This paper will review the challenges encountered in delivering on these targets and how they were overcome. What did we overcome? The list includes: working in an antagonistic unionized environment, software system integration, securing the appropriate data to keep the program alive, being already short staff, transitioning staff mentality toward total responsibility and what we all love the most: dealing people who just don't get it.

Introduction

The Bermuda Electric Light Company is the sole provider of electricity for the country of Bermuda, supporting a population of 66,000 residents and numerous business and tourist visitors. With a 100 year history in this role, BELCO continues to improve its performance for both shareholders and customers through initiatives designed to deliver reliable, cost effective electricity and shareholder value. We provide service to approximately 30,000 metered connection with half of the demand for electricity coming from a pool of less than 200 large customers.

What makes Bermuda's power provider distinct from typical power utilities in the US is that it derives the bulk of its energy production from diesel engines. The US as a whole generates only 3% of its electricity use from oil while we use virtually 100% oil. (There is a government owned and operated incinerator that generates less than 2% of the annual kWh production). BELCO does employ gas turbines but even these are configured to run on a medium grade of diesel fuel.

In 2005 it was agreed to pursue a Reliability Centered Maintenance (RCM) Program. This paper will discuss our progress, the obstacles overcome, those still to be overcome and the results we have achieved to date. It is our hope to inspire those who are considering such a bold move, yet have no precedent, to take that step with confidence.

BELCO, as a sole supplier of electricity in an expensive country is no stranger to controversy either. Record oil prices for a country entirely reliant on oil have driven retail costs to over 30 cents/kWh.

As a monopoly, the magnifying glass is perpetually on the company and at any misstep there are those detractors ready to take aim. The company has over the years been a great supported of community events, sometimes publicly and sometimes quietly. This has served to maintain a good image through good times and not so good times. Bermuda's forefathers had the foresight to construct very strong homes, ready for hurricane force winds. There are no shortage of vintage homes on the island, some over 250 years old complete with their original roofs, chimneys and walls. The power system cannot claim such immunity from hurricane strikes and during their occasional visit - perhaps once in 7 years or so - there is a massive support for the workers who work night and day to restore power as quickly as possible. This is somewhat of a testament to BELCO's relationship to the community.

The last major storm - Hurricane Fabian - was in 2003 and left some without power for several days, more than a week in a few cases. Yet this was a rallying point for BELCO. Events like these can tip the scales at any time with talk of regulation etc being floated around occasionally.

No event caused more of such talk the July 14 2005 fire. In the early hours of this morning, High Voltage (HV) switchgear installed in the 1960s faulted, caught fire and cascaded to each successive switch and onto an adjacent HV board. These events lead to an island wide blackout and a significant environmental situation. Ironically, residents were back on power within a day while it just so happened that the city power - the economic engine of the country - could not be restored for several days. With virtually an entire underground network of power distribution, there was little incentive for commercial buildings to have emergency generators given hurricane threat to their power supply was extremely low.

Yet once again, BELCO bounced back from this disaster. That said, it is events such as these that provide the external impetus that keeps management on their toes, anticipating the need to adapt and putting the programs in place in advance of any external pressures to do so where possible.

While the occasional hurricane and the fire of 2005 where not the direct motivation for initiation of the RCM program, such events may have played a part in creating a focus on competitiveness of the firm in an environment that bears not competition - at this time.

One of the hallmarks of RCM is the preference for the use of Condition Monitoring Technologies over intrusive work where cost effective and feasible. BELCO has been employing such technology for more than 10 years and RCM was also seen as a natural extension of what to date has been a piecemeal approach to its application. These and other factors form the basis for our quest for improvement.

Quest for Improvement

BELCO's complete reliance on diesel fuel in these times of record diesel prices, creates an atmosphere where ways to improve must be explored. Further, we operate in a high cost environment, where cheap labor is unheard of. Restrictions on use of non-local labor make it cumbersome to cherry pick from lower cost jurisdiction although there are no less than 10,000 foreign workers on Bermuda soil.

Yet Bermuda is not an industrial country but more an insurance and financial service driven economy with tourism playing an increasingly secondary role. Local technically skilled workers are becoming harder to recruit and retain. We are not alone on the world stage in facing this challenge. There is said to be a worldwide shortage of skilled labor and it behooves us to make the most of what we do have in the face of this. BELCO also maintains an interesting mix of legacy and state of the art generation equipment. Shop floor staff must be capable of maintaining both.

Finally, we must not forget the looming external pressures on the company - from businesses, the government, the community and the shareholders - to "do more with less" in order to deliver increased value to them. These factors and more are the backdrop to our quest for improvement.

A decision was made to explore RCM as a means to address or at least offset some of these issues.

Decision Time

In the first instance, the team assigned to investigate RCM started their education by attending a conference dedicated to the maintenance approach. It was there we were able to network with practitioners and vendors and get a sense for the approaches being used, the benefits and limits of these approaches. It is important to separate the sales pitch from the reality and other users are a good way to do that. We learned there are many variations on RCM and we had to find the one to suit us.

One key question that was kept in view was: Will this philosophy work for our plant? Vendors quite proudly spoke of the numerous industries in which they found success: Pharmaceuticals, nuclear, hydro, pig farms....everything except a large diesel plant it seemed. The best data we could initially find that was remotely comparable were work done small (truck sized) diesel engines for mining equipment.

We keyed in on a few service providers and explored them further upon our return to Bermuda. It was important to find an approach that would work for our organization, both its business and its people. We could not afford to judge a program in a vacuum but had to take into account how the rollout would proceed and internal factors that would either support or limit its success.

We chose a service provider that has a program that played to our strengths and just so happened to offer a substantial reduction over traditional approaches in manpower requirements and time to results. While it is not central to this discussion, it was interesting to note the service provider committed what must be the equivalent of heresy by presenting at a conference filled with RCM gurus and stating categorically that virtually the same results could be achieved by skipping - under the right terms - what some term as essential steps in traditional RCM.

Despite the controversial approach, we adopted this variation because it suited where we were as an organization. It promised results 6 times faster than a Classical approach. It promised we could take our key staff - already in short supply - off the floor for only a week at a time and make good progress. It promised that the results would be comparable to the Classical approached.

Factors in our organization that support this approach included a solid track record of planning and scheduling. We had well developed PMs with years of planning and operation experience represented in them. They were computerized. We had a solid record of our forced outage history with causes. We had a comprehensive set of documentation for our equipment. We maintain close relations with the original equipment manufacturers and other operators of like equipment. We have an in-house pool of bona fide experts: fitter, planners, engineers, operators, predictive maintenance technicians all with hands on experience for substantial amounts of time.

These are all factors that support the implementation of a PMO style RCM program.

It was just after the point that we concluded on using PMO that I got feedback from another similar firm who had employed RCM2.

This island utility had:

1. Hired consultants to train their staff

2. Took 20% of their workforce off the shop-floor fulltime

3. Had them perform analysis for 18 months

They never implemented RCM.

The response I got when I asked what problems they ran into:

1. Staff who were off the floor had grief about not being involved in overhaul work (overtime?).

2. Staff who were not involved ‘lost contact' and did not support the program.

3. The Maintenance Manager was 4 years from retirement and did not care for the program.

4. They calculated they would need more staff for the transition period.

5. There was a perception (not proven) that inventory levels would increase.

You can imagine the frustration of key staff that spent a year and a half of their working lives trying to better a maintenance program only to see it abandoned. There were some benefits to the analysis such as a realization of the need to do more predictive technology work, but the bulk of the promise of RCM was never realized.

Ironically, some folks at the firm are still convinced that RCM is a good thing.

This was quite the wakeup call to us at the outset of our RCM Journey in Uncharted Waters. But we had chosen an approach that seemed sound and we knew could be sustained if we have management's support to provide dedicated access to our top staff for short periods of time. If management agreed to these terms, inclusive of a dedicated leader to drive the Initiative, our decision would be finalized.

Selling the Program

Everyone has their needs and wants at work. Our next task was to convince our Executive and Manager, Engineers that RCM was a productive use of already scarce resources. A series of presentations were arranged where we discussed our research and conclusions and projections of the benefits. Admittedly some of the numbers were mere copies of the typical results our vendor had achieved with other industries using the process. There was no way we could substantiate the numbers without any experience to draw on. But based on the compelling results seen elsewhere, and a lot of passion, we were able to convince our executive that the numbers we were projecting were achievable if they were willing to commit the resources. Right off the bat we projected:

1. 20% increase in productivity

2. Cut downtime in half

3. Measurable results in 18 months

To be sure, if we achieved even half of this, our leaders would be very impressed. These are unheard of numbers in our industry.

Our next task was to get the key set of staff for the project, our shop floor staff, to be convinced this was something of benefit to them. In real terms, whenever folks mention at 20% increase in productivity, there is a hint there of less overtime for the blue collar worker. This is a fringe benefit of RCM in most cases and with us the real prize is in fuel savings - more than half the expenditures of the firm go to it. A 3% fuel savings would increase the company's earning per share (EPS) by 11%. We estimated that including wasted labor and materials, this would result in a 16% increase in EPS in time.

These numbers are little motivation for unionized, hourly paid staff. They come to work on very different terms than say, salaried staff. Presentation to our union staff emphasized the need for improvement in our corporate performance - a perennial issue in any company. The logic of RCM was emphasized and was ultimately the key tool for garnering their support of the process - it made sense and they were driving the change.

Rallying the Troops

Our first act in initiating change was to train staff in PMO based RCM philosophy. With our aggressive targets in place, we were allocated the best and brightest staff from each discipline - operations, maintenance, planners and engineers - to carry out our task. Pulling the best staff off the shop floor in the middle of "outage season" is no mean feat and took real guts by our management. We promised that for every day they were off the tools, we would save 4 days on the tools and that ROI was attractive.

The training session was split into two groups. A very enlightening process the facilitator used to open up the training program was to have each individual introduce themselves and list their top 3 unresolved issues with maintenance. The list - which we ensured we kept for posterity - reads like a "what's what" list in the maintenance world. It contains the types of things you cannot learn in a textbook or on an engineering degree course.

In a few minutes we captured several decades' worth of experience, aspiration, frustration and knowledge. The one comment that stands out in my mind - from arguably the most influential blue collar worker of them all - was that "no matter what" the length of time a job takes will continue to remain the same. Now bear in mind this is in opening introductions - the details of the program were not even known at this point. But this is the reality of change management in some unionized and hourly paid environment. I'll come back to this comment later. The training itself went well and the week after we were into our first workshop.

Big Diesel Success

Sometimes we get lucky.

Sometimes we put ourselves in a position to get lucky.

We prioritized our base load engines for RCM and our pilot project targeted the performer with the lowest availability of that group of 8 diesel engines, the largest pair of engines of which can produce a steady 14.5MW each. It just so happened that in the very first hour of our very first workshop, we got lucky. This never before assembled team of subject matter experts hashed out the details that would form the basis for eliminating a complete outage in the outage cycle of this engine. In the diesel world, we classify minor and major outages, in this case with 3 minor outages and one major outage (teardown) before restarting the cycle again over an 18 month period.

The team deduced the means of eliminating one of the minor outages and extending the time between them such that we could complete a cycle with 3 outages instead of 4. Better yet, if these plans proved feasible, we would reduce the minor outage time from 7 days to 3 days. This first hour of work put us 1/3 the way toward our goal of halving downtime.

In general, the workshop format was to use our existing work plans, determine the failure modes and consequences embedded in them and formulate appropriate tasks and intervals to manage those failures. We rotated in and out subject matter experts as agenda required, never keeping an individual for more than 5 days with the exception of the operations players who's input is required at every stage.

It was only through the workshops can we could really see the benefits we had become convinced of in choosing this approach. The assembly of this team - temporarily cut off from spanners, email and cell phones, fed a steady diet of coffee and sandwiches - brought an unparalleled focus and energy to the room. We learned a lot from each other - the intent behind issued plans, the reality behind the execution. At the end of it we reached a consensus not seen to date. Operator, Mechanic, Electrician and Predictive Tech tasks were are harmonized like a world class orchestra.

A key aspect of our approach is single lines of responsibility. The often repeated catch phrase throughout the workshop was "Dual responsibility equals no responsibility". We arranged tasks based on the way equipment failed, who was best suited to the task and the appropriate interval based on our collective experience and the OEM documents. Only one trade would be responsible for a particular task, delivering clarity to them and also facilitating easier investigations where outage events deviate from planned activity.

At the end of workshop, we were in a position to point to any system and the major components in the system and list the preventable ways in which it failed and all the strategies we employ to mitigate that failure across our trades. (We were also exhausted.) Our engineers and planners had confidence their plans would be executed as planned and our tradespersons were confident that plans were appropriate and called for. Unplugging this team from their craft does require some finesse to keep them focused - spanner-less and email-less. But I assure you, the end results were worth it. And then we all got back to the real world.

The Dream Team was reconvened to present the results of our efforts to our Executive and Management. Among others, our now CEO was very impressed not just with the results but the fact that these were driven by our frontline staff.

We had shown without a shadow of doubt that this approach works on large diesel engines. In total:

• We eliminated 21% of our tasks including 6% on the main diesel engine
• We extended the interval for 26% of tasks.
• We added new tasks that amounted to 10% of the total
• In the end, 68% of our work was substantially changed.

In a subsequent workshop, the same party quoted earlier, who insisted the time to complete a task would remain no matter what, was quoted as saying: "This just makes sense. Once we analyzed the tasks, it was clear in some instances we were making doughnuts only because someone told us to make doughnuts."

Implementation

Talk to any guru in RCM and they will tell you most people get hung-up on implementation. It is a key focal point. While we knew this going into the program, we were not able to sidestep delays in implementation. We did not anticipate the extent of the effort required by our CMMS provider to link our existing PM scheduling system with our new maintenance strategy development system. At the time of writing of this paper, we are making good progress and testing out the automated links between systems. Once finalize, we can move to have software system distributed to end users with appropriate user levels configured and training will take place.

Each task analyzed has its own entry for any "needs to arrange" items that are required to make the tasks a success. These are allocated on the spot and lists are distributed after the workshop the responsible parties.

Other tasks to be tackled prior to full implementation include the training of staff where appropriate. We found a number of tasks for example that are within the job descriptions of our operator where the need appropriate training to take over these tasks from mechanics. We also scoped out the required tooling and tasked the appropriate parties to put these resources in place in preparation for implementation.

With a highly skilled but limited pool of people, it was also necessary to brief the bulk of our staff on the coming changes. Key to their acceptance was that their most respected peers were drivers for the change.

The Future: Doubling Up

We anticipate bringing closure on all the outstanding issues by year end 2007 and moving on to the next phase of this RCM Initiative in 2008. By that time we will have in place a strategy for all our main generating assets, based on preventable failure mechanisms across all trades. We are very pleased with our results to date especially having arrived at them through a diverse team based approach.

The next phase of this system is Defect Elimination, a process of addressing the deviations from the strategy and feeding the resolution back into the maintenance strategy. This promises to take the returns we have in our sights right now just from developing a coherent strategy and double them.

Keys to Success

Based on our experience to date, the following are a few Keys to Success to remember for your initiation of RCM in Uncharted Waters:

1. Do you research on an approach that will work for your organization and its people.

2. Be bold enough to establish targets using other industries if needed.

3. To establish a program you need a champion who understands the promise of RCM and has the ear of senior management. If it isn't you, you will need to connect with this person.

4. To maintain and grow the program you need to market results far and wide. Use post-analysis presentations, internal newsletters, corporate broadcasts, intranets, email etc.

5. Anticipate the human problems: Expect everything the program was never designed to resolve to be thrown in your face by frontline staff. How you accept it, learn from it and navigate it is key. Including a broad spectrum of first rate people on your team gets you halfway there.

6. Make the time to crunch the numbers.

Article submitted by Abayomi Carmichael CEng MBA BEng, Bermuda Electric Light Co. Ltd.

Bio: Abayomi Carmichael is an Electrical Engineer who has worked with the Bermuda Electric Light Co Ltd for over 18 years. He serves as Bermuda's International Professional Registration Advisor for the Institute of Engineering Technology. He has completed an electrical apprenticeship and went on to study Engineering at Newcastle University in England. He also received a MBA from Imperial College in London. He established a number of predictive technologies at BELCO including Infrared Thermography, Ultrasonics and Partial Discharge testing. He is currently dedicated to RCM.