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The Human Factor in Asset Management

The Human Factor in Asset Management by Rudi Frederix

The Human Factor in Asset Management

Rudi Frederix

Figure 1: The BAM model

Many companies have started, are in the middle of, or have already finished an operational excellence exercise. Although these companies are in different industries, the strategy for optimizing their technical departments (e.g., maintenance, engineering, utilities, facilities) is about 90 percent the same. So, the approach does not change much in the different industries or in the different departments.

In the pharmaceutical industry, for instance, product safety is a major concern. In the food industry, there is the balance between availability and cost. In the automotive industry, uptime and productivity are key. So, while the principles and building blocks of excellence exercises are based on the same strategy, such as the Uptime® Elements, brilliant asset management (BAM) model©, etc., the goals vary from industry to industry.

Another important element is the maturity of the processes in place. The pharmaceutical industry and the nuclear industry are the farthest behind. This is mainly because every change in the production process takes a lot of time due to the in-depth validation process. Taking that into account, changes are discouraged and often aren’t feasible.

So, one needs to adapt the approach to reach asset management (AM) excellence in various industries.

But…how about the human approach?

Some Facts

Fact 1

In 1850, the information available doubled every 45 years.

In the past, all the knowledge was owned by the boss (manager). The only place where you could learn was school. So, the boss went to school, read a lot of books (only available at school) and earned a degree. In other words, the boss was the smartest guy in the company – an example of the 2-D Age. Employees looked up to the manager because this person had all the knowledge. In other words, the boss had the power based on knowledge. All this had to do with availability of information.

In 1990, the information available doubled every three years.

In 2011, the information available doubled every two years.

Nowadays, the information available doubles/triples every year.

All information is now freely available. The bar to access information is so low to all people that anyone can learn. Since information is so accessible to all people, there has been a shift from the 2-D Age to the 3-D Age. Now, you can learn outside the classic classroom and know even more than your boss. All of a sudden, your boss isn’t the smartest anymore.

Fact 2

Only 13 percent of the people worldwide are engaged in their work.

It’s a disturbing number, to say the least.

Based on Gallup’s nationally representative polling samples in 2011 and 2012 from more than 140 countries:

63% of the workforce is not engaged or are simply unmotivated and unlikely to exert extra effort.

24% of the workforce is actively disengaged or truly unhappy and unproductive.

13% of employees worldwide are engaged in their jobs, emotionally invested in their work and focused on helping their organizations improve according to additional data on the Internet.

Combining the three facts, one can discern that most people are not engaged and one important reason for that is their knowledge isn’t used or is even neglected. The solution is simple. Engage and empower people by using their knowledge. That said, how can this be implemented in real life?

Figure 2: The transformation of information availability (Source: Jef Staes ©Fenestra bvba)

Let’s start with the maintenance excellence (MEX) program used in a pharmaceutical company.

Maintenance Excellence (MEX) Program in a Pharmaceutical Company

The project contained five steps:

Step 1: Conduct a survey. The purpose of the survey is to learn the maturity level of the maintenance department. The BAM model was used. It was learned that the work order flow was poor, especially work preparation and scheduling.

Step 2: Establish a road map. After defining the maturity level and indicating the opportunities, develop a road map that describes the necessary steps to go forward.

Step 3: Perform process mapping. Using the Makigami method, the existing situation (i.e., current state) is mapped out. It is then compared to how the current state would work in an ideal situation (i.e., dream state). The necessary steps to move from the current state to the future state are defined. This is done by asking the question: What do we need to improve/change to go from the current state to the future state?

Step 4: Implementation. Implement the defined actions to reach the future state.

Step 5: Follow up. Follow up and finalize the project.

The survey conducted at the pharmaceutical company found that the main issues were located in the work preparation and scheduling processes. After analyzing and improving the process, a hands-on tool time (HOTT) analysis was performed. Changes were incorporated into the processes and implemented. After one year, another HOTT analysis was conducted and the results were stunning.

Before implementation, the average duration of a work order was four hours. After implementation of the changes, the duration was only three hours. The company managed 9,000 work orders on a yearly basis, with an average full-time equivalent (FTE) cost of $59.30. After the first year, the company realized a profit of $534K.

This was only possible by using the knowledge of the people. First, the knowledge of the people was used for the survey and second, the people were empowered to build the new work order flow, resulting in ownership of the results.

Figure 3: Engaging and empowering people for success

One lesson learned was that communication is key. If you don’t explain why and what the purpose is, then people are skeptical from day one and will not (fully) cooperate.

The four essential areas to remember when working with people are:

  1. Use the pull principle instead of the push principle. Use the knowledge of the people and empower them.
  2. Each person has a personality. Define each person’s personality using, for example, the Myers-Briggs Type Indicator (MBTI)®, and communicate it to the group. This way, everyone knows how to approach a specific person to get the best out of the individual.
  3. Don’t push people into cooperation. Ask who might be interested in helping out. There are always several people who are interested, at least 13 percent based on the research presented in Fact 2. Empower them. Give them the necessary tools (e.g., time, budget and coaching) so they can implement their ideas. You also may want to use coaching techniques, such as GROW, Harada, etc.
  4. As soon as the first achievements are reached, make them visible. Build a wall of fame. Recognize the individuals involved. By doing so, other less engaged people will show interest.

When it comes to the human factor in asset management, keep in mind: Engaged people see an opportunity in every problem; disengaged people see a problem in every opportunity.