While many builds are great, it is clear that most focus on the perspective of reliability experts rather than executive management. It is crucial to bridge the gap between reliability and financial performance in order to secure funds for advancing IIOT, digitalization, and AI objectives. Executive management holds the purse strings, so connecting financial impact to assets, such as with ROA, is key. It is essential to focus on a few critical metrics, as having too many can diminish their importance. For example, in my experience working with industrial gas plants, three key metrics stood out: KWH/MCF to monitor power costs, product availability for customer satisfaction, and safety. This narrowed focus proved to be more effective than overwhelming with numerous metrics. - Vic Rioli, Naples, Florida, USA, +1-716-510-9580.
When discussing Asset Management within a comprehensive system, it is crucial that Key Performance Indicators (KPIs) align with the overarching Asset Management objectives. Evaluating only costs and performance can be risky in the long run, so it is important to also consider potential risks. Executive management plays a critical role in funding initiatives like IIOT, digitalization, and AI, so bridging the gap between reliability and financial performance is essential. Focusing on 3-5 key metrics is recommended to avoid diluting their importance. For example, metrics like Return on Assets (ROA) can effectively tie financial impact to asset performance. Prioritizing critical metrics related to energy costs, product availability, and safety can be more impactful than overwhelming executives with too many metrics. By concentrating on key indicators, organizations can make more informed decisions regarding Asset Management strategies. Contact us for more information on optimizing Asset Management KPIs.
To maximize success in maintenance management, it is crucial for Maintenance Managers to align their goals with the overall corporate objectives and be fluent in the language of business. This includes understanding financial aspects such as budgets, balance sheets, and cash flow statements, and being able to articulate how their team's performance impacts these areas. It is essential for managers to translate key performance indicators (KPIs), such as uptime improvement, into terms that resonate with executives, such as "additional available production time." While some may argue that additional uptime is insignificant if products are not fully sold, this is actually a KPI issue for the sales and marketing team. The role of Maintenance Managers is to create opportunities for increased productivity and efficiency, leaving it to other departments to capitalize on these opportunities. Furthermore, Maintenance Managers should educate their teams on how their performance indicators directly influence the organization's financial outcomes. This includes calculating and presenting the return on investment (ROI) for proposed projects. Essentially, Maintenance Managers need to be financially literate in order to effectively communicate the value of their work to higher management. In my own experience, transitioning from a technical background to obtaining a degree in Management has provided me with a comprehensive financial education that has proven invaluable in the maintenance field. This unique background has allowed me to bridge the gap between technical know-how and financial acumen, making me a valuable asset in the industry. With the right combination of technical expertise and financial literacy, Maintenance Managers can truly excel in their role and drive positive results for their organization. Michael Meehan CEO/Senior Consultant Reliability Dude, LLC Maumee OH 505-554-8036
I completely agree, Michael. It is crucial for technical professionals to demonstrate how assets can be utilized more effectively for increased production through financial data in order to receive the appropriate recognition and rewards. Without solid financial figures, the value of these assets may not be fully appreciated. Regards, Vivek Gupta Please consider the environment before printing this email - Let's help save trees. Confidentiality Note: The contents of this email are confidential and may be legally privileged. It is intended only for the recipient. Unauthorized access to this email is prohibited. Any unauthorized use, distribution, copying, or disclosure is strictly prohibited and may be unlawful. If you have received this email in error, please contact the sender and delete the original and all copies from your system immediately.
Michael Meehan highlighted a significant real-world issue: the disconnect between Maintenance and Management teams. These two roles often do not share the same office space due to the differing education and expertise required. In my experience as a consultant, I have accompanied maintenance managers to plant managers to ensure the ordering of spare parts or scheduling shutdowns for maintenance or repairs. My approach involved presenting a printed request, and if production refused, I would have them sign a copy of the request indicating the refusal. This tactic eliminated plausible deniability when breakdowns occurred and faults were attributed solely to maintenance. This strategy resulted in increased cooperation from production teams, ultimately leading to more efficient operations. Efficient operation is key, with maintenance serving as a tool to achieve this goal. Derek Norfield Consulting Engineer Vibration and Balancing Solutions balancr@gmail.com Michael Meehan CEO/Senior Consultant Reliability Dude, LLC Maumee OH 505-554-8036 Victor E Rioli, Naples, Florida USA, emphasized the importance of bridging the gap between reliability performance and financial performance to secure funds for advancements in IIOT, digitalization, and AI initiatives. Executive management plays a crucial role in allocating resources, making it essential for Maintenance Managers to understand financial aspects and translate key performance indicators into financial impacts for the organization. Rioli suggests focusing on 3-5 critical metrics to avoid diluting their importance and recommends metrics such as KWH/MCF, product availability, and safety as essential for industrial plants. By emphasizing these key metrics, organizations can drive success and operational efficiency.
Effectively aligning a maintenance team with organizational objectives is a crucial aspect of a maintenance manager's role. This alignment ensures that the team directly supports the company's goals. A great example of this alignment can be seen in engineering teams on cruise ships. When senior engineers transition to positions like deputy chief engineer, they must understand that their role goes beyond managing a larger team and more equipment. They essentially become the Chief Engineer's second-in-command, responsible for leadership, motivation, and balancing engineering priorities with guest satisfaction. Establishing strong relationships with operational staff is key to ensuring everyone is working towards the same goals. By demonstrating support for the team's long-term objectives, maintenance managers can foster collaboration and unity in the workplace. In addition to technical expertise, maintenance managers should also possess financial acumen to translate performance indicators into tangible financial results for the organization. Being able to explain the financial impact of maintenance activities and calculate the ROI for proposed projects is essential. By understanding budgeting, financial statements, and the impact of maintenance activities on the bottom line, maintenance managers can effectively communicate the value of their team's work to executive management. Furthermore, focusing on a few critical metrics rather than an overwhelming number of KPIs is crucial. Concentrating on key metrics that align with financial performance, such as energy efficiency and product availability, can help demonstrate the maintenance team's contribution to the organization's overall success. By bridging the gap between reliability performance and financial performance, maintenance managers can secure necessary funding for initiatives like IIOT, digitalization, and AI objectives. This approach ensures that executive management sees the financial impact of maintenance activities and makes informed decisions about resource allocation.
Great points, Vic! I totally agree that honing in on a few critical metrics makes a huge difference in conveying the value of reliability initiatives to executive management. In my experience, aligning metrics with business outcomes not only strengthens the case for funding but also fosters a culture of accountability across teams. It’s all about telling a compelling story that relates asset performance directly to the bottom line, which can sometimes be overshadowed by the technical details. It would be interesting to hear which strategies you found most effective in driving that alignment in your industrial gas plant experience!
Great points, Vic! I completely agree that honing in on a few critical metrics can make all the difference. When we can clearly demonstrate how reliability impacts the bottom line—like linking safety and product availability directly to revenue—it makes the case for investments in IIoT and AI much stronger. I've seen similar success in other industries by emphasizing how these metrics drive financial performance, which in turn helps secure buy-in from management. It’s all about translating technical reliability language into financial terms they can relate to.
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Answer: - Bridging the gap between reliability and financial performance is crucial in order to secure funds for advancing objectives like IIOT, digitalization, and AI. Executive management holds the purse strings, so connecting financial impact to assets, such as with metrics like ROA, is key to gaining support for investment in asset management initiatives.
Answer: - Focusing on a few critical metrics is essential because having too many metrics can diminish their importance. By narrowing the focus to key metrics, such as monitoring power costs, product availability, and safety, organizations can better track and improve their asset performance without getting overwhelmed by numerous metrics.
Answer: - In the context of industrial gas plants, key metrics like KWH/MCF to monitor power costs, product availability for customer satisfaction, and safety have been highlighted as effective KPIs. These specific KPIs have shown to be impactful in improving asset performance and overall operational efficiency.
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