We are very lucky that Dr Mike Provost is joining the Service in Industry team to share some of the lessons he has learned from developing the technologies and processes used to manage complex assets with companies such as Rolls Royce, Bombardier and Intelligent Energy. In his first of five blogs based on his book, Everything works wonderfully (www.everythingworkswonderfully.com), Mike will review 6 key Business Lessons he has learned while looking after planes, trains, energy and human health…..
Part 1 BUSINESS LESSONS
1. It’s what an asset does, not what it is, that is important
Train, bus, aircraft and truck operators really want the ability to carry passengers and freight, not planes or vehicles. Utilities really want clean and efficient electricity generation, not turbines, boilers, etc. Manufacturers of electronic equipment really want components placed on a circuit board, not the machinery that does this. Bottling plants really want filled bottles, not bottle-filling machinery. Airlines really want thrust, not jet engines. The literature is full of examples of the seismic shift from customers wanting the asset itself (and negotiating the price down as far as possible to reduce capital expenditure) to them wanting the capability the asset provides (and being more willing to pay a predictable, de-risked operational cost that can more easily be passed on to their end customers). Providing an Asset Management capability and ensuring that this is delivered to your customers consistently and efficiently over the lifetime of the assets you make, is a very lucrative, stable and long-lasting business proposition which you need to fully embrace before your competitors and other third parties do so.
2. Asset Management is a business issue
It is not just another IT problem; it impacts the whole structure of your business and the way you think about and relate to your customers. Every aspect of a business, including strategy, development, management, partnerships, mergers and acquisitions, projects, marketing, sales, engineering, IT, communications, resource planning, configuration management, logistics, training, field support and customer billing, is profoundly affected.
3. Without senior management support, Asset Management goes nowhere
The changes to your business that Asset Management demands are so huge that, without the full support of management at the very highest levels, it will never get ‘off the ground’, never mind succeed. The vested interests, new and expanded mind-sets and understandings, changes in existing organisational power structures and general corporate inertia can only be overturned by committed leadership from the very top of your organisation.
4. Know your assets
A deep understanding of your assets, the business contexts and ambient environments they operate in, their failure modes, frequencies and consequences and how they need to be looked after is much more important than knowledge of IT, databases and analysis methods. Your business has knowledge gained during the design, development and production phases of the assets you make and sell that can be used to generate value for the business time and time again over the whole life of those assets, rather than being used once only during manufacture.
5. Asset Management needs to be incorporated at the start, not brought in later as an ‘add-on gimmick’
Don’t let the need for low first cost destroy the greater need to create lifetime value. There is a conflict to be resolved between the production demands for low first cost and high product and spares sales volumes and the Asset Management needs for data gathering hardware and more finely-tuned product and spares offerings that may be the best solution for your customers. Many production-focussed organisations see Asset Management as a threat, both to sales of new products and to sales of spares; many Asset Management initiatives have been deliberately strangled at birth because of the perceived loss of spares revenues (or even new products) that could result. Mechanisms need to be found for the long-term rewards of Asset Management to be fed back to the production arm of the business, which, after all, provides the ‘entry ticket’ for all future Asset Management value streams. Retrofitting sensors and remodelling organisations are very expensive and time-consuming processes.
6. Break down the silos, open your mind and look for what your customers really need to help them make money and serve their markets better
The benefits of Asset Management may not be where you first thought. Bringing all the measurements and analysis together into one ‘single source of truth’ can produce many savings and unexpected value-creating synergies. Once the measurements are in one place, it becomes much easier for you to weed out unnecessary duplications, see the whole picture across both individual assets and asset fleets and carry out analyses that go beyond the initial aims of monitoring asset health and operation and move towards answering the real questions that your customers may be asking about their businesses.
Note: This series of blogs is based on material originally produced for the Society of Automotive Engineers (Jennions 2014): it has also been presented as a paper at the IET/IAM 2014 Asset Management Conference in London, UK (Provost 2014). It is reproduced with permission from both the SAE and the IET.