Strategy Development Options
key issue is always that of business value. The business may not always benefit
from increased production capacity, for example. This may be the case where
there is a limited or shrinking market. Even though the company could benefit
from greater reliability during the periods when they are operating, it may not
be the best focus.
such as these are a part of defining the desired performance levels that make
up step one of the MSC process. From the first chapter we determined that
strategic advantages were-
The set of unique or hard to duplicate abilities,
competencies and capacities contained within an organization that support the
company’s competitive advantages
the desired level of performance is known, then the abilities, competencies and
capacities that are required to bridge the gap between the current level of
performance and the desired level of performance can be determined.
analyzing the ability to achieve desired levels of performance, there are two
possible outcomes. (See Figure 3.2) The objectives could exceed the design capacity
of the organization. Or they could be within the design capacity of the
organization, that is, the capacity that
the organization currently possesses, including considerations of physical
assets, employee skills and numbers, information management systems in place
and a range of other factors.
whether desired performance levels are within the current operational capacity
of the organization is often a difficult task and frequently involves detailed
analysis of a multitude of areas. Some of these may include: (in no particular
legislative requirements on the organization
. This includes trends in this area in the planned future,
and the impact that these requirements may have on the asset management
function, and on the achievement of desired performance levels. The importance
of this area cannot be understated, particularly within heavily regulated
reliability performance information regarding the physical asset base.
This is an area that, on its own, can be
exceedingly large. There is a need to consider the state of the asset base at
present with regard to functional condition, areas of low reliability, or
availability as well as areas where unit costs may exceed what is required.
This area will be the key area in the determination of current performance
levels. Reliability is often mixed with estimations of equipment life during
recent time. It needs to be clear that there is not always a direct link
between the age of equipment and the need for capital replacement. This belief
in deterioration accord
to age has been disproved many times over the past two decades yet still
remains at the forefront of thinking in engineering.
information regarding the performance of the asset base.
This type of information is almost never
available, unfortunately. However over the past five years in particular there
has been a great increase in the abilities of organizations to capture relevant
data. Other sources are often available. Industry bodies or benchmarking
organizations, manufacturers recommendations14, or engineering
judgment of existing employees are often good alternative sources of historical
experience. Historical information can be a vital indicator to potential
bottlenecks in performance of personnel and machinery as well as an indication of
the potential to achieve desired performance levels.
detailed requirements of any contractual arrangements need to be carefully
considered in the creation of strategy. These could include contracts for service
or product delivery or, in the case of outsourced arrangements, it could mean
the contract between the asset owner and the asset manager. In all cases, it is
likely to be an important factor in achieving corporate objectives and goals,
and a constraining or liberating factor when considering the creation of
The need for
introducing new strategic planning into an organization there is often a need
to fully understand the manner in which things are currently done. There may
often be a need to put in place change management initiatives to ensure
continuity of operations and performance while the company changes direction.
The availability of change management initiatives may make the difference
between whether or not the corporate goals and objectives are achievable with
the current operational design of the organization.
Good practice in
asset management or within the industry.
This brings the area of benchmarking into the thinking
within this area. Benchmarking is an area of asset management that is often
misunderstood and misapplied. Good practices need to be reviewed and analyzed
to ensure that they are compliant with the operating environment of the
organization. Good practice information can also be gleaned from widely
accepted and implemented standards throughout the world. For example, the guide
to the RCM standard, SAE JA1012, is a reliable and widely quoted source for
good practices in the application of Reliability-centered Maintenance.
Despite being much maligned within the reliability communities of the world,
equipment manufacturers remain a trustworthy source of performance information
and data. There is always a need to bear in mind the commercial perspective of
these companies and that they normally do not necessarily understand the operating
context of your particular industry or company.
Exceeding Design Capacity
the goals of the organization are not possible given the current design capacities
of the company, then the following options are available to it:
– The quickest, although often not the
least painful, of decisions to make. If what a company wants to achieve is beyond
what it can currently achieve, then the quickest decision is to lower
expectations and aim for easier targets. Commercial realities or exceedingly
optimistic goal setting often lead to desired performance levels that are too
high. When considering risk management, this is an area where decisions need to
be made while bearing in mind that they may be scrutinized in the years to
come; therefore reduction of expectations may not be an alternative.
– Modifications to existing assets is
often a small capital cost for a greater operational or risk mitigation gain in
some form or other. In determining redesigns to assets and equipment, thought
needs to be given to future operational impacts and costs of such redesigns.
– Within this sector of the capabilities
decision diagram, workforce configuration refers to changes from current design
capabilities of the workforce. This frequently means increases in the overall number
of the workforce or a change to the mixture of internal and outsourced workers.
– The final option available is that of
acquisition or purchasing of new equipment, new systems, tools or other assets
required for achievement of the desired performance levels.
order to turn this into reality, we need to break down corporate objectives into
strategies, and then define the underlying abilities, competencies and capacities
required to successfully implement these. In the previous chapter we reviewed
the objectives that were put in place for particular strategy themes. One of
these was the reduction of unit costs while another was the elimination of
Within Design Capacity
the goals and objectives defined within the first stage of the MSC are found to
be within the current design capacity of the organization, then this can often
be targeted via the following strategic areas.
Maintenance administration and regimes
– This could include changes to the
amount and types of maintenance that are being carried out to the machines
and asset base, or a change to the way that we are applying current
maintenance regimes. Either way it involves changes to the status quo to
extract more value from the asset base. This can be accomplished without
changes to the fundamental operational design of the organization.
– It is often the case that
operational procedures and techniques can have a dramatic impact on the
reliability and performance of the assets. Elimination of techniques that
are aimed at periodically overloading, or permanently overloading, the
assets are areas where benefits can often be quickly gained. In this area
it is often very difficult to change operating techniques, particularly if
operations staff believe that this is the only way that they have to meet
production targets. Analysis of this area may well prove that there is not
an ability to achieve corporate goals within current design capacities.
– Within this part of the
capabilities decision diagram, the term workforce configuration generally
refers to the raising of skill levels, training, changes to shift patterns
or other changes to the way that the workforce carries out the task of
maintenance and operations. This area is also one that can yield some
amazingly large benefits.
Renewals and replacements policies
– Often this aspect of strategic
planning is overlooked as companies are dominated by old thinking
regarding age-based change-outs and concepts of deterioration. However
application of modern reliability thinking regarding this area can be a
way to extract substantial value from the asset base in the medium and