March 07, 2005

Return on Investment for Your Motor Diagnostics Program 1

Howard W Penrose, Ph.D. (howard@motordoc.net)
Vice President Electrical Reliability Programs
T-Solutions, Inc. (http://www.tsoln-inc.com)


Introduction

Now that I have re-entered the consulting field (1997-1999 Senior Research Engineer, Industrial Assessments Team – University of Illinois at Chicago (UIC-ERC) and Adjunct Professor of Industrial and Mechanical Engineering [don’t ask!]), I have been reviewing the materials on different programs and their justifications. You know what I read? Blah, blah, blah – more big words and big speech which actually sounds like the authors attempting to justify themselves. I know, a little harsh, but many miss the main points, most likely because I see very few that have real-world, knuckle-dragging experience in the areas that they view themselves as experts in.

If you are reading this, are one of these authors and feel offended by this, then you are one of the ones I am talking about! If you agree, then you are not! I have literally been involved when a ‘business consultant’ made the recommendation to switch a 20 year plant manager veteran with 30 years in the business with a 2 year, 20-something customer service representative and had to deal with many of the disasters that resulted in a motor repair shop. I have seen another case where a consultant recommended that a company bring in a human resource specialist from outside of the industry, and an HR person from a retail store was brought in to a blue-collar environment. The end result was a conflict between the ‘front and back’ – or the white collar and blue collar people within the company as the HR person viewed the white collar group (sales, marketing and accounting) as management and the blue collar group the same as she viewed the high school cashiers that she had dealt with in the past. The final straw, in my case as an executive in the company, was when she accused me of being “to friendly with those blue collar types.” I left the company shortly thereafter.

The lesson: I am always cautious of new consulting or business fads. Instead, I believe in tried and true, cutting edge… common sense. Now, what is the use of a consultant and why did I get into this business? Sometimes it takes a third party facilitator, or someone with experience in similar industries, to see above the forest to identify common sense. It is unfortunate, but common sense is not all that common!

As I have stated in some of my recent MotorDoc MDMH (Motor Diagnostics and Motor Health) newsletters, the actual measure of the success of a program is an impact on the bottom line or profitability of the company. Calculating return on investment has a minimal effect when you are presenting numbers that relate in the $thousands or even tens of $thousands to managers who are dealing with issues related in $millions.

In this part of the lecture series, we are going to discuss how to relate maintenance and reliability in terms of business impact versus feel-good numbers. It is not as difficult as it may seem.

In keeping with the tone, I am also going to discuss a real issue: Many consultants of different R&M methods view those methods as the program, itself. It has to be remembered that programs such as RCM, Knowledge Management, CBM, etc. are just tools to improve maintenance and reliability. If these tools are viewed as the program and a significant portion of the M&R time and budget is focused on these areas with limited improvements to the bottom line, then the overall purpose of the program will fail. If these are viewed as tools to meet your goal, then you will most likely succeed!

Recommended reading during this series (I expect that I will be on this subject for about 6 weeks): “The Goal: A Process of Ongoing Improvement,” by Eliyahu M Goldratt. ISBN: 0-88427-178-1; and, “A Novel Approach to Industrial Assessments for Improved Energy, Waste Stream, Process and Reliability,” by Howard W Penrose, Ph.D. and available in Adobe Acrobat for free from http://www.motordiagnostics.com/presentations.htm.

Posted by hpenrose at 10:12 AM | Comments (0)