If the true measure of success is a sustainable programme, then I can safely say that without senior management support the programme would go through the classic roller coaster pattern - improvements over a period of time, then a decline, followed by another period of improvement, but then the inevitable decline.

Why Seek Executive Support?

The first reason: you won’t succeed without senior management support. I know, I am repeating myself. But it is important to emphasize this point. I have never seen a reliability improvement initiative succeed without it.

You need their financial support. It is actually possible to achieve a great deal without a high level of investment, but whether it is the purchase of condition monitoring equipment, training and consulting assistance, or the reassignment of staff to reliability positions, ready access to funding will improve the programme. And if redesign projects are required, you will certainly need their financial backing.

Leadership is the area that will make or break your programme. If senior executives give clear, consistent, and repetitive messages that reliability is important then you will be able to create the culture of reliability that is the key to success.

We only need to look at how safety has been transformed. Everyone knows how important it is on a practical level, but it is only when it is given as a corporate priority that change occurs. Asset management through reliability improvement needs to take the same approach. Without it, people will pay lip service but will ultimately fall back to their old ways.

But there are other reasons why leadership is important. A very common cause of programme failure is the apparent success of the programme. That may seem confusing, but when a plant has an obvious reliability problem, like practicing some level of reactive maintenance or experiencing a high level of downtime, then (once the message has been sold) management understand the reason for the investments being made.

But as you get reliability under control, management may question whether any further investment is required. They will ask the question what have you done for me lately. No one questions the need for ongoing safety training, and the ongoing focus on safety in a plant with a good safety record, but the same is not true in a reliable plant - not unless you have true senior management support.

If You Don’t Have Required Support

I like to call this stealth mode. It is possible to do a lot of good work within an organization to improve reliability and take action to minimize downtime. Activities include implementing a condition monitoring programme, utilizing precision tools such as laser alignment, eliminating lubricant contamination, performing root cause failure analysis – and so on.

But for the most part, none of these activities deal with the true root cause of poor reliability - the organization’s reliability culture. A strong and consistent message from the highest levels of management is an essential ingredient in developing the reliability culture.

The Key Messages

There are a number of messages we want senior management to hear. Let’s go through some of the most important ones.

Management needs to be aware of the benefits of improved reliability and the risks if they do nothing. There are many risks, but the following is a summary of those that can be mitigated with improved reliability:

• Fewer safety incidents
• Fewer environmental incidents
• More insurable
• ISO 55000 compliance
• Regulatory compliance
• Plant/facility viability

Likewise there are a number of benefits that need to be explained and quantified in order to convince senior management:

• Increased production (through improved availability and capacity)
• Reduced costs
• Higher reliability/dependability/stability
• Improved morale/job satisfaction

Who Influences Reliability?

It is important to help senior management understand who it is within the organization that influences reliability. It is highly likely they would assume that the maintenance department is responsible for the lack of reliability, and therefore they should be responsible for improving reliability. They are wrong on both counts.

They may also feel that the answer is to create a group that is dedicated to improving reliability. If managed correctly, that is a good idea. But it is not the solution. The reliability group should not be solely responsible for improving reliability. People should not throw their problems over the fence to reliability.

Instead, it is essential that senior management understand that everyone within the organization contributes to the current lack of reliability, and therefore everyone in the organization has to contribute to the reliability improvement initiative.

Reliability is influenced by the design, procurement, (vendors/contractors), spares management, planning and scheduling, maintenance (including the installation and commissioning) phases, and the way the equipment is operated.

The sales department can put downward pressure on the plant to produce product at a higher rate, which results in poor reliability. And there are many other ways in which reliability will be influenced. That is why it is insufficient to just have a small group of people focused on reliability.

It is not enough to seek the many financial benefits associated with improving reliability; senior management has to understand the risks of not improving reliability. They have to take responsibility for the safety, environmental, and business-related consequences.

One way that you can help them to appreciate the risks is to perform an asset criticality ranking; a ranking of all your assets based on the consequences and likelihood of failure. You can combine that with Pareto analysis of the equipment failures you have experienced in recent times.

Economical Value Add matrix.

How Do You Sell the Benefits?

There are three basic ways to approach this challenge; technically, financially, and personally. Many of us who have an interest in asset management and reliability improvement also have an interest in the technical approaches that can be taken: RCM, FMEA, condition monitoring, precision maintenance, RCFA - and the list goes on (and on).

We may understand these approaches, and we may appreciate the importance of the technical issues behind these approaches – but most senior managers will not. Most senior managers do not have the time or inclination to understand these approaches. Instead we have to focus on the value we add by utilizing those approaches.

While we can talk in general terms about the value of increased production, reduced cost, and reduced risk, it is essential you put them in financial terms – using their financial language. We have to start by understanding what drives the business. What is most important in your situation; increasing production, reducing costs, or reducing risk?

If the focus is on reducing cost then you must be able to demonstrate that a simplistic approach on cost reduction (typically reducing the maintenance budget) will be detrimental to equipment reliability, and therefore, while there may be short-term gains there will certainly be long-term pain.

Instead it is easy to make the case that by focusing on improving reliability we will reduce cost but in a far more sustainable way. It can be demonstrated that by improving reliability there will also be:

• Reduced maintenance costs
• Reduced operating costs
• Reduced/deferred capital expenditure
• Reduced compliance costs
• Lower working capital
• Reduced spares inventory.

We can instead focus on how production can be increased through:

• Less planned downtime
• Less unplanned downtime
• Higher rate
• Higher quality
• Improved customer satisfaction

But we should still focus on presenting this in a way that resonates with senior management. And that’s where we can use a tool called Economical Value Add (EVA).

EVA is based on the difference between the operating income that results from a particular project and the cost of capital associated with implementing that project. As you continue upstream, we have a key metric in the Return On Net Assets (RONA), and the Weighted Average Cost of Capital (WACC), which could be described as the opportunity cost of the capital that has been invested in the project.

What we can demonstrate is that by improving reliability we can increase the operating income and increase the profit margin on that income, and we can reduce the amount of capital expenditure.

We have the amount of hours that we plan to operate the plant (which can be increased if we reduce the amount of planned downtime) and we have the Overall Equipment Effectiveness (OEE) which is a measure of the availability (or uptime) of the plant during those planned hours, the quality (or lack of rejects), and the rate of production.

By increasing the OEE we increase the output of the plant and in doing so we also reduce costs (the overhead). We also give greater confidence to the sales people and customers which leads to a greater market share.

The bottom line is that we generate a positive EVA - and that is important to any senior executive. And if you can combine that with an evaluation of the Net Present Value of any proposed investments, then you will be dealing with them on their terms.

But in addition to needing to learn the financial language, you will need to know what an hour of downtime costs, what your maintenance costs are, what your level of quality is, what your spares inventory is in Euro/dollar terms – and so on. Without this information, everything else is theoretical and hypothetical.

It also helps if you can benchmark your plant with the industry’s best in class. With this information it will become easier to estimate what can be achieved within your organization.

Taking a Personal Approach

It is worth remembering that the senior executive is made up of human beings. Those humans share many traits with you. They have goals they want to achieve. They don’t want to look bad if they make the wrong decision. They don’t want to be held accountable if there is a safety or environmental incident.

So you need to get in their shoes and appeal to their personal needs – show them how supporting your plan for reliability improvement will help them achieve their goals.

There is no doubt that proper asset management through reliability improvement will benefit any organization. If you can speak the language of senior management you will get their support. And you need their support.

Once you win the support of senior management you can begin to develop the reliability culture within the organization and make the essential improvements that will realize the lucrative benefits of increased uptime, reduce costs, and reduced risk.

If you would like to learn more, there is a free one-hour recording available of a presentation by the author. Webinar – Reliability Leadership: bit.ly/1LWJKan