I’ve have the opportunity to spend the last ten years working in the reliability engineering and predictive maintenance industry as a business advisor.  In that regard, I’ve been fortunate enough to watch the industry grow up and evolve into a very exciting and critical component of our nation’s manufacturing and processing industries success.  In as much as we’ve seen significant job losses to these sectors over the years, I shudder to think of what they would be if the methodologies and principles our industry provides were not being implemented at the level they are.

I’ve been fortunate enough to meet and work with some of our industry’s leading companies, many of whom are smaller/entrepreneurial companies that got started in the industry because they were passionate about reliability/maintenance and sensed an opportunity to not only make a difference but make some money. As a result, I believe that one of the primary drivers for the level of adaption and acceptance we’ve seen is directly related to the level of entrepreneurship that our industry seems to nurture.

Consequently, I was disheartened to see the recent report on entrepreneurship issued by the Kaufman Foundation and presented at their State of Entrepreneurship presentation last week.  Some of the key findings:

• 36 percent of entrepreneurs reported reductions in head count in the past year; only 8 percent have added employees.
• Nearly two-thirds have seen their sales volume and their profitability decrease.
• 71 percent of entrepreneurs do not expect to add any new jobs in 2010.
• 61 percent of entrepreneurs think the economy is on the wrong track.

As the report notes:

“Entrepreneurs are still the primary engine of job creation in the United States,” Schramm said. “In the last 30 years, literally all net job creation in this country has taken place in firms less than five years old.

With such a gloomy outlook for entrepreneurs, I am concerned about how these trends will impact the reliability engineering/PdM industry.  Entrepreneurship is a critical component of the innovation and adaption occurring in our industry and we need to do everything we can to promote it and ensure that our entrepreneurial culture is nurtured and promoted.  Around this time last year, I posted a blog on The Vann Group entitled “The Entrepreneurial Fix” that outlined some thinking on how to promote entrepreneurship and small business.  Given the Kaufman report, I think the post is as timely as ever.

What do you think of the state of entrepreneurship and what can be done to support it?

Assume you are the newly hired maintenance manager.   Since you were recruited and relocated, you are expected to produce and be better than anyone else that was available locally.  The culture of the area is different and that has to be learned.  Trust has to be earned.  You are viewed as an outsider with suspicion.  The reliability is not good and trending worse.  The department is not spending as it should.  The expenditures that should happen can’t because of budgetary constraints.  The excessive reactive culture consumes almost all of your time.  Where to start?

This is the dilemma I faced in my last job.  I could have responded more quickly. I could have provided quicker results.  I was overwhelmed by the reactive culture.  I believe I learned the logical steps to bring quicker results.  Limited resources are usually a problem.  The system is broken.  The fix is to establish the solid building blocks and then build stable systems on that base.

The first place to start is the CMMS system.  Two first determinations are needed:  administrator ability and CMMS implementation effectiveness.

• The administrator needs to have a very good grasp on how to use and modify the system.  Also knowledge of how to run reports, analysis/interpretation/charting of data and metrics.  A very good Excel spreadsheet ability as it will be needed for standard weekly or daily reports.

• The CMMS system most likely was implemented improperly for good reliability analysis.  It is probably based on equipment asset level as the primary unit instead of driving down to a lower equipment component level.  If this is the case, a determination needs to be made.  Is the cost to change the implementation worth the investment?  If all the equipment has many dissimilar components, it will not matter.  However if there are 100 pumps on 50 pieces of like equipment, then the system might need to be modified to go to the individual pump/component level for failure analysis.  The decision is yours but usually only in asset highly intensive process industries will this be economically justified.  How much of the system is used?  Is just the PM, work order, and asset list part used?  Or is the storeroom inventory and purchasing modules used?  How about the personnel module?  This needs to be determined for report generation in the future. 

 Build an open relationship.  While completing this analysis, include the CMMS administrator.  This person is a valuable asset.  If the system is not working properly, input from this person is vital to correcting what is observed.  If encouraged to talk about frustrations in administering this system, valuable insight will be gained.  In addition any changes should be addressed in open dialogue and debate before implemented to ensure the best outcomes and buy-in.  Building this type of relationship will empower the administrator to communicate problems in their infancy.

These are the basics needed to have a functioning CMMS driven work order system to properly control the department.  The list of items that are needed for an effective work order system are as follows:

• The ability to display or download a daily updated work order backlog.
• The proper system settings changed that enable established types of work order priorities to become more urgent than others based on time open.
• The types of work orders the system will use.  Examples: pm’s, TPM’s, PdM’s, breakdowns, repairs, etc.

These are the basics to having a CMMS system that will help to effectively manage the department instead of a repository for work orders that are never completed.   The CMMS will also be able to provide data for analysis.  Your experience and needs should result in customization strategies as needed.

Last November, the IRS announced it would launch a comprehensive audit of employers’ payroll tax practices, which is slated to begin in February 2010. To read the IRS’s announcement, click here.

Referring to it as an Employment Tax Research Study, the IRS intends to randomly select 2,000 employers each year for the next three years to review their current payroll tax practices. That means 6,000 employers over a three-year period will be targeted by the IRS for review.

According to the IRS, this review is intended to be for research purposes only in which they will collect data to gauge more accurately the extent to which businesses properly comply with employment tax law and related reporting requirements. Despite this proclamation, ultimately, the purpose behind this study is likely to be revenue collection. In fact, it has been reported that the IRS has, for years, believed that employers were drastically underpaying payroll taxes to the tune of $14 billion annually.

As part of the audit, the IRS is likely to be focused on misclassification of workers and issues related to expense reimbursement, officer/owner compensation, fringe benefits and tip reporting. In order to prepare for the IRS’s ramped up enforcement effort, you should conduct a self-audit of your practices, which should include a review of your independent contractor classifications and record keeping practices.

A new employment opportunity is accepted.  Many maintenance/reliability management professionals are searching for employment opportunities.  This may be the result of plant closings or cutbacks due to the economy.  Others may be attempting to advance or increase their earning potential.  We as professionals need to realize many of the pitfalls that we will encounter:

• If the position is a newly created position, the infrastructure to operate efficiently and successfully will need to be built.  Since management has already bought in to this approach, it will be easier to request resources.  Execution is easier because systems can be structured properly from the outset.
• If the position is replacing someone, there a number of scenarios that could be faced, most of them very challenging.  In addition, if the company is willing to relocate a candidate, they could be searching for “a hired gun” to straighten things out.  The position could have been vacant for a while.  In this case, much focus is needed to bring back the disciplined execution lost from not having a manager.   If the operation were world-class, wouldn’t there be someone promotable?

In this blog series I would like to discuss steps and strategies to build systems that create reliability.  Many times entering new employment, we are over-whelmed and just try to keep up.  The employer is searching for immediate improvement.  I was presented with this challenge in my last employment opportunity and learned under fire the order to maintenance and reliability improvements.  If I had been prepared how to proceed, our operation could have been successful much more quickly.

Maintenance and reliability improvement sequence.  The sequence for maintenance and reliability improvement is as follows:

1.     CMMS system

2.     Asset Prioritization

3.     Work order system

4.     KPI creation

5.     Scheduling/Planning

6.     Team building, employee empowerment

7.     Reliability building – FMEA process to form maintenance strategies and auditing

8.     PDM

9.     CBM

10. RCM

11. Cost Control & Stores

This is the planned blog sequence.  More than one blog might be required to adequately address the concerns of each step.  Please follow this series.  It can be a great aid to those beginning new employment.

NextUp Careers, the first career site dedicated to reliability engineering, PdM and industrial maintenance is preparing to launch.  To maximize the value we provide the industry, we are looking for industry professionals who are interested in sharing their advice, experience and knowledge with the community.

Within our site we have a section entitled career and employment advice that will feature experts on topics such as human resources, legal issues, generational issues, etc.  To provide a real world flavor of practical knowledge we are looking for professionals just like you to write on non-technical topics such as leadership and management, communication, work/life balance and career management.

Each contributor will be featured on the main advice page and have their own page within our site.  Each page provides the writer the opportunity to provide a bio, their logo (if applicable0 contact information and other relevant information they want to share with the community.

This is a great way to promote yourself and your business while also sharing your knowledge, wisdom and advice with the overall reliability & PdM community.  If you are interested in becoming a contributor, please contact Michael Vann at mvann@nextupcareers.com

Career planning should be part of being an effective maintenance and reliability career professional.  Employment in a global economy with the rigorous competitive pressure for market share will make all employment tenuous no matter how stable the company or business.  We can all think of companies that were on the top at one time and either are much smaller or don’t exist at all.  Jim Collins has written on the subject of how some companies become great and some do not.  He has now published follow-up studies on the same companies.

Don’t let your career stagnate.  I have seen many great maintenance and reliability people work to perfect their core skills through education and experience.  Unfortunately, many of them seem to get to a certain point and stop.  They work in a field dedicated to continuous improvement to achieve world class manufacturing standards but do not apply this strategy to their own careers.  If education and skills are not continuously developed, stagnation results.  The person then looses pace with peers and is not as valuable to his employer or future employers.  Advancement is unlikely.

Education seems to open your mind.  The work performed now might not be enough for you in the future because of the expanded view.  I have continued education much of my adult life in the evening while I worked during the day.  An Associate of Science, Bachelor of Science, a Master of Business Administration, and finally certification as a maintenance manager through Association of Facilities Engineers.  I was a highly effective floor level maintenance tech and have held just about all the positions in maintenance and reliability.

Has this kept my job stable?  No.  Other business pressures and circumstances outside of my control affect this.  2 jobs disappeared, and I was downsized in another.  I was able to come back and find better jobs.  My employer always received value from my employment. 

My current employment will end shortly as my plant has closed.  I am now searching like many of you.  I get down.  I get elated.  I get aggravated.  I wonder why some companies can’t identify the value I bring.  I have all the feelings and reactions like you do.  One thing I have going for me is that my education is current.  My next employer will be thrilled to get me because not only can I perform now but I am promotable due to education and experience.

Coming blogs.  In future blogs I plan to write about strategies to improve maintenance performance and driving change.

Several weeks after the COBRA subsidy extension, the DOL has just released new model COBRA notices for employers to use, which can be accessed here. There are three new model notices in total: the Updated General Notice, the Premium Assistance Extension Notice and the Updated Alternative Notice.

The Updated General Notice:

* Includes updated information on the subsidy and information required in a COBRA election notice.

* Must be provided to all qualified beneficiaries, not just covered employees, who have not been provided an election notice and who experience a qualifying event between September 1, 2008 through February 28, 2010, regardless of the type of qualifying event.

* Must be provided to individuals who experienced a qualifying event that was a termination of employment in December 2009 and who were not eligible for COBRA until January 2010. As these individuals were likely not provided proper notice, in addition to receiving the Updated General Notice, they must also be given a full 60 days from the date the updated notice is provided to make a COBRA election.

Premium Assistance Election Notice:

* Includes information about the Department of Defense Appropriation Act of 2010’s (DODAA) amendments to the American Recovery and Reinvestment Act (ARRA).

* Requires plan administrators to provide this notice to certain individuals who have already been provided a COBRA election notice, but were provided with one that did not include information regarding the DODAA’s amendments to the ARRA.

* This notice must be provided to individuals who were “assistance eligible” as of October 31, 2009 (unless they are in a transition period as set forth below), and individuals who experienced a termination of employment on or after October 31, 2009 and lost health coverage (unless they were already provided a timely, updated General Notice). Such notice must be provided by February 17, 2010.

* Individuals who are in a “transition period” must be given this notice within 60 days of the first day of the transition period. A “transition period” is defined as the period that begins immediately after the end of the maximum number of months (generally nine) of premium reduction available under the ARRA before it was amended. An individual is in a transition period only if the premium reduction provisions would continue to apply due to the extension from nine to 15 months and they otherwise remain eligible for the premium reduction.

* Special note: To some extent, there is overlap with regard to individuals who are “assistance eligible” and who are in a “transition period.” This creates a situation where an individual may be entitled to multiple notices. Providing the Premium Assistance Extension Notice by the earliest date required will satisfy the notice requirement(s).

Updated Alternative Notice:

* Insurance issuers providing group health insurance must send the Updated Alternative to persons who became eligible for continuation coverage under a state law.

As of January 1, 2010, Connecticut’s minimum wage increased to $8.25 per hour while Colorado’s minimum wage fell to $7.25 per hour. In fact, Colorado employees will now receive 3 cents less per hour as of the new year. Massachusetts’ minimum wage has, since January 1, 2008, remained at $8.00 per hour.

The United States Department of Labor maintains a state by state minimum wage chart, which can be accessed by clicking here.