Informed recommendations

Jan. 11, 2012
Tom Moriarty says better information means better decisions about safety, regulatory compliance and production rates.

Not long ago, I was sitting in on a presentation from a gentleman who was a reliability engineer at an Australian electric power transmission company. He had an interesting presentation that provided an overview of the progression of events during the past decade leading to his company’s outstanding reliability program and how it has affected the capital investment program in a positive direction.

This gentleman’s position in the organization was, in my opinion, pretty innovative. His was that of a liaison between the maintenance and reliability engineering group and the corporate leadership team. Basically, he was a translator between the operations, maintenance, reliability and engineering functions and the chief finance officer, chief executive officer and board of directors.

This guy had a great job. He took data the operations and maintenance programs generated and converted it into understandable information cast in financial and business management terms.

He said something that resonated with me. He said, “The people above me in the organization get paid more than I get paid. Therefore, I provide them alternatives, and they make the decision.”

The part that resonated was when he expressed the concept that he viewed his position as someone who provides facts to the people who were paid to make important decisions. He said that he fully recognized that the people who were in charge of his organization were smart people. In fact, they were paid substantially more than he was being paid specifically because they were expected to make the big decisions. His challenge is to do the homework to ensure the alternatives he presents are well researched and that alternatives represent the true best alternatives.

The presenter took the position that it was his job to present the alternatives dispassionately and let those who were paid to make the decisions make them. Accountable people presented with credible information usually make the most appropriate decision.

The challenge, then, is to measure the right variables. When the right ones are measured, you get good data. From good data you can derive credible information. Credible information can be provided to the decision makers who are accountable for the decision.

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As an example, suppose you have a good work management process and have been able to allocate labor, materials and contractor costs to specific plant assets. You’re able to filter the data and develop credible evidence that a particular system has been exhibiting increasing unreliability — a decreasing mean time between failure (MTBF). If you approach the plant manager and say, “System X MTBF is decreasing, and we need to stop pushing the equipment so hard,” then you might get the deer-in-the-headlights look, or you might get the quit-whining-and-do-your-job look. If you’ve been a supervisor or manager for longer than a month, you know these looks.

On the other hand, you were able to tell your plant manager: “System X has historically provided pretty reliable performance. However, last quarter we increased production rates by 18% and limited the time available for PM. This resulted in a 15% increase in unscheduled corrective maintenance, a 6% increase in overtime, a 10% increase in scrap rate, and three missed shipment dates in the past two weeks. The net result of these changes means that the profit margin per unit sold has contracted from 12% to 7%.”

You can now recommend that we either continue at the present production profile with the new performance level or reduce the production rate to previous levels to get our historic profit cash flow, quality product rate, margins and customer satisfaction.

Think about the way information can be best presented to the people who are paid to make the big decisions. Present alternatives-based good analysis. The top dogs need to know the issues, why they’re occurring, how they affect safety, regulatory compliance, production quality/rates and how they affect revenue and profit margins.

Remember that the boss often has access to more information than you do, so don’t be offended if your recommendation is met with additional questions or even outright rejection. Try to know as much as you can about the matters that confront the boss.

When the big boys and girls make the call, they own the result. Giving them solid alternatives they act on builds confidence in your judgment and recommendations.

Tom Moriarty, P.E., CMRP, is president of Alidade MER. Contact him at [email protected] and (321) 773-3356.

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