♪ (music) ♪ (Terrance O'Hanlon) Hello and welcome to our webinar about the Certified Reliability Leader brought to you by the Association of Asset Management Professionals located at www.maintenance.org. My name is Terence O'Hanlon. I'm a Director for the Association of Asset Management Professionals and the CEO publisher of "Reliabilityweb" and "Uptime" magazine. I am also a reliability advisor for firms such as Honda, BMS, Bentley Systems, IBM, and many other Fortune 500 firms. I'm the recipient of the first certified maintenance reliability professional of the Year award from the Society of Maintenance Reliability Professionals. I'm a voting member of the US technical advisory group that drafted ISO 55.000 along with 32 other countries around the world. I'm an asset management expert on ISO working group 39 that drafted ISO 17021-5, the audit certification standards for an ISO 55.001 program. I'm a producer of conferences like the International Maintenance Conference and the Reliability Conference Las Vegas. I'm, as I sad, a Director of the Asset Management Professionals. I'm a judge in the Uptime awards and the Year in Infrastructure awards. I'm the treasurer of the Institute of Asset Management here in the USA. I'm a certified maintenance reliability professional, a certified reliability leader. And I have an asset management certificate from the Institute of Asset Management in the UK. Primarily, I consider myself an evangelist for reliability and asset management. So that your day can be productive, I'm asking you to make a commitment to keep a list during my presentation and capture one thing that you can take back to work and do immediately. So the Association of Asset Management Professionals is a Florida not-for-profit organization. It's a Community of Practice focused on reliability and asset management. The Association of Asset Management Professionals is a grassroots voluntary forum by and for the profession with a specific laser focus on reliability and asset management. In other words, we don't focus much to other industrial topics. We're focused primarily on reliability and asset management. By joining, you're gaining access to an amazing community of professionals who love reliability asset management. We take this work all around the world. And all we're waiting for is an invitation. And we'll come to your part of the world. What we find is, of course, there's different cultures, languages, modes of dress, and all sorts of interesting differences between us in the world. But when it comes to reliability and asset management, we find that the challenges are pretty universal. And even if they are fairly unique in your line of business or in your particular geographical area the solutions are all almost very universal. Most of our work is done around this framework, Uptime Elements a reliability framework for asset performance, consisting of reliability engineering for maintenance, asset condition management, work execution management, and leadership for reliability conducted over the entire asset management lifecycle. As a benchmark, today's top performers are approaching 99% mechanical availability, while spending only 1.4% of their plant replacement value. Plants not achieving these levels are losing opportunity and incurring unnecessary maintenance costs. That comes from Jeff Dudley, the RAM study project manager at Solomon Associates, released August 29, 2014, after studying 600 organizations and their maintenance practices. Oftentimes, we approach these reliability improvements, these asset management improvements, and can we point to any organizational change as a result of the improvement recipes we typically use? And the answer is generally no. Can we point to a specific return on investment that actually shows up on the company's financial statement? Usually, the answer is no. And can we point to specific performance improvements as a result of what we've done? And a lot of times, unfortunately, the answer is no. In fact, in Reliabilityweb's work, our research shows us that only 30% of these legacy technical implementations result in sustained business improvement. In other words, proven techniques, like reliability center maintenance, predictive maintenance, MRO spare parts management, enterprise asset management, and computerized maintenance management systems, root cause analysis, operational excellence, total productive maintenance, maintenance planning and scheduling, what we're saying is that when we study these technical implementations, we find it only moves the needle. In other words, it only moves the needle. It shows up on the financial statement or other organizational objectives 30% of the time. 70% of the time, the legacy maintenance initiatives fail to generate sustainable business results. As an example, we just completed an RCM study. There were 602 respondents. And we asked them, if you had used reliability centered maintenance at some point, and then you stopped using it, why? And 18.27, the top response, said, that's because RCM produced the desired result. And we completed the project 18% of the time. The other 82% of the time, RCM didn't produce the desired result. The funding ran out. The analysis was too difficult. It was ineffective. There was too little management support. There was too little manpower available. RCM analysis was actually completed, but the results were never implemented in 13%. No support for changing from the current maintenance program. And it's not simply with RCM. RCM is a proven, effective method. It just has a high failure rate when it comes to technical implementation. CMMS, the Computerized Maintenance Management System, or enterprise asset management system, most of us use to manage work orders, spare parts, maintenance labor, usually it represents a very significant spend in the maintenance area. We asked what's your organization's level of satisfaction with the ability of your computerized maintenance management system to support the plant maintenance process in your organization? About 10%, a little less, said it was poor. 30 some percent said it was fair. Less than 50% were even able to say that it was good. And really only 12% were able to say it was excellent. After such a significant spend, you would hope that the results would be a little more optimistic than that. Luckily we're not alone. It's not just in maintenance reliability. We found some research in the Harvard Business Review, where they studied 200 management tools, total quality management, enterprise resource planning, customer relationship management. 160 companies compared to shareholder return over five years. And our findings took us by surprise, said the study group leaders. Most of the management tools and techniques that we studied had no causal relationship to superior business performance. So what's going on on this? Do any of these reliability methods work? 70% of the time we say, no, they don't work. Alignment to the AIM is missing, the organizational objectives. The front line alignment coordination-- in other words, the people will be affected by the change have not been communicated with. And they don't understand the new system. We all have full time jobs and simple execution of these improvement methodologies can be overwhelmed by our daily work responsibilities. Many companies are making the mistake of managing using lag indicators rather than leading indicators. Of course, we need lagging indicators. But it's the leading indicators that will drive new behaviors. Team accountability-- team member to team member accountability is often lacking in these improvement projects. Reliability is often treated as an engineering exercise, as a maintenance initiative. Reliability is not a maintenance initiative. Reliability is not an engineering exercise. Reliability is a business critical or a mission critical initiative. Many methods are aimed at ensuring that labor resource efficiencies, in otherwords, installing a computerized maintenance management system or improving our maintenance planning or our spare parts. Now, these are really great things to do. But you cannot plan your way to the reliability. Many methods are not being sold. They're not based in discipline, failure elimination. In other words, we walk into many companies, and they're doing condition monitoring. But they have not completed any formalized failure modes analysis. They have not done criticality analysis. So the linkage is missing between failure elimination and their condition monitoring. Many point solutions fail to address the holistic nature of a reliability framework. And data integrity is not available to support current decisions on reliability or to refine them in the future. In other words, oftentimes, the data is lacking. But the biggest single obstacle for improving asset performance -- we studied 1,000 asset intensive organizations around the world. And we found that 40% of the time, the number one answer is organizational culture is the biggest single obstacle for improving asset performance. And culture is created with leadership. Many of you are familiar with the fact that ISO the International Organization for Standardization, published a series of three standards, known as ISO 55000 to the world, ISO 55000, ISO 55001and ISO 55002. It is a managing system standard for asset management. And many companies are looking at it because it's a framework to create value from your assets through a coordinated set of activities. And asset management is a very specific practice that can be gone at the C-level. It can be done at the finance level. It can be done at a portfolio level. It can be done at an engineering level. And it can be done down at a plant or an equipment level as well. So there's various layers for asset management. The thing that all of them have in common is that the asset management activities are directly linked through a line of sight with organizational objectives as they call them in ISO 55001, or AIM, as we call them in the Uptime Elements in the Certified Reliability Leader program. In other words, all the activities that you're doing are designed to be directly linked to achievement of the aim for the organizational objective. So what reliability and asset management have in common is that reliability enables good asset management decisions and asset management enables good reliability decisions. They're two sides of the same coin. And our value recipe for asset performance comes from BSI PAS 55. That was the asset management specification that was based in the UK, was created in 2004, has now been retired in 2012, and replaced by ISO 55001, the asset management framework, also used in conjunction with ISO 31000 risk management framework. And we say plus reliability leadership, the Association of Asset Management Professional Certified Reliability Leader combined with Uptime Elements framework for asset performance. That is delivering assets performance value. That's our framework that we're promoting. And as I said, this is the basis for most of the work that's being done in Uptime Elements as well as in the Certified Reliability Leader; it's based on these particular topics. Now, it's primarily a framework of all of the elements that you need to do to achieve asset performance. In other words, to have reliability in your assets, you need to do all 29 of these individual elements almost all of the time to have a high level of asset performance. And so it's interesting-- this framework is interesting as a topical list, although there's not a lot of power in using it in a topical list. Most of the elements on this framework are quite well known to almost all of you who are interested in this topic. What is interesting about this is first off the sequencing of it, putting them together in one unified framework. So as a recipe, it certainly has some value. 29 clever options better to have than not having 29 clever options. But what we really like to see this framework used for is to empower and engage stakeholders across the organization in delivery of the organizational objectives, or the AIM, through reliability. And what a framework like this allows us to do is get everybody on the same page. We can empower and engage when we have one single standardto refer back to. Now, remember, this is a framework of what and why for each element. In other words, what is RCM and why do you need it in a framework for asset performance? What is vibration analysis and why do you need it in a framework? What is maintenance, planning, and scheduling, and why do you need it in a framework? It is not a framework of how to. There are all other bodies of knowledge in the world and there are other certifications that deal with how to realm. This is used, as I said, to engage and empower stakeholders across the organization through knowledge and a consistent application of concept around reliability and asset performance. So we start everything with the organizational objectives, or what we call the AIM. AIM is the reason that your organization exists and it's how the organization is managed. That's supported by asset management objectives that are typically managed and identified in an ISO 55001 type of a framework or some of the anatomy is supported by the Institute of Asset Management in the UK. You can download their anatomy document at www.viam.org. But we say then that those asset management objectives are supported by reliability objectives. This is where Uptime Elements and Certified Reliability Leader come in. And that's achieved through a reliability strategy that's managed withreliability systems. And those activities are coordinated through a reliability plan. The Certified Reliability Leader and Uptime Elements, as you notice, is color coded. Those color codings also refer to a framework of internationally recognized standards that we build the framework upon. In other words, in the yellow asset management part of Uptime Elements we're referencing back to the ISO 55000 standard series and the ISO 31000 series. In the leadership for reliability, we are referencing back to ISO 50001, ISO 9001, and ISO 14001, which have recently been updated to be more in alignment with the ISO 55001 standard. In the work execution management, we like to base a lot of the work on ISO 14224, collection and exchange of reliability of maintenance data for equipment, and BSI's PAS 1192, which is specification for information management around the operational phase of assets using BIM. In the orange, reliability engineering for maintenance, we refer to SAE JA 1011 and 1012 for reliability center maintenance as well as some of the IEC 6300 series on dependability, and the IEC 61078 for reliability block diagrams. In the asset condition management, or what a lot of people refer to as predictive maintenance, there's also a very vibrant framework of international standards that we build Uptime Elements on. And you can see some of them here. Almost every technology has both a programmatic or a technical approach based in ISO standards, as well as competency and certification approaches, to each one of the condition monitoring technologies that are commonly used. So I will leave this up for a moment so you can either freeze the screen if you want to write down some of these, or my suggestion is start pursuing the Certified Reliability Leader for yourself, and you'll learn all about these standards. Where do we position ourselves when it comes to asset management? There's a lot of confusion now with ISO coming out with these asset management standards. All of a sudden, what was maintenance yesterday became asset management today. But as I mentioned, and I think this illustration from the institute of Asset Management does a really great job, at the C-level, asset management is keeping stakeholders happy, corporate and organizational management. So asset management can be practiced up at that level. Now, in our organization, the Association of Asset Management, we don't have a lot of guidance on how to manage a corporation or how to do organizational management of a corporation. What we do have is guidance for executives to achieve reliability within their work. So IAM has a lot more information about asset management at that level the Institute of Asset Management. They also have a lot of guidance and information at managing asset portfolios. For example, if you're a large electrical generation company, you might have transmission and distribution assets. You might have generation assets. And somebody's managing that portfolio of assets. And again, at the Association of Asset Management Professionals, we don't have a lot of guidance. We simply have guidance about reliability for asset management portfolios, not a lot of asset management guidance. Again, we suggest VIAM.org at that level. Then where we sort of cross over with IAM is managing asset systems. IAM has a lot of information. It's sort of a secondary focus at AMP, where we really focus is down in the life cycle activities-- maintenance, reliability, life cycle costing, things of that nature. That's where the Association of Asset Management Professional sees its biggest role to guide maintenance reliability leaders to their role in asset management. Where some associations are jumping forward saying, hey,maintenance is asset management, we take a more holistic view at the Association Asset Management Professionals. And we realize we are not the end all and do all when it comes to asset management. A C-level executive would find very little of interest in his day to day from what we focus on. We are really focused down in life cycle activities. And we feel like we're one of the most resource rich organizations in our body of knowledge available down at that level. So if you're a maintenance reliability leader, and you're looking to find your way to excellence in asset management, that's where AMP is focusing. And we're glad to have your attention in that regard. And that's where CLR can really contribute. Now the Certified Reliability Leader that we're really here to talk about is based on, as I said, on the framework, Uptime Elements. And it's really based on this specific body of knowledge. It's 29 Passports that, as I said earlier, explain the what and the why of each one of these Elements. And the reason that is, if you remember earlier in this presentation, I said that reliability is not a maintenance initiative. Reliability is a business initiative. And we need to get stakeholders in operations, and procurement, and senior management, and IT, and safety, and HR to have an understanding of what we mean when we say reliability. So this is based on a series of 20 page Passports, entry level, primer level, 101 level information about each one of these elements. So there's enough information that they can have a clear idea of what they're being asked to support. A little deeper body of knowledge is available in these five ancillary books, "Clean, Green, and Reliable," "Don't Just Fix It, Improve It," "Level Five Leadership at Work," "People, A Reliability Success Story," and the new asset manager handbook Plus, The Reliability Leadership Travel Guide," give you a good rounding of this entire system. And that's what the CRL, or Certified Reliability Leader exam is based on is this specific body of knowledge. There's over 500 companies with employees who are certified through the Association of Asset Management Professionals as Certified Reliability Leaders. The Certified Reliability Leader exam consists of 125 questions. It is an open book. However, it's limited to the AMP body of knowledge that I just showed on that earlier slide. You bring your own device, your own computer, your own tablet. Or you can even try it on a smartphone. It is an electronic test with bookmarking capability. There are three choices per question. It's a multiple choice exam. It's two hours to complete the CRL exam. There's a three-year certification period. And re-certification is through professional development hours or you can re-sit for the exam three years later. Most people choose to be re-certified through the professional development hours. There is a $299 US fee for the exam. And you can get more information at maintenance.org/CRL. Our friends at Bristol-Myers Squibb have over 100 people. They're well on their way to 200 Certified Reliability Leaders in their ranks. And we're hoping to see them get all the way up to 500 to install a global culture of reliability. Another aspect of reliability in asset management as a strategy is the triple bottom line. We asked Certified Reliability Leaders to pledge that using more energy and material than a process demand is a failure. In essence, all of the easy materials and all the easy energy in the world is pretty much gone. And we're having to work very hard. So 63% of the people we surveyed in that asset management survey said they're adopting asset management to achieve the environmental goals, the environmental promises, that their organizations make. 54% said they're using asset management to achieve social responsibility goals that their organizations make. And, of course, 90% said they're going to achieve economic goals. We call it the triple bottom line. And we think that asset management reliability has a huge impact on this. And we're glad you've got an interest in this. And we're hoping that you join us in taking the pledge of using more energy and material than a process demands is a failure. Also, the CRL framework is the framework we use to judge the Uptime award. So we're hoping that as you learn more about it, you can lead your organization to victory and recognition. With reliability typically not happen, so it's very difficult to get a lot of accolades inside your company sometimes with things not happening. But that is the reward when it comes to reliability. So we like to recognize them each year at the International Maintenance Conference. AMP has 53,000 plus members worldwide. You can log on at maintenance.org. Membership is free. It's a very deep Community of Practice and body of knowledge that's available there. And we encourage you to do so. If LinkedIn is more your thing, you can look up the AMP group. There is over 45,000 people that also participate in the discussions at LinkedIn, making it one of the largest groups on asset management and reliability at LinkedIn. And we invite you also to join free in that regard. We're working on expanding an alliance of organizations that are global and have an interest in supporting asset management. So if you belong to an organization and you want to find out more about AMP's alliances, please get in touch with us. And we'd love to have a conversation with you about that. As I said, this framework, sort of at its lowest level, it's a clever set of options, these 29 options. And if you recall, I said it's better to have these 29 options than to not have them. I said, though, that we like to work at a level above that. And we use it as an engagement and an empowerment tool, to engage and empower stakeholders across the organization in what is this reliability journey we're on. So we need to recruit, engage, and empower people in operations, people in procurement, people in human resources, people in engineering, people in senior management. And using a framework like this allows us to do so. And what we really like to work at is the level that we call transformation in leading the change so that reliability becomes the way that you do business in your organization. So this is not a maintenance management certificate. There are many associations that have pragmatic certifications around the practice of managing maintenance. There are several in the United States. There's one in Canada. There are several in Europe that do that type of certification. This certification is about transforming the journey to reliability transforming how you do business. That's very specific with the Certified Reliability Leader. And we think it makes it very unique in the world itself. Remember, reliability is not one person's responsibility. Although we can all take personal accountability for reliability in our organization, reliability is everybody's responsibility. We hope that you'll consider trying to attain the Certified Reliability Leader certification. You can reach me at some of the links that are on this page. I'm, as I said, very passionate about maintenance reliability and asset management. I like to engage with people. I learn from people all over the world. And I look forward to congratulating you upon being adding the CRL designation after your name. My name is Terence O'Hanlon. I appreciate your time and your attention. And again, I look forward to meeting you at an upcoming conference or another event somewhere around the world. Thank you very much for your attention.