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Reflections on Excellence:

R. Keith Mobleys 15 Laws for Continuous Improvement


R. Keith Mobley, renowned practitioner and author of 22 books, shares his experience and observations gleaned from a 46-year career devoted to continuous improvement in manufacturing. Keiths letters contain real examples of what works and what doesnt in the quest for excellence.

Life Cycle Engineering 2012

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Mobleys 1st Law:

All things are possible if you are willing to roll up your sleeves and do it.
At the cajoling of friends and associates, this is the first in a series of letters that will share my experience and observations gleaned from a career devoted to continuous improvement in manufacturing. If nothing else, almost 50 years of involvement at all levels of plant and corporate management has shown me what does not work and hopefully what is needed to be successful and competitive. As the oldest son of a millwright, the official start of my career was working the night shift as a maintenance technician to pay for my education. I was introduced to the business world by stories my father shared about his perception of management and how its baling wires and band aid mentality destroyed equipment and morale. This perception seemed to be confirmed when viewed through the eyes of an 18 year old engineering student. After college, my career evolved much quicker than most growing from a first job as a plant engineer to plant manager at 25, V.P. Engineering and Manufacturing at 30, and E.V.P and C.O.O. at 40. Looking for even more of a challenge, I have spent the past 27 years helping clients around the world transform and achieve their full potential. Two factors are responsible for my fast-track growth. First, a God-given talent for seeing beyond the surface conditions and truly understanding the underlying cause of problems and factors that limit performance has been the cornerstone of my growth and success. I have dedicated my life to honing what was given and using it to its best advantage. The second factor was pure, dumb luck. When I needed it the most, I had the opportunity to meet and work with three gifted men who also had the insight to understand what companies need to succeed. Dr. Edwards Deming, Philip Crosby and Joseph Juran helped me to focus my vision on how to create a sustainable, highly successful company. I treasure the education and mentoring that these gentlemen provided to a brash, perhaps egotistical, young man. Without them, my career would have been quite different. Now, as I too quickly near the end of my career, it is time to share as much as I can with others and this series of letters is one avenue for sharing what I have learned. As you know, I live to worknothing gives me more pleasure. At 67 I must face the realization that no one lives forever, but I am still convinced that we can create legacies that do. While I dont presume to be on the same level as my mentors, creating a legacy is important to me. Hopefully, the lessons that I have learned the hard way will help and in some small way be my legacy. In this series of letters, titled Reflections on Excellence, I will share my observations of the characteristics common to all highly successful companies; how they were able to overcome the myriad problems that limit performance; and the pitfalls that should be avoided in your journey to sustainable world-class status. I think that these characteristics may surprise you. They are not complex or sophisticated. In fact, most are common sense and cost nothing to implement.

In this series of letters, I will share my observations of the characteristics common to all highly successful companies
As a taste of what is to come, let me share a recent conversation with a colleague. We were discussing the sources of limiting factors that we all face in business. To prove his point, he cited one of Dr. Demings better-known sayings: 85% of problems are caused by management issues. My colleague was arguing that management decisions, too often based on opinion, partial or skewed data, or emotions, are at the heart of our inability to be competitive and profitable. What do you think? Are 85% of the problems that you face each day caused by faulty decision-making? From my perspective, I think that Dr. Deming was an optimist. The contribution of self-induced limiting factors is much more than 85% -- perhaps 90% or more. Let me share an example. A few years ago we evaluated the performance of a food processing plant and found that their asset utilization was 27%. They controlled 70% market share, but with only a marginal operating profit. When we sat down to discuss these and other issues, the client could not or would not accept that low utilization was a problem. Once this was overcome, we tried to discuss possible solutions that would better utilize their installed capacity and improve their operating profit. The client was adamant that nothing could be done. We suggested private labeled products as a means to increase utilization; exporting to larger markets; and consolidating plants to match their footprint to demand. For each solution the client had 101 reasons it would not work. It took two years of almost constant education, but the client finally moved away from their it cannot be done attitude. They are exporting products, producing private brands for the domestic market and have consolidated plants to eliminate duplication. The result is a much-improved operating profit and positive growth trend that should take them to the next level.

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Life Cycle Engineering 2012

Mobleys 2nd Law:

There are no silver bullets; change takes time.


If I had a nickel for every time a client has said, but you dont understand, were different, I would be a rich man. While it is true that there are differences, this is too often an excuse we use for not doing what we need to doacknowledge our shortcomings and admit our imperfections. Then and only then can we overcome limitations and truly achieve our full potential. This is especially true when it comes to continuous improvement. I have lost count of the times when I have visited plants that have embraced or adopted Lean, Six Sigma, TPM or one of the other alphabet soup of continuous improvement philosophies only to find they really have not. In many of these plants, the leadership, implementation team, and sometimes even the associates on the floor know all the right words and can parrot all of the important words. But it quickly becomes clear they do not really understand what the words mean or the real philosophy of continuous improvement.

To resolve these maintenance deficiencies one must address the sources of the visible symptoms and that means deficiencies in production, operations, engineering, procurement and other functions...
In a recent visit to a large discrete manufacturing plant, I heard the V.P. of Operations espouse the merits of Lean and the value of Kaizen. What he was really taking about was Kaizen Blitzshort duration, high intensity improvements, not Kaizena methodical, long-term continuous improvement process. When asked, he affirmed that their transformation from almost totally reactive to world-class would be accomplished in a few months and with no other effort than a few teams implementing Kaizen. The instant gratification of Kaizen Blitz, even though gains are not sustainable, was his and the companys preferred solution, rather than a slower, steady journey to sustainable excellence. How one can expect brute force changes, such as those created by blitz activities, will survive without changing the culture that enable the deficiencies in the first place escapes me. Unless and until the enabling culture is changed, nothing is sustainable. As in this example, we have become a culture that is obsessed with instant gratification and short-term focus. Read any trade magazine or listen to the multitude of continuous improvement consultancies and you will be bombarded with proven solutions to your problems. Although the solutions vary, most share a common theme: the solution is quick, cheap and painless. Some focus on maintenance; others on reliability and still others on production improvement. Maybe it is just me, but none of these solutions and their associated gains ring true. A statement I hear often is that maintenance is the sole reason a company cannot capture and retain market share. No matter how hard I try, the logic behind this escapes me. If one really looks into the maintenance deficiencies that plague most plants, the true cause is not maintenance. Most deficiencies, regardless of where they are generated, manifest as maintenance issues, e.g. breakdowns, unplanned cost and reduced output. The old saw One operator can wreck a machine faster than ten mechanics can repair it is true. To resolve these maintenance deficiencies one must address the sources of the visible symptoms and that means deficiencies in production, operations, engineering, procurement and other functions whose combined deficiencies create them. Anything short of a holistica total approach to continuous improvement must result in partial, less than desired results. I have learned with absolute certainty that there are no silver bulletsno quick solutions to the complex issues that must be resolved before any company can capture and retain sufficient market share and margins to assure continuance and profitability. Once this simple fact is accepted, one can begin the process of reengineering with some assurance of success. Where should you start? There can be only one answereverywhere, but with production or manufacturing as the focal point. The interdependency of plants and corporations forces a holistic approach. Think about how you would improve your production organization. The best place to start is to eliminate variability in the way work is planned and executed. If one looks at the results of each operating team and shift on a day-to-day basis, the level of variability is clear. Next, eliminate the waste and losses by value-stream mapping all of the work activities required to effectively produce the requisite output; create value-added standard processes and procedures and then enforce them. Continued on next page

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Life Cycle Engineering 2012

Mobleys 2nd Law:


Continued from previous page

There are no silver bullets; change takes time.

As you go through the process, one thing should become clearthe ability to effectively produce or manufacture depends on the supply chain, engineering, maintenance, human resources, salesin other words, the entire company. A holistic or total approach is the only option that assures changes that eliminate the loss and waste in todays environment, precludes recurrence of poor practices, and engrains a culture of continuous improvement. Oh, before I forget, there is one other small thing you must do to transformenforce policies and standards. When did compliance with company policy and adherence to established practices become optional?

...the ability to effectively produce or manufacture depends on the supply chain, engineering, maintenance, human resources, salesin other words, the entire company.
A few years ago, I was asked to help a mid-western manufacturer of high-end automotive consumer products. In our initial conversation, the General Manager laid out the problemthey were losing a little more than $2 per unit shipped, resulting in a significant annual loss. He, and others, believed that a technology problem in their foundry was the reason for high scrap rates and low production rates. What we found was quite different. While their foundry technology was dated, the real reason was simply failure of their operators to comply with standard procedures. Their procedures were near perfect; they simply were not being used. As a result, throughput was less than 50% of capacitynot enough to cover fixed costs and their scrap rate in excess of 25%. The truly amazing part of this story is that no one on the management team had any idea that this was going on. Why? For the same reason the problem occurred in the first place: no one from the management team, including the front-line supervisors, were on the floor and no one was looking at the performance data. Because they already had valid standards and standard work procedures, solving the problem was straightforward. Get the supervisors back on the floor and universally enforce the procedures. Within a month, the plant was consistently doubling their previous daily outputand making more than $4 per shipped unit. I can hear you now. You just dont understand. Were different. We know whats going on in our plant, and besides we cant afford to make the kind of investment youre talking about. It takes too long. I once felt that way too, but after striving for excellence for these past four plus decades, I encourage you to reconsider your approach. Change takes time and cannot be achieved by selective or partial solutions. No matter how hard or how often you try, there are no silver bullets and no way to shortcut the change process. Approach change with an open mind and patience to see it through. The results are certainly worth the effort.

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Life Cycle Engineering 2012

Mobleys 3Rd Law:

People do what you inspect, not what you expect.


How much time do you spend in your plant and with your direct reports? Years ago, we were asked to lead the transformation of the second largest integrated steel mill in the world, all 20,000+ hourly employees and 13 labor unions. In our initial meeting, the V.P. and General Manager, who was also the corporate fixer, asked what had to be done to transform this operation from one that was losing key customers and hundreds of millions annually to one that could compete in the new global marketplace. At first, he was stunned by our answer, which was simply that he needed to change the way he managed the operation. After recovering from this initial shock, we discussed what these changes would be. When John was first assigned to either fix or shut down this failing operation, he dedicated one full day each week to spending time on the plant floorlistening to the workers and having open, honest communications that gave both parties an understanding of the business and its drivers. In this heavily union environment, neither labor nor management trusted the other and through this management by walking around style, he was able to break down some of the barriers and open a dialogue that was having positive impact on performance.

Second, the fact that he allocated a measurable portion of his busy schedule to these regular plant floor visits sent a message that the employees and their input were valuedwhat they do has value to the company and their insights are important. I can remember my early mentors and how impressed I was with them when they would ask me about my work. It really felt good to think theyas busy as they weretook the time to check with me about my contribution to the company. Even after I learned that this was a planned activity and that they kept tickler files to remind them to follow up on key points, my admiration did not diminish. There is another reason that executive managersespecially the most seniorshould spend time on the floor. It is the only way he or she can have a factual understanding of the plants operations. One cannot rely on the reporting systems, no matter how good they are, for the level of understanding needed to effectively lead and assure sustainable competitive performance levels. The only way to truly understand what is or is not happening on the plant floor or within your span of control is to regularly spend time directly observing or participating in its operations. Whether we recognize it or not, there is a communications filtering system in place in all plants or corporations. These filters may be inadvertent or intentional but either way they distort reality as information flows from the plant floor to the executive office as well as from the executive office to the plant floor. When inadvertent, the filtering is the subconscious interpretation or skewing of information as it is passed up or down the hierarchy of the organization. This is compounded by the inherent desire for job security that leads us to put the best face on any data or information that may be seen by our superiors. For those of you who are into Lean, this management by walking around is called Gemba, which means the real place and is appropriate to this discussion in that the plant or factory floor is the most critical part of any operation. Regardless of what you call it, this simple management tool affords company leaders, managers and supervisors a simple, easy means of supporting overall continuous improvement and process standardization while helping to insure alignment of the efforts of all teams. What happened to John and the worlds second largest integrated steel mill? It took time, but the transformation was successful. Within a year, the mill was generating a substantial operating profit and regaining lost market share. One key to this success was the active, willing participation and involvement of the mills entire workforcecreated by a mutual trust between labor and management driven by Johns weekly time on the plant floor. Yes there was much more involved, including a new enterprise information management system, standard work processes and procedures that eliminated waste and losses, and culture that embraced continuous improvement. As John said, It was like pulling an impacted wisdom tooth without Novocain, but it was worth it. If youre considering spending more time on the plant floor or with your direct reports, I would caution you to do it right. Be open and sincere. Encourage everyone to be open and honest. Really listen to what you hear and always, always respond to questions and suggestions. If you still need motivation to get out of your office, remember Mobleys 3rd Law.

The only way to truly understand what is or is not happening on the plant floor or within your span of control is to regularly spend time directly observing or participating in its operations.

His time on the floor was essential for two reasons. First, the simple fact that John cared enough to spend his time on the plant floor listening and learning about the issues and problems that impacted the workforces ability to meet performance standards had a positive impact on everyone. The key to his success was that he really listened and learned.

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Life Cycle Engineering 2012

Mobleys 4TH Law:

Change cannot be mandated; the workforce must acknowledge the need, create the means and embrace the changes.
Over much of my career, discussions centering on how to change the work cultureviewed to be one of the roots of poor performance have been frequent and often quite heated. It seems everyone has an opinion or favored methodology to get the workforce to adopt new policies or work practices. These methods vary depending on the organizational level and background of the individual. Senior executives tend to believe that they can mandate change. All that is needed is to tell the workforce what they must do to comply with changes developed solely by a core group of the management team and then hold the workers accountable for success. They point to Hoshin Kanri, a favored Japanese management concept, which is interpreted as an executive-developed policy deployment process. Hoshin Kanri does establish a discipline that helps an organization create and focus on shared goals, effectively communicate these goals to all leaders, involve all leaders in the planning, and hold participants accountable for achieving their part of the plan. I believe they are interpreting the word leaders. Leaders occur at all levels within the organization, not just in the rarified strata of the executive wing. There are two primary reasons that factory level leadersincluding hourly and salaried employeesmust be involved in the change process. First, only those on the factory floor have a true, practical understanding of factors that limit their ability to be effective and efficient. This practical knowledge of factory-floor limiting factors is inversely proportional to ones position on the corporate ladder. As you climb the corporate ladder, your first-hand knowledge diminishes until you rely solely on reports and communications that often distort fact. Others believe that change is a straightforward, tactical exercise. All one must do is make the workforce aware of the change, create a desire to change, have the workforce exhibit its ability to make the change and then everything will be better. If you believe their logic, creating awareness is simply a matter of one-way communication. Again, management communicates that change is coming and the employees role in the change. Sometimes, this communication will include managements reason for the changein the better attempts they try to couch the reasons in terms the employee can relate to or at least understandin others it is just deployment communications.

Leaders occur at all levels within the organization, not just in the rarified strata of the executive wing...factory level leadersincluding hourly and salaried employeesmust be involved in the change process.

If you are not too far removed from your days on the factory floor or a true member of the workforce, try to remember what it was like to be on the receiving end of these mandated changes. How did you like being told that you must change the way to think, the way your work is to be performed, and how your worth would be measured? Couple this with your experience with all of the previous changes that invariably led to workforce reductions, expansion of workload and a myriad of other negative impacts on your work life. What do you thinkwill mandated change really change anything? Over my career, I have tried or been involved in every possible approach of effecting sustainable cultural change. Most of these early attempts, patterned after my interpretation of popular methodology, failed. While we could create short-term improvement and gain the appearance of change, the workforce would revert to its old habits as soon as management pressure was removed. As we progressed, we tried everything from threats to incentives to get the workforce to accept the changes that we as management thought necessary to meet business goals. Nothing seemed to gain traction with the workforce. Three epiphanies, one quickly following the other, finally showed the way to successful change: Identify true attributes of change: When I looked back at the changes we had attempted, it became clear that too often we were attempting to change the wrong things. We were trying to fix systemic or infrastructural problems by forcing cost reductions, elimination of overtime and other cosmetic changes that did little other than alienate the workforce. I remember sitting in a leadership team meeting years ago. Around the table sat 21 vice presidents discussing a reduction in the hourly workforce. Business had not been good and we were falling below our business goals. The obvious solution was to reduce the hourly workforce to compensateright? At that point in my career, I was responsible for the manufacturing organization and knew we could not meet demand with the reduced workforce that was being suggested. As an alternative, I suggested that three of usthe vice presidentsresign instead of cutting the workforce. Eliminating three vice presidents would have the same impact on our bottom line and still support our ability to meet customer demand. What do you think happened? Continued on next page

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Mobleys 4TH Law:

Change cannot be mandated; the workforce must acknowledge the need, create the means and embrace the changes.
Continued from previous page Involve the workforce and natural leaders: My second epiphany was if I cannot get the workforce to accept and adopt managements view of needed change, let them develop it. Think for one minute. When you have an idea, it is in your view logical and totally viable; but when you hear or read someone elses idea you can quickly see flaws and faults that need changing. Thats simply human nature. Why not leverage this trait and eliminate the resistance by letting the workforce develop and create the changes needed to eliminate waste and improve effectiveness. The use of cross-functional teams comprised of stakeholders in the change and at all levels of the organization has proven to be highly effective. Leveraging natural work teams and leadersat all levels of the organizationempowers the change process and is essential to sustainability.

The use of cross-functional teams comprised of stakeholders in the change and at all levels of the organization has proven to be highly effective.
The workforce encompasses the entire organization: The third epiphany changed my focus from downward to the factory floor. One reason for these early failures was that we ignored required changes in the executive, senior and middle level management strata of the organization. One fallacy of management-created change is that we tend to overlook the deficiencies within our own span of control. Its simply too easy to fixate on the perceived weaknesses in the execution of the production and maintenance functions and not see that they are the result of policies that we created.

One fallacy of management-created change is that we tend to overlook the deficiencies within our own span of control.
One thing that I have learned is that change is not easy, but it is not as hard as we too often make it. You can fight the workforce and try to force them to adopt your view of change or you can lead them through the process of recognizing the need for change, defining how they can best effect the needed change and finally enable them to succeed. Change can be easyif you just let it be. Use your workforce. Let them make you a hero.

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Mobleys 5TH Law:

Change is a personal choice and must be implemented one person at a time.


Last week I attended a workshop on change managementeven old dogs can learn new tricks, or at least renew old lessons. One of the first topics discussed was how you change the work culture in a plant or company. As you can imagine, the discussion quickly migrated to organizational behavior, getting people involved and tipping point. All of the more popular theories were espoused in great detail but everyone immediately fixated on the mechanics of getting everyone involved in the change process by creating cross-functional teams, building a change infrastructure comprised of natural leaders and change management professionals, and a variety of other methodologies designed to get as many people as possible involved in the mechanics of change management. As I listened to these discussions, at times quite passionate, my mindas it tends to do more and more often latelywandered off to what change really means. Thinking back, I thought about all of the transformations and their requisite culture changes in which I have participated over almost five decades. Some succeeded and some failed. What made the difference? To be effective, change must be at the individual level. Each member of the workforceno matter how significant their rolemust choose to change the way they think and behave before the work culture can change. Change is a very personal thing and all culture change must start with one individual and continue until all individuals within the culture you are trying to change have made that personal decision to change. Impossible? No, it is quite possible. Let me give two simple examples. First, every major religion began with one individual who had a vision, passion and an absolute commitment to a set of values and beliefs. That individual shared this unique vision with others who chose to become disciples and then helped others choose to embrace their shared vision. From this simple beginning, hundreds of millions of people share the same vision, passion and commitment to these religionsbut in each religion it started with one individual who made a decisiona personal choiceto embrace certain values as a way of life. If you want further proof, look to Japan, which grew rapidly from a devastated country to become one of the worlds manufacturing leaders. This remarkable transformation began with a few visionaries, like Dr. Edwards Deming, Philip Crosby, and later, James Womack, who were able to share their visions of effective manufacturing and management with the people who would become the leaders of todays leading Japanese companies. These three men, and a few others, were able to help hundreds of thousands share a common vision and strive together as a team to become successful.

A more mundane example is a plant transformation that we led over a decade ago. The plant, an integrated steel mill consisting of more than 20,000 employees, had a culture that had passed on management responsibilities to successive generations of family members. Combine that culture with 13 unions and an almost total lack of standard processes and procedures and you have a guaranteed formula for failure. As you would expect, this plant was losing moneymore than $150 million annuallyas well as key customers because of quality and late delivery issues. Even the Japanese experts, who spent six months evaluating the plant, thought this plant was beyond hope and should be shut down. In everyones view this was a hopeless cause. Within three years, this hopeless plant was profitable, had been certified as a preferred vendor by its major customers and was well on its way to success. What changed? Continued on next page

To be effective, change must be at the individual level. Each member of the workforceno matter how significant their rolemust choose to change the way they think and behave before the work culture can change.

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Mobleys 5TH Law:


Continued from previous page

Change is a personal choice and must be implemented one person at a time.

The simple answer is that 20,000 employees made a personal choice to embrace new ideas, to work together as a team to make the plant successful. Of course it wasnt quite that simple. It was imperative that all employees change their thought and action patterns, but we never lost sight of the simple fact that each employee had to make a personal choice to embrace the changes and to join the team effort to succeed. Starting with a few select disciples including executives and plant floor employees, we were able to help a core group see the vision, the opportunities and the possibilities that the plant could enjoy. They chose to embrace the vision and pursue the dream. Through them, more and more of the employees were able to embrace the vision until all 20,000 were unified into a team that could not be dissuaded. This team reversed the financial losses and created a plant that anyone could be proud of. Today, more than a decade later, this plant is still presenting papers at trade conferences touting their drive for continuous improvementtheir constant search for perfection. My wife of 47 years always includes a scripture or quote as part of her signature block on emails and correspondence. Her most recent quote rings true to this discussion. It is one of Edmund Burkes better comments, Nobody made a greater mistake than he who did nothing because he could do only a little. In the context of change management, think about what Burke is saying. If change is dependent on one individual making a choice to do something different, then is he right? Is our greatest failure the failure to take that first step toward changebecause we can only do so little?

Each of us can make a difference. We can change our culture, our society, our worldbut first we must change ourselves and be willing to exhibit our passion and commitment to change.
To quote one of my heroesYoda from Star Warswho, when asked, Can one ray of light change the universe? responded It depends on who is holding it. Each of us can make a difference. We can change our culture, our society, our worldbut first we must change ourselves and be willing to exhibit our passion and commitment to change. Being the prophet of change can be career limitingnot all will view it as a good thing. But once you have made the decision to be a change leader it becomes a straightforward, constant process. All you need to do is help a few of your coworkers or members of your group share the same vision and passion; for change that you feel; they in turn will help others and before you know it, change will happen. Its not instant gratification. Change will take time, but with perseverance and commitment all things are possible. In the beginning of this letter, I started talking about the tools and methodologies of change and I dont want to leave you with the wrong impression. A process, complete with tools and guidelines, is essential for effective and sustainable cultural change. I would not attempt any substantive change without my toolbox. My warning, if it is a warning, is to never lose focus on the simple fact that each individual within the culture you are attempting to change must make a personal decision to either ignore or embrace the proposed change or changes. Keep your focus and change will happen. Become enamored with the tools, audits, and pretty graphs and you are destined to fail.

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Mobleys 6TH Law:

The first step toward solving a problem is to acknowledge you have one.
Recently I rediscovered a passion that has been dormant for too longI returned to the classroom to lead a group of business leaders through a year-long workshop that will prepare them to lead their companies on the journey to excellence. I had forgotten just how much helping others really means to me. Now that this passion has been rekindled, more of my time will be allocated to the classroom.

After the first day, several of my colleagues, who had audited the course, suggested that we might want to use a more upbeat studyperhaps a success storyin future workshops because the MIT article is just too depressing. Perhaps its just meI have been accused of being weird for yearsbut the MIT article is far from being depressing. While it does present a dark picture of our lessthan-desirable current position, it also points out the five imperativesthe five tasksthat we must achieve to regain our ability to compete. In my view, the article is uplifting in that it provides a path that will overcome our limitations and once again permit us to be competitive in the global marketplace. The MIT study points to six limitations that prevent us from being competitive: Outdated strategies: We have been much too slow to recognize the change in the marketplace. We did not adapt from a mass producer of consumer goods for a predominately domestic market to a global market that relies on manufacturing flexibility and effective valuestream management. Short time horizons: American industry is too focused upon short-term profits and has failed to invest in long-term production expansion and modernization. In part, this failure has been driven by our societal need for quick solutions and instant gratification. Technology limitations: While we may still lead in some fields of basic research, we have failed to apply new technologies to industry. In part, our failure in this area is tied to our short-term horizons and perceived need to maximize short-term profit. Neglect of human resources: Deficiencies in our education systems and the lack of effective on-the-job training have created a technology and skills gap that seriously limits our ability to compete with the new global workforce. Our failure in this area goes much further. We have forgotten that the workforcenot the physical assets that comprise our factories and plantsis the factor that will determine our long-term survival. We can buy state-of-the-art production assets, invest in the latest technologies and shift to a long-term view of profitability, but without an educated, motivated and involved workforce we will fail.

American industry is too focused upon short-term profits and has failed to invest in longterm production expansion and modernization. In part, this failure has been driven by our societal need for quick solutions and instant gratification.

One thing that occurred in the opening workshop is worth sharing with you. We used a recent MIT study, Made in America: Regaining the Competitive Edge, to set the stage for discussing the challenges that we all face in todays global economy. The study defines six of the more serious deficiencies that limit our ability to compete and then five imperatives that we must address to regain a competitive edge. The workshop participants, 16 senior and mid-level managers from a cross-section of industries, acknowledged the validity of the study results and we enjoyed a lively discussion of our options to overcome them.

We can buy state-of-the-art production assets, invest in the latest technologies and shift to a long-term view of profitability, but without an educated, motivated and involved workforce we will fail.

Failures of cooperation: A fundamental lack of cooperation and communication between individuals and groups within firms and across the supply chain has directly impacted our effectiveness. We all joke about the adversarial relationship between plant functions, such as maintenance and production and fail to recognize just how much impact this lack of cooperation and coordination has on our ability to compete and win market share. Recently, I visited an operation that not only had vertical silos (functions) that would not communicateat any levelwith other silos but would not do so within the silos. Everyone held information close and refused to share even the simplest data with others. Is it any surprise that this operation is losing tens of millions each year? Continued on next page
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Mobleys 6TH Law:


Continued from previous page

The first step toward solving a problem is to acknowledge you have one.

Government and industry at cross-purposes: The report cited the kinds of government interventionrather than the amount of itthat have hurt productivity. We are the most regulated country in the world and these restrictions do adversely affect our ability to be competitive in the global market. No one can disagree with the deficiencies identified by the study. They should be obvious to anyone who can look inward and dispassionately evaluate their companys current state. Is it depressing? Yes. Should we throw up our hands in defeat? What do you think? The study countered these deficiencies with five imperatives that would at least begin the journey back to our once premier position as the global manufacturing leader. Like the deficiencies, these recommendations are clear and achievable. New manufacturing fundamentals: If we want to regain our ability to compete, we must rethink and change the way we evaluate and manage our operations. The focus must shift from short-term, solely financial performance to long-term survivability and profitability. Shortterm profits may well suffer, but we must build a strong foundation by investing in the future. This shift in culture will not be easy. It has become so deeply ingrained into the corporate psyche that change will take timeperhaps too much time. New economic citizenship: We must increase the technological competence of our workforceat all levels. We cannot count on shortterm solutions to the failures in our education system; we must invest in direct training of our existing workforce and establish viable means to grow our future workforces. Teaming with community colleges, technical schools and creation of in-house training capabilities is no longer optionalit is a fundamental requirement for survival. Blend cooperation and individualism: Elimination of variability in the way that we identify, plan, manage and execute the myriad of activities required by a best-in-class operation is essential; but survival also depends on innovation and continuous improvement. Successful companies must develop a culture that balances the need for standardization and the individualism needed to drive innovation and improvement. This must include replacing functional silos with a fully integrated operation where all share a single vision and work seamlessly together to accomplish a common goal.

Successful companies must develop a culture that balances the need for standardization and the individualism needed to drive innovation and improvement.
Adapt to the global economy: We must become more aware of the diversity in world cultures and become much more involved in the global economy. This includes shopping internationally for technology, materials and innovative industrial practices. Provide for the future: Educational reform must create a more technically literate and culturally tolerant workforce. Industry must take the lead in lobbying and supporting these reforms to assure that we have a workforce that is capable of competing with those in the global market. Depressing? I do not think so. The study would be depressing only if there were no solution and that is definitely not the case. With the possible exception of the last imperative, all of these are well within our capability as company leaders to accomplish. In fact, if one looks closely at the MIT recommendations, these imperatives are common to the reliability and operational excellence model. They are changes that all best-in-class operations have already implemented; they are proven to be achievable. So in closing this letter, my response to my colleagues is that not only is the MIT study not depressing, it is or should be an uplifting, encouraging roadmap to the future in which we reclaim a leadership position in the global market.

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Life Cycle Engineering 2012

Mobleys 7TH Law:

Take Nothing for Granted, Question Everything.


A few years ago, I had the opportunity to work with a client to improve their production performance. The plant consisted of high-speed continuous process systems that, to say the least, were highly variable in output and operating costs. Shift-to-shift and module-to-module, the output had only one common traitit was always well below the system designed capacityranging from zero to perhaps one-half of design. The production systems were not new, had been well-used, and perhaps had not been maintained as well as they should have been. In the clients view the resultant loss of asset reliability was the sole reason for the poor performance. The plant leaders pointed to high faults, such as plugs and breaks, as well asset downtime to support their view. They were absolutely convinced that these systems could no longer operate at, or even near, design capacity. Our first evaluation of the mountains of data the client provided seemed to support their conclusions. It contained thousands of trouble calls that would seem to indicate excessive downtime and point to asset reliability as the dominant reason for poor performance. Candidly, it would have be easy to simply confirm the clients conclusion and recommend they rebuild or replace their assetsthats what they were already prepared to hear. One thing that I have learned the hard way is to never, ever take anything for granted. Never accept the obvious answer. When I look back over almost five decades of solving problems, every time I accepted the firsteasiestanswer or the obvious conclusion, it turned out to be wrong. We are all conditioned to see or hear the answers we expect to see or hear. In this instance asset reliability issues resulting from poor maintenance was a believable answer. So, we dug deeper into the historical data, questioned operators and maintenance technicians, analyzed the design, and defined the inherent reliability of the production systems. This extra step resulted in a totally different view of production performance and its limiting factors. Of course there were asset reliability issues. Years of improper operation and deferred maintenance had taken a toll. But the inherent reliability was still adequate to support reliable performance at or near design levels. Lack of standard procedures, training deficiencies and limited supervision led the list of issues that turned out to be the real source of their performance problems. Believe it or not, the primary reason for this clients poor performance was the simple fact that managementfrom the top executive to front line supervisorshad decided that these production systems could not run at design capacity. As a result, they had substantially lowered the target outputs and did nothing to resolve chronic production shortfalls. They had basically given up and just accepted that only a complete rebuild or replacement of their installed capacity would solve the problem. This view had become a shared vision throughout the plant and, as one would expect, had become the reality. Convincing first the management team and then the workforce that their production systems could reliably perform at design-level turned out to be our biggest challenge in this turnaround. Years of conditioning are very difficult to overcome and cannot be accomplished quickly. But if one follows sound change management practices and makes sure that each step is carefully evaluatedremember, never assume anythingit can be done. After a few months of concentrated effort and carefully crafted steps to both recondition the workforce and improve production performance, everyone could see measurable improvement. Outputs were substantially highernot at full design, but definitely trending in that direction. Operators were beginning to believe that their modules could actually deliver design outputs. Some modules had posted shift outputs within 10% of maximum. Overall, production performance (OEE) had improved by 5.3%. At this point, one could assume the turnaround had succeeded and celebrate success, right? Unfortunately, this was notand typically is nottrue. Changing the conditioned beliefs of the workforce and management team takes proof and time. Careful observations as well as communications with the workforce at all levels revealed hidden resistors who remained convinced that operating these production systems at higher speeds was absolutely the wrong thing to do. While they were not overtly resisting change, their convictions affected their decisions and work executions, and influenced the performance of others. Success was and is dependent on careful, continuous analysis and resultant actions that assume nothing and question everything. Do not assume anythingespecially when it comes to how people will react, think or act. Oh, the project was successful. It took several years to institutionalize the changes and create a new work culture, but the results were worth the effort. The ultimate solution incorporated workforce-generated standard procedures that now govern all aspects of the production, procurement, materials handling and maintenance activities that had contributed to the plants poor performance. The heart of their turnaround is the workforce-driven continuous improvement culture that now permeates the plant. Now the workforcefrom executive management to the factory floorbelieves that design-level performance is possible and can be maintained.

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Life Cycle Engineering 2012

Mobleys 8TH Law:

Be effective first, then strive for efficiency.


Why is everyone always in such a hurry? Recently, I was approached by yet another production manager who was in a panic to improve the performance of his production area. Nothing would do other than immediate help and instantaneous results. It did not matter that the poor performance that he was so anxious to resolve had existed for yearshe wanted improvement right now. Obviously the pressure from above was on and the need for change was immediate. For someone in my profession, this is a common requestinstant solutions to problems that have evolved over years of variance from best practices or just plain bad practices. They want us to wave a magic wand, speed up their production process, eliminate waste and improve their operating profit. And they want it done yesterday. What they do not seem to understand is that it is just not that simple. The keys to effective production are consistency and stability. Each step, task and action in the production process must be performed in the same way and in the same sequence each and every time. Variability in the operation, from incoming materials to finished goods and from startup to shutdown, must be eliminated or at least held within acceptable norms. Achieving this consistency and stability takes time and cannot be speeded up in a rush to instant gratification. Years of solving these types of problems have taught me an important lesson. Always seek effectiveness first, and then worry about how fast it can be done. I was reminded of this lesson as I listened to this potential client. He just could not understand why his efforts to improve his operation were not having the desired effect. He argued that he had copied exactly what we had done in another area of the plant. He had established process control boards and new standard procedures copied directly from what we had done. He had instructed his supervisors to enforce these changes. Why was it not working? The difference between the approach that worked and the one that did not is that the successful approach concentrated on being effective first. It took the time to create cross-functional teams made up of the operators, maintainers and support personnel in the subject production area. These teams were charged with the responsibility and authority to resolve the issues that impacted the consistency and stability of the production operation. They identified the waste, losses and non-value activities associated with their current mode of operating. They designed new standard procedures containing specific, step-by-step instructions to guide execution of the production processprocedures that were effective and provided consistency and stability. Because the teams created these new procedures, acceptance and adherence was a natural progression.

Efficiency must be built upon a stable, consistent platform. It cannot be achieved by taking shortcuts, eliminating needed tasks or activities, or by arbitrarily reducing headcount.
In contrast, in the approach that did not work, the workforce was not involved at all. Instead the production manager attempted to mandate changeto bypass effectiveness in an attempt to speed up the process. Hopefully you recall our discussion of Mobleys Law #5 and understand the reasons that change must be voluntary and accepted on a personal level. It cannot be forced or mandated. The evolution from current, less-than-desired operating performance to best-in-class does not stop with the reengineering process. After the cross-functional teams have accomplished their assigned task, these new procedures and methods must become an integral part of the operations DNA. This is a two-fold process. First, these procedures must be implemented and validated to assure effectiveness. Then you need to establish the means to assure long-term compliance. Only after this is done, can we switch focus to efficiency. Efficiency must be built upon a stable, consistent platform. It cannot be achieved by taking shortcuts, eliminating needed tasks or activities, or by arbitrarily reducing headcount. Efficiency improvement is a continuous, long-term process focused on eliminating waste and inefficiency in all aspects of the production process. This might entail implementing a kanban materials handling system to eliminate lost time waiting on materials, a redesign of the module or cell layout or further elimination of unnecessary steps, but it is constant and never-ending. In closing, always remember to concentrate on doing it right first, and then worry about how fast it can be done. Cheaper, faster, quicker is a guaranteed journey to failure.

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Life Cycle Engineering 2012

Mobleys 9TH Law:

Praise, honestly given, works miracles.


A few months ago during one of my frequent walks of the manufacturing floor at a clients site, I stopped to read the previous shift operators comments that appeared to express some frustration. To do so, I had to ask two men who were carrying on a conversation to move slightly so that I could get to the visual control board. As part of my polite request, I made a comment about how proud I was of the operators and what they have been able to accomplish as part of the transformation process. This natural expression of praise was spontaneous and I truly was not even aware of making it. Both of the men stopped and look at me with the strangest expression on their faces. One of them tilted his head, looked me in the eyes and asked me to repeat what I had just said. Caught off guard, I paused for a moment and repeated my expression of pride in the workers who, through their natural work teams and as individuals, had eliminated many of the constraints and restrictions associated with their manufacturing processes and literally raised the bar for the entire facility. With this strange look still on his face, this gentleman said, You really mean that, dont you? When I answered in the affirmative, he thanked me for my feelings and open expression of pride. He went on to comment that no one had ever thanked the operators or expressed pride in them. As it turned out, the man was the president of the local union and that brief, unintentional conversation assured his support and elevated the effort put forward by the hourly workforce to an even higher level. I have shared this incident with others, including the executive of this client. Most have been skeptical and attributed this chance encounter to pure luck. I do honestly believe that it is people who make the difference. Involved, motivated employees can and in most cases do work miracles. This incident and the response of those I shared it with rekindled memories of my first mentor. The world was a different place in the early 1960s when a brash, egotistical, freshly vetted engineer entered the business world. In those days it was all about me. Any success was my success, any win was my win. Without me, the world would no longer turn. Fortunately for me, a very wise man decided to help this self-centered person recognize the error of his ways. He showed me by his actions that no oneno matter how smart or how goodcan achieve success alone. He never tried to be the center of attention, actively sought input from everyone on the team, listened more than he talked and never, ever accepted credit when the team successfully finished a project. Invariably, he would pass the credit on to the team or elevate a team member into the spotlight. Conversely, if we failed it was his failure, not the teams or someone on the team, even when it truly was because someone on the team was responsible. I finally asked him why he never accepted credit and always absorbed blame. His answer has stayed with me and has become a part of my DNA. He said he did it out of selfishnessthat he wanted to be successful in everything that he attempted, that he wanted to be viewed as a success. I will admit that I did not get it at first, but he continued to explain that his success depended on others. No matter how hard he worked, no matter how smart he was, he could not possibly be successful without the help of others. He said that the best way to gain that help was to swallow his ego and elevate others. After acknowledging his rationale, my naivety led me to my next conclusion. You mean all I need to do is tell other people they are important, praise them for their work and basically con them into making me successful? Looking back, I am surprised he did not throw up his hands, give up on me and walk away. Fortunately for me he did not. Instead, he patiently adjusted my lack of logic and clarified my vision. He explained that one cannot fake praise; no one can con others into doing anything. It has to be genuine. You probably all know someone who says the right words, sends the right memos and goes through the motions of praising the effort of others, while claiming all the glory for wins and passing on the blame for failures. These individuals may enjoy some short-term success. They may even climb the corporate ladder but in the end they will fail. Why? Remember, no one can do it alone. True success depends on a team effortwhen everyone works together to accomplish a common goal. True success comes when you can forget the me and embrace the we. Remember to absorb the blame and pass on the praise. A few words of praisehonestly givenwill work miracles.

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Life Cycle Engineering 2012

Mobleys 10 TH Law:

Making the same mistake twice is unforgivable.


From an early age, my father instilled in me rules that I was to live byor else. Near the top of his list was one that has, and does, resonate with me almost every day. He explained that making mistakes was a natural part of the learning processonly those who do nothing can go through life and never make a mistake. Sound advice, but he did not stop there. Instead he continued to admonish me that making the same mistake twice was absolutely unforgivable. Admittedly I am not the brightest star in the universe and was somewhat of a slow learner in my early years. As a result, my father had more than one opportunity to reinforce his mandate that making the same mistake would not be tolerated. With repetition and some pain, I learned this invaluable lesson and today strive to learn from my mistakes and never, ever make the same one twice. The reason this early lesson resonates with me almost every day is simple. As part of my profession, I am exposed to classic examples of the same mistake being made not just twice but too often tens or even hundreds of times. If the results were not so serious, some of these are so ridiculous that they are almost funny. Others are so catastrophic in nature that there is nothing funny about them. Consider the steel mill that manufactured a product that severely damaged critical production systems each time they ran it. When asked if they were aware of the damage this product produced, they acknowledged that they did. Why did they continue to produce it? It was a niche market; no one else would produce it so they had a captive market. Oh, by the way, their margins on this product were practically zero. Why would one elect to make a product that caused severe damage and then give it away? Or there was the food company that continued to run a critical packaging line after all of its timing belts and drive chains had stretched well beyond their limits. Even after repeated wrecks, they continued to run the line without ordering new belts and chainsuntil the line catastrophically failed. I wonder if they will repeat this mistake.

If we cannot acknowledge our mistakes and with an absolute open mind understand how they occurred we are destined to repeat them over and over again.
Another example of repeating mistakes: management teams that continue to listen to and act upon bad advice. Even when history clearly shows that the inner circle of advisors lack the ability to provide sound business advice, management continues to turn a blind eye to facts and continues to make decisions that limit success, sometimes to the point of bankruptcy. I once worked for a company owned and managed by three professors. Primarily because of this recurring mistake, the company was forced to file for bankruptcy. The recovery plan filed with the courts offered a solution that the owners and their small inner circle of advisors thought would guarantee future success the owners would change roles within the company. Each of the three owner-managers would assume a new role. Ted who was over engineering would move to marketing; Jim to manufacturing and Bert to engineering. The judge with a bit of a smirk on his face asked them if changing positions would make them any smarter. The reorganization plan was rejected. I have never truly understood why it is so hard to learn from our mistakes. Granted, I hate to make mistakes but when a mistake is made, I am the first to acknowledge it and accept full responsibility. Perhaps this is because of my upbringing, but it is also the logical thing to do. If we cannot acknowledge our mistakes and with an absolute open mind understand how they occurred we are destined to repeat them over and over again. To my father and now to me, life is too short to be wasted on recurring mistakes. One common trait of highly successful companies is their ability to limit mistakes and never to make the same mistake twice. They are driven by knowledge gained from accurate, timely datanot the opinion of an inner circle of advisors who may or may not provide good advice. They have standard processes that isolate and identify mistakeswithout placing blame or penaltyas well as provide a positive means of preventing repetition. In other words they are following the same mandate that my father impressed upon meit is acceptable to make mistakes, but unforgivable to make the same mistake twice. Mistakes are a part of learning and growth. Failure to learn from ones mistakes assures stagnation and mediocrity. Never fear making mistakes. They are an inevitable part of change and growthembrace them and use them to become smarter both as a person and as a company.

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Life Cycle Engineering 2012

Mobleys 11TH Law:


Work Smart, Not Hard.
When I state, as I often do, that I am basically lazy, those who know me are incredulous. They know that my work is constant and almost continuous. What they do not understand is that when you work smart, it is not stressful or tiringits actually quite enjoyable, even fun. Have you ever observed an operator or maintenance technician fight a problem until the symptoms disappeared only to have the same problem occur lateroften repeating this cycle for weeks or even months? This is a too-frequent example of working hard, not smart. We too often mistake activity for value-added work, in this case problem-solving. One of my favorite examples of working hard not smart comes from a plate glass plant. I had the opportunity to evaluate the effectiveness of their operation, including maintenance. While reviewing their maintenance logs, one shift stood out. Eight times during the midnight shift, the on-duty maintenance technician was called to repair a robot that unloaded plate glass from the production line. He had to walk from his shop to the robotabout one-half mile round tripto respond to each call. What caught my attention was the action taken on each of the trips. In each case, the technician reset the breaker and returned to his shop. Perhaps that is an appropriate action on the first call. Surely one would recognize that something was causing the breaker fault on the subsequent seven calls; but apparently not. On the following shift, a different maintenance technician responded to the ninth call and found the mechanical binding that was the source of the repeated trips. In this example, working smart would be to trouble-shoot the problem on the first call and prevent the subsequent calls.

There are always many different ways to achieve a desired outcome, but only one that will accomplish the objective with the least effort and investment of time and money.

Working hard is not a bad thing. In fact it is the foundation of every successful person and organization. But simply working hard is not enough. It is fascinating to watch the frenetic activities that too many think is productive work. Another of my favorite examples is budget development. The norm seems to be to consume the third and fourth quarter of each fiscal year developing the budget for the following year. Hours upon hours of key employees time is consumed by this one annual event. The sad part is that the budgets are too There is absolutely no shame often arbitrary rather than data or fact-based. We all know that budgets are a recurring requirement of any business, so why not in asking for help. No one can automate the process and eliminate the excessive labor-hours that know everything or be the we offer up to the budget god each year? If each of the functional groups that make up a company are effectively managing and expert in every facet of the measuring their operations, creating next years budget should be a non-event. business world. Here are my fundamentals for working smart: Plan before you act: One trait that has helped me more than any other is that I rarely do anything without a reason. Everything one does should have a clear objective and your actions should be carefully evaluated before they are executed. Use the 80/20 rule: As an engineer, this was one of the hardest traits for me. There are always many different ways to achieve a desired outcome, but only one that will accomplish the objective with the least effort and investment of time and money. You must also know when to stop80% is often perfectly acceptable. Automate: If you know that a task or activity is recurring, create a work aida toolthat will eliminate as many of the repetitive activities as possible. Those who know me accuse me of having a tool for everythingan exaggeration, but not by much. Ask for help: There is absolutely no shame in asking for help. No one can know everything or be the expert in every facet of the business world. Asking for help from others will let you accomplish your objectives much more quicklyand with better results. Always look for a better way: As my father said, Son, if you have done anything the same way for years, odds are there is a better way. Good advice then and now. Never restrict yourself to a certain set of rules just to maintain status quo. Think outside the box and f find better, more efficient ways to accomplish your objective. When you work smart, work can be enjoyableeven fun. It certainly eliminates much of the frustration and fatigue that are the outcome of working hard. Take a hard look at yourself. Are you working smart?

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Life Cycle Engineering 2012

Mobleys 12TH Law:


Never, never, never give up.
It has been too long since my last letter, but 2011 closed with a burst of new problems with dire consequences that mandated immediate attention. I am happy to tell you that all of these have been resolved and our clients enter 2012 with a much brighter future. Let me start off the new year by sharing news that I received from a protg in South America. I had the opportunity to work with John about five years ago and over a three-year period was able to share our approach to Reliability Excellence. As we applied this approach, his company an alumina refinery achieved a first-year reduction in operating cost of more than $11M and firmly established the foundation for continuous improvement. The refinery was well on its way to excellence. About three years ago, John was lured away from the refinery by another company in the same country. They had heard of the refinerys success and wanted John to duplicate it for them. When he accepted the position, everyone on his new employers leadership team was excited and eager for changeor were they?

We put together a solid business case that conservatively would yield a $25M improvement in operating cost over a threeyear period, but to get there the client a governmentowned enterprise would have to make substantial changes in the way they managed the company.

We were asked to spend a few weeks with the client to assess the situation and recommend the best approach to implementing a Reliability Excellence-based continuous improvement program. It was a hard, long two weeks but with Johns help we were able to gather the necessary cost and performance data needed to fully understand the strengths and weaknesses of his new company. We put together a solid business case that conservatively would yield a $25M improvement in operating cost over a three-year period, but to get there the client a government-owned enterprise would have to make substantial changes in the way they managed the company. The company, citing too many initiatives, elected not to pursue Reliability Excellence. John refused to give up. Instead of simply accepting the companys decision to defer implementation, he set about resolving some of the deficiencies that we had identified through the assessment process. He focused on those that were within his and the Reliability Engineering Managers span of control and through persistent efforts he was able to achieve substantial results.

One of my best Christmas presents in 2011 was an email from John sharing the results of his efforts. Without any support from senior management and despite resistance from a bureaucratic organization, he was able to reduce operating cost by more than $9M and identified an additional $4.5M that would be enjoyed in the first quarter of 2012. He took some pride in reporting this to his management team and tactfully reminding them of the $25M potential that achieving Reliability Excellence would provide. Needless to say, I am proud to have been a part of Johns introduction to and education in Reliability Excellence. His success in applying what he learned is commendable, but I am most proud of his adherence to Mobleys 12th Law Never, never, never give up.

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Life Cycle Engineering 2012

Mobleys 13TH Law:

Seek perfection; never settle for anything less.


Granted, I am old and perhaps set in my ways but there is one thing that I just cannot understand. Why is everyone averse to striving for perfection? It seems that almost every time we broach the subject of improvement, the client always has a thousand and one reasons why their company cannot achieve and therefore should not pursue perfection in the form of asset utilization, cost of goods sold and elimination of waste. If one looks at asset utilization, for example, many companies give up at least half of their installed capacity before actual production losses enter the picture. When a company elects to operate on a five-day, 24 hours/day production schedule, they automatically give up 104 days or 28.5% of their capacity. Add holidays, outage downtime and other arbitrary reasons for non-productive time and the net result is that only 40% to 50% of possible capacity is availableassuming no actual production (OEE) losses. Over the past three years I have had the opportunity to evaluate numerous, multi-national, multiple plant organizations and the best asset utilization I found was 36%. None of them recognized their low utilization. According to their internal numbers, these plants were operating in the 75% to 90% asset efficiency or effectiveness range with no consideration for true utilization. When we discussed the absolute need to improve their use of installed capacity none believed that they could or should try to achieve full utilization. Instead, each wanted to set their goals well below 100% -- in some cases as low as 60% to 70%. When pressured for a reason, the most common answer was, We just cannot achieve higher levels of performance in our culture. All had a myriad of reasons, such as cleaning requirements, seasonal sales, asset maintenance requirements, etc., but none had any data or statistics to support them. Asset utilization losses compound when one considers those associated with operations. Overall Equipment Effectiveness (OEE) is the most common measure of these losses and includes actual run time, production rate and yield losses as a measure of effectiveness. Most of the clients we have evaluated over the past decade fail to accurately measure these losses and instead assume that they are a result of asset reliability and maintenance deficiencies. In truth, the single largest source of OEE losses is reduced speed operationcaused solely by operators who elect to run at a lower speed. We have observed operations where as much as 40% of shift output is lost to run-below-rate decisions. One would think that enforcing consistent operation at the rated speed of an asset would be a no-brainer, right? Wrong. In most cases the management response is that the assets will not run at design. This type of response really bothers me as a reliability engineer and machinery designer. Machines are designed to operate at their design speedanything less actually accelerates the wear and tear on the machine and will increase the interval and level of sustaining maintenance. There are several things that I would like you to think about. First, take a long, hard look at your use of installed capacity. Do you really know what it is or are you relying on numbers that are skewed and give everyone a false sense of well-being? If your utilization is less than 8,760 hours per year, can you isolate and identify the reason for each day lost? Is each reason real and justifiable? There is one legitimate reason for not running 24/7/365: sustaining maintenance. All electro-mechanical equipment requires some level of maintenance to retain reliable performance and useful operating life. Depending on asset type, between 400 and 1000 hours per year (5% - 11%) should be allocated to maintenance. All other deductions from continuous operation are controllable losses. Second, are you fully and effectively using those hours that you currently plan to run? Have you really considered the cost associated with your production schedule and mode of operation? How much time are you losing to changeovers and are they really necessary? Production planning and the coordination within the internal supply chain combine to severely reduce the effectiveness and increase the cost of most operations. And finally, write down all of the losses, including everything. Once you have the list, calculate the cost of each of them. Remember that there is a real cost associated with everything and this is certainly true of production losses. For example, what is the cost associated with a fully manned production asset that produces one half of designed capacity? It should be obvious that your cost is doubleit takes twice as long to make the same amount of product. What about running one shift a day? What is the cost of the idle capacity for the other two shifts? Now, list the reason that you cannot eliminate each of the losses on your list. In light of the costs, are these justifiable? Can you justify these losses? Should you not seek perfectionfull, effective utilization of your installed capacity? Can you really justify continued operation with some or all of these losses? As stated at the beginning, I simply do not understand why anyone would choose to ignore obvious, controllable losses and not make a concerted effort to eliminate allnot just some of them. One cannot violate the laws of physicsthere are only 24 hours in a day, seven days in a week and 365 days in a year. One should strive to effectively use all of this timeanything less is a controllable loss. If one is satisfied with less than perfection, then thats all they will ever achieve. If you truly want to be world-class, you must seek perfection and never, ever settle for anything less.

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Life Cycle Engineering 2012

Mobleys 14TH Law:

If you change nothing, nothing changes.


Almost three decades ago I was approached by a major publisher to write a book that defined the tenets of a successful company. Not knowing any better, I accepted the challenge and over the next months the book took form. When it was finally finished and the galley proofs received, I made a slight miscalculationI asked my wife to read it. You need to understand, my wife was put on earth to keep me humble and she has done an exceptionally good job over our 46 years of marriage. She reluctantly complied with my requestwell almost. After reading the preface and introduction, she came into my office, threw the book on my deck and said, No one will read this book all you have written is just simple, common sense. She was right, of course, but what she failed to understand is that there is a void of common sense in the world of business. I am constantly amazed by the almost total lack of common sense or even simple logic that exists in todays business world. Too many companies seem to be managednot ledby those who either cannot or will not acknowledge the simple truths that limit their ability to compete in an ever-changing world market. One recurring, almost universal, example of this lack of common sense is the belief that thingsperformance, finance and market sharewill magically improve if we ignore the factors that limit them enough and just continue to do what we have always done in exactly the same way as it has always been done. Most rational people understand that it is insane to expect a different outcome when one continues to do exactly the same things, the same way. Why is it so difficult to see the fallacy in this logic? Even my father, with his limited education, taught me this lesson with his constant reminder, Son, if you have done the same thing, in the same way for years, the odds are there is a better way. For more than five decades in the business world, I have tried to push down the frustration when dealing with this lack of common sense and tried to focus on understanding the reasons for this inability of so many to see the obvious and use simple logic to made decisions. Success has been slow in coming and at best remains limited. I have finally accepted the fact that a complete understanding will always elude me, but have been able to isolate a few of the more frequent reasons. One of the most common reasons is the risk-averse mentality that has come to permeate corporate and plant management. Everyone has become so afraid of failure that they will not take any risk. This translates into maintain status quodo not change anything and you will not be blamed. A classic, recurring example of this is trying to get a client to establish goals that stretch production and the workforce to a higher level of performance. Even when the goals are achievable, they expose the management team to a modest riskif they failed to achieve the goals, their performance reviews, promotions and bonuses could suffer. More often than not, the management team will refuse to accept the higher goals, electing instead to retain current, or modestly higher, goalsones that they are absolutely sure can be achieved. Obviously, this is not good for the business, and one would think would not be accepted by higher-level management. Wrong, this risk aversion is not limited to line and middle management. In too many corporations it permeates the entire management team. These companies tend to struggle, maintaining just enough market share to stay in business but never very profitable or successful.

Everyone has become so afraid of failure that they will not take any risk. This translates into maintain status quodo not change anything and you will not be blamed.
Change is inevitable; one cannot go through life without adapting, without changing. We begin life totally dependent on others to care for us, over time reach some level of independence and as we near the end perhaps become dependent upon others again. Common sense should make it clear that it is no different in business. If there is any doubt, look at commercial air travel. In the 1950s air travel from New York to Paris took 20 plus hours and two refueling stops on a TWA Constellation, a four-engine, propeller-driven aircraft. In the 1960s, Pan Am offered direct flights using their new 707 jet aircraft in eight hours. In the intervening years, both TWA and Pan AM failed to adapt to the changing market and as a result no longer exist, yet another example of change or perish. My reference library is full of books, many written before 1970, that tout the tenets of success. Almost all reference example companies that support their theories of how a world-class company should be run. You know the names: AT&T, General Motors, TWA, Pan Am and so on. These were the shining examples of how to be successful when I entered the business world; but look at them today. Many no longer exist; others retain the name but are no longer the world leader that they once were. What happened? The one common theme for all of them is that they failed to adapt. They failed to recognize the changes that were taking place all around them. They failed to change. How about you and your company? Will you change or perish?

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Life Cycle Engineering 2012

Mobleys 15TH Law:

Impatience Never Commands Success.


Being fast is important in a race and perhaps other instances, but not when changing individual habits or work culture. Both take time and infinite patience. Change cannot be rushed. This simple fact has been the downfall of too many attempts to transform a reactive, poor performance company into one that can competesurvivein todays marketplace. Frankly, I continue to struggle with why companies ignore poor performance until it is much too late and then demand instant solutions to a sometimes decades-old problem. Invariably, they will expect miracles that require little, if any, effort on their part, and they just cannot understand why they are not possible. After all its not a management or infrastructure problem. Just make the workforce work longer, harder, or with less, and the problem is solved.

Surprisingly, the workforce is just as impatient. The business reengineering process, when done correctly, requires the commitment and involvement of the workforce for periods of 18 to 36 months. The first year is generally dedicated to value-stream mapping and reengineering of the processes and procedures. This effort is intensive and requires hours of concentrated work. Long before this initial effort is complete; the workforce will grow impatient and want to opt out. Just tell us the answer or what the best-in-class process looks like and lets get on with it, is the typical request. Unfortunately, neither of these demands can be satisfied. Resolving the complex factors that limit poorly performing companies cannot be accomplished with the snap of your fingers. There are no silver bullets or magic wands that will undo bad habits, ineffective processes and inefficient procedures that are at the heart of poor performance. Current-state performance must be systematically evaluated, limiting factors must be identified and solutions that will provide long-term, effective resolution must be implemented. There is also no quick solution for workforce impatience. The only way that the workforce will embrace and universally adopt change is to go through the process of self-creation. They must understand the deficiencies in their current practices and develop solutions that will add value to the operation. Giving them the answer is not an option. They must go through the pain of creation before the new way of life is theirs.

There are no silver bullets or magic wands that will undo bad habits, ineffective processes and inefficient procedures that are at the heart of poor performance.

There really is not any reason that temporary fixes cannot be integrated into the journey to a permanent solution. However, one must understand that temporary fixes are just thattemporary.

I know what you are thinking; its the same rationale that we get from almost all clients. You dont understand. We cannot wait. You and they will cite tens or hundreds of reasonsranging from operating profit to loss of market shareas reasons an immediate solution is needed. While many of these arguments are based in reality, quick fixes and permanent resolutions are diametric opposites. The conundrum is that you are right; many companies cannot wait. The problems have become critical and survival is a real concern. How do you resolve both the short-term need and a permanent change that will prevent a recurrence and assure long-term survivability?

There is no short cut to the permanent solution. Patience and absolute commitment to doing it right is not optional. With that said, there is no reason that one cannot integrate a parallel, more tactical effort that can be used to stop or at least slow down the bleeding. In most cases, one can find problems or issues that can be resolved using viable tactical or technical efforts. For example, we were able to find $11.3MM in unnecessary costs in a refinery that could be saved by changing the control logica quick fix that could, and most likely would, reoccur without a permanent change in the way these logics are developed. There really is not any reason that temporary fixes cannot be integrated into the journey to a permanent solution. However, one must understand that temporary fixes are just thattemporary. Do not let impatience overrule logic. Do not let the short-term pressures, no matter how grave, prevent permanent solutions to the limiting factors that prevent sustainable best-in-class performance.

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Life Cycle Engineering 2012

About the author:


Keith Mobley, MBB, CMRP
Keith Mobley is a Principal Consultant with Life Cycle Engineering. Mr. Mobley has earned an international reputation as a leader in corporate transformations, reliability engineering and process optimization. He is on the advisory boards of ANSI and ISO; a Distinguished Lecturer for ASME; and recipient of the Smarro Award for outstanding contribution in engineering and reliability. Mr. Mobley has served on Technical Advisory Boards for the Technical Association for Pulp and Paper Industry (TAPPI), Association of Iron and Steel Engineers (AISE), Society of Manufacturing Engineers (SME), and the Electric Power Research Institute (EPRI). Mobley has 46 years of combined business, finance, engineering and consulting experience in a wide variety of industries. He has 21 years of international consulting experience and 25 years experience in corporate positions including: V.P. Engineering and Manufacturing, V.P. Finance, V.P. Marketing and Sales, E.V.P. and COO. He has also served as President and CEO of a $50M international consulting, engineering services and training company specializing in corporate transformations. Motorola-Juran Institute trained, he is a Master Black Belt with hundreds of successful projects and 20 years of direct Lean-Six Sigma application. Mobley is the author of 22 textbooks including: Total Plant Performance Management Plant Engineers Handbook Maintenance Engineering Handbook Rules of Thumb for Reliability Engineers Introduction to Predictive Maintenance Contact Keith: KMobley@LCE.com 865.207.5640 Subscribe to Reflections on Excellence

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Life Cycle Engineering 2012