Why Enterprise Asset Management Badly Under Performs its Promise and What to do About It

Enterprise Asset Management makes great claims to improve maintenance and reliability results. Efforts to standardise Enterprise Asset Management were made with PAS 55, and later ISO 55000 Standard for Asset Management. Yet when Enterprise Asset Management is applied it is hardly ever successful. What is wrong with EAM and its stipulated processes and business solutions?

 


Dear Mike,

I am currently undertaking a master’s study on “Understanding the Difficulties of Developing an Effective Planned Preventive Maintenance Regime at an underground coal mine”.

My masters is based on finding the reasons why in the mining field the other methods of maintenance methodologies such as RCM. TPM, Six sigma, etc. do not seem to get embraced by the mining maintenance teams, and there is always a weak attempt to implement them on the part of management.

I also want to know why computerised maintenance management systems (CMMS) seem to always fail to deliver the expected return on investment in a lot of organisations.

I have read your books /articles on maintenance and they are quite impressive, but I need to find out how the culture, the education level, the underground conditions and the resistance to change of the mining maintenance people contribute to the barriers of implementing these innovative techniques.

I will be happy to hear your opinion on this and other latest trends in the maintenance field, and with your permission I will include the information in my thesis. Any suggestions that you may have will be greatly appreciated.

Thank you in advance.

 


 

Hello Isaac,

Your comments and observations on ineffective maintenance regimes have hit close to my heart. The problems you identify have been around for decades. They are old, old issues, nor is it only in mining where they have not been successfully solved. Make sure that your scope of investigation is not too small, you need a scope that covers from shopfloor, right up to the Executive and the Boardroom.

The issues you want to examine in your masters thesis have be in my thoughts, and occupied my business activities, for over twenty years. It is my goal in life to deliver a sure solution so that every company can have enterprise asset management and operational excellence success.

You have already mentioned some key factors: culture, education level, workplace conditions, resistance to change. You should include human nature, organisational structure, leadership and business processes. Let’s work through them one by one.

CULTURE

Culture is a construct. You create the culture of a company. It means the mining culture you see about you was fashioned. It is the result of past beliefs, events and leaders. The culture in a company today comes from the collective memory. That wonderfully means that you can change culture to what you want through the choice of beliefs, events and leaders. I do not see culture as being difficult to turn into what is required. Having a great strategy, a line-of-site plan and tenacious leadership are the main constraints to successful culture change.

EDUCATION LEVEL

You can only do what you know. More than that; you can only do well what you know how to do well. If your education is limited then what you can successfully do is limited. The workplace and management practices you see happening in your coal mine are learned behaviours. That is wonderful to know because you can teach people the behaviours that work better than what they now do. The right education is vital and success cannot happen without it. Again, I do not see lack of knowledge and understanding being a problem. Wrong thinking, no skills, ignorance are all solvable with the right education and consistent practice.

WORKPLACE CONDITIONS

If you know of Frederick Herzberg’s research into workplace motivation, you start to understand the impact of workplace environment on the people in the workplace. Mining is dirty, hard, physically sapping work. You only do mining work for the money—there are few good reasons to be a miner. You are not building Cathedrals that will outlast you by centuries, where your workmanship is praise to God, where your skills are on display long after you die. Mining work is a rotten, mind-deadening job. It degrades peoples’ spirit and people act accordingly.

RESISTANCE TO CHANGE

People do not resist change. What they resist is pointless change. Human beings are learning machines. We absolutely love to know more about what interests us. We will happily change our behaviour if it is to our advantage to do so. When you see miners being resistance to change there is a deeper reason than not wanting to change. It is more accurate to call it fear of change than resistance to change. Remove the fear and make change valuable, and people will change.

HUMAN NATURE

There are seasons in life—spring, summer, autumn, winter. Men in the autumn of their lives are not interested in summer games. If you have worked your career as an employee in mining, by the time you are 45 years old you have seen a lot of changes and a lot of people come and go in the industry. Remember, it is only money that keeps workers in mining. Interest and passion does not enter into their consideration. After more than twenty years employed in mining, you learn that new ideas and changes are never implemented properly by management because they do not know how. You know managers will not stay long in the role; managers simply bumble their way through their job and leave when they see troubles coming their way. You soon learn that managers just want the money and glory. You are just a piece in their game. It is sad, but this is how employees view mining companies. By the time you are 45 years old you know that you only need to pay lip service to management, then wait long enough and another ‘flavour of the month’ change will pass by.

ORGANISATIONAL STRUCTURE

Hierarchical organisations are modelled on structures designed to fight wars between hated enemies. The performance of companies using such an organisational structure is dominated by the decisions of the High Command. Instructions go from top to bottom and then outcomes result. When you have long chains-of-command and Commanders are well back from the front, you greatly increase the chance for late decisions and bad decisions.

LEADERSHIP

It is easy enough to appoint a leader. It is the lack of leadership ability that is the problem. A leader needs to know where they are going so they can guide the way for those that follow. Leadership sets the direction and creates the path to get to it. If you want a leader to change a business, the leader must have a trail to follow to the destination. They are the person at the front, which everyone else shadows. Until you have the leader at the front showing the way there is not a path forward to follow. Unfortunately, the leadership in mining companies is drawn from career miners. Mostly they are over 45 and in the autumn of their lives.

BUSINESS PROCESSES

In one of the greatest books written about management, Out of the Crisis, its author W. Edwards Deming stated a great business truth: Your system is perfectly designed to give you the results that you get. The operating performance you receive is the natural outcome of your business system capability. What happens in, and to, a company is totally the result of its process design. Deming actually determined (from his observations of businesses over decades) that 94 percent of business problems are caused by the business system. Deming found that for every 20 problems in a business, 19 are caused by the business design. You should look very closely at how a business is designed; it will explain everything that is wrong with it. The design of a business and its processes is the responsibility of its management.

WHERE TO FROM HERE?

Enterprise Asset Management performance is the result of the EAM processes you use. Your maintenance performance is the result of the maintenance processes you use. This realisation let me reach my goal to deliver a sure solution for enterprise asset management and operational excellence success.

The answer is to do what Deming said: first design the right processes. Do not impose bad EAM processes on companies, as PAS 55 and ISO 55000 frameworks force you to do, or live with poor processes from past cultural habit. Start afresh and identify the right path that takes you to world class Enterprise Asset Management results. Design a line-of-sight route that you follow to create the processes you need for outstanding reliability and operational performance.

The Plant and Equipment Wellness methodology is designed to apply Deming’s business truth. PEW contains the tools you use to design the right maintenance and enterprise asset management processes into industrial businesses so that they naturally deliver world class EAM results.

With a charted path ahead you bring together the leadership to travel the course. The operational and maintenance processes that you need are clear and they get designed to work properly. You know what education to impart and the behaviours to adopt to make the processes work brilliantly. You start to build the right culture for the operation’s new future. Now the best side of human nature plays its part as people see positive benefits coming to them because of the useful changes. All the good things can happen once you have a well-planned and organised path leading forward to better prospects for everyone.

During the exploring, assessing and development years of PEW one fact about how to produce excellence kept reappearing. Whether you looked at how aircraft reliability became so extraordinary; or you learned why the USA nuclear naval fleet turned into a high reliability organisation (HRO); or you examined how world class symphony orchestras with over one hundred people play magnificently; there was always one common thread—they only had one documented system that everyone followed without deviation.

Using a single documented system created business symmetry and demanded that people use the right behaviours that permitted perfection of execution and produced excellence. PEW lets you design and build the best, single system, fully documented to bring operational excellence to industrial companies.

Once you have correctly designed processes, your computerised maintenance management system (CMMS) holds the system documents and information needed in the processes. The CMMS does not dictate the processes to use, which is what usually happens when companies use a CMMS. They wrongly adopt the inherent processes built into the CMMS software. The inherent CMMS processes are always wrong. They cannot create the reliability and uptime that you want because they are not designed to promote excellence.

CMMS fail to deliver business performance improvement because they cannot do so. They are designed to move information about. They are not designed to make your business perform better. Management are the people responsible to design processes to deliver outstanding operational results. A CMMS is just a tool to assist management in meeting its purpose; a CMMS cannot deliver great results itself. A CMMS responds to the quality of the business process put into place by company management.

CONCLUSION

EAM has failed companies for decades. It imposes the wrong processes onto companies; processes that do not create business success. Company managers adopt enterprise asset management standards like PAS 55 and ISO 55000 in total ignorance of Deming’s truth that the results you get are dictated by your business design. They think that they are doing the safe thing by following the advice in the standard. They do not know that the standard will cause their maintenance and asset management failures because then contain wrong processes.

Your processes must be designed to work right and the right methods and practices are written into your process documents in great detail. This is what all organisations reaching the heights of excellence do. They make it very clear to their people what ‘right’ looks like, what it feels like, smells like, tastes like, and they teach them how to do it right every time. Companies at Operational Excellence performance levels leave nothing to chance. They know exactly how their processes work and what they will deliver. They imbed into their peoples’ behaviours the culture and habits that create operational excellence.

When you look closely at your coal mining company during your thesis do not look at the bottom of the organisation for the cause of its problems. Out of every twenty problems nineteen are the fault of management because they use wrong, or poor processes.

Start your research by looking at the business processes and the variations they create when they are used. Trace the company history and see what impacts its past managers and major events had on the culture in the company today. Check if people follow the processes imbedded in the CMMS or does the CMMS follow the processes designed by the company. Watch and see if workers are valued by managers or they are just bodies to pay for their hours on site.

It has been valuable to me to put these thoughts down for you. They are collections of learning gathered over many years trying to understand why so very few industrial sites reach operational excellence. I learned that company managers have allowed too many opportunities for chance to arise in their processes. I also learned that you can design excellence into a company by applying the methodology and tools that make you become a world class performer.

I hope that these thoughts are of use to you as you investigate and develop your thesis. I have touched on many factors that cause enterprise asset management and maintenance management to fail in companies. You have to get a lot right concurrently—that can only be achieved by design. There is much more that can be written, but I want to leave you the pleasure and satisfaction of discovery and understanding as you do your thesis. Good luck; dig deep in your search.

 

My best regards to you,

Mike Sondalini
Managing Director
Lifetime Reliability Solutions HQ

 

P.S. If you require advice on industrial asset management, industrial equipment maintenance strategy, defect elimination and failure prevention or plant and equipment maintenance and reliability, please feel free to contact me by email at info@lifetime-reliability.com