RELIABILITY – ESSENTIAL

FOR A SAFE, COST

EFFECTIVE OPERATION

RON MOORE
JUNE 2020
Safety is a Top Priority

• Most all organizations say safety is

a top priority
• They have policies, standards,
processes, systems, etc. to
support this
• They are committed to enforcing
these policies

2
 Safety Policy Statement

• All injuries are preventable

• No task is so urgent that it cannot be done safely
• Management must provide a safe work place
• We are each responsible for preventing injuries
• Everyone is empowered to stop unsafe behavior
Reliability and Safety Relationship
• If executives were truly committed
to safety…
• They would be committed to
reliability, and have similar policies,
standards, processes, and systems
• But, they typically don’t understand:
• How to achieve reliability, or
• The relationship between reliability
and safety
4
 BP Texas City, 23 March 2005
Was Celebrating a Safety Award
the Day of the Disaster! 15 People Died!

5
 BP’s Deepwater Horizon, 22 April 2010
Two VP’s were aboard the platform that morning
Presenting a Safety Award! 11 people died!

6
 Imperial Chemicals Inc.
(ICI)
Had very good safety performance.

And Went Out of Business!

7
What did they all have in common?
What does this say about:

Their reliability?

Their operating practices?

The difference between

personal and process safety?

8
 Relationship
between
Reliability and Safety
(and Costs and Environmental
Incidents)

Let’s look at a sampling of the data

9
Injury Rate v. AU/OEE
over Time - Company A

OEE/AU- % of Base
120
R = 0.80
135
R2 = 0.64 115
115
110
95
105
75
100
55

35 95
Injury Rate

OEE/AU

15 90
1
4
7
10
13
16
19
22
25
28
31
34
37
40
43
46
48
52
Month

10
 Correlation of Corrective & Reactive
Work Orders with Injury Rate –
Plant No. 1
Total Injuries per Year

400

350 R = 0.827
R2 = 0.684
300

250

200

150

100
6000 8000 10000 12000 14000

11
 Correlation of PM & PdM Work Orders
with Injury Rate – Plant No. 1
Total Injuries per Year

400

350 R = 0.955
R2 = 0.911
300

250

200

150

100
4000 6000 8000 10000 12000 14000

12
 The More Disciplined Your
(normalized to a base number)
Maintenance, the Fewer Injuries

5
R = 0.95
2
4 R = 0.90

2
Injury Rate

0
60 70 80 90 100

13
 A Reliable Plant is Environmentally Sound
Asset Utilization vs. Environmental Incidents- Plant B
Environmental Incidents/yr

10
9
8
7
6
5
4
3
2
1
0
90 100 110 120 130 140

14
 And, is More Productive -
AU/OEE vs. Reactive Maintenance
Asset Utilization (AU) or OEE

100

90 Slope= -0.24
80

70

60

50

40
10 20 30 40 50 60 70 80 90 100

Reactive Maintenance %

15
 Total Recordable Injury Rate vs.
Reactive Maintenance
Injury Rate – TRIR

Reactive Mtce Levels,

Best 25%, Middle 50%, Worst 25%
(Emergency + Unplanned, Avg of Four Quartiles)
 Maintenance Costs vs. Reactive Mtce,
Review of 140 Companies w/3,000 Facilities

Mtce Costs vs. Reactive Mtce

14
% Asset Replacement Value

12
Maintenance Costs,

10
8
6
4
2
0
0 20 40 60
60 80
80

Reactive Mtce Levels, %

(Emergency + Unplanned, Avg of Four Quartiles)
 And, is More Cost Effective -
Reliability Index v. Production Unit Costs
(As reliability increases, costs decrease)
Production Costs $/Unit

120 R = 0.632
R2 = 0.40
110
100
90
80
70
60
50
30 40 50 60 70 80 90

18
Further:
• DuPont reported that the most likely person to
be injured is:*
a maintenance technician,
with less than two years experience,
doing reactive work
(Additional training and procedures may mitigate this risk)
• Exxon-Mobil reported that accidents are five
(5) times more likely in maintenance when
doing breakdown work than when doing
planned and scheduled work**
• In ~66% of companies, ~60% of injuries
occur while doing reactive maintenance***

19
Defects (Failure Modes) Affect
Reliability
1 Every major incident
major (large production loss, lost time accident, etc)
incident implies thousands of defects

For a plant with

6,500 repair work orders/year,
10 losses 10,000 defects (failure modes)
must be eliminated to reduce
the incident rate by 50%

6,500 repair work orders

Source: Winston Ledet,
The Manufacturing Game;
Ledet Enterprises, Inc.,
Humble, TX
20,000 defects (failure modes)

20
Safety and Reliability –
A Question of Leadership

The Safety Manager cannot make the plant safe.

They can support it with tools, training,
facilitation, measures, etc.
Safety is everyone’s responsibility
The Reliability Manager cannot make the plant
reliable. They can support it with tools, training,
facilitation, measures, etc.
Reliability is everyone’s responsibility

21
Establish a policy linking
Reliability and Safety
• If safe behavior is a requirement, for which you
have specific standards, then…
• Operational excellence is a requirement, and you
have specific standards for operations and
maintenance!
• If you believe in Zero Incidents/Injuries, you
must believe in Zero Failures/Unplanned
Downtime
• Given this, operations & maintenance training
should be on a par with safety training
• Getting both reliability and safety requires:
Operational Discipline –
tenacious use of best practices in ALL areas
22
 A Caution
• Personal safety & process safety are not the same
• You can have excellent personal safety and still:
Go out of business (a major chemical company)
Have a major accident (a major oil refining company)
• Personal safety is improved by disciplined use of
PPE, lock out/ tag out, personal behavior, and
disciplined practices
• Process safety is improved by disciplined design,
operating and maintenance practices, including as
necessary a process hazards analysis
• Getting both personal and process safety requires
Operational Discipline –
tenacious use of best practices in ALL areas
23
Another caution- focusing on Safety/Safe
Practices will improve safety, but only to a point.
You must also reduce the exposure to the risk of
injury, the defects
Initiative
Safety

2
Lost Time Accident Rate

1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10

Annual Injury Rate per 200K Hours (Co. X)

 Poor Operational Discipline
Results in Major Accidents
Every major accident results in fatalities
Major and major plant damage.
accident It also implies hundreds of errors

Loss of containment -
potential for many injuries;
plant damage

Process safety breach: loss of -

layer of protection, mechanical integrity,
Source: Andrew Hopkins in
or shutdown system; exceed critical limits Failure to Learn; CCH Australia,
Melbourne, Australia

Minor process errors - exceeding safe operating limits;

ignoring alarms; missed critical inspections; faulty designs
25
 Defects & Process Errors Reduce
Reliability and Increase Hazards

Major Major
incident accident

Loss of
10 losses
containment

6,500 repair work orders Process safety breach

20,000 defects Numerous minor process errors

Operational Discipline is essential to eliminate defects and process errors

26
 Another way of considering reliability Big Bad
and safety is the Swiss cheese model Things
Happen

Maintain

Operate
Defects or
System “Holes”
Install &
Startup

Store

Small
Buy
Initiating
Events

Design

27
 Revised Policy Statement
Linking Reliability and Safety
• All injuries, and failures, are preventable
• No task is so urgent that it cannot be done safely, and
reliably
• Management must provide a safe, & reliable, workplace
• We are each responsible for preventing injuries, and
failures
• Everyone is empowered to stop unsafe, & unreliable,
behavior

28 28
Drive Reliability with the same
actions that Drive Safety
• Top-down leadership – clear consistent expectations
• Bottom-up ownership and employee engagement
• Education and training
• Action plans and measures
• Visual Communication
• Standards and procedures
• Benchmarking and aggressive goals
• Audits and assessments
• Root cause focus – eliminate repeat failures
• Rewards (& willingness to challenge non-compliance)
• Resources for supporting improvement
• Continuous improvement expectation and process
• A culture – a way of life
29
 The Reliability Process
A Commitment to Safety Requires
a Co-Commitment to Reliability
and Related Policies and Practices

(and should be given as much executive attention as

recommendations from high-powered consulting companies)

30
 The Reliability Process
(Note that very few defects are controlled by maintenance)
Doing better Mtce will not
contribute much to Reliability

Install/
Design Buy Store Operate Maintain
Startup
(Life Cycle Cost) (With Discipline) (With Care)
(Cost of Ownership) (“Like a Store”) (With Precision)
Defects Defects Defects Defects Defects Defects

Root Causes
Rate Losses & Downtime
Unnecessary Work

Source: In Cooperation with Injuries & Env. Incidents

Andrew Fraser,
Reliable Manufacturing Ltd.. Minimum unit cost
Uptime
& of Production
Necessary Work
31
 DESIGN -
For Reliability, Operability, Availability,
and Maintainability

(not just budget and schedule, and including

a process hazards analysis as necessary)

32
Life Cycle Cost and Cash Flow Considerations

Life Cycle
Cost Policy
Cash ROI
Flow
($)
Lowest installed
Cost Policy

Time

Minimum Life Cycle Costs =>

Maximum Long Term Profits

33
 BUY/PURCHASE-
For Reliability using
Strategic Alliances,
Good Specifications & Standards,
and Focus on
Total Cost of Ownership

34
Total Cost of Ownership
Total Cost of Ownership- costs include:
• Price
• Drawings, bill of material, manuals, etc.
• Selection effort, including company staff, travel
• Procurement transaction, freight, duties
• Delivery, assembly, installation, startup
• Performance capability, efficiency, operability
• Maintenance/PM requirements, maintainability
• Parts stocking, inventory, warranty
• Service levels (or lack thereof)
• Other costs…
Only ~25% of total cost of ownership is price!

35
 STORES –
Assure Reliability and Availability of
Spares

36
Stores are an asset, and should be treated
so. Stores should be run “like a store, a business”:

• Clean and efficient

• High turns, good cash management, low
shrinkage-- not too much or too little
• Zero critical or minimal ordinary stockouts
• Stock levels related to histories
• Receipt inspection- quantity, quality, part no.
• Quantities as indicated
• Everything in its place
Customer driven-- Run
• Quick access for efficiency by a manager
with an understanding
of needs & applications

37
 Stores (cont)

• Various domains for stores operations:

• Reactive- lots of spares required
• Preventive/Predictive- fewer required
• Proactive- ideal for reducing spares

• Stores staffing consistent with business

needs- have a night shift to do “kitting”
of parts, receipt inspection, stocking,
cycle counts, cleaning, etc.

38
INSTALL and STARTUP–
with precision for long life

39
 Disciplined Installation, Startup and
Commissioning- Critical to Reliability
 Rohm & Haas reported that you’re 7-17 times more likely
to introduce defects during startup (than normal operation)
 BP reported that incidents are 10 times more likely
during startup;
 The chemical industry reported process safety incidents
are 5 times more likely during startup
 New equipment can have twice the number of infant
mortality defects as existing equipment
 Companies without apprenticeship programs have 5X
the installation/startup defects as those with programs
 92% of rotating machinery is reported to have defects at
startup that result in premature failure
Sources: 1) Reliability Magazine, February 2001, 2) Failure to Learn by Andrew Hopkins, 3) Level 5 Leadership at Work by
40
W. Ledet; 4) Doug Plucknette, GP Allied, Charleston, SC; 5) Machinery Reliability Conference, Phoenix, April, 2001
OPERATE RELIABLY –
with care and precision,
and within process limits

41
Reliability Based Operations

Reliability cannot be driven by the

maintenance organization. It must be
driven by the operating units, …and led
from the top.
Charles Bailey, VP of Operations
Eastman Chemicals (Retired)

42
Reliability Based Operations
• To expect maintenance to “own”
reliability is like expecting the mechanic
at the garage to “own” the reliability of
our cars
• To help assure reliability, operators must
exercise “ownership”:
• TLC - tighten, lubricate, clean
• Condition monitoring - look, listen, feel, smell
• Basic care in operation - within its capability
• “Ownership” must have specific meaning-
standards, practices, checklists, measures, etc.,
that operators help develop

43
 Only ~ 10% of production losses are
typically maintenance-controlled –
Causes of Production Losses

Changeovers, rate/quality losses,

raw material, market demand, etc
Equipment Related
Losses-Maintenance
Equipment Related
Losses- Operation
Non Equipment
Related Losses

Similar findings reported by

BASF-UK (Stevens), and
Borg-Warner-US (Cerny)
44
 For Example-
• Japanese Institute of Plant Mgmt (JIPM) reported:
• 70% of failures are preventable by operators
• 30% require intervention by technical specialists
• A Fortune 500 manufacturer did 23 RCM analyses,
resulting in 1,864 tasks to minimize failures:
• 1260 tasks (68%) were done by operators
• 570 (31%) were done by technicians
• 237 redesigns of process and/or equipment
• A large chemical company did FMEA analyses at
one of their plants, resulting in 475 tasks:
• 315 tasks (66%) were done by operators
• 160 tasks (34%) were done by maintenance & reliability,
and engineering (2%)

45
The Five Manufacturing Domains
World Class Manufacturing
Performance Levels
Strategic
Domain
Proactive Organizational
Domain Learning-
Eliminate Industry
Planned
Defects; Leadership
Domain
Lowest Cost
Reactive Fix it beforeCompetitive
Domain it breaks; Advantage
Least Stable
Fix it after No Surprises,
Regressive it breaks; Competitive Parity
Domain Most
Expensive
Don’t fix it
Overtime
Meet Budget, Source: W. Ledet
Heroes
Staged decay The Manufacturing Game;
Kingwood, TX
46
Reliability Based Operations
To address these issues, we must have:
• Production and maintenance partnership- good
communications, teamwork, common measures
• Consistency of operation across shifts
• Process Conformance and Capability
Standard operating conditions/procedures
Quality, calibrated instrumentation
Quality raw material
Equipment Reliability
• Good shift handover practices
• Operator care/PM, training and skills

47
 Correlation of Operator Care/PM and
Maintenance Costs (Avg data at each level for 200 plants surveyed)
16
R = 0.85
14
Original Equipment Cost

R2 = 0.73
12
Mtce Costs as a % of

10
8
6
4
2
0
0 1 2 3 4 5

48
 Operator Care, Ownership (cont.)

Provide Basic Care- Competently, Safely

Take care of the place where you make

your living, so it will take care of you.

Mom

49
MAINTAIN –
For Reliability

50
 Maintenance Strategy for Reliability-
the integration of:

Reactive - Run-to-fail, emergency, breakdown, etc.

Preventive - Time based

Predictive - Condition based

Proactive - Root cause based

Maintenance: A reliability function not a repair function

BUT, as we’ve seen, Reliability is not just about maintenance

51
 Excess Defects Lead to Reactive
Behaviors-
Typical
60
Maintenance
Practices
Reactive
50
40
30 Time-based
20 Condition-based
10 Root Cause-based

0
Reactive Preventive Predictive Proactive

Source: Author’s surveys and The Reliability-based Maintenance Strategy: A Vision for Improving Industrial
Productivity, R. Moore, F. Pardue, A. Pride, J. Wilson, September 1993, CSI Industry Report.

52
 Eliminate and/or Manage Defects-
Benchmark Maintenance Practices

60 Planned and/or Scheduled

Condition-based
50
40
30 Time-based
Time-based Root Cause-based
20
Reactive
10
0
Reactive Preventive Predictive Proactive

Source: Author’s surveys and The Reliability-based Maintenance Strategy: A Vision for Improving Industrial
Productivity, R. Moore, F. Pardue, A. Pride, J. Wilson, September 1993, CSI Industry Report.

53
 Classical Failure Profile for
Intrusive Preventive Maintenance
PREVENTIVE
MAINTENANCE
Conditional Probability of Failure

WEAR-OUT
ZONE
LIFE

OPERATING AGE
Source: A. M. Smith, “Reliability-Centered Maintenance,” McGraw-Hill 1993, and
Reliability-Centered Maintenance, NTIS Document No. AD/A066-579, 1978.

54
 But Random Failure is far more
Common

350
Random Failure Pattern is Common –
300
~80-90% of failures are random;
250 Best addressed by condition monitoring
Running Time

200
150
100
50
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 30

Component Number

Source: Component Manufacturer

55
Age Related Failure Curves
time-based intrusive PM is often counter-productive

UAL Bromberg US Navy Plucknette

19681 19732 ’93 / ’013/4 20055
Conditional Probability of Failure

(United Airlines) (Surface/Sub) (Mfg Industry)

4% 3% 3 / 2% 3%

2% 1% 17 / 10% 3.5%

5% 4% 3 / 17% 6.5%
Sources: 1. S. Nowlan and H. Heap
Time 2. L. Pau
3. American Management Systems
4. T. Allen
5. D. Plucknette
56
 Random Failure Curves (cont)
(greatest risk of failure is shortly after startup)

UAL Bromberg US Navy Plucknette

19681 19732 ’93 / ’013/4 20055
Conditional Probability of Failure

(United Airlines) (Surface/Sub) (Mfg Industry)

7% 11% 6/9% 7%

14% 15% 42/56% 13%

68% 66% 29 / 6% 67%

Sources: 1. S. Nowlan and H. Heap
Time 2. L. Pau
3. American Management Systems
4. T. Allen
5. D. Plucknette
57
 Understand Degradation Process
(Avoid or Minimize the Consequence of Failure)

Onset of Failure Detect Potential Failure- Functional Failure-

System Meeting All System Not Meeting
Requirements All Requirements
(Resistance to Failure)

Pending Failure
Condition

Not Detected Broken- $$$

(PM- too much, too soon?) Maintenance/
Action Window
Performance
“PF Interval" Losses
(too little, too late)

Proactive* Predictive* Protective*

Stop/Delay Onset of Failure* Time

Sources: Ivara Corp, Hamilton, Ontario

58 *R. Baldridge, Cargill
 Maintenance Costs v. CM/PdM%
(Typical Correlation)
Database - minimum of 25 plants; minimum of 5 companies

20
2
R = 0.96
Mtce Costs, %ARV

15
Note: Work Management and Planning & Scheduling
MUST be excellent to act on findings of PdM; and
10 a proactive mindset is necessary for defect elimination

0
0 10 20 30 40 50 60 70 80 90 100

Percent CM/PdM

Source: John Schultz, Allied Reliability, Inc.;

Charleston, SC
59
 Maintenance Costs v. % PM

20
R = 0.984
2
R = 0.969
Mtce Costs, %ARV

15

10

0
0 10 20 30 40 50 60 70 80 90 100

Source: John Schultz, Allied Reliability, Inc.;

Charleston, SC
60
Don’t assume your PM is
correct- You could be wrong!

Use As Is
Delete
Replace w/PdM
Re-engineer-SFMEA
Xfer to Ops
Xfer to Lube

Source: John Schultz,

Allied Reliability, Inc.
20,000 Tasks analyzed

61
Equipment Availability v. Maintenance
Costs for Various Strategies
(Cost cutting reduces performance in a given strategy)
Strategy

Reliability
Mechanical Availability

Focused
(Reactive + PM + PdM + Proactive)

Condition
A Based (PdM)
B
Fixed Interval (PM)

Reactive

Maintenance Cost
Source: R. Schuyler, E.I. DuPont
62
Work Management, Planning, then Scheduling
• Excellence in work mgmt., planning and scheduling requires:
• A proactive approach to defect elimination – planning will fail if
the total no. of defects overwhelm the planning system
• Understanding of equipment condition
• Equipment histories, excellence in PM and basic care
• Integration with production planning
• You should have ONE Plan led by production, with
maintenance in support, including:
• A policy for planning and scheduling and related criteria
• Competency via training & practice
• One planner, minimum, for every 20 maintenance staff
• Routine review of equipment histories, failure modes
• Primary goal: improve labor productivity, e.g., typical “wrench time”
is 35% vs. best in class of 55%; Caution - wrench time must be
balanced v. other issues, PM, etc.

63
Strategy for Implementation

64
 Strategy for Implementation
• Led from the top- executive sponsorship is
essential (Permission is not sponsorship, or
leadership! Active engagement is essential)
• Production & Maintenance Partnership- Clear
goals and expectations must be set, and
reasonably achievable
• Shared KPI’s for reliability & business results
must be in the annual management appraisal and
bonus system
• Shop floor engagement process, including
structured improvement time, use of cross
functional teams, and a support structure

65
Implementing Reliability –
Effect on Maintenance Costs (Only)
Implementation Break-even
Bow-wave (10-30%) Point
(1-2 years)
Direct Cost of Maintenance

Invest

Planned PM Profit
(20-70%) Condition Based
(20-50%)
20-50%
Operator Maintenance Proactive/
Reactive
Maintenance Planned
(30-80%) 50-80%
Strive for Zero Downtime

Time 2-5 years

Source: Taking the Forties Field to 2010, R. L. Thompson, et al.,
BP Exploration, Presented at SPE international Offshore
European Conference, Aberdeen Scotland, Sept. 1993

66
 Manage the Bow-wave using “Mini”
Bow-waves: Small Improvement Teams
Break-even
Point
Mini- (1-3 months)
Bow-waves
Direct Cost of Maintenance

Profit

Time

67
 Correlation of AU/OEE with Key Practices
No single practice is dominant

Management

Overhaul
Perf. Msmt.

Stores
Operations
Teamwork

PdM

PAM
0.5

PM
0.4

Training
Correlation Coefficient

0.3

0.2

0.1

-0.1
We must be tenacious about
-0.2
doing many things really well
-0.3
Reactive

-0.4

-0.5

68
 Engage the entire workforce

500 A1 – Big Opportunities: A2 > A1

Solve using teams applying
400 RCM, Six Sigma, RCA, KT, etc.
Business Impact, K$

300
A2- Myriad of Little Opportunities:
200 A1 A2
Leadership engaging all the workforce,
individually or in very small teams,
100 applying simple fixes, common sense, 5 Whys
0
1 6 11 16 21 26 31 36 41 46

Opportunities (> 100)

Sources: 1) David Burns, Reliability Services Ltd. Melbourne, Australia; 2) Similar Results
Reported by Sergio Barreiro of Braskem’s 19 Brazilian Plants
69
 Engage the entire workforce
• Eliminating small day to day problems has a
much bigger impact on results than focusing
on the major failures (Study by Los Alamos National
Labs, reported in Spiral Up by Jane Flinder)
• Engaged employees are 3X more productive
than average (ISR Research study of 41 companies &
360,000 employees, reported in Spiral Up by Jane Flinder)

• If you want to understand the problems with

the work, talk to the workers! 70% of all
improvement ideas come from them
• Nothing changes until the shop floor does
things differently!
70
Employee engagement - critical

• Only ~30% are engaged;

• ~50% are dis-engaged;
• ~20% are actively disengaged

Source: Bob Kelleher, Employee Engagement Group, Boston, MA

71
 Leadership,
Organizational Alignment,
and
Change Management

72
Leadership

Leadership- the ability to inspire ordinary people

to consistently perform at an extraordinary level
Ron Moore

Leadership begs the question “How do I get

people to genuinely look forward to coming to
work every day?”

73
Peter Wicken’s Leadership Model –
Engage people in developing the processes

P
r Autocratic Ascendant
o
c
e
s
s
e
s Apathetic Anarchic

Source: The Ascendant Organization People

By Peter Wickens
74
Aligning the Organization

75
 Most Organizations are not Aligned
According to Harris Interactive Research (2006), only:
37% of employees had a clear understanding of what the
organization was trying to achieve
20% were enthusiastic about organizational goals
20% saw a clear connection between their tasks and
organizational goals
15% felt the organization enabled them to achieve their goals
15% felt they were in a high trust environment
10% felt their organization held people accountable
13% felt there was a high-trust, highly cooperative working
relationships with other groups or departments

Consider the consequences of this if you were a coach and

your team’s athletes felt this way
76
 Align the Organization
• The process of organizing creates naturally
competing groups- shifts, areas, plants,
divisions, etc.
• Alignment is critical where task inter-
dependence makes collaboration essential for
organizational effectiveness, (e.g., production and
maintenance; between shifts; between marketing and manufacturing)
• Overcoming this requires the creation of
superordinate goals that take priority over
“group” interests:
• Constantly remind people to focus on the higher level goals
• Think at a systems level – don’t optimize at the suboptimal level
in your little silo – ask ‘what effect will this have on the system’?
• Develop shared measures between “competing” groups and
partnership agreements
Source: Edgar Schein,
77 Organizational Psychology
 Performance Measurement Principles
Our measurements must:
• Expose our weaknesses (so we can improve them, e.g., OEE)
• Facilitate collaboration, not conflict, across
functional boundaries, particularly in groups
with high task inter-dependence, e.g., production
& maintenance, shifts, purchasing and stores,
marketing and manufacturing
Have the right balance of:
• Leading Indicators (shop floor - the things you do)
• Lagging Indicators (management-the results you get)
Management provides the systems for both

78
Performance Measurement Principles
(cont.)

• Matter – be used to drive behavior (but be careful

with measures that drive “silo” behavior)
• Be visible and current
• Limited to our span of control, ability to
manage
Cascade from the executive suite to shop floor,
being vertically supportive in both directions, and
facilitating collaboration across functions

79
Managing Cultural Change-
A Process Model

“Culture – what people do when the boss isn’t around.”

Ian Fyfe, BP (now w/Ineos)

80
 The best way to change and sustain
an organizational culture is by first
changing management behavior

You cannot think your way into a

new way of acting. You must act your
way into a new way of thinking.

John Shook, Author

81
 Managing Cultural Change
Articulate a compelling reason for change- “positive tension”

Communicate your strategy, goals, and roles, repeatedly

Apply Leadership and Management Principles

Facilitate employee implementation of the change process

Measure the results- reinforce good behavior; challenge bad behavior

Stabilize the change/organization in the new order

Repeat these steps, over and over

82
Facilitate Employee
Implementation

People don’t want to change?

83
 Facilitate Employee Implementation
• People do want to change,
• IF given compelling reasons for change

• IF there’s something in it for them:

More secure future
Better pay or rewards
Less stress and hassle
Less personal risk or fewer injuries

• IF they participate in the design of the changes:

Set up structured improvement time, e.g., small action teams
Train and apply the appropriate tools for their needs
Remove the obstacles from their success
Routinely solicit, and act on, their ideas for improvement
Show gratitude and appreciation for their contribution
• All three IF’s must be addressed, aligning employee
interests and well being with corporate interests
• “People own what they create” – help them create!
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 Stabilize the Changes
• Develop and/or update standards & procedures
• Incorporate these through Mgmt. of Change
• Train staff in new standards/procedures
• Audit/Assess for compliance
• Incorporate into:
ISO 9000 certification
Performance Objectives
Succession Planning
• Assure Management Stability - It’s very
difficult to have process stability with frequent
management changes
• If the change takes longer than executive
or organizational “attention span”, then it
is doomed to failure.
• Constancy of purpose is essential
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 Reliability-

Essential for a
Safe,
Cost Effective,
Environmentally Friendly
Operation

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 With all this in mind,

What are you going to do

To support a comprehensive
approach to reliability in
your organization?

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 Appendix - Contact Details
Ron Moore
Managing Partner
The RM Group, Inc.
12024 Broadwood Drive
Knoxville, TN 37934
Tel/Fax: 865-675-7647
Mobile: 865-207-5798
Email: RonsRMGp@aol.com

Ron Moore is the author of:

• Making Common Sense Common Practice- Models for Operational Excellence, 5th ed.,
• What Tool? When? A Management Guide for Selecting Improvement Tools, 2nd ed.,
• Where Do We Start Our Improvement Program?,
• Business Fables and Foibles,
• A Common Sense Approach to Defect Elimination,
• Our Transplant Journey: A Caregiver’s Story,
as well as over 70 journal articles.

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