Maintenance Technology July 2017 - 4

EDITORIAL

Reliability's Bottom-Line
Connection

Gary L. Parr
Editorial Director

4|

A

couple of months ago, while at a trade
show, I received a white paper titled "How
Reliability Impacts Shareholder Value,"
authored by Bruce Hawkins, CMRP of
Emerson. The title piqued my interest, so I flagged
it for later reading-and later I actually read it.
The piece addresses one of the biggest challenges
faced by anyone who is trying to establish and
sustain a reliability program: How to demonstrate
to management that establishing and sustaining a
reliability culture puts money on the bottom line.
The seven-page document contains segments that
address revenue growth, cost effectiveness, asset
efficiency, market expectations, and measuring
shareholder value. It also has several charts that
are ideal for presntations. Below are some of the
statements that I coated with highlighter ink. You can
download and read the entire piece at
maintenancetechnology.com/1707emerson.
Reliability enables premium pricing: "Stable
production processes within statistical control inherently produce consistent quality products. Unreliable
equipment that frequently fails introduces "special
cause" variation into the process that leads to quality
problems. If these special causes can be eliminated,
it enables the organization to research and address
the sources of common-cause variation, leading to
quality improvement. Consistently higher quality
products than the competition enables the organization to command premium prices, or at least to
maintain pricing in the face of a market downturn."
Reliability drives down minimum unit cost:
"A reliable manufacturing process helps ensure
that the products can be produced at a minimum
unit cost. In most commodity businesses, the low
cost producer wins-it is in the best position to
ride through a potential market downturn while
remaining profitable and providing an acceptable
return on assets. A good reliability program can have
a significant impact on Costs of Goods Sold (COGS)
through efficient resource utilization and the ability
to eliminate unnecessary work."
Reliability maximizes asset efficiency: "A
reliability program assists with asset efficiency by
helping to maximize output with a minimum of
investment. As we increase reliability we would be
able to increase asset utilization without investing
in additional capacity (more capital assets). Also, if

MAINTENANCE TECHNOLOGY

we clearly understand the operating condition of
the equipment (its "health," so to speak), we have
less uncertainty and therefore less of a need to have
redundant spare equipment. Additionally, if the
equipment is appropriately cared for, its useful life
is extended and there is less need for replacement
capital (this also has the effect of reducing costs due
to a reduction in depreciation expense). The business
has the option to deploy that capital on items that
will increase productivity or reduce operating costs."
Reliability cuts turnaround costs: "One major
expense in some industries is the scheduled
turnaround (also referred to as shutdowns or outages
in some industries). A good reliability program
helps to maximize the efficiency and effectiveness
of the turnaround by ensuring that the scope of the
turnaround is known (the predictive-maintenance
program provides information on asset health
and there are fewer "surprises" when equipment is
opened). Advanced notice of issues and effective
planning of the corrective actions can help minimize
turnaround duration."
Reliability enhances knowledge of assets: "Organizations with reliable assets inherently have better
knowledge and information about those assets; it is
a byproduct of understanding how the equipment
is supposed to operate and how it can potentially
fail. They understand both the capacity constraints
of the equipment and the potential consequences of
exceeding those constraints. They also, through effective condition monitoring, understand the operating
condition and the general asset health at any point in
time so mitigating actions can be taken with minimal
disruption to the operation."
Reliability delivers more than planned: "Organizations that embrace asset reliability and focus on
implementing the tools, techniques, and technologies
necessary to enhance and sustain it nearly always
find that the returns are much greater than anticipated. When reliability becomes an integral part of
an organization's culture, the discipline and rigor
necessary to launch and sustain it tend to permeate
throughout the organization and drive benefits
in all facets of the operation. It is doubtful that an
organization can embark on any other initiative that
can have such a far-reaching impact on the entire
business." MT

gparr@maintenancetechnology.com
JULY 2017


http://www.maintenancetechnology.com/1707emerson

Table of Contents for the Digital Edition of Maintenance Technology July 2017

Editorial
Uptime
On The Floor
Powering Auto Production
Following The North Star
Flying Inspections
Untangle Compressed Air Misconceptions
Change Your Lubrication Mindset
HMI-Design Essentials For Today's SCADA Systems
SAP: Tips and Tricks
Cybersecurity Best Practices
Bearing Storage
Interpreting IP Code
Noisy Pumps
Move From Time- to Condition-Based Lubrication
CMMS Energizes Maintenance Efforts
Products
Ad Index
Showcase
Final Thought
Maintenance Technology July 2017 - 1
Maintenance Technology July 2017 - Cover1
Maintenance Technology July 2017 - Cover2
Maintenance Technology July 2017 - 1
Maintenance Technology July 2017 - 2
Maintenance Technology July 2017 - 3
Maintenance Technology July 2017 - Editorial
Maintenance Technology July 2017 - 5
Maintenance Technology July 2017 - Uptime
Maintenance Technology July 2017 - 7
Maintenance Technology July 2017 - On The Floor
Maintenance Technology July 2017 - 9
Maintenance Technology July 2017 - Powering Auto Production
Maintenance Technology July 2017 - 11
Maintenance Technology July 2017 - 12
Maintenance Technology July 2017 - 13
Maintenance Technology July 2017 - 14
Maintenance Technology July 2017 - Following The North Star
Maintenance Technology July 2017 - 16
Maintenance Technology July 2017 - 17
Maintenance Technology July 2017 - Flying Inspections
Maintenance Technology July 2017 - 19
Maintenance Technology July 2017 - 20
Maintenance Technology July 2017 - 21
Maintenance Technology July 2017 - Untangle Compressed Air Misconceptions
Maintenance Technology July 2017 - 23
Maintenance Technology July 2017 - 24
Maintenance Technology July 2017 - Change Your Lubrication Mindset
Maintenance Technology July 2017 - 26
Maintenance Technology July 2017 - HMI-Design Essentials For Today's SCADA Systems
Maintenance Technology July 2017 - 28
Maintenance Technology July 2017 - 29
Maintenance Technology July 2017 - SAP: Tips and Tricks
Maintenance Technology July 2017 - Cybersecurity Best Practices
Maintenance Technology July 2017 - Bearing Storage
Maintenance Technology July 2017 - Interpreting IP Code
Maintenance Technology July 2017 - Noisy Pumps
Maintenance Technology July 2017 - Move From Time- to Condition-Based Lubrication
Maintenance Technology July 2017 - 36
Maintenance Technology July 2017 - 37
Maintenance Technology July 2017 - 38
Maintenance Technology July 2017 - CMMS Energizes Maintenance Efforts
Maintenance Technology July 2017 - 40
Maintenance Technology July 2017 - 41
Maintenance Technology July 2017 - Products
Maintenance Technology July 2017 - 43
Maintenance Technology July 2017 - 44
Maintenance Technology July 2017 - 45
Maintenance Technology July 2017 - Ad Index
Maintenance Technology July 2017 - Showcase
Maintenance Technology July 2017 - Final Thought
Maintenance Technology July 2017 - Cover3
Maintenance Technology July 2017 - Cover4
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