Uptime Magazine - October/November 2008 - (Page 60)

continue to depend on that streak of luck. Unconsciously, they may even turn a blind eye to “reliability reality”, thinking that since everything is running well today, everything is just fine with their plant or facility. There may even be a reverse incentive to continue to do nothing, since the option of doing nothing saves money in the short term. Can you see where this faulty logic is taking us? A Faulty Logic That same “cruising right along” logic prevailed at our most prestigious investment banks on Wall Street. Let’s look at the makings of that global financial misfortune in detail. Not unlike the plant management with visions of “Reliability Nirvana”, the Investment Bank CEO’s and Managers had that same kind of misappropriated confidence without being realistic about the risks involved. They were in what I call a “Financial Nirvana.” Many of those in risk management at the leading Wall Street institutions inadvertently set up “blinders” so they could not really peek at the true risks involved in the undertakings they were dealing with. How about the profits? They were enormous. Sounds a little like some of those folks in a state of “Reliability Nirvana”, making more money by doing nothing and cutting costs capriciously. Did any of those financial leaders really want to challenge the status quo that was bringing in all the money they could possibly hope for? Could they not see, even for a moment, that they were running on luck? Did it take that much insight to figure out that when they loaned money to people who had very little chance of repaying that debt, they were playing all their cards on the hope that home prices would continue going up by the day. And if that upward trend suddenly stopped, they would pay dearly. Surely it didn’t take a genius to see that their formula for success also put them on the brink of disaster? Those subprime mortgages were further packaged into Collateralized Debt Obligations (CDO’s), then even further re-packaged by the CDO’s into Structured Investment Vehicles (SIV’s). Each financial instrument in the process brought in more money and more bonuses for the Wall Street crowd. At each step of the way the financial leaders turned a blind eye to risks and to reality. VALVES AND TRAPS CAUSING EFFICIENCY LOSSES? ULTRASONIC VALVE & TRAP LEAK DETECTION IMPROVING PERFORMANCE FOR MORE THAN ✦ Enhance Efficiency ✦ Increase Output ✦ Lower Heat Rate ✦ Reduce Maintenance Costs ✦ Avoid Unnecessary Repairs 25 YEARS LDS provides a systematic, time-proven method of improving cycle efficiency. We use our patented ValveAlyzer® System,custom databases, test procedures, physical inspections, ultrasonic testing, and complex thermal analysis to provide significant plant wide savings. The Similarities Of A Disaster In summary let’s look at the similarities of the mortgage disaster and the impending equipment disaster just waiting to happen at a plant or facility. A FALSE STATE OF “NIRVANA”: In the Financial World: Senior management believed their current sub-prime mortgage process could continue indefinitely and their “house of cards” could not fail. In the Reliability World: Senior management believes their facilities will continue cruising right along and their facility could not incur a disaster. TOTALLY OBLIVIOUS TO THE REAL RISKS: In the Financial World: Senior Investment For more information, contact us today: 800-345-7157 www.leakdetect.com 60 october/november 2008 http://www.leakdetect.com http://www.leakdetect.com

Table of Contents Feed for the Digital Edition of Uptime Magazine - October/November 2008

Uptime Magazine - October/November 2008 Contents Upfront Upclose: An Asset Management Oasis in the Desert Information Technology: Streamlining Through Simplicity Lubrication: Phases for Framing a Solid Foundation Infrared: Do Your Homework Before You Buy Maintenance Management: Get It Together by Getting Together Motor Testing: Key Elements in Motor Decision Making Precision Maintenance: Shedding Some Light on Tolerances Reliability: RCM & the Mortgage Meltdown Ultrasound: A Multidimensional Tool Vibration: The Whirling Pump Mystery, Solved with ODS Upgrade: Are You Looking in the Right Place for Your Wear Debris?

Uptime Magazine - October/November 2008

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