When training RCM facilitators, (or any leaders of reliability change for that matter), I am always sure to make sure I show them how to build a business case, and how to “tell the story”.

This isn’t your run of the mill “How RCM saves you money” article. But hopefully it will give RCM Facilitators and Analysts some capability to determine the value from their studies, and to use that to build momentum for change in their companies.

The ability to implement is a rare skill, and in times of rapid change it becomes extremely valuable. Showing value from work is something that is of vital importance, yet seems to be lacking in many reliability projects. As a career consultant my view of this is obviously skewed, but it seems like a lot of reliability professionals tend to outsource this to consultants. (And there are some pretty good reasons for that. Both in terms of the internal dynamics of the company, and in terms of “deny-ability” later sadly)

It is true that many RCM analyses end their life as dust gatherers or trapped inside some software program, and there are lost of reasons why. But one of the biggest causes of inaction is a failure, on behalf of the facilitator, to sell the value from the analysis effort.

Implementing RCM crosses many corporate boundaries and many managerial disciplines. Not all of whom understand what you are doing, and often they could care less what maintenance are up to. Thats not their fault, they are busy people too, and such is life.

So if you are going to get them engaged in your analysis project, then you need to have a compelling story about what you are doing, why you want to do it, and how it will “rock” their world if they help you to do it. And for that you need benefits!!

These come in two varieties, the cashable variety and the non-cashable type. Both are good, but some get more attention than others. Get used to that, you aren’t going to change it - so you might as well use it to your favor.

Cashable Benefits

The stuff that changes the bottom line. Period

Potential Revenue Increases

Activities and changes that will cause a net increase in uptime, utilization or yield rates. This benefit is most credible when you can prove downtime from this issue over a reasonable period, say 2 - 3 years, and then forecast the savings over a similar time period.

At times this change may be the result of several strategies, not just one. So look carefully for them.

Direct reductions in maintenance costs

Moubray was fond of saying that RCM will achieve “a reduction of between 20% and 70% in routine maintenance where there is an existing scheduled maintenance program.” My experience is that John, as always, was right on the money with this one. But how does this happen? Here are some areas to look for:

When you apply RCM that is compliant with the SAE JA1011 it specifically asks you to determine whether each strategy is “Technically Feasible” (Applicable) and “Effective”, therefore some obvious benefits come from:

1. Inapplicable Maintenance:Elimination of maintenance routines that are accomplishing nothing because they do not fit the criteria to be applied.
2. Ineffective Maintenance: Elimination of routines that increase rather than reduce the costs of maintenance, or they do not reduce the risk of failure to the appropriate levels, or they actually increase the likelihood of failure.
3. Maintenance Out of Context: A big one in my view. Changing operating procedures, plans and strategies to suit the operating context of the assets.

Non-Cashable Benefits

All the other stuff that RCM can give you. This is a huge list and I am only going to list some of them here.

Avoided Cost

Careful definition required here, this is one that many risk consultants play up. But if you are going to be honest about it there is a right way and a wrong way to define these.

The definition I have been using for the last 5 years or so is:

The consequences that are mitigate via any maintenance strategy applied to a reasonably likely failure mode; where there was an inadequate existing maintenance policy.

Note the emphasis on the existing maintenance policy! Often this is calculated from the estimated costs of downtime only, but you need to make sure that there was nothing in place previously.

Although this will give a quantifiable answer as a dollar value, this figure will never show up on anybodies bottom line. It hasn’t happened to date, and because of your strategy it will not happen in the future.

So it remains a valid benefit claim for the RCM team to make, but careful consideration is needed to explain it.

Knowledge increases

• Changes to procedures, work processes and related policies (such as stores policies)
• Increases in the knowledge of each participant ion the RCM process
• Changes to P&IDs
• Better understanding of the limitations and requirements of the asset base by all those who are charged with managing them

When to start calculating benefits

Don’t wait until the analysis finishes. Start to calculate these the moment that the process starts. Be conscious of the impact of every failure mode that is analyzed and of every strategy that is recommended.

Part of the reason why I truly enjoy training people in RCM is because the method lends itself to accepting responsibility for changing whats going on around the business.

• If management doesn’t get it, you didn’t explain it well enough,
• If you have no support, you haven’t lobbied correctly or hard enough
• If your analyses don’t get implemented, then you haven’t done enough to influence the implementers

And so on… great fun. Good luck!

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I wrote this well over a decade ago while working in a few mining organizations in Australia. It has stood up pretty well over time so I thought I would post it here.

As a result of recent audits and reviews of various medium to large-scale industry. I have found the following to be a general observation regarding systems of work.

As technology for maintenance has moved forward there has been an increasing demand on the time of the maintenance-planning department.

Areas such as:

• Equipment profiling (Plant Index information)
• Parts listings (APL’s)
• Equipment strategy philosophies, investigation of proactive methods
• Analysis of system data
• Spares criticality assessments, ANSI management
• Advanced shutdown systems
• Equipment overhaul / replacement / repair procedures

All are key to progressing the maintenance delivery systems towards world-class status. Organizations may use various positions to analyze this function.

Roles such as Plant Engineers, Stores analysts, shutdown planning specialists as well as outside consultants can provide these functions. Functional decision of this nature determine the effectiveness of the maintenance effort as a whole and need to be considered early in the development / review process.

Often overlooked, or not clearly identified, are the basic systems that require attention for execution of everyday works.

Coupled with this has been the proliferation of advanced ERP/EAM systems, designed to manage the processes of an entire enterprise’ requirements. However very little time is spent integrating the new system with established and functioning processes.

Claims to be able to replace 40 other systems or so are only valid if there is a focus on integration also.

Resulting from this combination of new technologies and system management focus is a requirement for a definite scheduling function for short-term maintenance works.

This function revolves around the following areas of responsibility:

• Backlog Management
• Weekly Scheduling
• Execution systems

The effective implementation and execution of the number of processes required to sustain the above systems can have a dramatic effect immediately.

• Introduction of work order vetting or a work requesting system can more accurately focus backlog lists to corporate rules.
• Agreed priorities and work order classifications.
• 24 hourly review systems and reports provide the trigger for future backlog control with valuable information also being available for daily review. Requires attention to work order-raising rules.
• Weekly capacity scheduling for maintenance purposes to be introduced. This will drive the worker availability to higher levels. Initial results generally are a surprise.
• Introduction of weekly KPI style reports highlighting areas of low compliance.
• Stores interfaces on holding, reserving, ordering and repairing equipment.
• Review reports for RCA and further analysis.

Although directly effecting maintenance the customers of the maintenance department need to have this information clearly explained to them. As well they need to be informed of any changes to business rules that require their participation. Eg Work Requesting, Scheduling etc.

Agreed work order KPI’s

Although there are a range of work order KPI’s to choose from the following I have found to be key in controlling necessary scheduling / backlog functions:

• Backlog
  • Planned Work Orders (Minimum 1 Crew week)
  • Unresourced
  • Unestimated
  • Waiting for parts
  • Age of work orders by priority
  • Backlog forward resources (Crew weeks equivalent 4 – 5 weeks)
  • Average work order life
• Scheduling
  • Planned / Scheduled Ratios (Inclusive of standing work orders)
  • Maintenance type ratios
  • Overtime as a percentage of total man hrs
  • Contractor hrs
  • Report of Unplanned / Unscheduled work orders per week

This provides an insight into the effectiveness of backlog control measures as well as the effectiveness of work control systems. From this point effective decisions can be made on:

• Work order criteria
• Planning criteria
  • Work package development
• Execution methods
  • Inclusion of repairs
  • Worker flexibility
• Areas of investigation
  • Either RCA / or other optimization technique
• Crew sizes

By developing the tools, training, work flows and measures for implementing the above systems a strong degree of control over the maintenance strategy can be developed. This will start the continuous improvement cycle by giving a baseline to improve upon.

The controls and benefits gained by effective scheduling and planning procedures are well documented and are not in question here.

Integrating them with the array of EAM systems in use as well as organizing them in such a manner that they produce data that is focussed on improvement of the maintenance effort is the issue that has been overlooked. As has the effect of current technologies on the make up and focus of a maintenance planning department

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Ever since first taking up Weibull analysis as a serious consulting and engineering pursuit I have been reading the work by Dr Bob and Wes Fulton and was pretty excited by the chance of Including Wes in the Profiles in Leadership series.

Wes Fulton is founder and CEO of Fulton Findings (TM) which he started after a long career in aircraft engineering, touching on many “wow” projects like the Indigenous Defensive Fighter (IDF) leading edge flap actuation system (LEFAS) development and production, the Rockwell/MBB X-31A LEFAS flight test program, and the F-16 Fighting Falcon LEFAS production and deployment support.

He also co-patented a multi-fuseable shaft (high performance drive train device).

As if that wasn’t enough he has 20 years of programming experience as a private programmer and developed the first widely-used Weibull software. An impressive track record and an obvious choice for our Profiles in Leadership series of interviews.

Q1. Weibull analysis seems to be going from strength to strength at the moment globally. Companies seem more willing and capable of implementing a Weibull and other probabilistic approaches today than (say) five years ago. Does this agree with what you are finding, and why do you think it is?

Answer: The technical community was reluctant at first to get past using 100% deterministic analysis (DA). An example of DA is where you calculate or estimate a single value (point estimate) for burst strength of a pressure vessel. But variability concerns make that single number suspect for use in newer applications. The old way of addressing this was to assign a “safety factor” (increase) to the expected load or to “derate” (lower) the strength by some arbitrary amount … or both. While this method worked reasonably well when re-using established designs, it turns out to be too risky for implementing new designs that utilize innovative configurations and state-of-the-art materials. Plus it can be overly conservative leading to excessively heavy or excessively pricey products. We are seeing an increasing amount of new designs appearing in service today due to business competition. So, the Weibull engineering way of modeling variability is gaining in popularity as safety factor use and derating become obsolete.

Q2. The war for talent is a double edged sword right now. A difficult time for companies, and a wealth of opportunities for talented individuals. With all the training and consulting you do, what tends to separate the leading professionals from the rest in your area? And, do you find difficulties in locating good talent for your own consultancy?

Answer: For all technical analysis, especially Weibull engineering, useful results are based on some inputs and usually some simplifying assumptions. The people that carefully evaluate the inputs and scrutinize the assumptions are the best. You don’t want someone that plugs-in questionable data entries and blindly trusts the output. I personally work with great people. I consider some people I work with brilliant (Dr. Bob Abernethy, Paul Barringer, Carl Tarum, Dr. Allen Liu, Dr. Todd Marquart, Jorge Granada, Dennis Keisic, and others). So I have not had difficulty locating good talent. However, in most cases people need second and third opinions to get it right. If you are searching for help with Weibull engineering, you first ought to look for someone with practical hands-on equipment operation experience. Those people know variability exists. Their Weibull engineering talent then comes easily with training.

Q3. What is the single largest impediment to implementing a robust Weibull approach and what advice could you give others to tackle this?

Answer: The #1 hardest thing to do is to acquire the appropriate data from equipment operation. Theoretically, this is not hard. But in reality, many data-recording systems are not properly established in the beginning, and also errors occur in the data-recording process. This can be easily fixed at the design stage, fixed with significant effort during start-up operation, and downright very costly and difficult to change if attempted later than that. What data do you need for Weibull engineering? You need the age on each relevant piece of equipment sampled, whether it is still operating successfully (called a suspension) or it has failed (called an occurrence). Other information like the root cause of failure for occurrences is also extremely useful so you can analyze only one root cause at a time. If you have to analyze multiple root causes with one analysis, then either the analysis gets overly complex or your results are not as useful for determining corrective action if needed.

Q4. As I read it, Dr Bob and you have advanced the method in quite a few areas. Are there remaining areas that you think could still be advanced? And on a personal level (As a research junkie myself) how do you manage to continue research, manage a business and have a personal life to boot?

Answer: I am very fortunate to have worked with Dr. Bob Abernethy for over 20 years now. The more we discover, the more future work seems to appear. Some future work is needed to look at the uncertainty (potential error) associated with popular complex methods like estimating confidence bounds on accelerated-testing projections. You first gather age-to-failure data at two or more different load levels. Then you can then estimate the effect of load on lifetime (higher load generally reduces lifetime).

Many applications use a power function or an Arrhenius function for the effect of load on lifetime. Then there is the extra step of adding confidence bounds on estimates of lifetime capability at untested load levels. In my opinion most analytical software now on the market grossly underestimates potential error in such results. On the very different subject of continued research, business management, and personal life … I invoke the 5th amendment. My wife would prefer otherwise, but I spend a lot of time on the business. I am hoping that personal cloning becomes affordable soon.

Q5. What can we expect from Fulton Findings over the next (say) 12 - 24 months in terms of new markets, new areas, or other business areas?

Answer: Jorge Granada and I have launched the first (to my knowledge) web-based Weibull engineering application at http://www.riscape.com called “Rapacci”. Access to Rapacci is currently free so we can introduce the concept and improve the service, before going commercial. Please feel free to check it out. You just have to set up a User Account first. I’m positive that all analysis will be done this way, over the internet, eventually.

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Get out of your office. Easy to do, just get up away from the screen, go and see what people are doing out there.

What happened with the RCM analysis that took 2 weeks to work through/ Offered great results right? Has it been implemented yet? Is anyone even starting to implement it yet? The data, the procedures, the (few) modifications, the changes to the way we work as an organization?

Or here’s a test. If the RCM results have already been turned into maintenance routines - then go and ask the people using them what they think. Do they get it? Do they even make sense? Did the team get it right?

What about the fantastic results from the recent RCA study? Anything happening there yet? Or the lubrication program your guys have just started to implement after redefining it.

Go and see the character who has whipped together a neat spreadsheet for managing bolt torque records, or see what is happening with the PSV test bench that your guys were installing.

There will be no doubt that your team’s will have come up with any number of innovative ways to deal with the challenges of day to day maintenance. But you are never going to get any appreciation of it from behind that desk.

So get out of the office!

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A blog post I read the other day on Seth Godin’s blog (read it) gave me an absolute moment of clarity.

“The problem with fitting in and being a cog in the machine is that cogs are intentionally designed to be easily replaced. When one breaks you just get a new one. No one particularly misses the old one.”

We have spoken on this blog a number of times about the changing nature of work. And about how you, as a commercially valuable talent, are facing a new and different work place than your parents did. (Read Free Agent Nation by Daniel Pink)

So if talent is the commodity of this century, and business life cycles are getting shorter; then your choice is obvious.

Be an asset, or be replaced by someone who is. This is particularly relevant in todays uncertain economic times.

Here are some things for you to ponder (I like that word) :

• If you left tomorrow; who would care? Would you be like removing a finger carefully from a glass of water, like removing a support beam from a wall? (Tip: be the beam)
• If your initiative stopped tomorrow, would anybody notice?
• How important is your project? (If you aren’t on one then GET ON ONE!)

Maybe its vital.. Does anybody know? How are you managing the message? Are you getting home runs and not telling anyone?

• What makes you the “must have” resource in your company? (Forget technical capability! You need that just to get into the game.)
• Think about the extra areas. Innovation, adding real value ($$$), developer of future leaders, or breadth of ability.

I often see others railing against specialization. And to some extent I agree.

But my experience is that you must do one thing exceptionally well, perhaps better than anybody else in the world. And then you need to be able to do “other” things well.

• Are you a goto person? Will clients / managers / supervisors or peers (internal and external) seek you out for your views on issues?
• And if they do, could they easily seek out someone else?

We are in an age where information is everywhere. Experience comes contained in RCM analysis and expert systems.

If you haven’t lived through it once already, them at some time in the near future you are going to find that some technological wizardry is suddenly able to perform the tasks you have perfected over years. (Or maybe even an engineer in some off shore low wage economy)

Tom Peters says be Distinct or Extinct. Wiser words were never spoken about career management, particularly in the 21st century and particularly in maintenance and reliability.

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I met Bob Latino via the internet while participating in Sandy Dunns’ Plant Maintenance forum. (the oldest in the game I think) This was well over a decade ago and I have enjoyed stating in contact with him ever since. During our time of knowing each other he has helped me to start writing, we worked together on a project in Egypt, and I was a representative for his company and products out of Mexico for a while. Great stuff.

Bob heads up the Reliability Center Incorporated (RCI) which holds the enviable domain name www.reliability.com.

Reliability Center, Inc. was established in 1972 as a Research & Development arm of a major U.S. corporation. It became an independent corporation in 1985 under the direction of founder and president, the much respected, Charles J. Latino. Today it is a mainstay of the reliability industry globally. There would be few have not heard of the PROACT software and methodologies, and Bob and his team are frequent participants in reliability events globally.

Like many other people I have come to know in the game Bob is one of the world’s sincere gentlemen. I have always found his dedication, commitment and business ethics to be very inspiring, so he was a natural choice for me to approach for the Profiles in Leadership Series.

Q1. Just checked out the website for the first time in a while. Looks great.

I am also seeing a lot of organizations where PROACT has wisely been implemented as an organizational program, rather than a project to be implemented.

Things seem to be really on the up for RCA and PROACT these days. What seems to have bought about this shift in the marketplace?

Answer: Daryl, as you know, the term RCA has become diluted to the point of uselessness today. Since there is no universally accepted definition of RCA, everyone interprets it the way they see fit. This really results in a disservice to the RCA community that must facilitate such analyses. The problem becomes that no matter what tool or approach someone may be using to resolve their undesirable outcomes, they will call it “RCA”. This means that tools such as Brainstorming, the 5-Whys, Fishbones, Cause-and-Effect Diagrams, Logic Trees and the like are all grouped together as commodities with no one tool being recognized as having more breadth and depth than the others.

To RCI, true Root Cause Analysis is not simply a task to be done using a single tool for a single event. RCA is a “system” and we purposely branded our PROACT Approach to that message. You may have the greatest tool to do RCA but that does not guarantee success. You also may have the greatest analyst on earth, but that alone also does not guarantee success. The sum of the parts must work together to produce a yield far greater than the sum of the individual components.

When RCI was originally an R&D group for Allied Chemical Corporation (Honeywell today), our charter was to develop the sciences of Equipment, Process and Human Reliability in manufacturing. This is where our PROACT Approach concept was originally conceived. When looking at RCA as a “system” rather than a “task” we must consider the big picture - equipment (tool), processes (approach) and humans (team). When any of these components are missing and/or inadequate, we will not be as successful as we are capable of being.

The “P3″ Model you see on our website incorporates all of the aspects we consider part of our PROACT RCA System.

Q2. What sort of activities do companies generally carry out when they look at RCA as a system rather than a project? In the past I have seen a lot of resistance to implementing RCA in a permanent sense (along with everything else) so I am really trying to work out how you were able to get over those traditional barriers. (Lack of support, lack of continued focus etc…)

I will once again reflect on when RCI was originally the Reliability Center for Allied Chemical Corporation. Allied was serious about their strive for true Reliability. To demonstrate their commitment, they issued a Corporate Reliability Policy. While this may seem like a paper gesture, what this means to the floor is that Reliability is not optional, it is the way in which this company chooses to conduct business. This provided the new Reliability departments at the plant level the clout to refer to the corporate policy when there was resistance to working with the Reliability departments.

I see the same for RCA. If facilities are serious about RCA, they will choose to institutionalize the processes they have chosen to use. By institutionalizing their RCA process it will survive management changes. As we all have experienced one time or another, we have our true Champions who push our cause in an organization and then when they are promoted, the cause falls on its face for lack of leadership. Institutionalizing our causes gives it a fighting chance in the absence of the Champion.

Corporations who are serious about using RCA to impact their bottom lines do not see RCA as a commodity. If people are shopping for the RCA tools and approaches based strictly on initial cost, RCI will not choose to bid in such situations. If the breadth and depth of the RCA approach does not matter to the buyer, then they are shopping based on cost so they will select the least expensive path. We do not wish to compete in this space. We want to work with people who shop based on “value” and not just “cost”. People who shop on value understand that the approach they want is the one that has the capability of producing the greatest return!!

Like you opened with Daryl, our success is based on our reputation in the industry. Most of our work is from repeat clients and referrals. Our case studies are from successes in the field by our users. This is what helps us convince others they can do it also. Our goal is NOT for our clients to be reliant on us to help them with continued success, but for them to let their success breed more success in their own organizations.

Q3. I am pretty impressed by the work I see you doing in the field of human error. What exactly are you doing there and how well is this being received by industry?

Answer: As far as we are concerned, if an organization is not using the research published on human error to add breadth and depth to their analyses, they are not doing RCA. As far as we are concerned RCA starts with Human Error and does not end with it.

Human errors are decision errors (errors of omission and commission) that trigger physical consequences to occur. If the physical consequences are not stopped they will continue to trigger more and more undesirable effects until you have no choice but to address them. What we try and focus on is not WHO made a poor decision, but WHY did they think it was the right decision at the time they made it? When we drill this deep into the human mind, we find that the organizational systems that we work with are often flawed. Such systems may be our policies, procedures, practices and habits that have evolved over time. Understanding the working relationships between ourselves and our equipment and processes is the key to reducing human errors. This is the reason we focus so heavily on the “soft side” of RCA or the human side.

Q4. Tell us about healthcare. Has this been a good area for you to have entered? You seem to be having a lot of success in the area.

Answer: Everyone reading this column can benefit from the use of RCA in healthcare. Having gone from the industrial sector to healthcare has been an eye-opening experience for me. With regards to the communications infrastructure in healthcare, I see them as at least 15 years behind that of industry. Healthcare is a very labor intensive industry and there are more human-to-human interfaces than in industry and this poses their greatest challenges to Reliability. Quick, effective and efficient communication is a necessity in healthcare and it is very lacking.

Our healthcare system in the USA can greatly benefit from the Reliability Engineering experience of industry. I am starting to see some rare hospitals hiring Reliability Engineers into their Risk Management departments, it is a start!

On October 1, 2008 the Center for Medicaid and Medicare Services (CMS) announced they will no longer reimburse hospitals for what they call Never Events (not present at admission). These are errors that occur in hospitals that cause harm to the patient and they are deemed preventable. Examples of Never Events include Falls and Bed Sores which as very expensive to correct. In the past CMS has paid the hospitals when these events were not present at admission and caused by the hospital. This will cease to be in October and hospitals will then have the incentive to stop these events from recurring or pay for them themselves. RCA will play a major role in helping hospitals prevent recurrence of such Never Events. CMS non-payment is just the beginning, the major insurance companies will not be far behind.

Q5. I have to ask about talent Bob. I know you, Mark and Ron mainly; and would work with any of you any day on any project. But how is the talent pipeline coming along? The resource crunch seems to be hitting everyone I know globally, and there are fewer and fewer good people in the pond to choose from. (Or make that, fewer good available people)

Answer: We see the same Daryl and face the same issues. In our line of work it is not good enough to have “warm bodies” out in the field representing our firms. Our reputation would not be able to sustain us very long if that were not the case. I will admit in the past, we have made such errors in judgment and taken the “warm body” route and paid the consequences. Like in RCA, we learn from our mistakes as well.

We are building a solid base of top notch technical instructors and facilitators. We have experts in the areas of fractology (materials engineering) and human factors engineering. These talents translate into our workshops on Mechanical Failure Scene Investigation (FSI), Electrical Failure Scene Investigation (FSI) and Human Error Reduction Techniques (HERT).

We use very niche recruiting firms to help us find the specific talents we are looking for and I will be honest, it does not happen quickly. But we are willing to wait in order bring the right “fit” on board. Oftentimes some of our star clients decide to take early retirement and express a desire to work with RCI on a full-time and/or part time basis. Because they are known commodities and the learning curves are nil, this provides a win-win scenario.

Q6. Always keen to see where you are going to be taking us over the next couple of years. So what does the next 12 - 24 months hold for the Reliability Center Bob? New markets, products, sectors, approaches?

Answer: RCI will continue to enhance and add new technologies to our PROACT RCA software to assist our analysts in the field. We will continue our quest to provide experience templates in our software to provide analysts in the field with successful experience from their peers in their own, and other industries.

RCI now offers a Lead Investigator Certification Series. This is a series of six workshops over a six month period. The workshops focus on our PROACT Methodology, Human Error Reduction Techniques, Mechanical Failure Scene Investigation, Electrical Failure Scene Investigation, PROACT Software and PROACT Facilitation. Students work on live projects producing their stunning ROI’s while in the workshops.

RCI will continue it integration into the health care world by establishing software partners whose products are complimentary to ours. Health care is an emerging market that will recognize the critical role of true RCA to the success of their hospitals in the years to come. This is near and dear to RCI as this is one way in which we can give back to our communities by helping reduce unnecessary harm to patients.

RCI will continue our push into South America via our representatives in these countries. We current have most all of our offerings in Spanish and will move to work on Portuguese next. Our PROACT Enterprise Software is now available in Spanish and this was a major undertaking but it made it much easier for us to convert to any other language, so it was well worth it.

RCI will continue our relationships with our partners in industry like Meridium. In such instances we provide technical expertise on the ground with the clients who are utilize our PROACT for Meridium version of software. This works well because Meridium’s core strength is software development and ours is RCA, so this has proven to be a good marriage.

Lastly but certainly not least, RCI will continue to define its success solely based on the success of its clients. As you know my father, Charles J. Latino, passed away late last year leaving RCI as his legacy to his family and his clients. We plan to achieve the vision my father always had for RCI and doing so within the value sets he instilled in each of this children. We plan to make Charles’ dream a reality for generations to come!

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I have been thinking a lot recently about implementation and execution. Actually it is part of the drive for my next book Asset Resource Planning, which looks at what to do after starting an RCM/ERP/TPM/whatever implementation program.

After a few years of studying this theme, both in practice and through published studies, a few things have really started to jump out at me. Lets look beyond the obvious statements related to corporate support, leadership and funding for a moment to get to some of the core reasons why projects fail.

1) The Work Matters! It really matters! Not the planning of the work, not the conceptualizing it, but the doing.

Seems obvious at first, but it is probably the least recognized activity in our daily maintenance lives. people are punished for doing things wrong, and for making errors, but they are rarely awarded/recognised for doing things well. (Not stand-out-above-the-rest well, just well)

At first we award stand-out RCM facilitation, (Say) then we award RCM successes, then we just leave everyone to get on with it and expect continual high quality performance as the norm. Wrong!

If we want to continually achieve high levels of data quality / RCM results / RCA results etcetera - then we need to continually reinforce, re-invigorate, and highlight what is expected as a minimum standard. Continually rewarding those who are able to deliver at that standard.

A really wise guy recently said to me “People don’t leave companies, they leave managers!” And why do they leave managers? Partly because they feel unappreciated. But it could be worse.

People can be uninspired and leave, or become disgruntled and stay!

This means that, as a manager, you need to be really into the detail. Understand whats going on, why, by whom, and what’s working. (What’s working will be the subject of a whole other post, fascinating topic) And you need to recognize great efforts, give everybody something to aspire to.

I don’t mean just token awards, but sincere appreciation! We often get caught up in the strategy side of things. Setting out the vision then putting in place the steps to get it done. But we have to continually review, recognize, modify, and check the work that is being done today.

Bill Smith is a great consultant (technician, mechanic, supervisor, engineer), always does good work, always delivers a great result, and then one day he up and left. Why? (Obvious isn’t it?)

How to make the work matter:

1. Get out of the office! Walk around, ask, listen, inquire, inform
2. Whats happening today! Where are thing going, and why?
3. Get metrics! Quickly! (And tie them to personal performance)
4. Reward innovation, effort, and inspiring effort.
5. Recognize the norm. Jack Welch says 70% of your people will be normal. Not high fliers, but the cogs of the company. Do not neglect them!
6. React to inconsistency, reward consistency
7. Hold status meetings, often. Not of the project, or the initiative, or the company. But of the day to day, whos doing what, why, with what, and what is the result.

The work matters, it really does matter. Not just the thinking of the work.
2) Relish the Detail: The vast majority of projects fail because of small issues that are left unchecked, or unresolved. Particularly on the big jobs.

Why is that, because its all so big, and current commercial realities seem to be focused on trying to do a heck of a lot with a talented few. So small things fall through the cracks.

The big one is communication. I get at least ten or so emails a day that I don’t read, I mean to get back to them. But I never do. (I get around 180 emails a day mind you)

Another big one is scope creep. Most (ALL) scope creep is generally driven by one well-meaning consultant who decides it will be okay for this small thing to be added, then suddenly it is part of the project deliverables and everything is hanging on the outcome of this small item. Paying-it-forward is a valid strategy, but needs to be kept in check.

The other side of scope is when we miss obvious areas of opportunity. “No, training of these people is out of scope.” Okay, fine - but if we don’t train them then the whole thing won’t work at all.

Too bad, not part of my budget, we will need to deal with it later. (Later never arrives by the way)

Another vital area of the detail is particularly when we are looking at large scale IT integration projects. We have so many people immersed in how we are doing something only to miss the point totally when it comes to understanding deeply what we are doing.

How are we doing RCM? Team facilitated, 5 people and a facilitator, one room, 6 days, etc, etc. (Normally with smatterings of detail about operating context and so on)

What are we doing with the RCM project? redefining the maintenance strategies, reducing the level of risk of safety and environmental incidents, improving uptime, increasing asset knowledge etc.

Two different stories. More about this later…

Some keys to relish the detail better:

1. Focus on what we are doing, not so much on how we are doing it.
2. Get a good (great) idea of what we are not going to do.
3. Talk to each other, don’t just send emails. Use Skype, chat, cell phones, video conferences, face to face (perish the thought) meetings
4. Have structured meetings, don’t let the wafflers win the war for conversation space.
5. Follow up, act and react.
6. Read, review and respond
7. Cut out unnecessary documentation (Arrgghhh!)
8. Scope check, project plan updates, (accurate) forecast checks, delivery checks
9. What is needed but not covered? How will we cover it? (Don’t get fobbed off here)
10. Integrate deeply. (Not with IT, but with people - Safety, production, purchasing)
11. Don’t do memos - do discussion.

This is a really fascinating topic that we are going to cover here a heck of a lot more. Execution is the challenge of the 21st century. We are all living in a world of perpetual change, and we are all trying to work out what to do about it. The survivors will be those who can not only innovate, but who can implement as well.

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I read a great article in my google newsreader this morning about data and had to share it with you all.

Check the Australian IT site ComputerWorld for the article here.

The author quotes an analyst from Gartner Group who was speaking at a seminar in Australia. He made a great case for data being mishandled when in the wrong hands, the role of data steward, and the fact that industry in general is becoming more interested in data management.

Great article, have a look at it. Particularly relevant as interest in our own area is surging throughout the world.

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This is the first in a string of interviews we are planning to do in this column called “Profiles in Leadership”. The game is filled with people who are really nice guys, innovators, and who work day in and day out to bring about change in our managerial discipline. This series is aimed at recognizing some of them and bringing them out of the shadows at least for a little while.

Steve Turner is the owner of OMCS, and the brains behind such products / methodologies as PMO2000, RIMSys and others. I have known Steve since around the turn of the century and it has been fascinating to watch his company grow from where it was then, to where he has taken it today. Not only is his story a profile in Leadership, but he is one of the games truly decent guys as well.

Q1: OMCS is part of the reliability landscape now. But what initially inspired you to start the company? Would you recommend entrepreneurship to others in the reliability game?

Answer: I was inspired to consulting by the reward of helping people- particularly shop floor people, improve their understanding and job satisfaction at work in what are normally difficult situations. Typically these are situations where management takes insufficient notice of their knowledge and capabilities. I love working with the shop floor people and facilitating their creative abilities to the point where they formulate comprehensive and logical improvement plans for their business.

My first real taste for this was when I was working for General Motors on their Supplier Development Program. This program involved facilitating production operators who effectively conducted lean manufacturing and line balancing analysis on their own production lines – stop watches and all.

From that I moved to a Big Six consulting firm where I was able to continue this passion. This worked for three years but eventually I found that work was mostly compromised by a policy to deliver a certain type of process, which I thought was mostly a bad fit with client needs. The program was an RCM program. I felt that most organizations were 80% of the way with respect to their maintenance program and that RCM amounted to setting aside what had been developed and starting from scratch: Throwing away the old and creating a new one. I wanted to work on a program whereby companies could start with what was already in place and rationalize and review this, and fill in the 20% that was missing. Developing something better was a key driver of starting my own business.

Another key driver was the diminishing satisfaction I was finding at working in a large firm with an unseen layer of intense internal politics. Additionally, my work was often compromised by directions from project managers who had a cost cutting view rather than a revenue view of businesses. Consulting in those days was primarily concerned with cost reduction and I felt uneasy in this situation; particularly in revenue businesses that can sell all they make.

I did not see myself as a partner in such an organization so I decided to do my own thing and see what happened.

I am now very happy in what I do even though there is an enormous workload. Fortunately I see work as a hobby and so I don’t mind devoting my spare time to developing new ideas and working on keeping the organization on a growth path. I now find myself mostly in a management role though I still work with the customers when we need our people trained or I sit in on my consultant’s/ client presentations.

I would do the same again so I would have to recommend this to others. I do know however, that many people start out in this business and don’t succeed. It is certainly different to corporate life as an employee. I have not had many holidays in the past decade and in the early days, with growth and product development costs, we did not pay much off on the mortgage. I think that for many people, the risks and the low initial rewards are incompatible with family and personal needs and so they don’t last long in consulting.

Q2: Finding talented people seems to be a common thread among consultants and client companies today. How are things with you given that your international reach gives you a broader pool to choose from than most? Got any tips that have helped you find and keep good people?

Answer: I don’t think we have a broader pool to choose from than most. First of all, few people come with the knowledge-set we need so we can’t easily hire people that have experience. People with the experience we need are easy to come by.

We therefore need to find people with the right personality and work ethics and spend three months training them before they work unsupervised. Even people with RCM background need to learn with us – and often, if they have been using complex or statistical RCM programs, they often fail to move to our way of thinking. Our needs are also ultra high in the computer skills area. This means that 80% (just a rough estimation) of the people in the 40+ age bracket are not suitable.

For these reasons, our target employee is someone in an age bracket between 28 and 35. They have to be able to travel. The reality is that most of the people in this bracket are starting families or looking for the partner of their dreams. The needs of consulting often conflict with their personal needs so it is tough to find people that fit the criteria and are likely to do so for five or so years.

Like most companies we advertise for people and try to find the best from the applicants. We have also recruited from references.

Keeping the good people is high on the list of company goals. We work hard to keep tabs on our consultants’ personal lives – not in an intrusive way, but we try to keep the Mrs and kids happy. We often send the spouse or partner to the location where the consultant is working and allow them time together at our expense – even if this is overseas.

Q3. To take a broader perspective; how is the market reacting to reliability these days? You see it across a number of continents, industries and cultures so yours is a pretty unique viewpoint.

Answer: It is good to see more people at reliability conferences. The current resources boom has loosened the purse strings a bit and got a focus on revenue back once again. I am still very disappointed in the poor improvement and the lack of real initiative. I have learnt not to get too frustrated and to lower my expectations.

The biggest set back for our industry is that we are engineers. We are people that can do. By and large we have an attitude that we can solve problems ourselves. If you tell an engineer the problem has no solution, he is likely to take it on and not stop until he has fixed it. This means often that our specialist advice or assistance is not sought often enough. We are called in frequently to do the initial work on projects, but most times, the engineers want to internalize the program far too early. Without exception, the total potential benefit not realized in these cases

Financial controllers often see maintenance improvement programs as risky business and that compounds the problems – finances for these projects are often half or less than what they should be.

Secondly, I think that the engineers have made the processes of improving maintenance overly complicated. This is becoming an increasing problem and I have been doing my best to change the direction. It seems easy to develop something that is complicated but it takes a lot of courage to go in the opposite direction. Complication seems to support a lot of consulting firms who have developed elegant statistical methods and hence say to their customers, “this is too complicated for you to do”…. This model feeds on itself unfortunately.

I believe, these consultants think they can get and sustain the work this way. Unfortunately, I think these complex approaches are having a major negative effect. Maintenance is not about failure statistics and models. There is rarely any source of reasonable data in maintenance yet we are seeing a significant increase in the number of packages that deal in a statistical way. The problems with this are major. First and foremost, such approaches drive improvement from the shop floor into the engineering back office staffed by young engineers who know a lot about statistics but very little about maintenance. Their output is usually founded on guesswork and unsupported assumptions… the shop floor people are not involved in the analysis and think it is flawed – and it usually is. The latter being the second major problem.

The move to statistical methods in maintenance is my biggest concern for the future. It will be a fad – but we will lose a lot of ground going this way. I hope we get back to simple fundamentals soon.

Q4: What do you see as the biggest barrier to embedding improvement initiatives, and what are your tips to help people overcome it?

Answer: I think the comments above are one of the barriers – statistical programs that are flawed.

The second barrier in my opinion is the inability of companies to think big and invest the right resources. They are still unable to release people for reliability improvement work. On the other side, most embark on overly resource intensive programs – but that drags out the argument of PMO rather than RCM so we will leave the discussion at that point.

Reliability Engineering is not mature by a wide margin. Reliability engineers are still confused and lacking in knowledge. Many of them have not received decent training and become reliability engineers by changing their position title. Unfortunately many of them are receiving training in complex methods which makes life tough for the man trying to sell simple things.

My tips are:

Keep it simple and stay away from statistical analysis methods,

Get a decent budget for your improvement program and get the help you need.

An improvement in reliability has a bigger ROI than any project on the books at your company, however understand that financiers see it ashigh risk business. Start small with a pilot program and then go in for the big budget armed with a successful pilot study in your pocket.

Q5: What’s in the next 24 months for OMCS? (New markets, products, partners?) When are we going to (finally) see the book on PMO?

Answer: In the next two years will see our business further expanding into Europe and USA. We hope to make some ground in Latin America where we have been for 12 months with limited success. Asia has been good for us and we hope to see growth continuing there. We have also written our training material and software in Russian for a Russian power company so we may move seriously into Russia. We are looking for a Russian partner to help us.

We are releasing new product in the area of Enterprise Data Analytics (based on simplicity) and making improvements to our other software packages.

We think we have developed a very good two-day training program – got great reviews so far so we will be seeing if there is a market for public courses again.

The training course development has information that can go straight into the PMO book I have been working on for a while. The book is back on the work list again and I hope to have it out this year.

Our software offering continues to evolve. We have written software to do the PMO of inventory management using the Inventory Cash Release system developed by renowned author and speaker Phil Slater.

We are going web with all our software and doing further integration between CMMS systems, and our own products.

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After decades of cutting costs through traditional methods maintainers are finding additional efficiency gains to be either limited or physically impossible. This article looks at sophisticated new metrics and methods to unlock the hidden maintenance workforce in your plant.

Increasing challenges for maintainers

After decades of evolving in virtual isolation, the discipline of physical asset management is now attracting interest from corporate management, institutions, regulators and government bodies. Asset managers are feeling the impact of this attention in two areas:

1. First in the increasingly sophisticated requirements that they generate. For example; the requirement for detailed and defensible budgetary submissions to regulators, accurate whole-of-life cost forecasts for shareholders, and confidently managing asset risk to tolerable levels.
2. Second in the increased level of pressure to increase the return on capital through traditional areas of efficiency and cost savings. (Labor and materials)

On one hand this has invigorated the interest globally in techniques and issues related to reliability, which is a welcome change to what maintainers have been used to in the recent past. On the other hand it has also created a significant issue for asset managers.

After decades of cutting costs using traditional methods such as reducing staffing and inventory levels, maintainers often find that further reductions in this area are either limited, or nearly impossible. And in the rush to embrace reliability methodologies, it is often forgotten that reliability initiatives are not effective unless they are implemented correctly, and executed efficiently.

For example; a routine predictive maintenance task, generated from an RCM study, may call for 3 monthly, say, vibration analyses of the bearings of critical motors. (Such as the ventilation fan motors in incineration plants) In defining this strategy the approach used is logical and follows the criteria set for selection of a predictive maintenance task. However, if we do not perform the predictive task at the desired time, then we run the risk of missing the warning sign that it is designed to detect.

Once or twice is not an issue generally speaking, but when a task such as this is routinely performed late, deferred or not carried out at all, then we are facing the very real threat of having an unpredicted failure on what we have defined as a critical asset. Similar can be said for all of the different types of routine and proactive tasks generated in an RCM analysis.

So how can asset managers improve their efficiency even more than they have over the past couple of decades? And do so without causing the performance of the assets themselves to suffer?

Many companies are implementing methods such as LEAN as it was originally applied in manufacturing environments, and often with good results. This has also bought with it measures such as Overall Equipment Effectiveness (O.E.E) for monitoring plant and equipment performance.

However, to adapt LEAN into the world of maintenance management requires a modified approach because the operating characteristics are fundamentally different from those of production. There are many reasons for this but within this article we will be focusing on the way that work is performed.

Unlike their production counterparts, maintainers often work on a wide range of tasks. Some are routine, some are regular but infrequent, and sometimes they are confronted with tasks they have never come across before. Each day in the maintenance workforce is a different day that could bring with it any combination of these tasks, often under the pressure of lost profits, and requiring a combination of skills, technical knowledge, and information resources.

If somebody set out to design an environment that provided continual and sometimes sudden logistical challenges they would be hard pressed to beat maintenance in asset-intensive industries.

Revealing the “Hidden Workforce”

If maintainers are going to effectively meet all of the challenges outlined above, then they are going to need a measure that unlocks the “hidden workforce” in the way that Overall Equipment Effectiveness unlocks the “hidden plant”, revealing a resource that can be tapped into to reduce the unit costs of maintenance.

Such a measure can be found in the Maintenance Productivity Factor (MPF) family of metrics.

Maintenance Productivity Factor (MPF) is a metric that combines efficiency in execution, quality of maintenance work and the impact of organizational effectiveness to measure the productivity of the maintenance workforce.

The formula is:

Estimated Work Time x Quality of Work x Organizational Effectiveness
Hours Worked (Paid)

Estimated Work Time (ET)

As the name suggests this relates to the estimated labor hours for a task. In order for MPF to be a useful measure the work and labor estimates contained in your job card system or in your CMMS need to be relatively accurate. Often when companies embark on a productivity measurement exercise this is one of the first areas where they focus their attention. A tip here would be to make sure that your work estimates are not the best possible time, nor the average time, but the time the task should take if it is properly planned and scheduled and the right skills are available to do the task.

Even if your work estimates are not to a high level initially, MPF will still provide a productivity indication based on what you think it should take.

Quality of Work (QW)

This refers to the level of rework required after maintenance is carried out; these are the losses due to things intangibles such as training and skill levels, knowledge levels, workforce morale levels, poor components and a range of other issues.

This is notoriously difficult to get agreement on and then to measure. However, once there is a clear definition within the company, and then a clear and easily followed process to record this, it is a useful statistic for many additional measures of maintenance performance.

It is in the recording of issues such as rework that we confront head-on the major stumbling block to good measurement systems, that of culture and corporate attitudes. For example, if somebody is aware that recording rework is going to get them clobbered, well, what would you do?

Recording it is sometimes as simple as a code on the work order, or a link to a past work order indicating a connection. Either way, once it is accurately recorded it can be managed.

Organizational Effectiveness (OE)

Here we look at how effective the organization is at allowing people to do the work assigned to them. Within MPF this is usually defined as hours of delay time. Many companies first come into contact with how effective their corporation is once they start with basic initiatives such as Capacity Scheduling for example.

For example, waiting for parts, equipment availability, labor resources, attending meetings, permits and a range of other day-to-day issues that you would be aware of where you work. All of these represent the lost time that occurs each and every working hour, a large part of the hidden workforce that we are trying to uncover.

Most work order systems available today have the ability to record work delay codes in some form or other, if you are not doing so now then this will need to be built into the work processes for the maintenance teams.

Hours Worked

Even today with all of the technology available to us many companies have great difficulty in accurately tracking hours worked per task. In most cases this is just an effort in applying easily used systems and processes in a disciplined manner. However, sometimes there are road blocks in terms of changes to information systems in particular. Although surprising in the 21st century, there are still some enterprise level systems that cost an army of consultants to make minor configuration changes.

A Worked Example

Let’s take for example a strip out and repair of the drive end bearing on a centrifugal pump within a process industry plant. The pump is a redundant item so there is no direct impact on production. However, the time to repair the pump and return it to service is 8 hours, 2 hours more than the 6 hours on the accurate work estimate.

During that period there was a need to remove the new bearing once as it had been installed in a way that had done damage to the outer races. This took an estimate of 90 minutes, which is roughly 20% of the total time allotted.

In the course of carrying out the work there were also a number of delays in finding the correct parts, the correct tools, and then in finding some bench space to work in due to other large scale projects currently underway. This also took an estimated 90 minutes of the total time.

In this case our formula would be:

6 x 0.8 x 0.8
8

Where:

• Estimated Work Time is given as being 6 hours
• Quality of Work is a total of 8 hours minus the 90 minutes that were required for rework purposes. In percentage terms this is 80% good quality work during that time. (or 0.8)
• Organizational Effectiveness is given as being a total of 8 hours minus the 90 minutes that were spent looking for parts, space and tools. In percentage terms 80% of working time was not impacted by these delays. (or 0.8)
• Hours worked is given as being 8 hours.

The result:

6 x 0.8 x 0.8
8

Is equal to a MPF of 0.48 or 48%

This means that only 48% of the hours that are paid for are productive.

To take this a step further we can use the metric Maintenance Productivity Cost (MPC), which is:

Rate of Pay
MPF

Or

$35 (say)
0.48

So, the actual cost for every productive hour of work in this example is $72.96. A startling figure when the company is only paying $35 per hour for labor. This is where part of the concept of the hidden workforce comes from, there are hidden costs associated with poor productivity that we know about, but often we are not able to accurately measure.

Most companies do not need to go into the actual costs of productivity (MPC) and will be able to make use of the Maintenance Productivity Factor figure as a useful guide to their levels of efficiency. Yet once a company does make the relationship between productivity and cost it often provides a pretty powerful indication of the level of hidden productivity that exists in their plants.

Although we like to think we can eliminate inefficiency in one blow, the fact remains that it is cyclical in nature and is related to the ebbs and flows of the workforce itself. As older more experienced people leave the organization, newer and less experienced people enter. The probability of rework, which is normally limited anyway, begins to rise, as does the probability of work delays due to unfamiliarity.

It is sometimes the case that MPF is equal to or greater than 1. In the cases where the author has observed this either the workforce is working at maximum levels of efficiency in an effective work environment, or the work estimates are too conservative.

Using either MPF or MPC we can establish pretty quickly how productive our maintenance efforts are for each task that we do. But if we want to find out how productive the workforce is as a whole then we need to look at not only the time when we are doing work, but also at the times when we are not doing work.

For example, due to delays in gaining access to equipment, or due to lack of planning resources, a workforce may not be fully utilized during a given period. In these cases the metric Workforce Productivity Factor (WPF) is useful and is calculated below.

Paid Hours

Utilized Hours

A problem with this is honesty in recording, and again we come against the problem of cultural issues in measuring maintenance performance. Here there is a strong chance that even when the workload is light or non-existent, people will book hours to other tasks, confusing the picture for all of these areas. This is particularly true when we are measuring the productivity of a contract workforce.

In this case we will say that for the period we had a total paid time of 5000 hours, and total utilized hours of 3000 hours. Giving us a Workforce productivity factor of 1.6, meaning we have paid 1.6 times what we utilized.

The final indicator, at a workforce level, is Workforce Productivity Cost (WPC) as detailed below:

MPC x WPF

Or

$72.96 x 1.6 = $116.74

This means that at a workforce level we are paying $116.74 per productive hour worked, even though the figure on the accounts is a mere $35 / hour.

Summary

The Maintenance Productivity Factor family of metrics represents a sophisticated index to drill down into already challenged maintenance departments to find areas where even greater efficiencies can be made. These indicators are used regularly in asset intensive industries in applications such as:

Driving out poor working practices in the quality of maintenance work; such as identifying frequently occurring human errors and other intangible causes of rework.

Comparing outsource service providers and internal labor on a like for like basis. (Rather than on hourly costs alone)

Targeting and improving delay reduction initiatives

Highlighting poor organizational practices that are leading to poor workforce productivity.

It goes without saying that the MPF goes hand in hand with a rigorous data based root cause analysis technique. So that as problems are observed they can be addressed immediately.

As organizations become more familiar with using MPF figures and formulas it can also start to be applied to various sections within the maintenance workload such as determining the productivity of routine work, or of corrective or reactive work and so on. However, even though all are useful, a company need only start with the initial Maintenance Performance Factor to begin to highlight the amount of productivity they are getting out of the hours they pay for.

If you would like to receive a short article on how to implement the Maintenance Productivity Factor (MPF) in your plant please send me an email to daryl.mather@gmail.com quoting this article.

Bibliography

• The Maintenance Scorecard, Daryl Mather, Industrial press ISBN 0831131810
• Asset Maintenance Management, Dr Alan Wilson, ISBN 0831131535
• Unleashing the power of O.E.E, Robert Hansen, MT-Online article