Human Capital: Understanding the Five Whats of plant performance improvement

As a leader, one of your roles is to be a navigator for your organization’s future performance. This came to mind after receiving a phone call from an engineer at a manufacturing plant who wanted to know how to get his organization structured to enable more effective use of maintenance resources. I began asking him a series of questions to better understand his situation.

Some of the important questions are presented below. These questions are targeted toward the person who is the department head for maintenance and reliability activities at an organization that may be reactive or struggling to define a course of action. You can think of these questions as the “Five Whats.”

What is the performance level you want to achieve?
What indications will there be to let you know if you are achieving the desired performance level?
What data do you need to develop the indicators of performance?
What has kept you from putting the processes in place and collecting the data needed to achieve higher performance levels?
What internal and external support do you need to achieve higher performance?

Most experienced leaders have a pretty good idea what high performance looks like for the organization. Putting high performance into words and thinking through what high performance means to the organization has great value. What does it mean to cash flow, unit profit margins, production capacity, customer satisfaction, and market share? This provides the link between maintenance, operations, and sales and marketing.

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Every activity in business needs indicators of performance. Indicators or measures guide current actions and help target improvement opportunities. Matching the indicators with your definition of high performance provides a link between performance goals, behaviors and outcomes.

Knowing which indicators you need to monitor defines the data structures that need to be available and used within your computerized maintenance management system (CMMS). Too often software implementations fail because this step was not given due effort. All of the popular CMMS software has the capability to support proper data structures. They are simply not leveraged.

Tom Moriarty, P.E., CMRP is president of Alidade MER. He is a former Coast Guardsman, having served for 24 years; an enlisted Machinery Technician for nine years; earned a commission through Officer Candidate School; and retired as a Lt. Commander. During his final year of service, 2003, Tom was selected as the U.S. Coast Guard’s Federal Engineer of the Year; an award sponsored by the National Society of Professional Engineers (NSPE). He is a member of the Society of Maintenance and Reliability professionals, the past Chair of the American Society of Mechanical Engineers (ASME), Canaveral Florida Section, and a member of the ASME Plant Engineering and Maintenance (PEM) Division. He has a B.S. in Mechanical Engineering from Western New England College, and an MBA from Florida Institute of Technology; Professional Engineer (PE) licensed in Florida and Virginia, Certified Maintenance and Reliability Professional, various credentials in management and reliability fields. He can be reached at [email protected].

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Most often CMMS data structures were not properly thought out or were not loaded into the CMMS properly. When the data structures have been thought out and entered into the CMMS, the leadership team did not or does not require their disciplined use. Leaders must demand disciplined data collection to enable indicators or measures to be generated so performance can be monitored and communicated.

A good leader must ask an honest question about why the organization is not already achieving these performance levels? Is it lack of senior level support? Lack of internal capacity or expertise? Lack of funding?

The question of what internal and external support you need is important to think through. The main issue here is to first determine how fast you want or need the improved performance to occur and by how much. Organizational change is evolutionary; it takes time to gain support, design the changes, pilot an implementation, make adjustments to the design, re-train, and roll out to the balance of the organization. A realistic timeline of milestones and reasonably ambitious performance goals should be outlined.

The speed and scale of performance improvement must be balanced against the resources you have available — internal capability and funding to hire expert help.

Generally speaking, most organizations have had staff and labor reductions beyond the fat, into the muscle, and sometimes into the bone. Pulling internal resources out of their day-to-day tasking means other activities are not going to get done. Oftentimes, internal resources have limited expertise or experience or lack enthusiasm due to program-of-the-month syndrome.

Supplementing your team with outside experts who have done many performance improvement projects reduces risk and shortens the timeline for benefit realization. Maintenance and reliability professionals know the pitfalls and how to deal with them. Additionally, when senior management pays for outside support, they pay more attention to the project; they expect tangible results with a return on investment.

All performance improvements drive up costs in the near term. Your objective should be to reduce the net impact by managing the process to attain a net return on investment expeditiously. Think through the Five Whats to develop a framework for understanding and communicating the challenges and benefits of performance improvement. You will be in a better position to present the need for internal and external resources to achieve performance improvements quickly.

Read Tom Moriarty's monthly column, Human Capital.