Archive | Management


7:32 pm
August 22, 2016
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Video Demo | Optimizing Spare Part Requirements

Emerson Electric, Inc. made news last week with its announcement of its acquisition of Pentair Plc and their valves and control business for $3.15 billion in cash. The company is selling other non-core businesses and is focusing squarely on the future of industrial equipment and Industrial Internet of Things.

Below is a video demo of Emerson’s CSI 6500 ATG mobile machine health solution for rotating equipment. This remote solution uses a smartphone app and software to provide machine health data, analytics, and insights on how to optimize spare parts.

1601Iot_logo>> For more IIoT coverage in maintenance and operations, click here! 


8:36 pm
August 9, 2016
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Put Efficiency In MRO Storerooms

Outdated designs, work processes, and technologies keep many of today’s storeroom operations from adequately meeting the needs of the maintenance efforts they’re expected to support.

While bar-code technology has been around for decades, only a few storerooms have fully implemented it to track and manage their MRO inventory.

While bar-code technology has been around for decades, only a few storerooms have fully implemented it to track and manage their MRO inventory.

By Wally Wilson, CMRP, CPIM, Life Cycle Engineering

Regardless of organization size, many storerooms are still operated as they  were when the plants first began operating—which could have been decades ago. They still have light-duty metal shelving that wastes substantial vertical-storage space and heavy-duty pallet racking with extra-wide aisles to accommodate large components. For many sites, changes that make MRO (maintenance, repair, and operations) storerooms more efficient are long overdue.

Why a storeroom deserves TLC

An MRO storeroom is a business within a business that’s expected to have available items to maintain a site’s operating equipment. While the maintenance department may be its primary customer, it serves many areas of an organization. Its main role is to manage the inventory investment and provide the needed parts and components for equipment repairs and support the overall objectives and goals of the business.

The culture of the maintenance organization directly affects how a storeroom functions. If the expectation is to provide repair parts quickly for equipment breakdowns, the storeroom will be forced to operate with a large inventory investment—and in a very reactive mode. If maintenance personnel are conducting reliability-centered maintenance (RCM) and planning and scheduling their work, the storeroom operates in a more efficient and proactive manner, and with less inventory.

Note that how inventory is managed affects the outcome of equipment reliability. Take, for example, the fact that a harsh storeroom environment can damage parts. Dust, dirt, heat, cold, vibration, and static electricity can affect the quality and performance of some parts when put in service.

Service life can also be affected by how items are physically handled and stored. Think about the impact of an electric motor that’s dropped or had its shaft struck by a lift truck. Mishandling of parts can cause concealed damage that does more than adversely affect the life of the components themselves. It also can cause collateral damage to other equipment with which those items are installed.

Here are some recommendations for bringing your storerooms up to date in terms of location, storage equipment, work processes, technology, layout, inventory-stocking decisions, and kitting approaches for planned work.

Changes that make their MRO storerooms more efficient are long overdue for many sites, starting with elimination of substantial space-wasting, light-weight vertical shelving.

Changes that make their MRO storerooms more efficient are long overdue for many sites, starting with elimination of substantial space-wasting, light-weight vertical shelving.

Update location

Past thinking was that the storeroom needed to be centrally located for easy access from anywhere on the site. This philosophy was driven by the role of the storeroom and the need of the employees to have access to everything from office supplies and consumables to repair parts for equipment maintenance.

Current thinking is that the storeroom should be located on the perimeter of a site for increased security. Placing a storeroom there also reduces delivery traffic that can cause a safety hazard for employees and delivery-vehicle operators. 

Locating the storeroom on the site’s perimeter increases the need to plan and schedule the preventive and routine maintenance work. To support the planning and scheduling of this work, parts need to be kitted and delivered to a staging area or specific job site. Ensuring that needed parts and services are available before a job is scheduled is critical—and directly supports proactive maintenance and MRO-storeroom operations.

If a storeroom isn’t staffed 24/7, grouping inventory by commodity helps off-shift personnel find parts they need without searching throughout the storeroom.

If a storeroom isn’t staffed 24/7, grouping inventory by commodity helps off-shift personnel find parts they need without searching throughout the storeroom.

Update storage equipment

Regardless of a storeroom’s location, how space is used determines whether it operates efficiently. Assessing the vertical space, along with the square footage, helps define which storage equipment will be best suited to effectively manage inventoried items. Most MRO storerooms contain about 70% small items, with larger components and sub-assemblies making up the balance.

The smaller items should be stored in high-density cabinets, that, compared with metal shelving, dramatically increase space utilization. Cabinets can reduce the footprint of metal shelving in a storeroom by two-thirds. These types of cabinets also provide protection from environmental hazards (dirt and contaminates) that can damage parts. 

If square footage is limited, but ample vertical space is available, vertical carousel units are a good option. These units combine the high-density cabinet capability with a small footprint for storing large numbers of parts. Keep in mind, however, that such units are not limited to small-item storage.

Most vertical-carousel units have a maximum weight capacity of 300 to 400 lb./tray. These units can be configured in varying heights from 16- to more than 30-ft. to maximize use of available vertical space. Implementing vertical carousels significantly increases the use of available square footage and reduces the required footprint even more than high-density cabinets. A limiting factor is usually the cost, which can range from $150,000 to $250,000 per unit.

Update work processes

Several basic work processes need to be in place to effectively manage the storeroom and the inventory. Some rely on areas of the business operation outside the storeroom to be successful. Processes internal to the storeroom include:

  • Receiving. Identifies tasks required for the storeroom clerk to document and verify receipt of a shipment.
  • Inventory-stocking. Activities required to locate and store items to ensure the parts are properly stored.
  • Inventory-issue. Tasks required to allocate items from the storeroom inventory.
  • Inventory-cycle counting. Activities required to verify and correct on-hand quantity discrepancies.
  • Inactive-inventory identification. Identifies non-critical, slow-moving items that are candidates for revised stocking levels.
  • Obsolete-inventory identification. Activities required to identify parts that are not attached to a current operating equipment asset.

Work processes that the storeroom supports include:

  • Incoming inspection. Inspections of incoming items that were fabricated or require certification before receipt.Return-to-inventory. Activities that credit returned items to a work order.
  • Return-to-supplier. Activities that address warranty, credit, or replacement of a defective part.
  • Planned-work kitting. Activities that ensure all parts are on-site before the job is scheduled for completion.
  • Repairable-component process. Activities that track and manage the rebuild of selected components from removal from service to return to the MRO storeroom inventory.

Update technology

Technological advancements can be valuable tools for dealing with MRO inventories. Many organizations, though, have invested hundreds of thousands of dollars to purchase and install a state-of-the-art inventory-management system, but failed to leverage all of its capabilities. The sad fact is that employees often don’t receive adequate training on how to use the software. Consequently, they continue to rely on spreadsheets and other workarounds to do their jobs.

The business software is one of the most critical aspects in effective management of today’s storerooms. While bar-code technology, which is supported by most of today’s available software applications, has been around for decades, only a few storerooms have fully implemented it to track and manage their MRO inventory. To maintain visibility of the storeroom inventory, its receipt, management, usage, and re-stocking of materials has to be streamlined and updated in real time.

If such software is managed properly, all authorized individuals have access to real-time inventory reporting. Accurate, real-time inventory visibility is essential to your maintenance planners. If they’re not confident the inventory is accurate, they will spend much of their time doing physical checks to confirm the parts are actually on site.

High-use items, such as personal protective equipment (PPE), tools, filters, and leak-prevention solutions, can be dispensed using various types of vending machines.

High-use items, such as personal protective equipment (PPE), tools, filters, and leak-prevention solutions, can be dispensed using various types of vending machines.

Update layout

A storeroom should be laid out with consideration for space utilization and material flow. Inventory analysis and classification, using the A-B-C identification system, lets the storeroom manager establish a cycle-count frequency and define what items are critical, what should be held in inventory as stock, what should be non-stock (order on demand), and what are commodities that should be vendor-managed in the shops.

Handling or moving inventory items multiple times is a waste of effort for the storeroom staff—and increases the chance of damaging parts and components. When determining the space needed for a specific commodity group, a cushion of 15% of the space should be reserved for expansion. This approach provides space for new parts stocked for equipment modifications or new equipment installations.

Generally, inventory is best located and managed by commodity grouping items. The main advantage for grouping by commodities is to reduce duplicate inventory. This minimizes dollars invested in inventory and frees up valuable space. If a storeroom isn’t staffed 24/7, having the inventory grouped by commodity helps off-shift maintenance personnel find parts they need without wasting time searching throughout the storeroom.

Update stocking decisions

Inventory should be tied to an operating-equipment asset. Not all parts—even those deemed critical—will be held in the storeroom inventory (nor should they be). The decision to stock a part in inventory should consider these factors:

  • Order lead time. The understanding of order lead time often varies within an organization. The order lead time typically starts when the order is received by the vendor and ends when the order leaves their shipping dock.
  • Expected usage. Many parts could have multiple applications across the site and if the MTBR (mean time between repair) is available, the stocking decision can be made more accurately.
  • Vendor reliability. When selecting vendors, consider past vendor performance and issues that could affect their ability to provide the needed parts.
  • Impact on safety, production, and/or environment. Gauge the potential blow to these areas if a needed part were not available for the equipment repair.

For consumable inventories, consider these options:

  • Vendor-managed inventories (VMI). Items in this category are high-use, low-dollar items that can be stocked at a point-of-use location.
  • Vending machines. Many consumables, such as personal protective equipment (PPE), tools, filters, leak-prevention solutions, and office supplies, can be dispensed using various types of vending machines.

Update kitting approaches

Ensuring that all correct parts are available for a job provides a strong platform for a proactive maintenance program.

A planned-work kitting program also helps the storeroom. The key benefit is the ability of the storeroom to reduce the level of parts stocked and total dollars of inventory investment. Reducing the inventory investment contributes to an organization’s ability to operate at a lower cost.

Adding to the storeroom’s efforts to reduce inventory, the purchasing group can secure parts as they are needed for repairs, thus reducing the need to expedite purchase orders for parts or stock large quantities of many items.

For example, it costs $150 to $300 to generate and administer the average purchase order from requisition to invoice payment. Using the auto-replenishment (material-resource-planning) capabilities of an inventory-management system cuts the purchase-order cost to $10 to $12 per transaction. If the kitting process is successful, much of the inventory can be ordered as needed, staged for the job, and the work executed as scheduled.

Kitting provides a number of other benefits for a plant, including better maintenance-technician utilization. In most organizations, that rate is about 25%. With a planned-work kitting program, the rate increases because jobs, by definition, are well planned, and technicians will not be wasting valuable time looking for the parts to complete them.

Start sooner than later

The common approach to revising storeroom operations is to turn to new technology to solve all problems. The first step, however, should be to determine where you are now and what barriers prevent you from having a functional storeroom that proactively supports your site’s reliability and maintenance efforts. You’ll most likely discover some problems that haven’t yet been addressed—perhaps because your site has never launched an initiative designed to capture the opportunities they represent.

If, in fact, you find that your MRO storeroom needs a makeover, start the process as soon as possible to reap the associated operational and financial benefits. Innovation is driven by a clear understanding of the problem, planning a strategy to facilitate the needed change, identifying key activities to achieve the goals of the strategy, and measuring the performance with lagging and leading indicators.

Having a strategy to execute an improvement plan puts a rudder on your storeroom ship. Monitoring the progress of the initiative with key performance metrics will validate your progress and drive the continuous-improvement effort forward. MT

Wally Wilson is a senior reliability consultant in materials management and work management, planning, and scheduling for Life Cycle Engineering (, Charleston, SC. He can be contacted at

Key Storeroom-Performance Metrics

Key performance indicators (KPIs) that report lagging storeroom performance can shape strategies and action plans to drive long-term continuous improvement. Leading indicators are the mid- and long-term performance goals and the strategy to trend the storeroom performance toward the target goals. The strategy should include key activities and process revisions to drive the expected performance. 

The following KPIs are used to measure storeroom performance:

  • Inventory-turns ratio. The best-practice MRO inventory turns ratio is three to four annually.
  • Inventory value. Best practice is 0.5% to 0.75% of the asset-replacement value.
  • Inventory issued. Indicates dollar value of inventory issued.
  • Inventory received. Indicates dollar value of inventory received.
  • Inventory transactions. Indicates the utilization of storeroom employees.
  • Incidence of inventory stock-outs. Best practice is less than 2% of total inventory requests for unplanned jobs.
  • Identified obsolete inventory. Expressed in dollars, the best practice is less than 5%.
  • Excess inventory. Stocking overage, expressed in dollars.
  • Inventory accuracy. Best practice is 98% overall inventory accuracy.
  • Inventory adjustments. From inventory cycle-count activities.

learnmore2“Mining Gold from 21st Century Storerooms”

“Consolidating Assets Maximizes Performance”

“How to Reduce Storeroom Inventory Painlessly”

“Uptime: PDCA Drives Parts Management”


8:11 pm
August 9, 2016
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The Yin and Yang of Availability

Cklaus01By Dr. Klaus M. Blache, Univ. of Tennessee, Reliability & Maintainability Center

The principle of Yin and Yang is based on the belief that all things exist as inseparable and contradictory opposites. This passage from The Ancient History Encyclopedia sums it up nicely:

“The two opposites attract and complement each other and, as their symbol illustrates, each side has at its core an element of the other (represented by the small dot). Neither pole is superior to the other and, as an increase in one brings a corresponding decrease in the other, a correct balance between the two poles must be reached in order to reach harmony.”

For our purposes, maintenance and reliability are the Yin and Yang of availability (and follow the same overall principles). The definition of one requires the definition of the other to be complete. Reliability isn’t absolute; neither is maintenance. Together, mean time between failure and mean time to repair define availability. Equipment systems are never 100% reliable, meaning some degree of maintenance is always involved and vice versa. As one aspect increases, the other decreases.

Consider the accompanying symbol: The black dot in the white pole signifies that there’s always some Yin in the Yang (or, for Maintenance Technology readers, some maintenance in the reliability process). Consider, too, the following points:

  • Yin-Yang balance can be affected by outside influences and is not static. Likewise, levels of reliability and maintainability will vary according to operations, resources, and other circumstances.
  • Yin-Yang describes how opposite forces are complementary and interdependent, i.e., dark-light, cold-heat, reliability-maintenance. Their interaction is thought to maintain the harmony of the universe and influence all within it. In a similar way, the reliability of everything (ROE) influences the world and its multitude of interactions. These are just a few examples.

My intent isn’t to delve into Chinese philosophy, here, but to raise awareness of how everything we do (including reliability and maintenance) is inter-dependent. This includes safety, throughput, quality, cost, and so on. Reliability is a trade-off between design costs, risks, and consequences. In daily practice, it’s further complicated by unpredictable human behavior. For example, when you’re driving home from work and hear about an enormous lottery jackpot, do you go out of your way to buy a ticket? The chance of winning (with Powerball) is typically 1 in 290,000,000. The lifetime chance of dying in a car accident, however (according to the National Safety Council), is about 1 in 113. So, how lucky do you feel?

Speaking with industrial personnel around the world, I sense that they generally have a good grasp of maintenance concepts (although not all are adhering to best practices). The meaning of reliability and how it should integrate into practice is less evident to many. As a case in point, for three weeks this summer, I taught a “Reliability and Business Excellence” course in Germany for Univ. of Tennessee engineering students. As our group visited various discrete-manufacturing and process facilities, (automotive, aircraft, chemical, and food), we asked about the sites’ perceptions of reliability and maintenance. Regarding maintenance, we typically heard explanations about activities and methodologies, including emergency repairs, predictive technologies, preventive approaches, turnarounds, and the importance of availability. But, as for reliability, many of our hosts struggled with a clear answer. (Personnel at Dow in Stade, Germany, on the other hand, plainly understood the reliability and maintenance journey. No wonder: The Dow Chemical Co., in the U.S., has a mature R&M process.)

In German, maintenance is “Instandhaltung;” reliability is “Zuverläßigkeit;” availability is “Verfügbarkeit.” Yet, no matter the language used or the location of the operation, one thing remains constant: Reliability and maintenance will always be the Yin-Yang of availability. MT

Based in Knoxville, Klaus M. Blache is director of the Reliability & Maintainability Center at the Univ. of Tennessee, and a research professor in the College of Engineering. Contact him at


8:07 pm
August 9, 2016
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Asset Management: Don’t Overlook Spare Parts

bobmugnewBy Bob Williamson, Contributing Editor

How spare parts are managed is an essential element in reliability and maintenance management of physical assets. It makes sense, then, for an organization’s asset-management system to address all requirements for spare-parts-management processes throughout the entire risk-posing supply chain. Here are key references to ISO-55001 clauses with my suggested questions regarding these processes.

Planning (Clause 6)

6.1 Actions to address risks and opportunities for the asset management system

  • Where are the organization’s objectives at risk due to failures of spare parts and/or spare-parts-management processes?
  • What practices should be put in place to prevent undesired effects from failures of spare parts?

6.2 Asset-management objectives and planning to achieve them

  • How should asset-management objectives within relevant organizational functions and levels be structured to include spare-parts management?
  • How should the strategic-asset-management plan address the spare-parts supply chain?

Support (Clause 7)

7.1 Resources

  • Organizational collaboration may be required to manage the spare-parts supply chain. What parts of the organization should be involved?”
  • What resources would be required to maintain reliable spare-parts-management processes?

7.2 Competence

  • What skills and knowledge are required to assure the spare-parts-management processes continue to achieve the asset-management objectives?

7.3 Awareness

  • What ensures that those involved are aware of the company policy, objectives, and plan?

7.4 Communication

  • What communication mechanisms are needed to assure effective management processes?

Operation (Clause 8)

8.1 Operational planning and control

  • What practices should be established to ensure that spare-parts-management processes are being carried out as planned?

8.2 Management of change

  • What processes are needed to ensure that any changes to the spare-parts-management processes don’t have any unintended consequences?

8.3 Outsourcing

  • How should the spare-parts supply chain outside the organization be managed to ensure that the objectives and plans are achieved?

Performance evaluation (Clause 9)

9.1 Monitoring, measurement, analysis and evaluation

  • What elements of the spare-parts-management processes should be monitored, measured, analyzed, and evaluated?

9.2 Internal audit

  • How should an internal audit be conducted to evaluate the effectiveness and compliance of the spare-parts-management process?

9.3 Management review

  • What elements of the spare-parts-management process should be periodically reviewed by top management?

Improvement (Clause 10)

  • What corrective actions should be established to address non-conformity with the spare-parts-management processes?
  • What processes should be in place to prevent failures or identify potential failures of the spare-parts-management processes?
  • What continuous-improvement processes should be established to improve the efficiency and effectiveness of the spare-parts-management processes? MT

Bob Williamson, CMRP, CPMM, and member of the Institute of Asset Management, is in his fourth decade of focusing on the “people side” of world-class reliability and maintenance. Contact him at

The ISO 55000:2014 Asset Management Standard could play a major role in industry in the coming years. Keep up to date with our ongoing coverage of this Standard at


8:43 pm
July 28, 2016
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Empowered Maintenance Techs, IIoT and Virtualization

My first B2B media job primarily covered factory applications, namely packaging automation factories in the early aughts, and it showed me a range of sophistication in the discrete space. I witnessed a high-end dairy beverage producer and its in-line molding and filling machines — Krones Inc. — or smaller just-in-time operations, such as bag filling machines.

However, process automation has become a big part of my editorial coverage and I recently wrote about how oil and gas companies are using more automation in the field to reduce maintenance operations  — 160728fieldworkRemote Processing Helps Shale Producers Find Profits. This article uncovers a new monitoring and control solution for capturing flare gas and reselling it.

It’s called a mobile gas processing unit— Mobile Alkane Gas Separator (MAGS)— but the platform is monitored and controlled from a remote location, some 200 to 300 miles away. Pioneer Energy relies on a roving army of technicians with operation and maintenance skills to service wellsites, while using smartphones and tablet to link into the platform.

Related is a recent post at Microsoft’s blog page that discusses the “empowerment of the field worker’ and quote ARC’s Ralph Rio. Rio discusses maintenance tech workers ability to do more sensing in the field, below:

“Mobile devices and state of the art software solutions have vastly improved the lives of field teams,” explains Ralph Rio, vice president at ARC Advisory Group. “Today’s leading field service workers are much more efficient and can quickly respond to faults through access to real-time data and line of business applications. They have a fully-digitized job list with the ability to report the status of a job, even if they’re out of network range.

Rio also discusses virtualization in the blog post and how this could alter the landscape. I’m not there yet with virtualization in the field, with oil and gas prices leveling off, demand low and products not fully realized.

Read Blog Post Here >>


1601Iot_logo>> For more IIoT coverage in maintenance and operations, click here! 


4:05 pm
July 7, 2016
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Change Your Game to Proactive

Basketball arena

Expanding the definition of reliability to include the human element can transform an organization’s culture and boost overall business performance.

By Jeff R. Dudley, HSB Solomon Associates LLC

Question: What’s a common denominator among the Beatles, Elvis Presley, Led Zeppelin, Jack Nicklaus, Michael Jordan, Wayne Gretzky, Steve Jobs, and Bill Gates?

Answer: The ability to change the game in their respective vocations or pursuits.

Game changers are entities that transform existing situations or activities in significant ways. They develop ideas or means of performing that completely alter the way a situation, profession, or even an industry develops. Each of aforementioned groups or individuals had a profound impact on their profession. At times, they appeared iconic, having a significant impact on the culture around them. Looking at them, you would label them as leaders, innovators, and proactive in their approaches.

When businesses exhibit these characteristics, they are thought to have great leadership and considered to be forward thinking or proactive. They’re also typically highly successful in their respective sectors.

Screen Shot 2016-07-07 at 10.29.45 AM

Culture continuum

All businesses develop a culture that defines them. The more leadership-focused an organization is, the more proactive it becomes. Figure 1 illustrates a culture continuum moving from highly reactive to highly proactive, highly manager-led to highly leader-led, and low reliability to high reliability. As an organization’s culture moves more to the right side of the chart, the opportunity for achieving game-changing performance increases. That’s good news. The bad news is that it’s still uncommon to find organizations moving toward and performing on the far right.

Unlike individual game changers, countless organizations that hope to achieve game-changing performance often lack the culture to sustain the dedication and commitment to excellence that will keep that performance going. Instead, they languish in a reactive, manager-led state. The biggest obstacle to their success is that it is simply easier to be complacent than to constantly strive for improvement.

Staying reactive leads to inevitable outcomes

By necessity, reactive organizations have to be manager-led—everybody has to be told what to do. Since seeking permission is standard operating procedure, things happen much slower. With risk-taking held in check, very little innovation occurs. As a result, such organizations become stuck in “this is how it has always been done” mode.

Following the same old path and holding risk in check, however, has another downside: Reactive work, coupled with lack of planning, leads to greater risk to employees and the business itself. Let’s examine some data that support this pattern.

The Solomon Associates, Dallas, “International Study of Plant Reliability and Maintenance Effectiveness” (RAM) study shows that third- and fourth-quartile (Q3 and Q4) performers are more reactive than first- and second-quartile (Q1 and Q2) performers. (All Solomon studies break results into performance quartiles with Q1 being the best and Q4 the worst.)

This research also shows that the majority of work done by companies with reactive cultures is significantly less planned and scheduled. Moreover, there’s an elevated potential for high-level emergency work that must to be completed. All of these factors potentially put employees at a higher risk. According to the compiled data, reactive organizations do approximately twice as much work as their proactive counterparts.

So how does the reactive culture put businesses at risk? Reactive cultures incur significantly more asset downtime and, as a result, are not capable of producing as much product as they could, therefore becoming less profitable. Reactive cultures are also less productive, from all aspects of running a business. They experience higher operating costs, compared with proactive cultures, and generally spend less time operating their assets and more time fixing them.

Another issue to consider has to do with the frequency and severity of environmental incidents. Solomon’s data indicate such incidents occur more frequently in a reactive culture and become more noteworthy than with proactive cultures. Obviously, these types of issues can have a negative impact on business sustainability.

In any organization, profitability is driven by asset availability and the cost to produce that availability, assuming a saleable product with sufficient standard margin. Reactive cultures typically have a strong cost focus, allowing cost to drive reliability. This type of environment creates a short-term focus on profitability and often results in de-capitalized assets and unsustainable profitability.

Performance improvements

As a culture moves to a proactive mindset, the organization becomes more resilient and possesses the capacity to turn the previously described negatives into positives—something we refer to as “LeadeReliablity.” This is where game-changing performance occurs.

As proactive organizations evolve, they become more leader-led. Administrative leaders trust that employees have been trained, know what to do in most situations, and will do it well. They use their leadership skills to teach others how to lead in their area of expertise, developing leadership traits in all employees. As more personnel apply their skills and ideas, innovation and improvement flourish. As the pattern continues, the organization transforms itself. Everyone begins to act like a leader, and performance, as a whole, improves dramatically.

Risk also is minimized because of the proactive nature. The opposite of what was previously discussed is true: Fewer employees are involved in every task and overtime is typically held to a minimum. Tasks are planned, scheduled, and completed on time, with little emergency work. Employee risk is minimized because most work and potential hazards are thought out ahead of time. These organizations typically have stellar safety results and performance.

Business risks are minimized as well because these organizations are reliable suppliers to their customers—and their customers know they can depend on them. As a result, these organizations are the ones other customers turn to when reactive organizations cannot meet their commitments. Proactive organizations create customer loyalty.

Proactive cultures focus on reliability first and allow cost to create the desired reliability, which sometimes means that, in the short-term, they spend more in a targeted fashion to address a specific issue. The outcome of this mindset is high reliability at the optimum cost to achieve it.

Game changing

While proactive cultures that continue on their reliability journey become game changers in all areas, the change in reliable performance is especially noteworthy. These organizations stand out because they have patiently and bravely followed a path that has made them significantly different from others. They excel in the following three areas:

Culture: Organizations that excel in the area of culture focus tirelessly on minimizing unplanned events, identifying the abnormal, and not allowing the abnormal to become normal. They plan, schedule, commit to, and complete tasks as planned and scheduled. They do not accept the status quo and know they can continuously improve.

Individuals in these types of organizations think of themselves as a “leaders” who can make a difference in what they do. By constantly focusing on “what could go wrong,” they don’t allow unplanned events to be disruptive. If and when problems do arise, they have already decided what to do about them. They believe they can learn from everything and take every opportunity to teach what they have learned. They are well trained and follow procedures, yet treat each procedure as a living document that can be improved. They have authority and freedom to act to address any situation. They use experts inside and outside the organization to reach solutions. Others desire to be a part of such organizations.

Reliability: Organizations that excel in this area consider reliability in broader terms than those with an asset focus. Their definition of reliability also deals with how personnel conduct their business and meet their commitments. They realize that, without reliable personnel, their assets don’t stand a chance. Because their focus is on a long-term commitment to reliable assets, however, such organizations deliver impressive results. Q1 performers consistently deliver more than 97% mechanical availability. More than 75% of their downtime is due to planned turnarounds.

Spending on Reliability and Maintenance: Cost control is not the driver for organizations that excel in this area. During their journeys, spending is optimized to deliver desired asset reliability. The culture has a positive impact on the amount of spending that occurs. A focus on proactive discovery, addressing abnormal conditions, planning, scheduling, and efficient completion of the work drives costs to the optimum level. As the culture continues to develop in such organizations, spending is driven down. Note that game changers are not the lowest-spending organizations. In fact, our research has shown that the lowest-spending operations typically have poor reliability and are normally Q3 performers).

Scoring big

If you want your organization to be the Michael Jordan of its industry, you must focus on reliability. Your definition of reliability will put employee-behavior at the forefront. Reliable human behavior creates reliable asset operation.

During the journey, you will focus on growing a reliable culture and target your spending. You understand you are not under any less constraint than your competition. But, because you are constantly becoming more reliable, you target your spending to eliminate future spending. As a result, you are constantly becoming more profitable than if you had not started this journey. You do not make promises to customers, employees, and stakeholders that you cannot keep.

As a result, you and your organization become a game changer in the area of reliably running your business and create customer loyalty, employee engagement, and sustainable profitability. MT

Jeff Dudley is a senior consultant with Dallas-based HSB Solomon Associates LLC ( He has spent more than 30 years in the reliability and maintenance arena. Contact him at

learnmore2Choose Reliability or Cost Control

Set Your Mind for Complete Reliability

Seven Steps to Culture Change

Match Attitude, Structure, to Change Culture


4:00 pm
July 6, 2016
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Expect Disaster, Plan for Recovery


Not having a disaster-recovery plan in place is like being up a flooded roadway without a paddle, or worse.

By Jane Alexander, Managing Editor

Floods, tornados, lightning, hurricanes, earthquakes, fires, explosions: Is any disaster really “expected?” Isn’t an element of surprise integral to the definition of a disaster? The answer is not a simple yes or no.

Any disaster, natural or man-made, probably affords the opportunity to make the most crucial decisions of your career. How you react to an overwhelming crisis may determine your professional future.

Being caught unprepared is not inevitable. According to Pat Beisert, president of Irving, TX-based Shermco Industries U.S., (, plant personnel can identify potentially catastrophic situations before they occur and develop mitigation approaches to reduce their impact on the site’s operations.

While no disaster is really ‘expected,’ personnel can identify potentially catastrophic situations before they occur and develop mitigation strategies to reduce their impact on site operations.

While no disaster is really ‘expected,’ personnel can identify potentially catastrophic situations before they occur and develop mitigation strategies to reduce their impact on site operations.

In advance

Disaster preparedness is typically defined as those actions required to ensure the effective coordination of efforts during an event. “Most people never think about recovery until it is too late,” stated Beisert. “To create a business case for a solid disaster-preparedness plan, there has to be a corporate culture that advocates and supports the creation of policies and plans that are based on the worst-case threats to business.”

He points to several must-do items when putting together a disaster strategy. The first is to establish a planning committee with the responsibility, authority, and budget required to minimize production disruptions and assure personnel safety. Committee members should include the plant manager, human-resources manager, and representatives from other departments, including safety, operations, purchasing, accounting, and electrical and mechanical maintenance. The committee should establish key activities in these areas:

  • Communications before, during, and after events
  • Training of management and personnel
  • Disaster drills for the facility and community services
  • Coordination with insurance providers
  • Coordination with state and federal agencies
  • Organization charts for the disaster teams
  • Hazard assessment
  • Safety assessment
  • Signage
  • Documentation and corrective actions.

“Electrical-system and equipment-recovery processes,” Beisert explained, “can be planned well in advance of any event to ensure a safe and reliable re-start commissioning, as well as future operational reliability.”

The key is to carefully document electrical equipment and circuits early on—prior to removal—to ensure they are reinstalled properly.” At a minimum, the documentation process should include the following:

Each piece of equipment should be tagged with an item number that corresponds to an equipment-tracking form and saved with photos to a local database.

All control and power wires should be marked and match an accurate diagram of the electrical system. All control wires should be labeled with wire numbers and the power wires with phasing tape. This will ensure the wiring will be connected as it was originally found.

Each piece of equipment should have at least one digital photo.

If equipment leaves the site for repair, it should carry equipment-shipping documents that correspond with item tag information. Equipment that comes back to the site should carry information on date shipped, date returned, date installed/to be installed, and the date quality assurance/quality control (QA/QC) was performed.

Each piece of equipment must be tagged and the tag filled out with all pertinent information for the electrical systems such as equipment-sequence number, plant identification number, plant description, date, power center, and room number.

To make the best disaster planning and recovery decisions, Beisert encourages plant personnel to use industry standards and guidelines for equipment assessment and electrical testing and analysis from sources such as NEMA ( and NETA ( The potential to recondition electrical equipment will vary with the nature of the electrical function, the degree of flooding, equipment age, and the length of time the equipment was exposed to water. Documentation should include condition-monitoring data and other previous performance history and characteristics of the equipment. Such data can help establish priorities for the realistic recovery or replacement of an asset.

“Age alone,” said Beisert, “should not be a consideration for replacement of electrical equipment, as much can be upgraded utilizing new components and other life-extension options during the remanufacturing process. If there is still concern regarding long-term reliability, remanufactured products can allow you to restore service until a new replacement can be found.”

Many of today’s facilities remain unprepared for a variety of natural and man-made disasters that could shut down operations.

Many of today’s facilities remain unprepared for a variety of natural and man-made disasters that could shut down operations.

After the fact

So what should you do if a damaging flood strikes—and your plant had not prepared for the possibility? Beisert laid out details of a six-step restoration process that Shermco follows to help plants achieve a safe, quick return to normal status at the lowest total cost after a disaster is over.

Step 1: Base camp/assessment. Often, even basic office space and personnel conveniences are not available after a major event. The disaster team first responders should first establish temporary facilities that include shelter, emergency-power systems and supply, safety/first-aid facility, and communications equipment. This forms the “base camp” for the recovery. Adequate parking and material-lay-down areas are critical, as much of the site’s equipment will need to be removed and temporarily stored before restoration.

A full assessment of the situation, including damage survey and status of records such as control- and power-systems drawings, must be done. Also critical is establishing a detailed logistics plan for an effective equipment supply chain, staffing, temporary housing, catering, and transportation.

Step 2: Data acquisition/control. Careful documentation, including one-line drawings should be developed, based on current electrical code as the core of the plan to return the facility to service. All affected equipment, including wiring and bus systems, should be inventoried and evaluated for replacement or repair. This will also be necessary for insurance claims and to complete operations-procurement planning and execution. Full engineering and safety plans should also be completed at this point, including coordination-study reports based on the new design.

Step 3: On-site clean-up/repair. All damaged components, identified in the previous steps, will be removed and either cleaned, remanufactured, or replaced, as required. All wiring and bus bars will be cleaned, dried, or replaced. New engineering drawings will be completed before installing equipment to integrate new or updated components and to assure that everything complies with code. Any motors, transformers, or switchgear that cannot be properly serviced on site should be sent to a certified repair facility with carefully scheduled return after repair.

Step 4: Installation/testing. Repaired and replacement equipment and power-distribution-system design upgrades should be installed by certified technicians under engineering supervision by the restoration team or OEM support engineers, if required. Base-line reliability and acceptance testing of equipment and wiring systems, including grounding, should be completed before connecting to the main substation, if possible, to assure proper installation and performance of the various components and machinery. This is also the time to verify any additional safety-related engineering studies, including arc-flash and shock hazards.

Step 5: Startup/commissioning. Working closely with production and operations personnel and following OEM and industry standards, the electrical and mechanical assets should be carefully brought back on line and commissioned to assure proper design and operation. Once normal operation is restored, the restoration-services team returns control to the normal operations management and staff.

Step 6: Follow-up consulting/maintenance. Once the plant is up and running again, it’s time to set up the site’s plan for any future disasters, as well as establish a strong maintenance program based on the newly tested and commissioned equipment. As the facility, in essence, has been handed a clean slate with new or equivalent equipment, this is the best time to improve long-term reliability and develop engineering and technician support for future maintenance or expansion projects.

What would you do if a flood was to strike or a water main were to break and your site had not planned for the ensuing damages and business interruption?

What would you do if a flood was to strike or a water main were to break and your site had not planned for the ensuing damages and business interruption?

Lessons learned

As Beisert put it, the take-away here is fairly obvious. “Devoting time and committing budgets to prepare a detailed disaster plan, identify and establish a recovery team, and then take proactive steps when an event can be predicted, offers the fastest, most cost-effective way to get back to business. Maintaining equipment records and electrical drawings, as well as updating to current industry standards and codes, will also pay back in recovery time, as less re-design will be required during the process.”

Unfortunately, even today, large numbers of operations find themselves without a recovery plan when disasters occur. Beisert’s bottom-line advice: “Plan, predict, and invest in reliability. While they’re all good moves on their own, they can be critical to a plant when the unexpected happens.” MT

Shermco Industries Inc., Irving, TX, offers a full line of electrical maintenance, testing, and repair services, including disaster-recovery support. For more information, visit