Uptime: Aligning ‘Our’ Goals With Business Goals
Bob Williamson | April 13, 2017
Cut expenses. Boost performance. Those are among the goals of many businesses. Frequently, though—too frequently, in fact—maintenance managers find themselves between a rock and a hard place: improving maintenance while reducing costs.
By its very nature, the maintenance function is a business expense. As an extreme, we could eliminate the entire maintenance budget as a cost-cutting measure. Having done that, the business would suffer under significantly more expensive run-to-failure equipment-management practices, leading to increased costs of repair and lost revenues from unpredictable/unplanned equipment and facilities downtime.
Maintenance can be defined as “actions for sustaining a desired level of equipment performance.” From a maintenance professional’s perspective, the big picture is more about sustaining desired levels of business performance.
Let’s be clear, we could be discussing the maintenance department as we explore the principles of aligning maintenance with business goals. But, when reviewing the scope of maintenance work, we must think and look well beyond the maintenance department and consider the maintenance function, regardless of the organization(s) performing the work. This is a crucial distinction when it comes to the alignment of goals.
Typically, the maintenance department is perceived as the party that’s responsible for the health and well being of equipment and facilities. Yet, many (if not most) of the causes of unhealthy and poorly performing equipment and facilities go well beyond the scope of the maintenance department. As a result, maintenance basically gets to address the symptoms, not the true causes, of problems.
Efficiency vs. effectiveness
The noted business-management consultant, author, and educator Peter Drucker defined efficiency and effectiveness this way:
• Efficiency: Doing things right—able to accomplish something with the least waste of time and effort. (Focuses on process).
• Effectiveness: Doing the right things—producing the intended or expected result. (Focuses on results, outcomes, throughput).
Just because maintenance is performed efficiently does not necessarily mean that it is effective.
NASCAR race-team pit crews offer an excellent example. An efficient pit stop can be performed in record time. The pit crew’s work processes are highly efficient. But, if they always change four tires while only two tires are showing signs of performance-handling wear, pit stops are ineffective.
In the business context of auto racing and pit stops, it’s not the responsibility of the pit crew (let’s call it the “maintenance crew”) to determine how many tires to change. The crew chief (let’s call him or her the “maintenance manager”) reviews previous tire-performance data, compared with vehicle handling, as reported by the driver, and determines the tire-changing tasks to be completed during each pit stop.
After all, the goal of a race is not only flawless work execution (efficiency) by the pit crew, but also performance of pit stops in a manner that ensures the business goal of winning the race is a top priority (effectiveness).
All too often, we focus primarily on measuring and improving maintenance efficiency, including, among other things, preventive-maintenance (PM)-schedule compliance, mean time to repair, actual hours/planned hours, planning variance, and preventive/predictive-maintenance (PM/PdM) yield. While activities (or actions) associated with these measurements and improvements lead to excellent maintenance practices, they must be balanced with maintenance effectiveness.
Aligning maintenance functions with business goals assures maintenance effectiveness. Maintenance actions then contribute to the goals of the business.
Line of sight
I’ve discussed asset-management standards and the importance of aligning an organization’s work processes with their goals in numerous Efficient Plant columns over the years. Both the PAS-55:2008 Asset Management Specification and ISO55000: 2014 Asset Management Standard refer to the importance of aligning asset-management practices to the goals of the business. PAS-55 referred to this alignment as a “line of sight” designed to assure the effectiveness of such practices.
Let’s use the chart on p. 6 to drill down through a typical line of sight, from the upper-most purposes of an enterprise, all the way to work execution on the plant floor. Since business terminology varies widely, here are my clarifications and some examples for this diagram:
• Business Opportunity (our market/customers/requirements)
• Shareholder/Owner Expectations (return on the investment)
• Organization’s Mission-Vision (who we are and where we want to be)
• Strategic Themes, Policy Statements (guiding principles)
• Strategic Business Plan (what and why)
• Business Goals (what we want to accomplish)
• Key Performance Indicators (measuring what is critical: financial, customer, process, people, and/or regulatory)
• Objectives/Strategic Initiatives (what and how)
• Organizational Structures (our divisions/cost centers/departments/shifts/crews)
• Job Roles & Responsibilities, Job Requirements (who, what, where, when)
• Work Processes, Methods, Procedures, Systems (how work should/shall be performed)
• Work Execution (performance management—how well).
There are two ways to approach line-of-sight alignment. Most organizations view it from a top-down perspective to define their respective business models and what they should measure to determine whether they’re on a successful path. Their KPIs (key performance indicators) often provide necessary measures of success.
From a bottom-up perspective, we see Work Execution reflecting the fundamental actions required to meet the Business Goals as measured by the KPIs. The two paths (top-down and bottom-up) meet in the middle—aligned toward the same KPIs.
Connecting and aligning Work Execution to the KPIs are some of the most critical links in the process. The KPIs can be made actionable by linking to the appropriate Equipment Utilization Losses (see Uptime, March 2017).
Specific Objectives or Initiatives are determined from the KPIs; Organizational Structures are defined; specific Job Roles & Responsibilities (in various departments) are defined; and Work Processes are developed to define how work is to be performed. All of this leads to the flawless Work Execution that’s necessary to achieve the Business Goals (as in the pit crew example).
Aligning the work culture (an organization’s behaviors) with a line of sight to the organization’s business goals begins by communicating the Business Opportunity and how the organization needs to pull in the same direction to take full advantage of it.
Linking maintenance to business goals is only one of many alignments that must exist in successful enterprises. Thus, we must remember that a maintenance department alone cannot effectively maintain equipment and facilities. More and more, we’re learning that the maintenance function is a team sport that requires multiple disciplines (players) brought in at different stages in the life cycle of a physical asset.
Paying attention to maintenance-work processes and efficiency are good things to measure. It’s when we align the outcomes of those processes and efficiencies with business goals that maintenance truly becomes effective in a business model.