Tactical vs. strategic: Find the best path to reliability
Over the years much has been written about the different approaches to establishing and sustaining equipment reliability and I’m fairly sure we are still looking for that one perfect solution. Is there one perfect solution? It’s almost like looking for the Holy Grail (unless you believe Indiana Jones actually found it in “Raiders of the Lost Ark”) and I’m reasonab...
By Tom Dabbs, ITT
Over the years much has been written about the different approaches to establishing and sustaining equipment reliability and I’m fairly sure we are still looking for that one perfect solution. Is there one perfect solution?
It’s almost like looking for the Holy Grail (unless you believe Indiana Jones actually found it in “Raiders of the Lost Ark”) and I’m reasonably convinced that the proverbial “silver bullet” to solve our business problems does not really exist. What has proven to produce dramatic results is a combination of targeted tactical solutions coupled with a strategic behavior-based implementation of reliability best practices that address counterproductive work processes and behaviors.
As a friend of mine, John Schultz, at Allied Reliability once said: “Best practice behaviors produce best practice results.”
What exactly is the difference between tactical and strategic? Most of the references of these two words are in the context of war and military tactics or strategy. Well, I guess business is a bit like war if we consider that our competition would not be too upset to see us fail or go out of business. Let’s examine how business views the differences in these approaches.
Most businesses use the term strategic to describe their long-term plans, programs and initiatives. Strategic initiatives vary dramatically from tactical initiatives. Tactical initiatives are those programs, initiatives or actions that have a major impact on reaching departmental or functional goals. These initiatives tend to be short-term and are, in general, narrowly focused on solving immediate problems.
Some examples are: resolution to a piece of equipment that is deemed to be a bad actor or causes significant disruption to an operation, replacing old technology or obsolete equipment with new to enhance performance or reduce energy consumption.
Conversely, strategic initiatives are intended to make a major contribution to helping the entire organization meet long-term goals and objectives and typically require people or groups of people to change their work processes and behaviors to effectively implement the changes. Examples of strategic business initiative include actions like improving customer service, reducing costs, increasing market share or employee productivity.
Identifying the value
What about the value of tactical vs. strategic solutions to an organization? Either approach can be significant; it depends on the cost of the loss or the incremental cost increase for the condition to exist. For example, one organization saved millions of dollars annually in energy costs by simply adjusting their pumps to operate at the proper position on the pump curve. Not only did they save on energy consumption, they experienced fewer failures and ceased to destroy their equipment which added another tidy sum to their bottom line.
You might ask, “How does this happen? Everyone should know how to operate a pump correctly.” Well, it’s not quite that simple. I’m fairly sure that when the equipment was designed and installed it was running properly, but somewhere along the way someone decided that it would be better if the pump were running at maximum pressure or the requirements of the system has changed over time to meet operating demands.
The rationale was that it would pump more material faster and business would be much improved. The failures did not show up immediately and no one was monitoring the increase in energy consumption so this became the normal operating practice or, more specifically, the “culture.” In fact, upon closer scrutiny, it was exposed that each shift in this particular organization had a different operating philosophy and, consequently, different operating procedures.
It was simple to change the specifics of how the pumps were to be operated at a single point in time, but changing the operating procedures and the behaviors of the operators to be consistent was much more difficult and became part of a larger strategic initiative.
The results in this example were realized immediately. The reduction in energy use was visible and the value of fewer failures was recognized before the end of the first year. The cost of investigation and implementation cost only a few thousand dollars and resulted in a significant return-on-investment in less than one year.
Another organization saved millions of dollars annually with a strategic initiative to implement best practice reliability work processes at a single location. These processes include work management, planning and scheduling, materials management, reliability engineering, and operator care that included 5S techniques. These are elements of any sound reliability program and it sounds like everyone should understand these elements and get busy making them happen.
But, again, it’s not quite that simple. There are some other issues that must be addressed; such as what people believe to be true and good old fashioned resistance to change.
Does any of this sound familiar? What made this work was the use of change management that focused on communication and alignment in early stages and an implementation process that required active participation at all levels of the organization.
One more thing: It was very crucial to get everyone to agree to lay down their armor and work together to get this done. This was completed with a formal written “Partnership Agreement” between operations, maintenance, and other functional groups within the plant.
Find a place to start
So, with all these opportunities around us, how do we get started? First, a problem or opportunity must be identified and quantified. Tactical opportunities should be the initial focus since they can have the most immediate impact and, in some cases, can be less costly to resolve.
Tactical solutions exist for issues like repetitive failures of bearings and seals, parts availability for routine maintenance or obsolete equipment, equipment inefficiencies that can be resolved with better technology, high energy and maintenance costs for specific equipment items.
Resolution to many of these issues can be significantly expedited by seeking out and engaging subject matter experts that bring the knowledge and experience needed to analyze these conditions and apply tactics like root cause failure analysis for repetitive failures, transition to parts management agreements for routine maintenance, reverse engineering and manufacturing of spare parts for obsolete equipment, improve efficiencies and costs by replacing old technology with new.
We must always bear in mind that even though tactical solutions produce almost immediate results they are not always sustainable. In many cases the root condition or situation addressed may be caused inadvertently by deficiencies in our current work practices and methods.
All this sounds a lot like application of common sense, but I heard Ron Moore put this into perspective during one of his “Reliability Leadership” workshops when he said: “The thing about common sense is that it isn’t very common.”
Strategic solutions generally require a tremendous amount of up-front communication and alignment in an organization to have a successful outcome. Remember, we are talking about people or groups of people changing their current work processes and behaviors to make the needed changes.
Although this type of change takes more effort, requires more time, and generally has a longer window to realize savings, a well conceived and executed strategic initiative is well worth the effort.
A rule of thumb is the return-on-investment projection should conservatively be a minimum of 8:1 in a three year window to be feasible. In my experience, this will satisfy almost any internal hurdle rate to justify a project and reactive organizations will have very little problem finding this kind of return. I have seen actual returns be more than 30:1 in three years but you should be careful projecting large returns within your organization for these initiatives.
First, conservative estimates are generally all that are needed to justify going forward and large projections appear unbelievable and can set people up for failure. Another consideration on strategic initiatives is that managers can destroy their credibility and demoralize the organization by starting the initiative, projecting a financially sound return on investment, getting people bought into the changes and failing to proceed with execution of the project.
Understand the fundamentals
Regardless of the type of project you have chosen to proceed with, tactical or strategic, there are some fundamental issues that must be considered to ensure a successful outcome. If you have worked with your team to define the project, you have started the process of establishing the infrastructure required to build a continuous improvement culture that will serve you well on future endeavors.
When you have sufficiently identified the improvement and approach, the best way to proceed is to establish a project team, or teams, depending on the breadth of the project.
You must then make sure these teams are sufficiently trained and have appropriate resources allocated to execute the project.
Everyone in the organization has a role in an effective implementation and one of management’s key roles is making sure the teams not only stay the course but also that resources are available and dedicated to the project.
The best way to ensure sustainable outcomes on your project is to establish effective measures that are routinely reviewed and “action taken” when results are not favorable.
The type of project you choose to execute, tactical or strategic, is not the critical factor and one is no more important or desirable than the other. The important issues are that you have selected appropriate issues that will have the most positive impact on your specific business issues and you have success executing the project.
Bringing knowledge to your maintenance staff through training and subject matter experts is one way to develop a greater strategic appreciation for reliability while also employing a more tactical approach.
Hands-on training is an essential element when an organization looks to improve reliability.
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.