3-step strategic analysis

Stanton McGroarty says set the course for reliability and maintenance.

By J. Stanton McGroarty, CMfgE, CMRP, senior technical editor

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Reliability and maintenance departments exist as businesses within businesses. In large plants especially, they have customers, vendors, competitors, workers, managers, utilities, and inventories that are all their own. Typically these elements are much different from those that make up the host company’s business environment. The reliability and maintenance operations has a very close relationship with the host. Neither of them is likely to succeed if the other fails. In fact the central aim of the department is to enhance the performance of the host, but still they are in very different businesses.

Given the differences, it is natural that the two will need to develop and pursue individual business strategies. A reliability and maintenance strategy review should probably be an annual exercise, and progress against the strategy should be reviewed and discussed at least monthly.

The strategic planning process for a small to medium-sized business with one primary customer need not be a huge, complex effort, but it will be worth holding a few team meetings. The goal alignment and measurability that results can pay big dividends in predictability and efficiency of departmental performance. Three steps should do the job:

  1. Define success for the department.
  2. Measure the fit of the department with the environment and the definition of success.
  3. Make a detailed plan to fit the department to its objectives and measure its progress toward them.

Defining success

J. Stanton McGroarty, CMfgE, CMRP, is senior technical editor of Plant Services. He was formerly consulting manager for Strategic Asset Management International (SAMI), where he focused on project management and training for manufacturing, maintenance and reliability engineering. He has more than 30 years of manufacturing and maintenance experience in the automotive, defense, consumer products and process manufacturing industries. He holds a bachelor of science degree in mechanical engineering from the Detroit Institute of Technology and a master’s degree in management from Central Michigan University. He can be reached at smcgroarty@putman.net or check out his .

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February is a good month for departmental strategic planning if the host company has completed its strategic plan at the end of last year. The key to defining success for a department with one customer is to understand the customer’s own definition of success. The company’s production objectives for the new year, along with other measurements they will use to gauge their success, will provide the core of the department’s strategic objectives.

If the host/customer organization has not been thinking strategically, it may be necessary to infer a departmental definition of success from the company’s business plan. But, if the company has done a strategic plan, it will be worthwhile to make the department’s priorities, terminology, and measurements match it.

The heads of the reliability and maintenance operations should gather the documentation that resulted from whatever strategic or business planning was done by the host/customer company and, if necessary, boil it down to its measurable elements. These elements will typically include safety and environmental goals, financial objectives, production goals, quality measures and perhaps a few other workforce development, branding, or other objectives. If corporate planning was done well, the boiling-down process will be complete. If not, reliability and maintenance leaders must answer the question, “What must the company accomplish this year in order to regard itself as successful?” Once the corporate definition of success is developed, it should be confirmed with top management. Then it will be ready to guide the departmental discussion of success.

The reliability and maintenance department heads should convene a meeting of their lead people and review each of the elements in the corporate definition of success. The group must determine exactly what reliability and maintenance have to achieve to support the corporate objectives for the year. Many of the answers will be no-brainers, but some will require technical work. For instance, what OEE is necessary from key equipment in order to meet production and quality objectives? If 100% equipment availability is required, there may be a need for some backup equipment or very sophisticated reliability work right away. Whatever the need, identify it as a team and make it the departmental definition of success for the year. This can probably be accomplished in two meetings, if the right people attend. There will probably be a period of technical work in between meetings to develop the departmental measurements.

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