Developing a reliability centered process maturity model: effective tools allow an organization to establish a roadmap to competitive advantage.

Over the past two decades, many industries--including the paper industry--have needed to change their focus from production and product quality improvements to finding new ways to address ever-increasing cost pressures and rapidly changing customer demands. These changes are compounding while the paper industry is seeking new ways to grow profitably. The National Association of Manufacturers has determined that plant and equipment reliability have emerged as the number two corporate objective in manufacturing following customer service. After addressing customer service, reliability will become the primary corporate objective. Product reliability is simply a direct extension of plant reliability.

The paper industry has discovered that achieving reliability concerns more than equipment. Reliability begins in the asset base of a plant. To begin, it includes the organization, personnel, vendors, and technology. The products and services delivered by a reliability-centric culture must be reliable and dependable and delivered on time to the customer at the lowest possible cost. After testing many times, the old adage that "reliability is a journey" is now truer than ever. In a continuing series of articles in Solutions!, the authors will present a structured roadmap for a company to journey successfully toward reliability. We believe the journey is essential for the paper industry to survive and thrive. We believe the payoff makes the journey worthwhile.

IMPORTANT ISSUES

No matter where an organization is on the road to reliability, solutions today must be sufficiently robust to ensure the ability to compete effectively over the next 10 years--not simply the next 12 months. Some issues that require consideration include:

* What processes are critical to survival?

* What changes will new methods drive in the industry?

* Will competitive pressures reduce profits and increase customer expectations?

* Will mergers reduce existing competitive advantages?

* Is remaining competitive with the existing asset base possible?

* Is increased market share a possibility?

Attempting to wrestle any one issue has often resulted in losing focus and performance of one or more other key factors. The results have been dismal--eroding profitability, disenchanted customers, and in some cases, unacceptably high plant costs. Seeking technological solutions, operations and maintenance have tried many approaches to reliability improvement. These often cost an organization significantly more than anticipated and return far less than expected. Mimicking "world class leaders" from other industrial settings have too often produced poor returns. Many organizations seeking to translate any investment in an asset base to a positive return are still seeking business process solutions as the key to achieving desirable, measurable, and sustainable returns.

Over the past several years, a suite of industrial tools have become available that enable organizations to address issues today. They provide the techniques to ensure any organized undertaking can change as rapidly as demands change without sacrificing cost, quality, reliability, or profitability. These tools and techniques form the Reliability Centered Process (RCP) Maturity Model. Regardless of the starting point of an organization on the road to success, the RCP model can provide a full range of tools that ensure timely results.

DRIVING COMPETITIVE DIFFERENTIATION

The reality of competitive differentiation challenges the paper industry. Remaining on the edge of competitive differentiation is vital to establishing long-term market leadership. As external market conditions changed and global competition evolved, newer, leaner, and more forward thinking competitors outpaced the leading corporations of yesterday. This reality sent shock waves through industry. It prompted legacy companies to respond with new strategies to reinvent themselves into more agile and more nimble organizations. They needed the ability to react to challenges in their markets and create dynamic changes to sustain profitable growth well into the future.

Companies also encounter customers demanding the lowest cost and highest quality product delivered complete and on time as a fundamental condition of doing business. Changes in customer markets reflect new demands, including "stop" orders on short notice with little or no repercussion to price. To meet these demands, companies in legacy capital intensive industries such as the paper industry are finding that true competitive advantages are not possible without first having reliable plants and equipment.

Any successful reliability model must leverage corporate and plant strengths to deliver a shared standard of plant reliability and performance. The internal result is increased and dependable plant capabilities at lower costs. Ensuring that a reliability model incorporates all the requirements--from suppliers to customers--will optimize the adjacent stakeholder activities process chain. The final result will be increased profit by lowering quality costs and significant potential to reduce future capital requirements.

With this knowledge, companies must be ready to address a reliability strategy that considers all the issues related to their industry, physical asset base, and culture. After developing such a strategy, corporate leadership can successfully transition from a market-reactive stance to a reliability responsive position while achieving dramatic profit improvements.

RCP MATURITY MODEL

As organizations and plants move toward a total reliability solution, they will migrate through some or all of the five stages of RCP management (see figure 1). Some organizations will begin from operating as an "isolated plant" and transition to become an extended enterprise. Most organizations will find various aspects of their company fitting into more than one stage when determining their path.

In our continuing Solutions! series, we will present a five-stage RCP Maturity Model. The series will present a method to reduce a complex area of business to manageable pieces. We believe the RCP Maturity Model creates a roadmap for corporations to gain competitive advantage through reliable plants and equipment. It allows companies to function profitably across multiple levels of simultaneous plant development while consistently guiding each corporation toward the successful completion of their short and long term strategic goals. The RCP Maturity Model allows companies to create significant competitive differentiation and market dominance using reliability as the key.

Practitioners know that all steps are important in reliability. All steps contribute toward the goal. The practitioners also know that a plant can move confidently and quickly toward a reliability-centric culture with a focus on reliability and a clear roadmap to results. The series will examine the five stages depicted in Fig. 1 and describe a path to move from one stage to another. S!

IN THIS ARTICLE YOU WILL LEARN

* Why reliability solutions today must ensure the ability to compete effectively over the next 10 years--not just the next 12 months.

* Why "legacy companies" need to adopt processes that will create dynamic changes to sustain profitable growth.

* Why organizations, as they move toward a total reliability solution, will migrate through some or all of the five stages of RCP management.

ADDITIONAL RESOURCES

* "Manufacturing reliability: The Dofasco story," by John Yolton, Solutions!, December 2002, p. 35. Also available online free of charge to TAPPI and PIMA members at www.tappi.org. Click on Solutions! and Archived Table of Contents Click an December 2002.

* For more information about PIMA's Manufacturing Reliability Specialist Group, or the 2003 PIMA International Management Conference, go to: www.pimaweb.org.

FIVE STAGES OF THE RCP MATURITY MODEL

Stage 1: Ad Hoc The Isolated Plant "Reversing Trends"

Stage 2: Plan Reliability as a Business "Changing the Culture"

Stage 3: Execute Integrating Plant Functions "Serve Stakeholders"

Stage 4: Measure The Integrated Enterprise "Create Building Value"

Stage 5: Analyze The Extended Enterprise "Leadership in Profit"

Editor's Note: The topics discussed in this article will be the subject of presentations at the PIMA International Management Conference, to be held May 29 to July 2 in New York, New York, USA. The program will also include a roundtable revealing the results of a survey conducted by PIMA's Manufacturing Reliability Specialist Group on industry wide maintenance and reliability practices. For more information go to www.pimaweb.org.

About the authors: Gail Petersen is asset management consultant for Datamasters, Vancouver, British Columbia, Canada. She is a member of the Solutions! Editorial Board and is a member Of the PIMA Manufacturing Reliability Committee, Contact her at [e-mail].

Joel Black, C.E., is vice president of North American operations at Aladon LLC. He specializes in the transfer of RCM II (reliability centered maintenance) technology. He is a member of the PIMA Manufacturing Reliability Committee. Contact him at [e-mail].