Uptime: Reliability’s ‘Chicken Or Egg’ Question

Discussions about life-cycle asset management and curiosity about the ISO 55000 Asset Management Standard have been growing since its launch in January 2014. While we are anticipating how this standard will affect decision making regarding the life cycles of an organization’s assets, we already know top management plays a key role (see “Uptime,” Feb. 2016). But, top management is only the leadership component.

Only the leadership component? What an understatement. Organizational culture is determined by leadership—either by design or by default. For most traditional organizations, transitioning from a typical project-based investment in new equipment and facilities to a life-cycle-centric, risk-based, asset-management culture requires highly focused, decisive, real-world leadership from the very top of the organization.

ISO 55000 defines asset management as the “coordinated activity of an organization to realize value from assets.” Two key words from that definition should resonate with us: “coordinated” and “organization.” Any meaningful coordinated activity requires a reliable organization. This approach is dramatically different from the traditional project phase, followed by a loosely connected operations-maintenance phase, i.e., an unreliable organization.

Asset management requires reliable equipment and reliable people in a reliable organization. Think about it. “Reliable equipment performs as intended, without failure, under stated operating conditions, for a specified period of time.” Reliability, though, is often expressed as mean time between failures (MTBF). People and organizations must be aligned with the goal of reliable equipment to increase the MTBF.

We know that equipment, systems, and facilities are all physical assets that must perform reliably to minimize their operating and maintenance costs and ensure long and productive service. Well then, what about the desired performance of an organization and its people?

Is it possible to have equipment consistently perform as intended if the people that operate and maintain it are inconsistent or unreliable?

Is it possible to have people consistently perform at the intended level if the organization has unclear, inconsistent, and unreliable standards and, therefore, behaviors?

We’ve had technologies to improve equipment reliability for decades. But true reliability has proven to be elusive whenever the root cause of unreliability isn’t addressed. For example, because reliability isn’t designed in—because operability and maintainability aren’t designed in—shortcuts and workarounds are often deployed to the best possible equipment performance.

Because 95% of life-cycle cost is determined at the design stage, and upward of 75% of those costs are attributable to operational and maintenance activities (Blanchard, 1978), organizations and people have to play a huge role in life-cycle cost and reliability of an asset. This is why life-cycle asset management continues to be an essential business-success factor for enterprises that depend on physical assets (equipment, systems, and facilities) to achieve their goals.

As also discussed in the Feb. 2016 installment of this column, various holistic equipment-management strategies since the early 1970s point to the need for organization-wide, life-cycle spanning, and coordinated activities. With few exceptions, however, the emphasis on people fell through the cracks: Why? Organizations typically had large numbers of skilled and knowledgeable people on staff. Vocational-education programs trained some of the best and brightest skilled crafts and trades. People weren’t afraid to get their hands dirty to make a decent living. And the growth of technology was relatively slow, compared with the exponential explosion of the past 20 years.

ISO 55000 defines an asset as “an item, thing, or entity that has potential or actual value to an organization.” At this point in our industrial/business evolution, and given the ISO 55000 definition of an asset, I consider an organization and the people within it to be assets.

Think ‘systemic reliability’

Organizations and people are destined to be the most important components of physical-asset management in our increasingly competitive marketplace with its rapidly transportable and growing technologies. Given that belief, now is the time to think more systemically about asset life-cycle performance and costs.

Equipment (asset)-performance reliability:

• The asset must be designed, built, installed, started up, operated, maintained, and decommissioned or restored, according to specifications and life-cycle cost goals.
• Failure and/or functional failure must be defined for each asset.
• Operating conditions, duty cycle (operating duration) must be specified.
• Planned service life (period of time) must be specified.

Organizational-performance reliability:

• The organization must be designed, staffed, started up, operated, maintained, and improved, according to specifications and employee life-cycle plans.
• Organization goals, objectives, vision, purpose, guiding principles, and values must be defined.
• Work processes, methods, and procedures must be specified (standardized).
• Constancy of purpose toward improvement (Deming) must be established.

Human-performance (people) reliability:

• Employees must be recruited, selected, hired, on boarded, trained, qualified, deployed, improved, and transitioned according to specifications and life-cycle plans.
• Employees’ roles and responsibilities must be clearly defined and communicated.
• Job training and on-job performance-qualification processes must be specified (standardized).
• Periodic re-training and performance qualification cycles must be established.

Chicken or egg?

Which came first, the chicken or the egg? The question is perplexing because a chicken is a living organism that hatched from an egg from a chicken from an egg… We have a similar conundrum when it comes to reliability: Which comes first, reliable equipment, reliable people, or reliable organizations?

For the most part, we know what reliable equipment is supposed to do. We can also measure its reliability in terms of MTBF. But, shouldn’t that same thinking apply to organizations and people? From a life-cycle asset-management perspective, we should be able to define what the organization looks like and what it is supposed to do—and then define when it fails to perform its intended function. Again, measured in terms of MTBF.

When people fail to perform as intended, we are inclined to call it human error. It’s more complicated than that, however. Reliable organizations must have specific methods for determining the root causes of human error to achieve the goal of flawless human performance. Human-induced failures can also be measured in terms of MTBF.

So, it’s not about reliable equipment, or people, or organizations. It’s really about reliable equipment AND people AND organizations. Share your thoughts with me. 

References:

Blanchard, Benjamin S., Design and Manage to Life Cycle Cost, M/A Press, 1978, Oregon.

Deming, W. Edwards, Out of the Crisis, MIT Press, 1986 (reprint July 2000), Cambridge, MA, and London.