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February 2012 | Volume 7, Issue 1

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Managing and
Communicating Change

Avoid What is New BoK Products SMRP’s

Communication Alliancing? now online Management
Failure Mode Transition!
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Features
Communication as a Failure Mode

To maintain critical asset health assurance, have you factored in all the
communication failure modes? Learn from GPAllied’s principal why, when,
and how often to facilitate communications as well as an build an effective
communications model. MICHAEL ARONEY
10 How Reliability Impacts Shareholder Value
Management Resources Group, Inc.’s Director of Reliability Services illustrates
the importance of Reliability and its impact on the key areas of generating
shareholder value. If reliability is integral to the organization’s culture, this can 4
drive benefits in all facets of the operation. BRUCE HAWKINS, CMRP
16 Alliancing Overview

Former Eastman Kodak manager shares details on this new and innovative
style of business relationship building, called Alliancing. Major Alliancing
principles are reviewed, including the benefits and challenges of this future
trend. WIL CAREY, CMRP
Departments
2 Officers and Directors
From the Chair Are you a leader? SMRP’s Board Chair discusses leadership
2 
and introduces SMRP new management and staffing company, Kellen
Company in Atlanta, GA. STAN MOORE, CMRP
10
BOK corner SMRPs Body of Knowledge Product and Business Development
20 
manager and Director for BoK showcases newer BoK products: SMRP
Knowledge Library and Benchmarking Surveys with member friendly pricing.
Find out how these can help you and your company leverage change and
growth as well as how you can contribute to the continuous improvement of
SMRPs BoK. LAURA B. KEANE AND RON LEONARD, PE, CMRP
FROM THE EXECUTIVE DIRECTOR Farewell from SMRP’s outgoing Executive
21 
Director. BARBARA DUNLAVEY, CMP, CAE
22 FROM THE EXAM TEAM On behalf of the entire Team, CMRP and CMRT Exam
Director shares updates on the Spanish, Brazilian Portuguese and electronic
exams as well as discusses 2012 plans for growth. Bonus: don’t miss the
newest Exam Team Reliability Tip. Terry Harris, CMRP
23 FROM THE NEW MANAGEMENT COMPANY Press announcing the new SMRP Kellen
Company management partnership. The release was written by SMRP’s
incoming Executive Director, Jon Krueger. jon krueger
27 SMRPCO SUSTAINING SPONSORS
Welcome New Members SMRP welcomes new executive and individual members.
26 
16
Dates/Raleigh, NC 33 NEW CMRPS SMRPCO welcomes new certificants
May 9-11, 2012
and
November 12-14, 2012
SMRP Solutions (ISN#1552-5082) is published bi-monthly by the Society for Maintenance and Reliability Professionals, exclusively for SMRP members. The
May 7-8, 2012 annual subscription rate is $15 for members, which is included in dues. The Society was incorporated as an Illinois not-for profit corporation in 1992 for those
and in the maintenance profession to share practitioner experiences and network. The Society is dedicated to excellence in maintenance and reliability in all types of
manufacturing and services organizations, and promotes maintenance excellence worldwide. SMRP’s Mission is to develop and promote leaders in Reliability and
September 10-11, 2012 Physical Asset Management.
September 12-13, 2012 The products featured in SMRP Solutions are not endorsed by SMRP, and SMRP assumes no responsibility in connection with the purchase or use of such products.
The opinions expressed in the articles contained in SMRP Solutions are not necessarily those of the editor or SMRP.
and
Back Issues: The current issue and back issues of SMRP Solutions can be downloaded from the library area of the SMRP Website. Original versions of the
November 15-16, 2012 current issue and some back issues of Solutions are available by contacting SMRP Headquarters ($5 per copy for members, $10 per copy for non-members).
SEND ADDRESS CHANGES AND INQUIRIES TO: SMRP Headquarters, 1100 Johnson Ferry Road, Suite 300, Atlanta, GA 30342, 800-950-7354,
E-mail: info@smrp.org.
1-800-849-2041
 2012 SMRP From the Chair
Officers & Directors Project3 12/14/11 2:02 PM Page 1

Chair

Are you a
Stan Moore, CMRP reliability, are we leaders? Do we understand our own
Ascend Materials company’s business plan and model? Do we lever-
stanmoore@ascendmaterials.com age our collective expertise in the maintenance and
256-552-2173
leader? reliability field to deliver value to our stock holders
or owners? As leaders in this area, our management
Immediate Past Chair,
By stan moore, CMRP looks to us to provide solutions and recommendations
Advisory Committee Chair of SMRP 2011-2012 that will improve our ability to produce products reli-
Rick Baldridge, CMRP
Cargill, Inc. ably and cost-effectively.
rick_baldridge@cargill.com
409-945-1734 T here are several well known personality
profile tools that are used to determine
personality traits. Maybe your company
SMRP is an enabler in this area, providing its
membership with a variety of tools and resources. The
continuing work of our BoK with the metrics library,
Vice Chair has participated in, or has used someone to benchmarking, and the online searchable database of
Shon Isenhour, CMRP
conduct assessments for your leadership? past proceedings are but a few examples. As SMRP
GP Allied
sisenhour@gpallied.com For example, the Small Business Association continues to mature and grow, we continue to look for
843-810-4446 government website, www.sba.gov/content/ ways to bring value to our membership. Having said
being-leader, has a listing of leadership traits that, SMRP has recently chosen Kellen Company as
Treasurer developed by Raymond Cattell way back in their new association management company. Kellen
Nick Roberts, CMRP
1954. Based on an analysis of military leaders, the following list of traits were devel- Company is a global professional services company,
Dupont
nick.l.roberts@usa.dupont.com
oped that characterize an effective leader. delivering innovative solutions and new opportuni-
304-863-4144 • Emotional stability: Good leaders must be able to tolerate frustration and stress. ties to clients, helping them achieve greater levels
Overall, they must be well-adjusted and have the psychological maturity to deal of success. Kellen Company serves more than 100
Secretary with anything they are required to face. association and corporate clients, representing more
Craig Seibold, CMRP • Dominance: Leaders are often competitive, decisive and usually enjoy overcom- than 10,000 companies and 100,000 professionals
Johns Manville
ing obstacles. Overall, they are assertive in their thinking style as well as their worldwide.  Kellen has offices worldwide and is head-
seiboldc@jm.com
303-978-2641 attitude in dealing with others. quartered in Atlanta, GA with offices worldwide.
• Enthusiasm: Leaders are usually seen as active, expressive and energetic. They SMRP would also like to acknowledge the service and
Executive Director are often very optimistic and open to change. Overall, they are generally quick support that AMG has provided over the last six years.
Barbara Dunlavey, CAE, CMP and alert and tend to be uninhibited. We gratefully acknowledge the support of the AMG
SMRP • Conscientiousness: Leaders are often dominated by a sense of duty and tend staff that has interfaced with the membership over the
301-523-7435
to be very exacting in character. They usually have a very high standard of years, most notably Maureen Gribble and Ali Sturman.
excellence and an inward desire to do their best. They also have a need for We also want to thank Barb Dunlavey. Barb has
Certification Director
Greg Yeager, CMRP order and tend to be very self-disciplined. been our executive director for the past two years and
Cargill, Inc. • Social boldness: Leaders tend to be spontaneous risk-takers. They are usually has helped us to grow in many areas. Her expertise
greg_yeager@cargill.com socially aggressive and generally thick-skinned. Overall, they are responsive to in association management, especially in the area of
952-984-2850
others and tend to be high in emotional stamina. governance and helping the board to function more
• Self-assurance: Self-confidence and resiliency are common traits among leaders. strategically has been valuable in helping SMRP grow.
Body of Knowledge Director
They tend to be free of guilt and have little or no need for approval. They are We appreciate her leadership and support of SMRP.
Ron Leonard, CMRP
Life Cycle Engineering, Inc. generally unaffected by prior mistakes or failures. I would also like to welcome Ed Foster to the SMRP
rleonard@lce.com • Compulsiveness: Leaders are controlled and very precise in their social inter- Board as our new Membership Director.
843-744-7110 actions. Overall, they are very protective of their integrity and reputation and A native of Houston, Ed works for The Mundy
consequently tended to be socially aware and careful, abundant in foresight, Companies. His positions have ranged from shutdown
Education Director
and very careful when making decisions or determining specific actions. planning to ASME Code Quality Control Inspector to
Butch DiMezzo, CMRP
Management Resources Group, Inc. • Intuitiveness: Rapid changes in the world today, combined with information Crew leader to Project Manager. Ed also helped start the
dimezzob@mrgsolutions.com overload result in an inability to know everything. In other words, reasoning Houston chapter of SMRP. We are excited to have Ed as
704-995-2262 and logic will not get you through all situations. In fact, more and more lead- our new membership directorate and he is looking for
ers are learning the value of using their intuition and trusting their gut when to the opportunity to serve the membership and “give
Member Services Director making decisions. back” to the industry. Please join me in welcoming Ed.
Howard Penrose, CMRP
• Empathy: Being able to put yourself in the other person’s shoes is a key trait of You will be hearing from him in the near future!
Dreisilker Electrical Motors
hpenrose@dreisilker.com leaders today. Without empathy, you can’t build trust; without trust, you will By the time you read this article, it will be February
860-575-3087 never be able to get the best effort from your employees. of 2012. We will each be engaged in our own areas of
• Charisma: People usually perceive leaders as larger than life. Charisma plays expertise, providing value to our companies and our
Outreach Director a large part in this perception. Leaders who have charisma are able to arouse families. In our respective leadership roles, we have
Howard Penrose, CMRP
strong emotions in their employees by defining a vision which unites and cap- the awesome privilege and responsibility to lead
Dreisilker Electrical Motors
tivates them. Using this vision, leaders motivate employees to reach toward a effectively and efficiently. I look forward to 2012, no
hpenrose@dreisilker.com
860-575-3087 future goal by tying the goal to substantial personal rewards and values. doubt filled with challenges, but then aren’t challenges
Do any of these traits resonate with you? When it comes to the business side of simply opportunities in disguise?

2 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 3
 “The single biggest problem in communication

is the illusion that it has taken place.”

—George Bernard Shaw

Communication
as a Failure Mode
By: Michael Aroney,
Principal, GPAllied

T his is probably the biggest challenge a leader faces when

trying to get new points across, like communicating to
stakeholders how reliability and maintenance improvement
aligns with business goals. How can he or she be certain the
message is received as intended and rally support? Communi-
cation ability could be one of the most critical skills for imple-
menting a maintenance and reliability initiative, yet it often
receives the least attention.
Asset health assurance is a foundational aspect of mainte-
nance and reliability. Asset health is the percent of assets that
are defect free and is associated with the P-F curve, component
failure modes, and “P”, the point where a defect first presents
itself in the asset with a pending failure. The longer the defect
remains, the greater the loss of functionality until the compo-
nent fails catastrophically. (Figure 1)
In this regard, there are several failure modes that are
routinely identified as contributing to failed projects. Reliability
and maintenance improvement projects, for example, often
fail because of (1) lack of top management support, (2) disen-
gaged workforce, (3) unclear goals, (4) resource constraints, (5)
competing priorities, (6) unclear roles, and (7) ineffective com-
munication. Many papers published by the Project Management

4 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 5
 Communication as a Failure Mode
Point where
failure starts
to occur
Equipment Condition
Broken
Time
Institute define project failure as exceeding
time and cost, falling short on providing
the desired functionality, and not achiev-
ing the full return on investment.
Project failure modes, or the ways in
which a project could fail, can be plotted
on a P-F curve in the same fashion as com-
ponent failure was demonstrated in Figure
1. In this perspective, a failure mode for
engaging stakeholders is communication
and the defect is “ineffective communi-
cation”. The longer the defect remains
without correction, the more likely it is that
the project will fail.
Most research on failed performance
improvement initiatives shows com-
munication as the single-most common
denominator. It is communication as a
failure mode that is uniquely human,
therefore highly variable and requires the
most attention. This article addresses com-
munication effectiveness as a failure mode
during the implementation of maintenance
and reliability improvements and provides
three principle-based strategies on Why,
When, and How to share information that
6 SMRP Solutions
Early Signal 1
Early Signal 2
Early Signal 3
Audible Noise
Hot to Touch
PdM Detects
Problems Early
Equipment Fails Here
Figure 1: Asset Health P-F Curve
will eliminate the defect of ineffective influenced by the current mental model.
communication. Anyone who has played the party game
Telephone, where a phrase is whispered
#1 – Know Why to Share into someone’s ear and he whispers what
Information he heard to the next person and so on
until the last person shares what he heard,
“You cannot hear what you do not which is hilariously nothing like the
understand.” ­—Dr. W. Edwards Deming original phrase, has seen this challenge at
work. Similarly, anyone who has encoun-
PR INCIPLE: Knowledge precedes attitude, tered a poorly written PM - such as one
which precedes behavior. that says “Inspect Pump”- knows he can
expect five different individuals to interpret
PR INCIPLE: To change results, change it five different ways with just about as
behavior. To change behavior, change the many results.
mental model. A mental model derives from the
The intent of communicating to individual’s current knowledge, experi-
stakeholders during a maintenance and ence, and value base and, according to
reliability initiative is to get their buy in Hersey and Blanchard in Management of
and support by showing them the rel- Organizational Behavior, knowledge influ-
evance and application of the change. ences attitude, behavior, and commitment.
The challenge to communication is the Overcoming existing mental models is the
current “mental models” that are at play. challenge of communicating when trying to
In other words, people will assign meaning start a new initiative in order to overcome
to what they hear based on what makes the “another-flavor-of-the-month” percep-
sense to them, and what makes sense to tion in order to gain commitment. People
them is what they know, which is heavily will add meaning to what they hear based
February 2012 | Volume 7, Issue 1
on what they know and have experienced
in the past. A consistent communication
message and strategy for delivery can
provide new knowledge almost immediately
while the project teams are working on
results that reinforce the new experience.
An excellent example of this concept
is the story of a friend’s wife who wanted
a new car – a sporty, two-seat convertible.
After some research, the friend narrowed
the field to two options, one of which was a
Mazda Miata and the other an Austin Mini
Cooper. She was informed about the auto-
motive evaluations, customer satisfaction
and dependability ratings, and the prices
before heading out to do the test drives.
What was interesting is that she had no
conception of a Mazda Miata, but knew
about the Mini Cooper and had an opinion
about it though she had never driven one.
The friend and his wife went to test drive
the Miata first and then the Mini Cooper.
His wife loved test driving the Miata and on
the way to the BMW dealership to test the
Mini Cooper pointed out at least a dozen
Miatas, commenting on the differences
she noticed between the newer and older
models. The irony is that prior to receiving
new knowledge and having the experience
of test driving one, she could not point out
a Miata if one ran her over.
The same paradigm challenge is at
play during a maintenance and reliability
initiative. Stakeholders will add mean-
ing to what they are told about it based
on what they know and have experienced
in the past. Recently, at a kick-off for an
M&R project, a plant leadership team was
meeting with the workforce during shift
changes to start informing them of what
was going to occur. They were given some
background information on the P-F curve
and told that a condition based mainte-
nance strategy would be put in place to
improve asset reliability and enhance
production capacity. This approach would
allow defects to be identified while the
equipment was still running using
predictive technologies. The question asked
afterward was: “Why are we bypassing
Lock-out/Tag-out procedures with this
new initiative?” There was very little
knowledge of Condition Based Maintenance
and the use of PdM technology, so the
information that was presented was inter-
preted based on what the workforce knew
at the time – a time-based maintenance
February 2012 | Volume 7, Issue 1
strategy using Preventive Maintenance
Routines.
An example of this concept is demon-
strated by the Change Model from Steven
Covey’s The Seven Habits of Highly Effective
People (Figure 2).
See
Change
Get
Figure 2: Steven Covey’s Change Model
According to this model, if new results
are desired (Get), it is necessary to change
behavior (Do), and the most effective way
to change behavior is to change mental
models (See). Effective communication as a
consequence of the current mental models
at play must ensure stakeholders under-
stand at a minimum: (1) Why something
is being done, (2) What the end result will
look like, (3) What’s in it for them/How it
will affect them, (4) What they are expected
to do, and (5) What they can expect from
the management team.
#2 – Know When to Share
Information and How Often
“We know what we told him but we don’t
know what he heard.”
—Dr. W. Edwards Deming
PR INCIPLE: Information should be shared
every time the situation experiences
a difference in permanence or risk to
permanence.
PR INCIPLE: Information should be shared
as soon as it is available and frequently
until the message is understood by all.
In the absence of information, people
will make things up that make sense to
them, and it will almost always be nega-
tive. This process is called “closure” and
Communication as a Failure Mode
is a coping mechanism for making sense
of things by filling in gaps. When the
situation changes or might change, either
positively or negatively, information should
be shared with those stakeholders who are
directly or indirectly affected. Secondly,
this information must be uniformly com-
municated in a timely fashion.
The “ineffective communication”
failure mode, in this regard, is when some
managers and supervisors share informa-
tion while others do not. As the workforce
begins to compare notes and there are
differences in what is being said, or not
said, and how it is interpreted, all manner
of creative interpretation will occur.
Do
Information should be communicated at
least six times before it is understood,
and if the information is heard from three
different sources, it is more likely to be
believed.
A wonderful example that demon-
strates this concept, along with human
variation in closing gaps to understand-
ing, is a word-association exercise. Here,
everyone prepares to write down the first
word that comes to their mind when they
hear a key word. The key word is “dog”. The
results when pulsed from each participant
can usually be plotted on an x/y axis with
a resulting bell curve distribution. The
mean will usually end up as “cat” with pet,
pet names, types of dogs, names of dogs,
dog items, etc. forming the outliers.
Assuming the thought “dog” rep-
resented a certain type of dog – in this
case a Husky – the initial responses are
inconsistent and inaccurate. Next, inform
the audience they need clarification of the
project “vision” and they will be given more
information to be taken in context with the
first key word. Next, say “sled” and pulse
for the new understanding. Add additional
information, such as “snow”, “Iditarod”,
and “type of dog”, and each time pulse the
audience for what they are now think-
ing until the variation in understanding
narrows and almost everyone is thinking
“Husky”.
Note that is has taken several commu-
nication initiatives and pulsing to finally
gain an understanding of the original
communication message – “dog”. The key
point is that eliminating the failure mode
of “ineffective communication” requires
constant communication and updates to
information to gain understanding. Thus,
SMRP Solutions 7
 Communication as a Failure Mode
the formula for effec-
tive communication
can be said to be “6X
+ 3X = Dog” (Figure
3). Communicate
the same message
six times to reduce
variation to a common
understanding and
ensure the message is
sent by three differ-
ent people so that it
is more likely to be Figure 3: Formula for Effective Communication,
believed and accepted.
Finally, communication must provide
information that is relevant to the receiver.
It should target the receiving audience and
provide information that applies to them.
An hourly workforce is going to want to
know how implementing an asset health
assurance approach to maintenance and
reliability is going to affect them. Will
their work change, will they have to learn
new skills, will there be job cuts, who
will participate in the project, and so on.
Supervisors and managers will want to
know how the project will be implemented
given scarce resources and competing pri-
orities and how they will know if they are
making progress, while executives want to
know the return on investment and when
to expect a positive cash flow.
The bottom line is that effective
communication is about managing
stakeholders’ expectations and a realistic
timeline and resource commitment for suc-
cess. The failure that will likely result from
ineffective communication is just one more
“Flavor of the Month”.
#3 – Know How to Share
Information
“If you thought you understood what I
said, what you heard me say isn’t what I
meant.” —Anonymous
PR INCIPLE: As a system matures, the mix
of active and passive communication will
vary. Immature systems require a higher
degree of active communication than do
mature systems.
PR INCIPLE: Active communication is not
merely the acknowledgement of receipt
of the information, but a verification of
comprehension.
8 SMRP Solutions
Communication as a Failure Mode
Translated, this there is a check in the box, communication Enterprise/PlantLed
means that when has taken place – preferably via email or Lean Manufacturing
Performance Levels
information is shared, postings on boards, walls, and websites. The 8 Wastes
the most important It never fails that supervisors and
part is to ensure that managers are surprised by the results Loss Elimination
OEE
Maintenance Driven
the intended mes- of findings during a maintenance and
sage is received and reliability maturity assessment when the Lean
understood exactly as workforce reports they knew nothing of State
Fix it Before it Breaks
the original message what is going on. When asked what they
Proactive
was intended. Figure know about the assessment and Asset
State
4 presents a model for Health Assurance, the response is often Fix it After it Breaks
this concept. “this is the first time we heard of it”. Planned
Communication When the supervisors and managers are
State
6X + 3X = Dog should never be open informed of what the workforce says they Staged Decay
Reactive
looped. This means that communication
should always include some verification of
know – which is nothing – their response is
almost always, “But we spent 10 minutes
State Vision
understanding. Without verifying that the at each shift change telling them what was Leadership
Regressive
original message was received as intended, going to happen!” They were efficient, but
State Long-Term Commitment
the possibility of the receiver misunder- ineffective and this communication defect
standing the intent is very high given the is now at point P.
Level 1 Level 2 Level 3 Level 4 Level 5
challenge of barriers to communication, As much face-to-face direct commu-
Not Engaged Experimenting Enlightened Good Practice Best Practice
such as noise in the environment and nication with checks for understanding
mental models. The failure that occurs and opportunities to provide feedback on
Figure 5: Maintenance and Reliability Maturity Continuum
most often in this regard is the sacrifice understanding is paramount when imple-
of communication effectiveness for com- menting a maintenance and reliability
munication efficiency. Many believe in the improvement initiative. The site leadership
checklist approach to informing and once team has to do most of the work in the beginning phase of this type of project and maintenance and reliability from Staged CYA
too often, they are “too busy” so they rely Decay to Planned State to Loss Elimination If you said “cover your assets”, you are
solely on efficient methods of informing. on a maturity continuum. probably in a reactive mode and ineffective
As organizations become less reactive In the Regressive State, the culture communication can have dramatic adverse
Typical Communication and more proactive, the need for frequent, maturity is dependent and the impact of impact. If you said “check your assump-
(Open Loop) formal face-to-face communication will ineffective communication is greatest. In tions”, you are most likely in a proactive
decrease. It is important to note that while the Proactive State, the culture maturity environment and effective communication
the frequency of face-to-face communi- is interdependent and effective communi- is part of the way things are done.
Send Receive cation will decrease, the need for it will cation is built into the way work is done.
remain. Keeping in the mind the formula The dichotomy is that everyone is running Mike retired from the U.S. Navy
for effective communication, 6X + 3X = around in the Reactive State putting out after a career flying the F-14 Tomcat
Dog, the face-to-face messages can be fires, or in some cases just moving the fires and spent the past 17 years leading
Encode Decode
supplemented with other, more efficient around, with the belief that there is no time
Organizational Excellence programs
communication methods. to communicate effectively, which in turn
involving business process reengineer-
Within an organizational context, leads to ineffective communication and
Idea Sender Receiver Idea this maturity can be assessed on Steven contributes to the Reactive Environment ing for the Department of the Navy, the
Covey’s Maturity Continuum from The in a self-perpetuating cycle. An analogy Department of Defense and numerous
Seven Habits of Highly Effective People, to explain this cycle is an example of two Fortune 1000 companies. Over the
where the maturity levels are: Dependence, lumber jacks laboring over a two-person last 10 years, Mike has worked exclu-
Independence, and Interdependence. saw to cut down a large tree. When a pass-
sively with companies in achieving the
Comprehensive Verification The higher the cultural maturity, the erby suggests that they stop to sharpen
full benefit of Asset Maintenance and
(Closing the Loop) less reactive the organization is and the their saw and the work will go a lot easier,
Decode Encode Reliability improvements as a part of
less need for face-to-face communication. the lumber jacks reply, “We can’t stop to
In terms of reliability, the more process sharpen the saw, we’re too busy sawing.” their overall Operational Effectiveness
focused and standardized the organization Not taking the time to communicate business strategy. Mike is a Principal
Receive Send is, the better the information and the less effectively to stakeholders is a defect that Advisor of Organizational Excellence
variation exists in how things are done. will contribute to the failure of a mainte-
and Change Management for GPAllied
Effective communication is embedded in nance and reliability improvement project.
(gpallied.com). He can be contacted at
the way work is done and the communica- Interpretation of the following acronym is a
tion culture is one of “interdependence”. fair indicator of a reactive versus proactive maroney@gpallied.com or by phone:
Figure 4: Closed-Loop Model for Effective Communication In Figure 5, we see the various stages of environment: 843 469-5458.
February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 9
 How Reliability
Impacts
Shareholder Value
BY: Bruce Hawkins, CMRP
Management Resources Group, Inc.

A s reliability professionals, we under-

stand the obvious benefits of lower
manufacturing costs and higher uptime
Revenue Growth

in embarking on a reliability improvement

initiative. However, many organizations
that are well down this path find that there Cost Effectiveness
are many additional benefits that are seen,
many of which were completely unexpect-
ed. In other words, the payback of reliabil-
Shareholder Value
ity greatly exceeds the planned benefit that
the original business case was based upon. Asset Efficiency
Some of these additional benefits are tangi-
ble and measureable; others are intangible
but no less real or important. This paper
will explore some of the reasons behind Market Expectations
these unexpected benefits and may provide
some assistance in determining a business
Figure 1
case for your own reliability initiative.
There are four general areas of value many of these factors will still provide the Asset Efficiency – Just as a good reli-
generation due to a reliability initiative potential to increase revenue. ability program makes efficient use of
(refer to Figure 1): Cost Effectiveness – A reliable manu- financial resources, it also promotes effi-
Revenue Growth – Reliability of facturing process makes efficient use of cient use of physical assets, enhancing the
manufacturing systems and equipment labor and raw material resources, and organization’s ability to maximize return
enhances an organization’s ability to a sound maintenance process makes on those assets.
increase revenue through a number of efficient use of craft labor and spare parts Market Expectations – In deciding
factors. Even though the business climate resources. Both of these result in the mini- to invest in a publicly traded company,
may be such that the market is sold out, mum unit cost of manufacturing. investors tend to look at a number of

10 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 11
 How Reliability Impacts Shareholder Value
Volume
Revenue Growth
Price Realization
Operations / Maintenance
Cost Effectiveness
COGS
Shareholder Value
Fixed Assets
Asset Efficiency
Current Assets
Company Strengths
Market
Expectations
Externalities
Figure 2
factors such as a sound balance sheet, to Figure 3 below). It does this by maximiz-
consistently meeting or beating analyst’s ing the three factors of Overall Equipment
earnings projections, and a consistent Effectiveness (OEE) which are Availability,
ability to grow dividends. A stable, predict- Throughput and Quality.
able and reliable manufacturing process Sales volumes are increased by ensur-
enhances an organization’s ability to meet ing the physical assets are available to
and exceed these expectations. manufacture products when needed and
Details of the benefit areas are shown can manufacture them at the required
in Figure 2 above and are described in rate. Availability is defined as the per-
detail throughout the document. centage of time the process is actually
operating compared to when it is sched-
Revenue Growth uled to operate. Throughput is defined
A manufacturing organization has the as the percentage of actual production
potential to grow revenue by increasing rates or speeds compared to the best
sales volume and increasing pricing (refer potential run rate or speed. As availability
Volume
Revenue Growth
Price Realization
Figure 3
12 SMRP Solutions
Availability
Throughput
Quality
Resource Utilization
Work Elimination
Waste Reduction
Energy Reduction
Utilization
Life Extension
Shutdown Effectiveness
Design for Reliability
Spares Inventory
Asset Intelligence
Execution
Managerial Effectiveness
Fact-Based Decision Making
Risk Management
Executive Credibility
and throughput improve, the potential
exists to increase production volumes. In
some organizations, market limitations
may preclude the use of this availability
improvement, but ensuring the assets can
run when needed will improve the organi-
zation’s ability to capture a greater share of
the market.
Stable production processes within
statistical control inherently produce
consistent quality products. Unreliable
equipment that frequently fails intro-
duces “special cause” variation into the
process that leads to quality problems. If
these special causes can be eliminated, it
Availability
Throughput
Quality
February 2012 | Volume 7, Issue 1
Cost Effectiveness
enables the organization to research and
address the sources of common cause
variation, leading to quality improvement.
Consistently higher quality products than
the competition enables the organization to
command premium prices, or at least the
ability to maintain pricing in the face of a
market downturn.
Cost Effectiveness
A reliable manufacturing process helps
ensure that the products can be produced
at a minimum unit cost. In most commod-
ity businesses, the low cost producer wins
– it is in the best position to ride through a
potential market downturn while remain-
ing profitable and providing an acceptable
return on assets. Referring to Figure 4
above, a good reliability program can have
a significant impact on Costs of Goods
Sold (COGS) through efficient resource
utilization and the ability to eliminate
unnecessary work.
Operations and maintenance costs
are optimized through ensuring that the
labor and material resources are effi-
ciently deployed in the manufacturing
process. It takes less operating labor for a
manufacturing process that is stable and
operating well than it does for one plagued
by equipment problems. Likewise, properly
planned maintenance work ensures that
maintenance labor resources are used at
maximum efficiency with as few delays
Asset Efficiency
February 2012 | Volume 7, Issue 1
How Reliability Impacts Shareholder Value
Operations / Maintenance
COGS
Figure 4
and as little wasted effort as possible.
Ensuring that proactive maintenance
tasks are linked to anticipated failure
modes prevents unnecessary scheduled
maintenance, and a sound predictive
maintenance program that allows the
maintenance function to respond to equip-
ment problems at the first sign of distress
avoids the potential for collateral damage
to other areas of the machine or process.
This has the effect of eliminating work that
is unnecessary; after all, we don’t have to
repair a failure that doesn’t occur!
Waste and energy reduction are also
areas for cost savings. Higher quality as
mentioned above means that there is less
“non-saleable” product to rework or for
disposal. Fewer repairs means there is
less potential hazardous waste to dispose
of. Energy costs are reduced because well
maintained equipment operates more
smoothly; there are also fewer steam and
compressed air leaks and insulation sys-
tems are maintained in good repair.
Asset Efficiency
One of the key measures of any busi-
ness is the return on assets – how much
money is the business earning relative to the
investment in assets. It is a measure of how
efficient management is at using its assets to
generate earnings. From an investor’s per-
spective, they want to see maximum returns
for minimum investment.
Fixed Assets
Current Assets
Figure 5
Resource Utilization
Work Elimination
Waste Reduction
Energy Reduction
For the purposes of this discussion,
assets can be divided into two categories:
fixed assets and current assets (refer to
Figure 5). Fixed assets are the property,
plant and equipment used to manufac-
ture products. Current assets are those
assets that are expected to be turned into
cash within one year; inventories, includ-
ing spare parts inventories, fall into this
classification.
A reliability program assists with asset
efficiency by helping to maximize output
with a minimum of investment. As we
increase reliability we would be able to
increase asset utilization without invest-
ing in additional capacity (more capital
assets). Also, if we clearly understand the
operating condition of the equipment (its
“health”, so to speak), we have less uncer-
tainty and therefore less of a need to have
redundant spare equipment. Additionally,
if the equipment is appropriately cared for,
its useful life is extended and there is less
need for replacement capital (this also has
the effect of reducing costs due to a reduc-
tion in depreciation expense). The business
has the option to deploy that capital on
items that will increase productivity or
reduce operating costs.
One major expense in some industries
is the scheduled turnaround (also referred
to as shutdowns or outages in some indus-
tries). A good reliability program helps to
maximize the efficiency and effectiveness
Utilization
Life Extension
Shutdown Effectiveness
Design for Reliability
Spares Inventory
SMRP Solutions 13
 How Reliability Impacts Shareholder Value
Market
Expectations
of the turnaround by ensuring that the
scope of the turnaround is known (the
predictive maintenance program provides
information on asset health and there
are fewer “surprises” when equipment is
opened). Advanced notice of issues and
effective planning of the corrective actions
can help minimize turnaround duration.
Another way that a reliability program
helps increase asset efficiency is through
the “design for reliability” process. Tools
such as Reliability Centered Maintenance
(RCM) used during equipment design can
enable small design changes to be made
before equipment is purchased to eliminate
some failure modes, and thus eliminate
the need for maintenance to mitigate those
failure modes. Maintainability reviews
in the design stage can incorporate ideas
to increase the speed and efficiency of
maintenance actions to reduce ongoing
maintenance and repair costs.
In a reliable plant, spare parts
inventories are minimized for a number
of reasons. There is a lower demand for
parts in a proactive organization because
there are fewer repairs needed. Since the
purpose of inventory is to protect against
risk and uncertainty, lower inventory levels
are required in proactive organizations
because there is less uncertainty – the
predictive program provides information
concerning developing problems. Also,
because the predictive program provides
advanced warning of problems, many parts
can be procured “just in time” instead of
needing to be stocked. Lower inventory
levels also impact COGS due to reduced
carrying costs and frees working capital
for other uses.
14 SMRP Solutions
Company Strengths
Exernalities
Figure 6
Market Expectations
If we consider a discounted cash flow
model for a business, we have forecasted
costs and revenues and a discounted rate
(or risk-adjusted rate) of return. Market
expectations addresses implicit market
perceptions on the magnitude of those
cash flows as well as the perceived risk
(uncertainty and variability). The more
confidence the market has in a particular
organization, the less of a risk “premium”
it will demand relative to others in the
same industry and a higher stock price
should result. The factors that a reliability
program should influence are somewhat
intangible in this area and are shown in
Figure 6.
Reliable physical assets enhance the
market’s perception of an organization in
several ways. If an organization is better
at producing asset information, leverag-
ing that information to make better and
timelier decisions, and ultimately improve
their ability to execute, they will be more
flexible and adaptable to changes in the
marketplace. With those strengths, and
in all likelihood a better cost structure
as a result of those strengths, they will
be better able to position themselves for
market opportunities. This can amount
to significant value reflected in the stock
price.
Organizations with reliable assets
inherently have better knowledge and
information about those assets; it is a
byproduct of understanding how the equip-
ment is supposed to operate and how it can
potentially fail. They understand both the
capacity constraints of the equipment and
the potential consequences of exceeding
Asset Intelligence
Execution
Managerial Effectiveness
Fact-Based Decision Making
Risk Management
Executive Credibility
those constraints. They also, through
effective condition monitoring, understand
the operating condition and the general
asset health at any point in time so miti-
gating actions can be taken with minimal
disruption to the operation.
The market values consistency and
nimbleness in an organization; consis-
tently being able to deliver on promises
and guidance enhances management’s
credibility. Having the necessary informa-
tion coupled with disciplined processes
to be able to act on that information
enhances management’s effectiveness and
ability to execute. Decisions can be made
on the basis of solid facts and tangible
information versus experience or “gut feel”.
Well-defined systems and work processes
serve to reduce the riskiness in a company
and can lead to reduced uncertainty in
the company’s performance and financial
outcomes.
Risk management is a key capability
that is augmented by good asset reliability.
The more it is integrated into other func-
tions, the more effective an organization
will be at identifying and mitigating risk.
For asset intensive industries it’s only logi-
cal that asset performance represents the
biggest risks. The key to risk management
is information – data and analytical capa-
bilities. Organizations that do not leverage
asset information have to suffer the conse-
quences or operate with a costly safety net
– excess capacity – which leads to higher
operating costs, a higher fixed asset base,
and ultimately lower margins.
There is a great deal of attention that
gets placed on corporate presentations to
the analyst community, and meeting or
February 2012 | Volume 7, Issue 1
beating commitments and quarterly guid-
ance. Only information in the Market can
impact market price, so executives share
some of the information in an effort to
positively influence share price. The more
credibility the company and executive
team has, the more those announcements
will have their intended effect. An organi-
zation can develop credibility by being very
conservative, but that doesn’t do much
for share value growth. If an organization
is going to be aggressive, it has to have
disciplined processes and accurate data.
The company has to be able to forecast
improvements and then deliver against
them.
Measuring Shareholder Value
Arguably the best measure of share-
holder value is Return on Assets (ROA).
According to Investopedia, it is “an indica-
tor of how profitable a company is relative
to its total assets. ROA gives an idea as to
how efficient management is at using its
assets to generate earnings.” It is cal-
culated by dividing a company’s annual
earnings by its total assets and is depicted
in Figure 7 below.
Potential investors often use ROA as
a comparative measure between compa-
nies in a similar industry to determine
which has the best value. The assets of
the company are comprised of both debt
and equity. Both of these types of financ-
ing are used to fund the operations of the
company. The ROA figure gives investors
an idea of how effectively the company is
converting the money it has to invest into
net income. The higher the ROA number,
the better, because the company is earning
more money on less investment.
As with any ratio, ROA is increased
by either increasing the numerator or
decreasing the denominator (or both).
Good asset reliability drives each factor in
the correct direction to increase ROA. Net
Income is calculated by subtracting annual
operating costs from revenue generated by
the business. As we have seen, a sound
reliability program increases revenue by
both volume growth and by the ability to
Return on Assets (ROA) =
Figure 7
February 2012 | Volume 7, Issue 1
How Reliability Impacts Shareholder Value
Revenue
Net Income
(earnings)
Costs
Shareholder Value
= f (ROA)
Current Assets
Total Assets
Fixed Assets
Figure 8
increase pricing. It also reduces operat- permeate throughout the organization and
ing costs by increasing the efficiency of drive benefits in all facets of the operation.
resource utilization and eliminating waste, It is doubtful that an organization can
so both factors are driven in the correct embark on any other initiative that can
direction to increase the numerator in the have such a far-reaching impact on the
ROA equation. entire business.
Total assets are made up of a combina-
tion of fixed and current assets. As we have
Bruce Hawkins, CMRP, Director of
seen above, with a good reliability program
the fixed asset base is lowered by reducing Reliability Services with Management
the need to recapitalize the machinery and Resources Group, Inc.
equipment used in production. Current (www.mrgsolutions.com), is a
assets are reduced by minimizing spare
management consultant with more
parts inventory. Again, both factors are
than 35 years of experience in
driven in the correct direction to reduce
implementing systems and processes
the denominator in the ROA equation (refer
to Figure 7 below). There are few other targeted at improving machinery
initiatives that an organization can imple- reliability. He has extensive experi-
ment that drive each factor in the correct ence at helping companies achieve
direction to maximize ROA!
significantly improved operating results
while dramatically reducing costs.
Summary
An accomplished public speaker and
Organizations that embrace asset
reliability and focus on implementing the educator, he has taught over 100
tools, techniques and technologies neces- courses in Maintenance and Reliability
sary to enhance and sustain it nearly Management as well as in Reliability
always find that the returns are much
Centered Maintenance and Root
greater than anticipated. When reliability
Cause Analysis techniques.
becomes an integral part of an organiza-
tion’s culture, the discipline and rigor
necessary to launch and sustain it tend to
Net Income (Earnings)
Total Assets
SMRP Solutions 15

Alliancing
Overview
BY: Wil Carey, CMRP
What Is Alliancing?
Introduction
A number of large global companies have been at the forefront
of championing alliance relationships across the services
and manufacturing industry. Alliancing is a relatively new in-
novative style of business relationship that differs from tradi-
tional forms of contracting and strategic partnering. This style of
relationship is based on the concept of mutual trust and shared
risk and reward between the client and the service provider. In
practise this means the service provider’s profit is directly linked
to the achievement of pre-determined Key Performance Indica-
tors (KPI’s), which in turn are aligned to the client’s performance
expectations.
16 SMRP Solutions February 2012 | Volume 7, Issue 1
Companies that have formed successful alliance style rela-
tionships are aware of the realities of operating in a commercially
competitive environment with the need to reduce overheads
whilst increasing market share. It is this realisation that has
prompted them to move away from the traditional adversarial
style contracting agreements.
Because the rewards derived for the service provider are
solely performance-based, alliancing encourages and empowers
the service provider to deliver whatever innovation and change
that is necessary to improve the performance of client’s asset.
When it works well, alliancing is a most satisfying arrangement
for all concerned. However looking to get the most from an alli-
ance style relationship requires a huge amount of effort, trust
and hard work by all of the parties involved.
The Principles Of Successful Alliancing
Experience demonstrates whilst most clients want the benefits
that can be gained from an alliance relationship, most propose a
style of contracting that goes only part of the way towards setting
up an alliance environment where these benefits can be fully
achieved. In some cases, key clauses within the agreements retain
elements of a traditional client / contractor relationship, even
though the client may espouse an alliancing mindset.
For alliance agreements to be successful all parties must
firmly be committed to the use of alliance principles in relation to
the term of the agreement. It is highly recommended that all par-
ties take the time to develop and promote these principles across
their organisations.
The principles for a successful alliance are:
• That the leadership teams must have a common vision, dem-
onstrate commitment and real leadership for the development
of an aligned business relationship.
• The alliance’s true objective is to achieve the client’s busi-
ness expectations in a way that would not be possible
under more traditional contracting arrangements.
• That everyone is rewarded by achieving those objectives
and they are measured by pre-determined KRS’s and KPI’s
• For an alliance to be successful in the long-term there must
be a cultural fit between the parties as a platform for devel-
oping a high level of trust, openness and cooperation.
• A shared set of principles guides all decision-making
• A “no blame” cultural environment
• A “joint ownership” of problems mindset (i.e. “how are we
going to solve this problem?)
• Total transparency in all commercial and financial matters
• They work together to always select the right person, regard-
less of employer
• The senior management teams must lead by example first
in establishing a framework of trust before cascading the
alliancing philosophy down through the teams.
• The trust is then reflected in a the creation of an operating
structure that integrates resources in the most effective way
to achieve the desired outcomes
• Alliance structures encourages and actually demand
that all involved work together to achieve business objec-
tives through innovations and continuous improvement
approaches
February 2012 | Volume 7, Issue 1
• The processes and structure is supported by systems that
are transparent between the parties
• Good alliance agreements are flexible enough to deal with:
• Changes in the client’s objectives and/or its customers
changing objectives
• Market changes and uncertainty
• The changes in behaviour and processes required to
embrace continuous improvement initiatives
• Dynamics caused by personnel changes
Alliancing Best Practice:
The top ten lessons learned from best practice companies in
alliance management structures are as follows.
THEY:
• Focus on building the relationship and cooperative cultures
first
• Ensure stakeholders are informed, involved and engaged in
building the relationship
• Develop the processes and practices that will drive the right
behaviours
• Establish realistic benchmarks and performance expecta-
tions or the development of the relationship
• Develop performance measures jointly
• Ensure performance measures are in accordance and
aligned with the client’s corporate goals and strategies
• Articulate qualitative goals for the service delivery arrange-
ment at the start
• Link and balance performance measurements so they cas-
cade up to and down from value drivers for the business
• Design flexibility into the performance measurement
systems
• Measure the fewest number of things with the fewest pos-
sible metrics
How Alliancing And Traditional Contracting Forms
Differ:
Traditional contracting:
These arrangements by definition are developed to control an
activity and tightly manage the process and cost in a way that can
be enforced in a court of law. They are often based around con-
frontation, adversarial, aggressive and uncooperative relationships
managed on the bases of mistrust with high levels of control and
compliance.
These relationships normally are seen as short term in dura-
tion with little or no incentive for innovation or exceeding contract
expectations. More times than not they are task related and the
contractors are not involved or even encouraged to be engaged
in the total business outcomes. Contracts are normally awarded
on the lowest price, are managed as hard dollar, fixed amounts
where changes to the details of the contract are tightly contested
due to the cost of variations.
Alliance relationships:
The active word here is “Relationship”. Contracting is more
likely to be a nameless, faceless hard nose arrangement with little
SMRP Solutions 17
 Alliancing Over view
to no involvement of the service provider. Alliancing on the other
hand promotes active interaction by all parties and encourages
ownership and rewards success.
This type of relationship is normally based on strategic long-
term vision where all parties share both risk and reward. They
focus on core business activities and share resources as required
to achieve aligned business objectives. Above all the relation-
ship must be founded on openness and integrity combined with
a seamless operation where mutual trust and accountability
manage the relationship.
These relationships require a shift in culture and must be
managed by change agents understanding the value and chal-
lenge of the journey. Alliance relationships are not only strategic
in nature they must be seen as critical catalyst for change with
long-term benefits measures by meeting and exceeding pre-
agreed performance expectations.
It must be understood that these forms of business relation-
ships do not just happen. They are not for everyone, they are
not easy and they will not create an improved environment for
businesses unwilling or unable to change. They require vision,
leadership and the energy to stay the journey for the long-term.
For those with the courage and the insight to take this path there
are opportunities to leverage core competencies and manage per-
formance in new and innovative ways.
The Principles Of Successful Alliancing
Experience demonstrates the principles for a successful
alliance are:
• The aim is to achieve the client’s objectives, through coop-
erative development
• The alliance is based on a no blame relationship
• Each partner must earn the trust of the other by a clear
focus on joint values and integrity
• Customer satisfaction and health of the relationship are core
business objectives
• Business objectives are achieve by delivering on agreed KRA’s
and KPI’s, operating within a risk & reward environment
• A cultural fit is developed and matured in order to engender
the necessary trust
• The senior management teams demonstrate the alliance
vision, through commitment & leadership
• The operating structure integrates resources, right person
for the job
• The structure encourages innovation and continuous
improvement
• The systems and flow of information is transparent between
the parties
• The agreement is flexible enough to deal with changing
conditions & needs
How Alliancing Benefits Clients
• The benefits clients derive from this approach include:
• Team strategy, to create an Incident free operation
• Alliance vision to achieves Lower total system cost
• Innovation and ownership creates opportunities for change
• This approach delivers a sustainable competitive advantage
for all parties
18 SMRP Solutions
• Implementation of an Open, honest and timely communica-
tions flow
• Maximise reliability improvement at optimum cost
• Reduction of waste and duplication across the business
• Development of skilled, competent and long term workforce
• Implementation of a one team culture for success
Other Less Obvious Advantages:
• Because the same things motivate both parties, there is the
potential for a higher degree of cooperation in the execution
of the operating structure than would otherwise be the case
• The degree of transparency and subsequent closeness of
the relationship that is built over time gives greater confi-
dence and assurance that outcomes will be achieved
• Maximum flexibility is achieved with greater access to
information, alliance agreements requires integration of
systems
• Problem solving is a less stressful and non-combative pro-
cess because both parties are equally incentivised to work
together to come up with the best solution without their
own agendas
How The Better Companies Providers Position
Themselves
• They aligned their culture and internal processes to
engender alliancing style behaviours in their people. There
is no culture shock as they move through alliance style
structures
• The culture fully embraces alliancing as its preferred and
most common form of relationship
• Their corporate values embrace this new service provide –
client relationship and are demonstrated by the importance
they place on the health of the relationship
Planning For The Alliance
Creating a leadership team with a like-minded approach
One of the first steps in forming an alliance is to appoint a
leadership team or Alliance Board that is equally representative
of both parties. The success of the alliance is critically dependent
on top-level leadership and ongoing support, particularly when
things get hard.
• The Alliance Board establishes the framework for the alli-
ance, including:
• Establishing the guiding principles (values)
• Projecting the Vision and Mission of the relationship
• Approving the alliance objectives and KRA’s and KPI’s
• Ascertain and agree on the scope of the services
• Leading the development of the alliance culture
• Promoting a change management culture
• Determining initial budgets
It is a fundamental principle of alliancing that all of the above
issues are resolved by mutual agreement.
Establishing the risk / reward framework for the alliance
The commercial risk/reward arrangements are established to
February 2012 | Volume 7, Issue 1
suit the needs of the client, and the service provider, both parties
must see value in the agreement. Typically, the commercial risks
and rewards for the both parties are linked to the achievement of
key objectives such as:
• Reduced delivery time
• Reduced costs, through improved operating performance
and optimum life cycling
• Better management of risk
• Enhanced business relationships because of aligned goals
and increased satisfaction,
• Flexibility to adapt to changing circumstances and reduced
cost structures
• Innovation through improvements to existing systems &
introduction of latest technology
• Optimum standards in the areas of quality, safety,
industrial relations, environmental performance, staff
development and introduction of best practice
Once the objectives have been established, these can be
translated into KRA’s and KPI’s and agreed measurement pro-
cesses can be put into place to allow the Alliance board to assess
service delivery performance and make decisions as required
throughout the alliance period.
Implementing The Alliance Stucture
Transition Phase
Alliancing is challenging journey and requires a team effort
and commitment with ongoing daily reaffirmation of what you are
striving to achieve and how we’ve agreed to do it. Typically there
is an initial “taking charge” period where service provider begins
to work on-site.
• Initially the relationship of the parties can be tentative,
cautious and hesitant
• As daily interactions increase, the team’s comfort level
develops and team behaviours such as openness and coop-
eration become commonplace
• As comfort level increase even more people begin to work
together to achieve the mutually established business
objectives
• As challenges begin to be tackled and problems solved,
confidence in the alliance will continue to develop
• Success will breed success and the more wins on the board
all parties will develop trust in the alliance and each other
• It is important to focus on the successes and downplay the
setbacks, particularly in the early stages of the alliance
Decision-making
The Alliance Board is the prime vehicle for making major
mutually agreed decisions throughout the alliance period. If for
some reason the Alliance Board is unable to reach agreement
the matter is escalated to the senior management teams of the
service provider and the client organisations.
Typical decisions that require attention throughout the alli-
ance agreement may include:
• Determining how the cost of experts, mediators and consul-
tants will be borne, normally shared
February 2012 | Volume 7, Issue 1
Alliancing Over view
• Selecting the KRA’s and KPI and when the risk reward pro-
cess is implemented, normally a grace period to protect the
services providers profit is established during the imple-
mentation phase of building the relationship
• Reviewing all proposals from the “Alliance Management
Team” requiring significant change in order to accrue per-
formance improvements
• Approving scope changes, fee adjustments, overruns and
any other financial decisions
• Undertaking annual reviews of the KPIs and adjusting
them where appropriate
• Making recommendations to the client on all major changes
to the relationship or the term of the agreement
• Approving changes to all key personnel
Ongoing performance management
The Alliance Board should meet regularly to review progress
against agreed objectives, budgets and specific project plans.
Monthly reports provided by the Alliance Management team
provide a major source of information to the board to assist them
in this process.
Stepped Change
Once the issues resulting from the initial transition phase
settle down, both parties start to accelerate their activities
around operating, maintaining and improving the operation of
the asset. This results in the initiation and implementation of
change initiatives that improve systems and processes.
It is critical that change is introduced according to a well-
considered plan. Time is needed to consolidate each major
change before the next generation of change is commenced. You
must develop a management of change process that encourages
keeping all stakeholders informed, involved and engaged in the
development of this new relationship. Get the relationship right
first then measure, monitor, mentor and manage for success.
Closing
I hope this overview of alliancing has been of help to you.
Moving from contracting to alliancing is a journey that is filled
with challenges and change. It is not one for the organisation
looking for a quick fix but it is an opportunity to achieve desired
business goals in a difficult global market place that might not
be other wise possible. Assess what it is you wish to achieve, plan
the journey, execute as a team, build the relationship first, select
performance measures and then measure, monitor, mentor and
manage the journey.
Wil worked for Eastman Kodak in Rochester New York for
over 25 years and now lives in Australia. He is the regional
asset management technical manager for Parsons
Brinckerhoff and is based in Melbourne. Wil’s career started
in 1963 and he has been a senior line manager, project man-
ager and consultant with a passion to deliver excellence.
SMRP Solutions 19
Body of Knowledge (BOK) Corner
Using BoK Products to Manage and
Communicate Change
BY: Ron Leonard, PE, CMRP, BoK Director
and Laura B. Keane, Business Development and Bok Manager
T he theme of this issue of Solutions
is “Managing and Communicating
Change” which is a perfect way to lead
us into this discussion on what has been
happening within the BoK. Change is what
the BoK committees are all about, either
in terms of supporting and defining new
change that is needed, managing current
change initiatives that may be going on
with your organizations or reinforcing and/
or maintaining the change for lasting and
sustained benefits and improvements in
the long term.
Change Management is now a com-
petitive advantage for organizations and
leaders that want to ensure successful
implementation and completion of major
corporate, company or site initiatives.
Research on project success continues
to identify change management as a key
focus area for successful completion of
initiatives. Organizational leaders that
have recognized the need to master change
have done so by focusing on and paying
attention to successful execution of their
role within the change initiative.
Change Management, simply stated,
is the process of managing and helping
the people involved in the initiative to be
successful. Organizations are composed
of individuals and we often believe that we
can influence and move the organization
in the direction desired and the people
will follow along. Again, research in this
area indicates that this is not always true,
especially in large organizations. Rather,
it suggest that specific focus on individual
change is a must for overall successful
organization change in order to meet the
business need and Return on Investment
(ROI) desired.
There are numerous Change
Management methodologies that have
made their appearance on the industrial
and commercial scene recently and all
have similar components that meet the
same overall objectives. Basically, effective
change happens when the following are
present:
20 SMRP Solutions
• Dissatisfaction with the current state
of affairs or operating conditions,
• A vision of what the new state of
affairs or operating conditions look
like, and
• A plan or specific steps that need to
be taken to achieve the new state of
affairs or operating conditions
However, within most all of the numer-
ous methodologies that exist today, there
are a few key nuggets of understanding
that exist and will drive the change to
become “internalized” and “accepted” as
the “way we do business” going forward.
These include:
• A planned approach or model to
follow in preparation for the change
at all levels within the organization,
not just the leadership,
• An implementation strategy that
builds on the plans developed and
ensures that discipline is applied in
effectively rolling out that strategy
and specific actions defined, and
• A recognition that change initiatives
do not survive on their own, but
require reinforcement and recogni-
tion along the way and well into the
future life of the change.
So, how does this relate to the work
that has been and continues to be done
within the BoK. Change Management
begins with a “Planning and Preparation”
phase of change. The BoK has provided a
benchmarking survey tool that provides
a means to gather fundamental informa-
tion about where we are today so that
the vision for the future can be solidi-
fied. Change Management continues with
an “Implementation or Execution” phase
which puts into practice what you have
planned. Best Practices and benchmark
metrics are keys to successful execu-
tion during this phase of change. Lastly,
Change Management involves being able
to sustain and continual improve what is
being done within the new state driven by
the change. The M&R Knowledge Library
is the ticket to support success during this
phase and is rich with information that
can be obtained by members at “no cost”
from the SMRP website.
We have all heard the statement “It’s
hard to believe that another year has….”
but that is truly how I feel again in 2011
as we look back at what has been accom-
plished within the Body of Knowledge
(BoK) Directorate for SMRP membership
during 2011. Because of the continued
commitment and hard work of the BoK
Committees; Best Practices, Benchmarking
and M&R Knowledge, much has been
accomplished. This was highlighted
during the SMRP Annual Conference in
Greensboro this year through the suc-
cess of the BoK booth at that conference.
There were numerous visits to this booth
to review and learn more about the BoK
products available to the SMRP member-
ship. This article will focus on a couple
of the key deliverables premiered at that
conference.
SMRP Benchmarking Survey for
Maintenance and Reliability:
This past year SMRP partnered with
enetrix-A Division of Gallup, to launch its
online evergreen delivery interface for the
Benchmarking Survey. The purpose of the
survey is to provide a means for organiza-
tions to compare their M&R performance
to others in the same or similar indus-
tries. The Benchmarking Study, which is
supported by SMRP’s consensus-based,
standardized metrics and definitions, gives
M&R professionals the ability to measure
performance consistently, make valid com-
parisons, establish achievable goals and
objectives and set realistic expectations.
This is the only M&R survey that is based
entirely on SMRP conscience metrics. It is
an invaluable baseline and comparison tool.
The study’s scope is consistent with
SMRP’s M&R Body of Knowledge which is,
supported by the Five Pillars of Knowledge,
comprised of two survey components: the
Survey for M&R of Production Equipment,
which is currently open for data collection,
February 2012 | Volume 7, Issue 1
and the Survey for M&R of Facilities Maintenance, which will
There is no
open for data collection in the early part of 2012.
The new online evergreen interface allows for data to
be submitted in a secure online environment backed by
enetrix-A Division of Gallup. All data submitted is strictly
silver bullet
confidential and is encrypted during transmission. In addi-
tion, the save entry feature enables data to be entered in
multiple sessions by multiple users if needed. Participants
also have the ability to track data for a single owner with
for reliability, performance, integrity.
multiple facilities.
Participation in the Benchmarking Study is free and open
to both members and nonmembers of SMRP. Reports and
data will be available by subscription, which allows access to
real time data 24 hours a day/7 days a week. Performance of
data can be monitored over time as the database continues
to grow. To check out the new online Benchmarking Study
go to https://smrpbenchmarking.enetrix.com . You can also
access the Study through the newly launched Library of
Knowledge, another exciting new tool launched this year.
SMRP Library of Knowledge
In addition to housing the new Benchmarking Survey,
SMRP’s Library of Knowledge offers access to more than
a decade of SMRP conference proceedings, all currently
published consensus-based metrics, guidelines for use of the
metrics, and SMRP’s standard glossary of terms.
Each feature of the Library of Knowledge gives users
immediate access to valuable information and tools for
improving M&R. The searchable database of conference
papers and presentations provides practical, real-life experi-
ences that support improvement in M&R. All 67 metrics,
which provide reliable and standardized guidance on how to
measure key performance indicators, are available through
the online knowledge center.
SMRP’s vision is for the Library to become the ultimate
resource for the M&R community. If you have an M&R
issue, you can visit the library and find real time, up-to-date
answers at your fingertips. If your plant is just starting the
reliability journey, you can search for metrics you need to put It’s a journey ... to operational excellence.
in place. If you have been working on a reliability program
and need to know how you’re doing, you can click over to the If asset performance, reliability, or integrity is
benchmarking section and compare yourself to your peers. If important to your business, Ivara EXP Enterprise
you come up against a problem that you’ve never encountered will support and drive the process.
before, you can search our conference papers and publica-
tions for answers. Take the journey with the experts at Ivara.
Attendees at this year’s conference showed great
enthusiasm for these new products. If you did not have the Visit www.ivara.com or call 1-877-746-3787.
opportunity to view them for yourself in Greensboro, take
a few minutes now and check out these cool new tools at
http://library.smrp.org.
I am very optimistic that the BoK will continue to have
plenty of work in front of them and would invite anyone that
has any interest in becoming part of this significant effort to
contact us through our Project and Business Development
Manager, Laura Keane at lkeane@smrp.org or myself at
rleonard@LCE.com.
February 2012 | Volume 7, Issue 1 SMRP Solutions 21
jodene@condotta.ca | 519 936 4879
 from the executive director

Society for Maintenance & Reliability Professionals

Fond Farewell
By Barb Dunlavey, CMP, CAE

Kellen Company Selected as Management Firm for

Society for Maintenance & Reliability Professionals T his is my last Executive Director
column for Solutions as I take leave
of SMRP. I am proud to have served
this important professional society and
Contact: Jon Krueger, JKrueger@KellenCompany.com facilitated so many areas of growth for the
community of maintenance and reliability
professionals.
ATLANTA, GA – The Society for Maintenance and Reliability Professionals (SMRP) Back in late 2009 when I was inter-
announced that it has selected Kellen Company to provide full-service association viewed by SMRP leaders, there were three
management services beginning February 1, 2012. Kellen Company is a global major mandates given to the new executive
professional services firm with operations in Atlanta, Chicago, New York City, – growth in revenues and reserves, growth
Washington, DC, Brussels and Beijing. in membership, and growth in outreach for
enhancing the Society’s global M&R com-
SMRP Chair Stan Moore, Ascend Performance Materials, said the relationship with munity presence and influence. Together,
Kellen will provide the Society with a strategic partner that can help SMRP live its we achieved all of these goals.
mission, fulfill its vision and enhance the services and programs it offers to members. I am proud to have supported Howard
Penrose and Tim Goshert’s efforts in build-
“We see this partnership as an essential step in our further development as the premier ing partnerships through international
professional society for leading and advancing Reliability and Physical Asset M&R organizations, domestic government
Management,” said Moore. “We feel that Kellen is a great fit for our organization and agencies, corporate and sister society and
look forward to growth in our visibility and outreach, increased benefits for our association relationships. A short list
Barb with the GFMAM Representatives and SMRP Board members at the 2011 Annual Conference in Greensboro, NC.
members and renewed vision.” includes: GFMAM, ANSI, DoE, DoD, the
Vibration Institute, SME, ASME, STLE, is well above any growth other associations excitement and enthusiasm from you at the
SMRP’s global headquarters will be Atlanta, Georgia. Jon Krueger, an experienced ASQ, PMEC and the Canadian Metal, or societies are experienced these past two Annual Conferences.
association CEO and Kellen account executive, will serve as SMRP’s Executive Director. Mining and Metallurgy Assoc. years. You, the members, have great sup-
Russ Lemieux, a Kellen Group Vice President, will serve as Executive Vice President for With strategy and guidance led by Stan I am most proud of having supported port from your new staff team, led by
SMRP. Mr. Lemieux has nearly 30 years of association management experience at Kellen. Moore, we achieved some initial growth for and facilitated enough growth in revenue Jon Krueger and Russ Lemieux. Even in
SMRPs Foundation and brought develop- that SMRP was able to contribute back to the short time I’ve enjoyed working with
“Kellen is extremely excited to partner with such a tremendous industry leader like ment ‘in kind’ services by a fundraising our reserves for the first time in 3 years. Kellen, I have come to know them as pro-
SMRP,” said Krueger. “We look forward to serving the SMRP members and to working expert and colleague of mine. All of these successes could only have fessionals eager to contribute to SMRP’s
with the Society’s leadership to continuously enhance and grow the organization. Collaborating with your Business been achieved with the support of a few programs and services and a team that
Development manager, Laura B. Keane, we key SMRP Volunteer Leaders. The brief can bring best practices to directly support
About Kellen Company were excited to have brought SMRP new list includes David Staat, CMRP; Michael the growth strategy of SMRP leaders.
Founded in 1964, Kellen Company is an accredited association management company. e commerce platforms for SMRPs impor- Eisenbise, CMRP; Rick Baldridge, CMRP; While my tenure with SMRP is coming
It provides association management, government affairs, public relations, meetings tant Body of Knowledge specifically, a new Stan Moore, CMRP; Howard Penrose, to a close, I believe in the many oppor-
management, creative communications, Web site development and other professional vendor for our Benchmarking Survey and a CMRP; Timothy Goshert, CMRP; Butch tunities for this Society. I sincerely look
services to associations, as well as individual companies and other organizations. robust SMRP Knowledge Library. DiMezzo, CMRP; Terry Harris, CMRP; and forward to hearing about the many future
Kellen serves more than 10,000 companies and 100,000 professionals worldwide, New marketing strategies led to suc- Naomi Angel, SMRPs savvy legal counsel. successes for SMRP!
either through its more than 100 client associations or directly from office and cesses in both the 2010 and 2011 SMRP I have enjoyed meeting so many of Thank you all for the opportunity to
representation in the United States, Europe, China, the Middle East, India and Annual Conference as well as membership you, I really enjoyed connecting at the serve.
Southeast Asia. For more information, visit www.kellencompany.com. growth of 7%. Each of these growth rates great Plant Tours and took away great

800-950-7354 info@smrp.org www.smrp.org

22 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 23
from the exam team

International Exams a Focus

for SMRPCO
By Terry Harris, CMRP
Exam director, smrpco

T he exam teams are off and running

for 2012. The English exam team has
around 60 new questions that have come
in over the past few months. We will be
reviewing these questions and making
changes, evaluating for international use,
and getting ready to beta test. The exam
team is very serious about getting ques-
tions that are quality and relative to the
Body of Knowledge areas.
The Spanish team will be working
on the candidate guide getting it trans-
lated into Spanish for use for our Latin
American friends whom have interest
in taking the exam. Interest is still high
in Columbia and Peru and we need to
maintain that momentum. There have also
been quite a few exam given in Mexico
and would really like to see those number
increase. Columbia gave 70 Exams in
December, this is a great effort by ACIEM
to improve the credibility of Columbian
reliability experts.
The Brazilian Portuguese exam is
ready and being given at a few venues
in Brazil. ABRAMAN is the Brazilian
maintenance organization and they will be
promoting the exam this year. I am looking
for new team members for the Portuguese
exam team so if you are a CMRP and are
interested please contact me.
The electronic exam that is adminis-
tered by SMT has enough exposures that it
is due for review by looking at the statis-
tic on each question. Questions will be
compared with results of the paper exam
forms. Questions will be replaced and the
exams will be updated.
The chapter question writing contest
will be in happening again this coming
year. It will give a $1000.00 prize to the
chapter turning in the most questions
in 2012 and the prize will be announced
at the annual conference in Orlando
next October. This is a great exercise for
a chapter meeting or for members of a
chapter to work on. If you have questions
or need help with any of the information
please contact me.
Anyone can send questions in for the
exam. Questions you send in are worth
points for your re-certification and are
also worth money. When you send 3 or
more questions in, using the correct form
and from books that have a ISBN number
or publications that are available world-
wide, they are worth $10.00 per question.
Example: 1 or 2 questions are worth noth-
ing dollar wise. 3 questions are $30.00
and $10.00 per question for each after
that number. Please use the question writ-
ing form for the questions.
Something new from the exam team
for this coming year is the “Reliability
Tip”. Members of the Exam Team will
Save the Date!
write a reliability tip in each issue in this
section. The tip will be related to an area
of the BOK in hopes of helping your plant
process or have a better understanding
of material contained in the exam. I get
SMRP’s 2012 Annual Conference is being held October 15-18, 2012
emails and questions often about train-
ing for the CMRP exam. SMRPCO does
not offer any training courses for the
at the Hilton in Orlando, FL. With 50+ educational sessions from the
CMRP exam. The exam is based on your
knowledge and experience in the area of
maintenance and reliability. There is a lot
Five Pillars of SMRP’s Body of Knowledge: Business Management,
of information on the BOK areas of the
exam in the candidate guide. Many of the
articles in Solutions magazine are great
Manufacturing Process Reliability, Equipment Reliability, Organization
resources for basic knowledge of exam
related information.
and Leadership and Work Management; 15+ Workshops; and Plant

Tours the SMRP Conference is your best resource for finding solu-
Exam Team Reliability Tip
tions to maintenance & reliability challenges and revitalizing your
T
here are two main reasons for performing an RCM analysis on a process or piece of equipment. The first is
deciding how to maintain the design or required function of the equipment you are working on. Every pro-
cess or piece of equipment in a plant must have its function defined in order to make sure we are performing to profitability! This year marks the 20th anniversary of the Society so
some standard. To determine this performance we must have measures in place to make sure defined functions
are being performed and what is the actual performance.
The second reason for performing an RCM analysis is to develop a complete maintenance strategy that don’t miss the education and celebration!
keeps the equipment performing its intended function. The process looks at every way the components in the
equipment have or can fail. We than ask the questions;
1. Can the failure be predicted using a PdM technology? Check www.smrp.org frequently for updates!
2. Can the failure rate be reduced using a Preventive Maintenance task?
3. Can the failure be eliminated with a redesign?
In nearly every RCM process, improvements to the operation and component life cycles will improve.

24 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 25
november 1, 2011 – december 31, 2011 New Members SMRPCO Sustaining Sponsors
The SMRP Certifying Organization (SMRPCO) has developed a program of ben-
efits for companies or organization wishing to provide support to the mission of
SMRPCO. For an annual contribution of $1000, sponsors receive discounts on
exams, recertification fees, and much more! To learn more please visit: www.smrp.
og/SMRP_certification/sustaining_members.htm

Executive Stuart Bevan Helio Danesi

Charles Hannah, PE
ABB Reliability Services Kraft Foods
Bunge Bunge
Chevron Phillips Chemical Co LP Advanced Technology Services, Life Cycle Engineering
Armstrong World Industries Andrey Bondarev Jason Davidson Inc.
Curtis Harke Los Alamos National
Bunge Asset Maintenance Success
Bunge IRISS, INC. AEDC/ATA Laboratory
John Borskey Carlos Davila
Flowserve Greg Heard AESSEAL, Inc. Louis Dreyfus Commodities
Bunge
Vincent Boss CAMS Consulting
SD Myers Inc. Dey Pharma Ron Day Agrium Luminant Power
Simon Heath
Infor
Wicus (al) Botha Emerson Process Management Alcoa Inc. Mainnovation Inc.
Individuals Sasol Synfuels Edison de Oliveira
William Heeter Allied Reliability, Inc. Management Resources
Bunge
Hamid Bouaricha Swagelok Co. Group, Inc.
(Note: It has come to our attention that David DePaolis ARAMARK Facility Services
there were missing members from the Dan Bozdog Craig Henry Marshall Institute
Flowserve
December new member list (August 1- Bunge University of Johannesburg Ascend Performance Materials
Edgardo Develluk Meridium, Inc.
Oct. 31). We apologize about this. Those David Brands, CMRP Ken Hicks Asociacion Colombiana de
missing members are now included in Bunge
Boise Inc MillerCoors Ingenieros (ACIEM) MillerCoors
this list.) Shane Dickson
Michael V Brown Stephen Hicks Austin Industrial, Inc. Mosaic
SamiAlhazmi Georgia Pacific
New Standard Institute Nova Chemicals Inc.
G. Keith Diepstra, ASQ, CQE, CRE BHP Billiton Nexen Inc.
Sameeh Al-Sahafi Matt Bucher Joe Hinnenkamp
SABIC - YANSAB Ralcorp BP- Gulf of Mexico Novelis, Inc.
ARAMARK Facility Services Armstrong World Industries
Mark Anderson Brian Dietsch, CMRP
Arkadiusz Burnos Melinda Howard CACI, Inc Owens Corning
Armstrong World Industries Bunge
BalticBerg Consulting SD Myers Inc.
Cargill, Inc. PepsiCo
Paul Andrews, ASQ, CSSBB, CSSGB Richard Edwards
Leonard Caputo Charles Hudson
Cliffs Natural Resources Peabody Energy Commercial Metals Company Pfizer, Inc.
New York Power Authority Merck & Company, Inc.
Steel Group
Samsudin Anggari David Eisenhawer
Bruce Carr Billy Wayne Hughes Predictive Service
PT Pupuk Kaltim Nova Chemicals Inc. Delta Air Lines
Sabic Innovative Plastics NRG Energy
Relogica
Carles Argelich Sérgio Ferreira Dubai Aluminium Limited
Lawrence Carver Michael Hujar
Bunge Bunge S.M. Cerro Verde
PCS Phosphate SD Myers Inc.
Dupont
Rafael Arguelles, CMRP,PE Demetrio Flores Tipismana Sabic Innovative Plastics
David Cederberg Gregory JeAnson
Sisvenca PLUSPETROL E&M Solutions C.A.
Basic American Foods WESTINGHOUSE ELECTRIC COMPANY
Sasol Synthetic Fuels
Dan Audet Jamile Chamlet Andre Jeffries, CMRP Eli Lilly & Company
AltaSteel Strategic Asset Management,
Bunge Mihaly Gabriel Nestle USA
Emerson Process Management Inc.
John Bahun, CMRP Bunge
Robert Christman, CMRP, CPMM Jimmy Johnson
USPS Fluor Corporation T.A. Cook Consultants Inc.
Genzyme Corp, A Sanofi Company Stephanie Gonzalez Data Architex
Chuck Baker Bradleys’ Inc GenOn Energy The Canadian Institute
Craig Clark Michael Karre, CMRP
SD Myers Inc. Rio Tinto Douglas Gourley Roquette America
Genzyme Corporation The Dow Chemical Company
Christopher Barclay, CET IRISS, INC.
James Clem William Keane
General Motors GreenWood, Inc Turner Industries
Bradleys’ Inc Ron Gray Merck & Company, Inc.
Joe Barnes Subsea7 Gulf Society of Maintenance UE Systems
Conrad Coles Steve Killanek
BP Professionals (GSMP)
Georgia-Pacific Corp. Arlene Grevi SD Myers Inc. UGL Unicco
Bill Barton Pfizer Consumer Healthcare Holcim US, Inc.
Rodney Collier, ASQ Dennis Killebrew
Armstrong World Industries United Technologies/ Pratt &
Emerson Industrial Automation Paul Griffin, CMRP Potash Corp White Springs Hormel Foods Whitney
Walter Behmer, CPM Management Resources Group, Inc.
Diane Colson Will Kingston, CMRP
Boehringer Ingelheim Irving Pulp and Paper Wells Dairy, Inc.
Eli Lilly & Company Bill Groth BC Hydro
Mark Bennett Infor Ivara Corporation Wood Group Colombia S.A.
Victor Costec, CMRP, PE Roger Kline
Bayer Material Science Cenovus Clay Hackney, CMRP Eugene Water & Electric Board JACOBS Wyle Laboratories
John Bertz PCS Phosphate
Tim CrIst Stephen Knoner
Jacobs/MAF
Armstrong World Industries Boehringer Ingelheim, Roxane. Flowserve
JESCO Maintenance Corp.

26 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 27
november 1, 2011 – december 31, 2011 New Members november 1, 2011 – december 31, 2011 New Members

Andrzej Kurdziel Riley Mieth Edgar Najera Macias Sangjoon Park Paul Reins Karin Salazar
Bunge RelaDyne A.W. Chesterton Co. Novelis, Inc. Liebherr Mining Equipment SPECPRO S.A.

David Langston, CMRP Gabriel Mijares Brian Nelson Dave Parker Joseph Reitz, ASQ, CMRP, CSSBB Ali Salem
Triumph Group Georgia Pacific LLC, Wood Products Ameri-Forge Group Blount International Novelis Nexen Inc.

Pawel Lecinski Robert Miller, CMRP Waldyr Neto Nicholas Parker, PHD David Reynolds Gutemberg Sales
Bunge IRISS, Inc Bunge marathon Oil Goodyear Tire & Rubber Co. Bunge

Yaling Lei Wayne Miller Linh Nguyen Ruth Parris Greg Rhodes David Salogga
Bunge ISP Chemicals, Inc. Ascend Performance Materials Mueller Co.
Tuan Nguyen, CMRP Christophe Passelaigue
Leonardo Leiser Kelly Miller SunCoke Energy Merck & Company, Inc. Raymond Rice, CMRP Juan Sanchez
Bunge Meridium, Inc. Boehringer Ingelheim Roxane Inc. Emerson
Andrew Norman, CMRP Steve Patton
Gavin Linderman, CMRP Robert Miller Norman and Associates LLC Sakisui Specialty Chemicals America, LLC Randy Riddell, CMRP Everett Sandoval
Sabic Innovative Plastics IRISS, INC. International Paper Hormel Foods
Muna Stella Ebele Nweke Tate Pearson
Glen Little William (Bill) Miller, CMM, MMC Shell Development Company of Nigeria Advanced Technology Services, Inc. Brian Riddley Ricaurte Santamaria
Life Cycle Engineering City of Des Moines WRF Limited Michelin Tire DP World
Carmelita Pena
David Lumentah Yuri Minnick George NwIgwe Nova Chemicals Inc. Jon-michael Riemer Silvio Santos
DP World Chevron Global Upstream Mundy Companies SEMEQ, Inc.
Sedat Mirza Gerardo Perez
Michael Machado, ASQ Bunge Keith Nye Bunge Deb Rindler Anthony Santosuosso
AREMAS - Smart Business Solutions Walmart Crown Equipment A.W. Chesterton
Jonathan Mitcham Daniel Perkins
Francisco Mangual Garcia, CMRP Albemarle Charles O’Connell KPAQ Industries LLC Roberto Rivera Sampayo, CMRP, PE Darren Sarich
Johnson & Johnson Global Brass and Copper dba Olin Brass Pfizer Pharmaceuticals LLC Nexen Inc.
Scott Mohr Gary Perrault
Fabio Maretti Allied Reliability, Inc. Temi Odusanya SunCoke Energy Andy Rodes Raymond Sarratt
Bunge Y-12 National Security Complex SEMEQ, Inc. The Timken Company - Gaffney Bearing
Roberto MoLina TJ Perreault
Plant
Adityo Marhendro Celanese Paul Ogea Infor Alfonso Rodriguez
PT Pupuk Kaltim Nexen Inc. Ascend Performance Materials Kerry Sayre
Brigido Montemayor Keith Phelps, CMRP
UGL Unicco
Oscar Martinez Urdaneta, CMRP Alcoa Ade Oladeinde, PE Novo Nordisk Admilson Romero
ABS Consulting Rio Tinto Alcan Praxair Inc Whitney Schaper
Tim Montgomery Barry Phillip
Marathon Oil Company
Jeff Mauntel Ascend Performance Materials Ken Oliphant, PE, PHD Development &Enhancement Services Ltd. Bibiana Rondon Salomon, CMRP
ESRG Jana AMS Group Ltda Marc Schnabel
Anthony Montier, CMRP Mark Porter
Cargill
William Mayo Constellation Energy Deberson Oliveira Irving Oil Refining GP Dennis Rosenbaum, CMRP
Babcock & Wilcox Bunge Rio Tinto Phillip Schooley
Edmond Moore, ASQ, CQE, CRE, PE Robert Price
Boehringer Ingelheim Roxane Inc.
Robert McArthur, CMRP CH2M Hill Christopher Olson, CMRP Agrium Bob Ross
Weatherford Intl MillerCoors Nexen Inc. Brett Schroeder
Ben Moreno Thomas Proksch
Asset Performance Networks
Joseph McClain, CMRP Bayer Material Science James Olson Pfizer, Inc. Alan Ross
DuPont Koch Industries, Inc. SD Myers Inc. Carl Schultz, CMRP
Luc Morin Kay Pulver
SEMEQ, Inc.
Barry McGill Rio Tinto Alcan Donna Oppegaard Rio Tinto Thomas Rowan
Vinylex Corporation Asset Management Services, LLC AES Ironwood Anthony Schwab
Michael Morris Alfonso Quintero Bueno, CMRP
Owens Corning
Peter McLiverty, CIRM Miguel Angel Ortiz Valdez ASQ Ecopetrol S.A. Fachrul Rozie
Raef Mostafa
Novaspect MillerCoors PT Pupuk Kaltim David Schwartz
Spanish Egytian Conmpany for LNG Basuki Rachmad
Ascend Performance Materials
Jason McMillan production (SEGAS) John Osarenren, PHD PT Pupuk Kaltim Walter Ruiz
Conoco Phillips ALPNG Integrated Agricultural and Industrial Co. Bunge Michael Schwerdt
Kevin Moyers, CMRP Ryan Ramage, CMRP
Bunge
Donald Mehrer Scitor Olusola Oso Teck Richard Saari
Peabody Energy Corp. Nexen Inc. Nexen Inc. Richard Sergent
Abduh Muhammad Curtis Ramsay
Walter Energy / Jim Walter Resources
R. Merchant, CMRP PT Pupuk Kaltim Alex Padilla, CMRP Ascend Performance Materials Craig Saget
Michelin North America Hess Corporation Ascend Performance Materials Martin Shaffer, PE
Daniel Mullin, CMRP Don Ras
Ascend Performance Materials
James Merck Novelis, Inc. Ed Pappas Heldon Inc. Ajit Sahoo
Owens Corning DuPont Teijin Films Agrium Mihir Sheth
Joseph Muniz, PE William Reavey
Nexen Inc.
Robert Merrick, CMRP, PE Hillary Parham Cargill, Inc. George Said, ASQ,CMRP
Jack Myer
Universal Studios Orlando GPAllied Sid Richardson Carbon and Energy Hans Siddharta, CMRP
Robert Bosch Corp. Tyrel Reed
PT. Kaltim pasifik Ammonia
Tronox, LLC

28 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 29
november 1, 2011 – december 31, 2011 New Members november 1, 2011 – december 31, 2011 New Members

Shaft
Duane Siemen, CMRP James Stascavage James Thompson Kyle Vincenti Marc Williams
Universal Studios Orlando Engineering Software Reliability Group UGL Services Unicco Operations US Gypsum Co. Tate and Lyle

Cristian Javier Sierra Montaño PE

Personal
Jonathan Staton
Michelin N.A.
Günter Thüringer
Bunge
Donald Vines
Dayton Superior
Deana Williamson
Washington Metropolitan Area Alignment
Joanna Sikorska, CMRP Daniel Stauft Huat Tung Ting Rostislav Voytsekhovsky
Transit Authority (WMATA)
& Geometric
Imes Australia Nissan North America, Inc Evonik-Degussa Bunge Stephan Williamson
Michelin Tire
Measurement
Carl Simard Robert Steibly, CPE Troy Tobey Saeed Wahdain
Rio Tinto Alcan Meridium, Inc. Nexen Inc. Richard Wilson
Thomas Steinmeyer, CMRP
Rio Tinto
George Simonoff Universal Studios Orlando Ana Torrealba Contreras Eric Waits
Owens Corning Petropiar Riley Wilson, PE
Jan Roger Stenstadvolden, CMRP Rick Walcer
Meridium
David Skarupa, CMRP Pabody Energy Cleber Torres Nexen Inc.
Advanced Technology Services, Inc. Bunge C. Mathis Wilson Iii
Darren Stevenson Craig Walker
Jacobs Industrials Services Inc.
Alexander Sluchok Swagelok Co. Francisco ToRres Gomez, ASQ, CMRP Rio Tinto/ Kennecott Utah Copper
Meridium PEMEX REFINACION Brad Winchell
Rodney Stewart Chang Quan Wang
Catalyst Paper
Audry Keith Smith Hoonda Manufacturing of Alabama Thomas Treharne Michelin
Allied Reliability TEZZCO INC. Harvey Winters, ASQ, CMRP, CQE
Dino Stubos John Watson, CMRP
Strategic Asset Management, Inc.
Duane Smith Eli Lilly & Company Alex Trevino North American Breweries
Boehringer Ingelheim, Roxane Inc. Bradleys’ Inc Mike Winters
Jefferson Sturkey Greg Watson
Armstrong World Industries
James Smith Infor David Truman Caravan Ingredients
IVC Technologies
James Sullivan
Siemens
Gary Webb
Preston Witt, CMRP Rotalign® ULTRA
Archer Daniels Midland

Vibration
Jeremy Smith Ethical Search Professionals, Ltd. Russ Tuck Georgia Pacific
TF Hudgins, Inc. Greater Cincinnati Water Works Slawomir Wojtala
Artur Szefer Ronnie Weeks

Analysis
Bunge
Johnny Smith Bunge Randy Tucker Bradleys’ Inc
Nexen Inc. Ascend Performance Materials Lindsey Wolf, CMRP
Teddy Jr. Tabanao Tim Weilbaker

& Balancing
Teck Coal LTD
Keith Smith, CMRP Chevron Geothermal Philippines Shane Turcott GPAllied
Infor Steel Image Kirk Wolfinger, CMRP
Abdulaziz Tanbal Scott Weiss, CMRP
GPAllied
Kenneth Smith National Methanol Company Charlie Turner Georgia-Pacific
Westar Energy RockTenn Walt Woodfin
Malcolm Tanner Ron Whisenant
Ascend Performance Materials
Sid Smith, CMRP Evonik Degussa Corp Eduardo Unda, CMRP Foster Farms Dairy
RockTenn PEMEX Paul Wotton
Edward Tark Edwin White, CMRP
Reliability Engineering Solutions Ltd.
Ed Smith Freeport-McMoRan Marcel van Velthoven Flowserve
Austin Industrial, Inc. Mainnovation Inc. Joe Wurster
Theera Tasanachon Mike White
Carpenter Technology Corp.
Jason Smith SCG Chemicals Michael Van Voorhis KCP&L
DuPont Teijin Films PIC Group, Inc. Wayne Yankie, CPMM
Martin Tauber Shelley Whitener, CMRP, PE
Georgia Pacific
William Smith Barber Foods Wim Vancauwenberghe Logos Technologies, Inc.
PPMS, LLC BEMAS Keith Yarber
Scott Taylor, CMRP James Whitley
James Snider, CPMM The Mundy Companies Jason Vaughan Jones Lang LaSalle
Morrison Milling VIBXPERT® II
h
Saint Gobain dba Corhart Refractories
Martin Terradez, CMRP
FMC
Peter Whitley
Ganis Yudikisworo WatcOS
PT Pupuk Kaltim VIDEine
Adam Snyder, CMRP Bunge V.j. Venkatraman KanekaTexas Corp
Onl
MillerCoors Genesis Solutions Amir Zaheer, CMRP, PE
Darcy Theriault Steve Whittle
Chevron Canada Limited
Maciej Sochaczewski
Bunge
Nexen Inc. Karen Verosky
Henkel Corporation
Ascend Performance Materials
Scott Zellen, CMRP
Easy-to-use
Ganesh SoNowane, ASQ
Leonard Thill
Thill Tom Veverka
Peter Wienholz
Bunge
Owens Corning solutions for your
TASNEE PETROCHEMICAL
Rick Thomas
The Timken Company
Darrin Wikoff, CMP
Greg Zembrodt, CMRP, PE maintenance needs!
WILD Flavors, Inc.
Michael Sowa Baxter Healthcare Robert Vichich GPAllied Sales • Rentals • Services
Asset Performance Networks Mark Zilavy
Ryan Spencer Edwin Thomas Andrew Wilkinson, CMRP
Westinghouse Electric
J.R. Simplot Company Austin Energy Marcos Vieira Bunge
Galp Energia Federico Zubini
Robert Spurgeon, CIMM Joppu Thomas, CMRP Terry Wilks
Bunge
Cornorstone Chemical Co. Sabic Paul Villaorduna Ascend Performance Materials
305-591-8935 • www.ludeca.com
Suncor Energy Inc.

30 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 31
 October 1, 2011 – December 31, 2011 New CMRPs

Diego Acosta, CMRP Stuart Bevan, CMRP Robert Dunkel, CMRP

Enintco LTOA BUNGE Henkel Canada Corporation

Robert Adornetto, CMRP Gerard Bothner, CMRP Darrin Earis, CMRP

Jacobs/MAF Cargill
Cargill DeicingJuan Aguilar
Santistebon, CMRP Larry Bramlitt, CMRP Gregory Elam, CMRP
EDEGEL Jacobs/JT-HO MRG

Trent Aiken, CMRP David Brands, CMRP Michael Engh, CMRP

Riotinto Boise Inc Owens Corning

Ahmad Alali, CMRP Javier Bravo Sanchez, CMRP Zachary Fijal, CMRP
Integrity Assessment Services Pigott & Associates
KNPCAli Alawadhi, CMRP
KNPC Tony Buffington, CMRP Richard Fineout, CMRP
Vesta Partners, LLC
Rashid Aldossary, CMRP Jacobs/MAFDoug Ford, CMRP
Saudi Aramco Ryan Burk, CMRP Tate and Lyle
Ascend Performance Materials
Ali Al-Hamdan, CMRP Joy Frosch, CMRP
Saudi Avamcs Hector Camargo Mora, CMRP Jacobs/MAF
SCM
Andrew Allen, CMRP Jose Ganoza, CMRP
Jacobs/JT-HO Fedor Canales Huayllas, CMRP
Hatch Asociados S.A. Francisco Garcia Rivera, CMRP

Discover the Michael Allred, CMRP

Sandia National Labs Francisco Cano Monroy, CMRP
Pacific Rubiales
Ecopetrol SA

Jeff Garth, CMRP

Nezar Alshammasi, CMRP

hidden treasure
Jacobs/MAF
Saudi Aramco Aldemar Castillo Manrique, CMRP
Petrotiger Ltd. Luc Girard, CMRP
Juan Amaris, CMRP Rio Tinto Alcan

in your company
South Consulting Terry Clark, CMRP
Mississippi Lime Christian Goernandt, CMRP
Carlos Arocho Rivera, CMRP Novelis
Pfizer Arlan Cochran, CMRP
Jacobs/MAF Erwin Gomez, CMRP
Miguel Arquez, CMRP Sicelub Colombia
AMS Group Richard Crozier, CMRP
Novelis Wesley Graf, CMRP
Edward Bagwell, CMRP Management Resources Group
Jacobs Aldo Cruz, CMRP
Pemex Paul Griffin, CMRP
Zetina Barbosa, CMRP MRG
Pemex Lazaro Cruz Jimenez, CMRP
Pemex John Griswald, CMRP
Sean Barnes, CMRP Management Resource Group
Jacobs/MAF Charles Cutler Jr, CMRP
Pfizer Alfredo Gutierrez Sanchez, CMRP
Kim Bartlett, CMRP Petrotiger
Bayer Dedy Darmasetiadi, CMRP
PT. Kaltim Pasific Amoniak Donald Haapapuru, CMRP
William Batt, CMRP All-Test Pro
The maintenance manager is under a lot of pressure. The current credit crunch Rio Tinto Juan Diaz Deza, CMRP
Hatch Asociados Clay Hackney, CMRP
forces you to improve. But where to start? How can you find the hidden treasure in Watch the VDM Inside demo
Kerry Baughn, CMRP PCS Phosphate
www.mainnovation.com
Brian Dietsch, CMRP
your maintenance department? VDM Inside is the Maintenance KPI Dashboard that Logan AluminumRyan Benning, CMRP Bunge North America Muhammad Haq, CMRP
provides you with real maintenance intelligence of your cost drivers, performance killers Hormel Saudi Aramco
Ayep Dirmawan, CMRP
and underlying causes. With VDM Inside you will finally get a grip on your maintenance Alan Beran, CMRP Jason Harris, CMRP
Teck John Draughn, CMRP Barrick - North America
performance. Want to know more? Go to www.vdminside.com
ATS
CONTROLLING MAINTENANCE, CREATING VALUE.
32 February 2012 | Volume 7, Issue 1 SMRP Solutions 33
October 1, 2011 – December 31, 2011 New CMRPs October 1, 2011 – December 31, 2011 New CMRPs

Allen Harris, CMRP Tim Kirchner, CMRP David Merko, CMRP Paula Peres, CMRP Kyle Ramsey, CMRP Luis Rojas Tristan, CMRP
Cargill Agrium Jacobs Technology Georgia Pacific Cia. Minera Antamina S.A.
James Knott, CMRP
Greg Heard, CMRP Novelis Robert Merrick, CMRP Percy Perez Euerrero, CMRP John Reay, CMRP Robert Rountree, CMRP
Cams Consulting Universal Orlando Corporacion Alyeska Pipeline Service Co.
Jay Kriner, CMRP Cheryl Redmon, CMRP
Gregory Heaslip, CMRP Richard Miller, CMRP Ariel Perez Gelvez, CMRP Jacobs/MAF George Said, CMRP
Jacobs/MAF David Langston, CMRP Ecopetrol
Triumph Group Peter Montgomery, CMRP Joseph Reitz, CMRP Juean Sanchez, CMRP
Juan Herazo, CMRP Jacobs/JT-HO David Petry, CMRP Novelis
Tecnicontrol SA Jamie LaValley, CMRP Jacobs/MAF Jose Antonio Sanchez Beltran,
Peabody Energy Anthony Montier, CMRP Jose Ricce Ramirez, CMRP CMRP
Alberto Hernandez, CMRP Constellation Energy Paul Pohlid, CMRP Hatch Asociados S.A. Comcel SA
Owens Corning Victor Lawrence, CMRP Owens Corning
Fernando Moran, CMRP Raymond Rice, CMRP Larry Sandifar, CMRP
Melissa Hoenstine, CMRP David Leaver, CMRP RYASA Christopher Pond, CMRP Boehringer Ingelheim Roxane Inc. Caterpillar Inc.
SKF Marathon Petroleum Company GPAllied
Kevin Moyers, CMRP William Richards, CMRP Bill Schlegel, CMRP
Richard Hogsett, CMRP Ian Lehrer, CMRP James Prunty, CMRP Management Resources Group Novelis
REC Silicon Hormel Tony Murray, CMRP Jacobs
Jacobs/MAF Roberto Rivera-Sampayo, CMRP Vickie Schmersahl, CMRP
Hamlyn Holder, CMRP Richard Leopard, CMRP Ryan Ramage, CMRP LCE Jacobs/MAF
Neal & Massy Wood Group Robert Bosch Oscar Navas, CMRP Teck
Confipetrol Jose Rojas, CMRP Robert Shapuras, CMRP
Arthur Holland, CMRP Joshua Lissauer, CMRP Willmar Ramirez, CMRP Southern Peru Novelis
Caterpillar Inc. GP Allied Jose Antonio Nayhua Gamarra, CMRP Ecopetrol
Barrick - Pierina
Tamora Houser, CMRP Shane Lloyd, CMRP
Jacobs/MAF Michelin North America Tuan Nguyen, CMRP
Suncoke Energy
Bill Howard, CMRP Samuel Lopez, CMRP
Jacobs Pfizer Pharmaceuticals Martin Nolan, Jr, CMRP
Chevron Oronite
Muhammad Irshad, CMRP Oscar Lopez, CMRP
Nova Chemicals Confipetrol David Nolting, CMRP
Jacobs/MAF
John Itai, CMRP Andres Lopez, CMRP
Hawaiin Electric Company, Inc. BMS SA Ian Norman, CMRP
Norman and Associates, LLC
Ever Jimenez, CMRP German Lopez, CMRP
Minera Yanacocha PEMEX Eric Norman, CMRP
PCS Phosphate
Russell Jimison, CMRP Jose Lopez Hernandez, CMRP
Albemarle Corp Pemex Javier Ochoa Moreno, CMRP
Confipetrol SA
Kenneth Johnson, CMRP Michael Marrtinez, CMRP
Michelin Boehringer Ingelheim Carlos Ovredo Castillo, CMRP
Gran Tierra Energy Colombia
Jeffrey Johnson, CMRP Oscar Martinez, CMRP
Jacobs ABS Consulting Arturo Pachas, CMRP
CIA Minera Conoestable
Michael Karre, CMRP Kenneth Maulsby, CMRP
Roquette Amorka Owens Corning Roofing and Asphalt, Alejandro Padilla, CMRP
LLC Hess Corporation
Violet Kenna, CMRP
Jacobs/JT-HO Robert McArthur, CMRP Oliver Pardo, CMRP
Weatherford Intl Hatch Asociados
Jane Kennedy, CMRP
Jacobs/MAF Joseph McClain, CMRP Bruce Parker, CMRP
DuPont
Wilson Kingston, CMRP Alicia Parra Bostuza, CMRP
BC Hydro Phil McGeever, CMRP Feneyros SAA
ABB

34 SMRP Solutions February 2012 | Volume 7, Issue 1 February 2012 | Volume 7, Issue 1 SMRP Solutions 35
October 1, 2011 – December 31, 2011 New CMRPs

James Shelton, CMRP Martin Terradez, CMRP Jeffrey Wahl, CMRP

Jacobs/JT-HO Bunge Argentina
Byran Walker, CMRP
Hans Siddharta, CMRP Brent Teubel, CMRP Jacobs/MAF
Pt Kaltim Pasifik Amoniak ATS Peoria
Scott Weiss, CMRP
Duane Siemen, CMRP Stacie Thomas, CMRP Georgia-Pacific
Universal Studios Jacobs/MAF
Michael Wibben, CMRP
Jerome Simonson, CMRP Patricia Thomas, CMRP ATS
Cargill Jacobs
Kent Wilcher, CMRP
Charles Smith, CMRP Joppu Thomas, CMRP Jacobs/JT-HO
Infor Sabic
Andrew Wilkinson, CMRP
Sid Smith, CMRP Ralph Tileston, CMRP Bunge LTD
RockTenn MRG, Inc
Roy Williams, CMRP
Audry Smith, CMRP Robert Trucksis, CMRP Jacobs
Ball Corporation
Katie Sowers, CMRP Jesse Wiste, CMRP
DuPont Katheleen Tuleuski, CMRP Hormel
Energizer
Robert Steibly, CMRP Preston Witt, CMRP
Fredy Uribe, CMRP
Thomas Steinmeyer, CMRP Ecopetrol SA Lindsey Wolf, CMRP
Teck Coal Ltd
Benjamin Stevens, CMRP George Valadez, CMRP
AW Chesterton Alcoa Derek Ybarra, CMRP
Jacobs/MAF
John Stieber, CMRP Ricardo Vasquez Garcia, CMRP
Farmer John Solucion Industrial Total Kan Yee, CMRP
Gene
Mihrez Suleiman, CMRP Sergio Vidal, CMRP
Saudi Aramco Saudi Aramco Omar Zarka, CMRP
Baxter
Scott Taylor, CMRP Paul Villaorduna, CMRP
The Mundy Companies Scott Zellen, CMRP
Mark Volk, CMRP Owens Corning
Victor Teran Henriquez, CMRP ATS
Tecnicontrol

36 SMRP Solutions February 2012 | Volume 7, Issue 1

 Society for Maintenance & Reliability Professionals
1100 Johnson Ferry Road, Suite 300
Atlanta, GA 30342 USA
www.smrp.org

SMRP Staff
Executive Director Exam Director Solutions Editorial Department
Jon Krueger Terry Harris, CMRP Dan Anderson
678-303-3045 937-371-1644 Communications Chair
jkrueger@kellencompany.com tkharris10@hotmail.com Life Cycle Engineering
danderson@lce.com
Certification and Education SMRP Product & Business Development
Tim Kline Manager Barb Dunlavey, CMP, CAE
404-252-3663 Laura Keane Content Editor, SMRP
tkline@kellencompany.com lkeane@smrp.org 301-523-7435
281-384-5943
Executive Vice President Ideas Communicated, LLC
Russ Lemieux Graphic Design
404-252-3663 www.ideascommunicated.com
rlemeiuz@kellencompany.com
Howard Penrose, CMRP
Contributing Editor
Dreisilker Electrical Motors
hpenrose@dreisilker.com