes will have significant impact on results. Very high linking indicates that components of the program are linked to both change drivers and results.
Latent Opportunity Factor 3 - Appropriateness of Benchmark TargetsFew organisations look for benchmarks and Best Practices beyond their own industry and territory. Very low appropriateness indicates that the targets are mostly set on an introspective view; external benchmarks used are inappropriate. Very high appropriateness indicates that benchmarking is seen as a competitive and professional way of life.
Latent Opportunity Factor 4 - Quality of the Benchmarking ProcessDoing benchmarking properly takes skill and effort. Very low quality indicates that benchmarking processes are informal and inexact; data is of little value in change planning. Very high quality indicates that benchmarking methodologies are available and are applied; data is used to guide planning.
Notes15-34 points - Watch out!
35-55 points - Keep a close eye on things.
56-75 points - You/your organisation are very likely to successfully implement the change program.
This is, of course, only a rough guide. In developing actionable ideas, consider the following: