S2:E4 Maintenance and Reliability Adding Value to Your Business with Larry Olson
In this week’s episode of Masterminds in Maintenance, we have Larry Olson, CEO and President of Nexus Global, on the show! Ryan and Larry discuss how effective maintenance programs help with achieving business development and growth. They also share why maintenance and reliability should be seen as value-add to a business, rather than a necessary evil. Listen today!
Episode Show Notes
- What are some key elements to develop a successful and effective maintenance program within a business?
- What are some common maintenance challenges?
- Larry shares with us Nexus Globals’s upcoming release of Investigation Optimizer!
00:05 Ryan Chan (S1): Welcome to Masterminds in Maintenance, podcast for those with new ideas in maintenance. I’m your host, Ryan, I’m the CEO and founder of UpKeep. Each week, I’ll be meeting with a guest who’s had an idea for how to shake things up, in the maintenance and reliability industry. Sometimes the idea failed, sometimes it made their business more successful and other times their idea revolutionized an entire industry. Today. I’m super excited, we’ve got Larry Olsen here on the show with us. Larry is truly a wealth of knowledge with approximately 30 years of experience in maintenance and reliability industry. Larry you’re also the CEO and president of Nexus Global. Welcome to the show, I’m really excited to get the opportunity to learn from you, Larry.
00:42 Larry Olson (S2): Thanks, Ryan appreciate the opportunity as well.
00:45 S1: Alright, well, hey, the way I love to start and kick things off is just, I would love to hear a little bit more about your background and how you were introduced to this field of maintenance and reliability.
00:55 S2: Alright, well, Ryan, I think maybe we’ll use up all the time on this podcast just to talk about 30 years, but I’ll try to make it an elevator pitch, and we’ll move on as quickly as possible. I actually came up in the maintenance field. I came right out of high school and went into an apprenticeship program as an electrical apprentice, moved up through electrical apprentice program into master electrician, went to work for a little company, a marine propulsion company that makes outboard engines, now the global leader. And in their organization, I was a maintenance manager. I went on to be the Director of Maintenance. Went into operations for two years. And this is important to note, because you’ll see a little bit of operations in me when I get to some of my topics here, today. And then went back into VP of maintenance, continuous improvement, implementing Lean Six Sigma and maintenance programs across all of the company. And here we are talking about 30 something years.
01:48 S1: Wow. So, yeah, you’ve definitely had the full spectrum going from an apprenticeship, operations, leading maintenance teams all the way over to the consulting side. So it must have been a fulfilling, fun, exciting journey over the last 30 years and you’re still in it, starting your own business and running that. For today’s topic, I would love to center it around effective maintenance programs and ultimately, how maintenance enables companies to achieve business results. I think you mentioned you’re in operations, and you’re alluding to that as well, just now. I’m curious what do you think are some key elements for a successful and effective maintenance program within a business?
02:27 S2: Today’s key elements are quite different than they were 20 years ago, only because of technology, and because of the evolution that’s come along in the maintenance industry from communications to collaboration to things we call road maps and ways and means of which we can manage things versus what we had early days. So here we are, 2020 trying to figure out how to manage maintenance the same as we did back in the day. And we have some tools now available to us, and I think some of the key elements are some of the tools, some of the innovations. You could look at ISO 55000, it provides a good management structure, but it doesn’t give us a guide, it just gives us a structure and the understanding. Then there’s other things that are out there that organizations have developed. In our organization, we hadn’t done anything any different than other consulting firms or other companies who manage maintenance. We developed our own little system. Asset performance management seems to be the up-and-coming buzzwords.
03:23 S2: Everybody is using it, but not everybody’s doing it. So anyway, we have what we call five domains that focus on leadership and data and strategy and investigation, and work management. This all helps with focus. But in the end, Ryan, it takes people to do these things, and it takes a wide range of people to do it. And I know you guys at UpKeep are starting your CMMS system, it all starts with good data and it’s kind of a simple secret sauce to be successful is, start with data, build from there, and then measure what you work on.
03:54 S1: Absolutely, you mentioned this parallel or kind of crossover between maintenance and operations, what did you mean by that?
04:02 S2: Yeah, I had an interesting Vice President that I worked for. Interesting in a way that he was kind of went down the same path, as I did, he was maintenance. He got put into operations and then he became the Vice President of the organization I worked for, and as I was working for him we had discussions, and so on. And he said, “I’ll tell you what, I’ll let you be the Director of Maintenance. But you need to spend two years in operations to understand what the pain is first, and once you understand the pain and how to manage the pain and how to solve those problems of the pain then we’ll talk about this Director of Maintenance organization role from a global perspective and then moving on in the organization.” I had to learn real quickly that when I was in operations, maintenance was not necessarily causing the pain. Maintenance was an enabler to success that operations couldn’t understand what that enabler was. So it was a communications problem and the communications break down barriers between people who operate equipment to produce widgets versus people who maintain equipment, so they can produce widgets. Two different languages.
05:08 S2: So we break down that language barrier and put together a road map and find a structure for them to work together. It will always be the same. And these are one of the first and simple things that we did as an operations team, when I was Director of Operations, is put together a communication plan, start working together, collaborate and implemented TPM. And when we implemented TPM the world changed. It was amazing how operators now felt that they were empowered to be a part of the maintenance team and maintenance understood that they were an enabler to the operations side, and they became a single team instead of two independent silos. It was just an awesome experience.
05:47 S1: That sounds like such an amazing experience going through that cultural shift at the company. And it sounds like you also had a very forward thinking manager as well, who really gave you the opportunity to step into this operations role. We really get to see the other side of the coin. Now, I gotta ask the question, Larry, for a lot of us, we may not have that super forward looking managers, but I think all of us realize and understand how important it is to understand both sides of the coin. What can we do as let’s call it, someone in maintenance to get that better understanding of what’s going on in operations and also vice versa.
06:28 S2: So I think with the systems in place today and I talk a lot about systems because back in 1980 and ’90 when I was in this role, systems weren’t readily available. Systems were growing internally by IT people who tried to make somethings work. So systems wasn’t necessarily the enabler then. So what do we have to do, it was paper and pen and it was putting things in a place and trying to implement a quality management system ’cause ISO 9000 was starting to be one of the big up-and-coming things. So we need to make that evolution from paper to a system and once we start moving into a system’s perspective in the late ’90s, 2000 then things started to move and things started to change and things became different, started to work together in the understanding so it was then putting…
07:19 S2: We identified areas early on and I still use the strategy today, co-locate. So we’re co-locating maintenance and operations teams together. It doesn’t always work but when you have such a big cultural divide you gotta get these guys to communicate first so that co-location, getting them to understand who their partners are in operations, getting them to understand who the customer is, getting each of them to understand that there’s a customer-supplier relationship, not necessarily from purchasing material, but customer-supplier relationship internally to the organization from a maintenance and operations perspective. And once I think organizations start doing that more even in today’s time as even with systems you can’t take away the communications and you’re really building the human factor into the organization, allowing people to be empowered, it’s, all I can say is it’s priceless.
08:14 S1: Yeah, so what I hear is really it’s about communication and one way to streamline and better communicate what you’re working on, what you’re responsible is, who my stakeholders are. One way to do this is by what you mentioned, co-locating, bringing them closer physically together. I’m also curious, one other idea that came into my mind just now was goal setting. Oftentimes operations has almost like a polar opposite goal than maintenance does. Is there a good way to streamline communication, improve the collaboration between these two departments through better goal setting?
08:50 S2: Absolutely, goals are sometimes a forgotten tool within an organization. So there’s goals and then there’s ways and means that you measure goals and then there’s the movement of how we adapt and what we own from a measuring perspective. So let me give you a couple examples, there’s always a ways and means to overcome things and one of the first things is adopt a management structure and what I mean by adopting a management structure is we have to have some structure that you’re working to, ISO 55000, PAS 55, it could be the reliability web. So we have to figure out in an organization how we’re going to manage things in a structured way. There’s a lot of different structures to manage it, so that’s one of the first things. It needs to be sponsored from the top down. So one goal would be is to adopt some kind of a management system, a management structure sponsored from the top down.
09:46 S2: And the other thing which is, it’s a huge paradigm shift is KPIs. KPIs are interesting in a way that people kinda put themselves in isolation and they think well, these are maintenance KPIs and these over here, these are operations KPIs and so on. So we need to shift some of the KPIs that have traditionally fell under maintenance into the operations side of the business, such as schedule compliance. You think about schedule compliance in a way that you’re going to operations and you’re saying, “This maintenance is due on your equipment. When can I schedule to have this done? It’s due by this date so we have a window of opportunity to do it.” And if operations own schedule compliance and they understand the impact negatively and positively to schedule compliance and you start educating them on what schedule compliance means to reliability and what it means to the output of the equipment from maybe even a quality side of things or the overall equipment effectiveness, the OEE side of things, they’ll start understanding it.
10:52 S2: The other thing is, PM compliance or equipment availability. These are huge paradigm shifts that takes a culture change and a good management structure to be able to move these things from one side of the organization to the other. Maintenance owns the execution of how that work gets done. Operations should own the schedule compliance, the PM compliance and the equipment availability. These are my takes on it. I feel pretty strongly about it and whatever organization that we’ve currently or in the past have helped they’ve seen a huge shift in reliability, tremendous difference.
11:27 S1: Yeah, that’s fascinating Larry. What it sounds like is like giving a common goal for maintenance, giving that to operations and when you have that shared common goal I think that just really helps streamline communication ’cause I’ve seen so many organizations or operations maintenance almost butt heads because their goals are just so polar opposite of one another and it’s almost impossible to do both.
11:50 S2: Exactly.
11:51 S1: That’s super fascinating. I’m also curious, Larry, what have you seen some common challenges with maintenance goals in the past?
12:00 S2: Common challenges are, we need to get our widgets out the door, we can’t give up your equipment. That challenge is not necessarily a challenge unless you figure out how to create the opportunity to the challenge and one of the ways that I like doing this and helping organizations do it is getting them to think it’s not about the widgets out the door necessarily. What it’s really about is creating this profit center. The profit center sits within maintenance and there’s a profit center sitting within operations. How do we pull these two things together where everybody thinks that maintenance is a cost center, operations is a cost center and the only one that profits is accounts receivable and the shareholders. So we have to get that in alignment. One of the ways that we like doing that is we’ve created a little worksheet and we call it a cost avoidance worksheet. So for example, if we have things that need to be done to equipment and it’s gonna take three hours to do this work on this piece of equipment well, we need to determine what is the cost of doing that work.
13:02 S2: What is the loss of production for doing that work, what are the failure modes we’re trying to prevent when we’re doing that work and what is the potential loss if we allow that failure mode to happen? Once we start to bring these things together into a cost avoidance worksheet, there’s no hard sell anymore. The challenge goes away, the equipment is now available because the operations all the way down to the output of the organization, the supply chain and they start to see what the impact is of reliable equipment and a team environment, understanding what cost avoidance means and a profit center becomes. It’s quite fascinating when you start pulling things together from different parts of the organization versus looking at them in isolation. I can talk more about challenges, but the biggest challenge is giving up that equipment.
13:48 S1: Yeah, what it sounds like is every single activity that we do with regards to PMs, routine maintenance, we should back it up with a… It’s almost like an ROI case analysis where we look at the impact that it has, the cost that it is, and also the benefit. And then, like you mentioned, if we put that together with some degree of confidence, then we won’t run into these challenges, these butting of heads because there’s a shared understanding that there is a cost associated to this activity, but there’s also a benefit that outweighs this cost.
14:24 S2: Exactly.
14:25 S1: One thing that I’ve also seen is that people do this. People do this activity once and then you kind of forget about it next year or someone, there’s a little bit of turnover in the organization. A person that put this whole five whys root cause analysis together, they’re no longer in the organization. What can we do, and what have you seen the most successful businesses do to retain all of this historical knowledge, so that we don’t go and have to do this whole case study every single year when we forget?
14:56 S2: Yeah, it sounds like you’ve done that before.
15:00 S1: [chuckle] I might be speaking from experience.
15:02 S2: Yeah, yeah, I’m right with you there. It’s a forever forgetful process because we’ll call it tribal knowledge, seems to travel around the organization and out the door and to somewhere else, and that tribal knowledge never and almost ever gets recorded. So it leads us to the work management area, for one, when organizations use a work management system to document and record activity that goes on within an organization, this now becomes a part of their historical record and which allows future activity, activities such as root cause analysis or decision-making on make versus buy, or replacement or rebuild, all of these key components to decision-making needs to be a part of historical records within the CMMS system when, if work is done, we’re gonna close it out. We’re not just gonna say work done, we’re gonna record what work has been done, when it was done, all the material and everything associated with it, and I know it might be inherent to technicians that hadn’t worked in the past in CMMS systems or have not had a good system to work with. They just seem to think that we just close it out and it’s done and/or there’s no process in place to do these or there’s no quality control in place to assure that it’s being done.
16:22 S2: So a good start in your CMMS system is getting this information recorded. I hear a lot, organizations and people within organizations, “Well, if it’s a quick fix, we don’t need to put that in the system.” And I say, “Well, wait a minute, let’s have a little discussion about your idea of a quick fix and if I’m gonna go change a light bulb you could call that a quick fix, but if I’m going to go out and make an adjustment that’s not a quick fix even though it might not take long, that adjustment means something. It may not mean something today, but maybe a week from now, a month from now, a year from now, that adjustment could be leading up to something.” So, the first place is getting this information recorded in a system. And you mentioned RCAs and those kind of activities, in the past, a lot of this activity and still in today’s time, all of these root cause analysis is, a lot of companies will say, “Well, five whys are simple and easy, and you just let the guys do it on the fly.” Okay, but it could lead to something bigger another day. So where are we gonna record that? “Oh, we don’t keep a record of that.”
17:28 S2: Either that or the guys keep it on their desktop, or they keep it in some folder somewhere in their desk or they keep it on the shelf and really, one of the biggest evolutions lately with push towards data, data management industry 4.0, going digitalization, we’re in a different world today, and that different world is about documentation, it’s about understanding where things are, how things are done. Things are being done procedurally and there’s a process and there’s a system and there’s a way to do it. And one of the things we’re doing over here is we created a tool called investigation optimizer, and this is the historian for all RCAs. We’re gonna call them investigations because it’s not necessarily only equipment related or reliability-related, it could be quality related, it could be HSE related, it could be a vehicle incident within an organization, it could be a lot of things associated with investigation. Ryan, what’s really important, I think, is the investigation regardless of what it is, should be tied back to an asset within the organization.
18:34 S2: An incident doesn’t happen in the organization, most typically, without it being involved with something of an asset and the asset, if it’s a slip or a trip, what’s involved? Well, the floor in that area was slippery and wet. Well, where was that location-wise in the organization? Let’s record that ’cause we might come back to that in a week and in a month and we’re having slips and trips in the same place and all of a sudden, now we have this historian of all of these incidents that it has happened across the organization and it just becomes mindblowing when you start looking at it. I’m going on a little bit here but this is my sweet spot. I really love it. And at Nexus Global is to create this investigation optimizer to pull all this stuff together and then tie it back into a CMMS system or a historian of which we can actually go and search and research information. It becomes a value add as opposed to a necessary evil.
19:30 S1: Absolutely, especially given what’s going on right now in the world with COVID, this move away from paper and pencil and on one person’s desktop. We have to move towards better documentation, better digitization, so that we can share and spread knowledge and collaborate seamlessly.
19:52 S2: Absolutely.
19:52 S1: Larry, I’ve learned so much on this conversation, on this short podcast with you. Where can all of our listeners go to continue to follow you on your journey and learn from you?
20:02 S2: Yeah, thanks, Ryan, I appreciate it and I enjoy talking about it, It’s a passion of mine. You can find me on LinkedIn, also, you can visit our website at www.nexusglobal.com. Follow us on LinkedIn, follow us on Twitter, follow us on Facebook. We’re all about maintenance, reliability, and talking to people, and this is a relationship business. It’s not about having to buy something from us, it’s about creating a relationship and building a network and we’re all about that.
20:31 S1: Awesome, well, thank you so much again for joining us, Larry, and thank you to all of our listeners for tuning in to today’s Masterminds in Maintenance. My name is Ryan Chan, I’m the CEO and founder of UpKeep, you can also connect with me. I’m very active on LinkedIn. You can also shoot me an email at [email protected] Until next time, thanks again, Larry.
20:49 S2: Appreciate it, Ryan, have a good day.
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