The Next GEC Meeting: Gain Management Buy-in for APM Transformation

Posted by Dan Miklovic on Wed, Feb 17, 2016 @ 10:30 AM

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APM-Fig-5.jpgSeveral of my recent posts have dealt with the importance of leadership’s support and management’s perception of maintenance in the context of asset performance management (APM). As with every other business process improvement (BPI) initiative, if management doesn’t buy-in significant and sustainable improvement will prove elusive.Click here to speak with Dan

While the pursuit of Operational Excellence is a top strategic goal driving APM adoption, leadership support remains one of the key hurdles to be successful in adopting real APM. Several steps maintenance and reliability engineers can take to gain buy-in are:

  • Communicate clearly what APM is and what benefits business can expect from adopting APM
  • Put in place key performance indicators (KPI’s) that measure performance and improvement
  • Track economic as well as soft benefits APM projects deliver

Define Your Vision of APM

APM is evolving. Originally thought of as a very specific discipline related to condition-based maintenance (CBM), reliability-centered maintenance (RCM) and asset criticality assessment; APM has grown to encompass all aspects of supporting the physical assets that an enterprise uses to delivers its goods and/or services. Each organization must clearly define its and where APM fits with respect to the entire application landscape. Some organizations include the functionality associated with an Enterprise Asset Management (EAM) package or the EAM module of an enterprise resource planning (ERP) suite in their definition of APM while others do not. Since the definition of APM can vary widely the first step in communicating with management is to set the parameters of what functionality falls within the context of APM in your organization.

Be Explicit as to the Benefits You Believe Will Accrue

The second part of properly communicating with management is to clearly define what real benefits the adoption of APM will generate for the enterprise. The purpose of a BPI project is improvement of processes with the resulting cost reductions or profitability improvements from increased productivity. LNS Research’s APM survey has consistently, over the last year, shown that the driving factor for adopting APM is improving operational performance. Gaining management buy-in means the improvements must be both specific and quantifiable. It’s always easier when you put the results that APM can deliver in terms related to either cost reduction or capacity or productivity increases.

Select the Right KPI’s and Track and Publish Performance Measurement

Once you gain some management support, at least for a pilot project, you need to gain all-in support by demonstrating you are in fact achieving the improvement you promised. To do that you must have meaningful metrics. The challenge for many enterprises is defining the metrics that correctly measure the process they are attempting to improve. If the goal of your APM initiative is to reduce failures, simply measuring downtime may not be the correct metric. Seasonal or product specific conditions such as raw material quality may impact downtime as much or more than mechanical failures. A better metric in this case might be unplanned reactive maintenance as a percentage of overall maintenance activity. Everyone who can impact the metrics by understanding what is being measured and why, as well as current performance, is another driver of using metrics to full potential. By publishing the actual measurement and the rationale behind the metric, people will be less inclined to manipulate the results to merely make the metric “look good.” As with any other BPI initiative it is critical to gain not only management buy-in, but the support of those that are actually performing the work. You must demonstrate why improvement is good for them, as well.

Measure the As-Is Today and Document the Improvements

Of course once you are using appropriate metrics, tracking improvement is straight-forward. To demonstrate the actual benefit your APM initiatives are delivering, you must have first documented the state beforehand. It is not sufficient just to look at cost reductions or production improvement at the top line. Eternal factors may have a greater impact than what the actual APM projects contribute. For example, say the goal of an APM initiative was to reduce costs by improving energy consumption. One may look at energy spending today versus a year ago, and could claim significant cost reductions. However, it would be more likely the cost savings came from the drastic drop in energy prices rather than the APM project itself. If one measures energy usage, then improvement can be documented if you have before-and-after data. To prove the worth of APM to management you need before-and-after data.

 Join our next Global Executive Council as an exclusive member to join Dan Miklovic of LNS Research and Nikolaus Despain of Leprino Foods to learn how to overcome APM challenges across the enterprise.New Call-to-action

Tags: Operational Excellence, Asset Performance Management, EAM