Strategic Asset Management Inc. - plant …

1 Strategic Asset Management New Britain AvenueUnionville, CT 06085(800) Future of Asset Managementby S. Bradley PetersonABSTRACTThis article explores a broader vision for assetmanagement than has been previously articulatedand brands this vision Strategic AssetManagement (SAM). Based on successfulexperience with our clients, SAM is an integratedset of processes that systematically derive thehighest value from plant assets, through aconsistent philosophy, plans and objectives, andcooperative involvement by everyone in the represents a higher level of performancethan is currently practiced or even recognized bythe manufacturing community useful model to guide action will have severalcharacteristics: Simplicity.

2 All of the greatest ideas are simplein concept. If not kept simple, they are notfully understood or remembered, and fail asguiding principles. Intuitive. Readers should be able tounderstand the underlying principles withoutguidance. Utility. The model should work consistently inapplication. Completeness. All necessary elements ofsuccess should be experience with the Strategic AssetManagement (SAM) model indicates these criteriaare met. However, you as the reader will need tomake your own 1- The SAM ModelStrategic Asset Management description of Strategic Asset Management (SAM) begins with the key elements of success,namely Lead, Execute and There are hundreds of books written aboutleadership, and each one has some valuable point tomake.

3 Frequently, though, the description is ofindividual leadership, and often charismatic in the plant setting, in our opinion, iscreating consistency of purpose and is a large set of complex andinterrelated systems of marketing, technology, finance,human resources, execution functions and Asset Management then must take all of theseinto things as simply as we can into the SAMmodel, the LEAD element consists of the ManagingSystem, Strategic Planning and System. Disciplined, aligned action is theunderpinning of any human endeavor.

4 Examine anyconsistently great achievement and you will findalignment and discipline. That is the purpose of themanaging system. Among the elements found here are: Top down and cascaded goals. Goals ofprofitability at the company level becomevolume and product mix goals for the the unit level these become volume goals,equating to equipment availability and productquality goals. For the operator these becomedaily production and equipment surveillancegoals. For the craftsman they becomeequipment condition goals. Plan-Do-Review. Everything we do is aprocess.

5 Take emergency maintenance forinstance. The process is: 1. get a request, do it, repeated all day long. Even aplanned and scheduled job doesn t improvethe system without a review process toexamine the effectiveness of the plan, theexecution of results, and a criticalunderstanding of what is happening with theequipment. Measurement systems. Assuring that inaddition to outcome (lagging) indicators, eachjob in the plant has process (leading)indicators will enable each worker to make amore positive 2 The Managing SystemThe Future Of Asset ManagementCopyright 2003 by Strategic Asset Management Reward systems.

6 Each plant rewardsbehavior in subtle ways. It may promote theoverbearing craftsman to a supervisor positionbecause he gets people going . We mayreward equipment breakdown with moneyand admiration (overtime and attaboys ).We may reward production achievement atany cost to people and Asset condition. Wereap what we sow, so we must be careful thatour reward systems actually encourageproactive behavior. Proactive maintenancecan t happen in a reactive managingenvironment. Roles, responsibilities and accountabilities areclear. If job expectations are not clear andresults measurable, we have muddledaccountability.

7 Fingers point in all directions,and the blame game goes on all day. Beingproactive in such a system takes more couragethan most people will risk. Clarifying jobs andaccountabilities is a leadership function. Feedback. This is part of the Plan-Do-Review process, but gets special shape behavior by giving honest feedbackwithout punishment. Under the rightcircumstances people want to fails if it doesn t capture that Planning. In every plant environment weencounter we hear the same (legitimate) complaints: Improving maintenance is important, but we justdon t have time.

8 We have 4 major plant initiatives and5 corporate initiatives, and don t know how any ofthem are going to get done! Or, Everything we do isa flavor of the month . We seem to start lots of stuff,but never finish .How do you set a plan that is timeless? One that hasapprovals all the way to the top of the company?How do you assure you have a single initiative insteadof 20? Through the act of Strategic planning!The product of functional Strategic planning isalignment around a multi-year improvement get alignment requires more than a few words in abook.

9 It requires that every level of the organizationbelieves the content of the plan is the most importantset of things the company can do with its means a real and compelling business case for thesenior executives. For plant executives it meansworking on those things which are most practical,which make a difference in daily control of the workand reduction of variance. For the staff functions itmeans an understanding of the support they mustrender to enable the plan to be elements of the Strategic Plan are these:1. Benchmarking the function.

10 Where are wetoday? What are the measures saying?2. Developing a vision for the future of plantoperations. Difficult to do, sometimes requires Industrial tourism to see the bigger picture,and using outside help to understand what spossible. This part has to be done right, or theplan will fall apart. Our clients have found theExecution Triangles (Production, Logistics andAsset Healthcare) to be valuable to setting thevision. See Figure Identify Gaps. Where do we fall short of thevision?4. Identify Strategies to close gaps.