How Can I Keep My Reliability Efforts on Track in this Recession?

By Paul Borders, Life Cycle Engineering
As appeared in Lean Manufacturing Journal e-newsletter

The vast majority of Reliability Excellence practitioners currently find themselves and their plants in a fiscal chokehold that they have never experienced before in their careers. Operations, maintenance, and training budgets have been slashed to levels that not only “cut into muscle” but are placing real stress on organizations. Many manufacturing plants are in survival mode and every expense is being scrutinized for its necessity. This severely cash-restrained environment places unique pressures on those pursuing Reliability Excellence and these pressures differ depending on where your facility is in the Reliability Excellence journey.  

If you are leading efforts in a facility that is just starting its reliability journey, your pressures are perhaps the most intense. Not only do you have the day to day pressures of a reactive environment, you are also now faced with almost certain demands to reduce maintenance spending to some level below your budgeted amount. It is within this environment that you are trying to move your plant culture from one of reactivity to one of being proactive. It is critical that you gain leadership support and define the level of resources that you’ll be allowed to deploy on the front end of your efforts. Establishing a sound business case with expected returns is fundamental in gaining this leadership support. A critical preparatory step will be to identify “quick wins” that will help to self-fund your reliability initiative. Don’t underestimate the training and education that will need to be done as well. The worst thing that can happen is you announce that you are pursuing Reliability Excellence and then the initiative stalls due to lack of resources. This places the management team in a place where their credibility is compromised.  

If you are several years into a reliability initiative, your cost pressures are similar in the sense that overall budgetary constraints are present, but there are some important differences. If you currently have an organization in place, you may feel pressure to reduce the number of planners, reliability engineers, or supervisors. A common approach is to eliminate the salaried positions and have hourly personnel fill the gap. Don’t be tempted to go this route…the outcomes are almost always disappointing. One strategy essential for continuing your reliability initiative is to actively manage your key reliability metrics.  Assign dollar values to each unit of improvement, such as 1% of OEE improvement, because your leadership and financial staff will need to have the value clearly spelled out for them. It’s equally important to connect the outcomes of your reliability initiative to long term business goals.

If your facility is relatively mature and has achieved the higher levels of Reliability Excellence, the pressures you will see in a recessionary environment are dramatically different. Because you have good equipment history and expense data available, you are in a much stronger position to demonstrate the value that reliability principles have contributed to your operation.  One of the main areas of pressure is on high cost maintenance items detailed in equipment maintenance plans. While you will still see overall cost pressures, you are in a better position to justify capital improvements in a capital-scarce environment. Your business case for certain projects will most certainly be stronger than other facilities that don’t have the data in hand to justify projects. It is critical that you quickly execute capital projects that are approved. This places your team in a position where the execution will be noticed by leadership, plus it positions your site for more spending if additional capital becomes available. Your reliability engineers will have the additional challenge of selling total cost of ownership arguments to leadership – a tough sell because future savings are not nearly as tangible as current spending levels.  

Dedicated and committed people in manufacturing plants all across North America are trying to institutionalize reliability principles in their own plant environment. Nearly all of these people are feeling the effects of this recessionary environment. The reduced emphasis on production experienced by many operations because of poor demand for their products can represent an opportunity to make gains in your reliability programs. It will take tenacity, creativity, leadership commitment, and networking with like-minded peers to make headway in this environment.

© Life Cycle Engineering, Inc.

For More Information

843.744.7110 | info@LCE.com