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management overall we're really great technical guides but understanding the business side and communicating that business side always seems to be difficult for us so this was something I've had to learn over the last 20 years and so I appreciate that a little bit about myself I've been doing this for almost 20 years I've got a whole bunch of initials that mean nothing but it feels good in my own insecure way my latest one was the I am asset management certificate this recently got it so that was a good accomplishment for me Cheerilee and their liability engine if you're at the smokers plant Toledo we do all the Pillsbury bakery products including frosting cake mixes those types of things so I appreciate that sudden introduction I'm here they're basis we are across center yes when it comes to accounting we are caught Center yes because technically we don't bring in any income but it all depends on how you sell it okay it's a political campaign of speaking and making promises the difference is as we as managers we can fulfill our promise and not just blow smoke we also hear that maintenance is a necessary evil it's a part of the job their fire fight bears your definition of maintenance it's always fixed replace your store whatever when really maintenance is guarding or protecting assets and so one of the ways you go about doing is you have to sell value okay and as a manager there's three levels of value that you have to understand and you have to to sell to those three types are convenience which is it makes life holiday product makes life easier makes life better those types of things you have process improvement which is you know running fully utilizing your assets minimizing downtime on those types of things and then you have the financial piece which is the framing up of cash flows reducing cost profit gains especially so when you can wrap your head around those three types you got to understand where you apply those to each layer that you have to sell value to and there's three directions as a manager you sell value to one direction is down to the subordinates that's where your convenience your safe quality work environment less stress easier life type of values get sold to unless you have a an entire shop that's really really driven and then they want to see downtime reduction those types of things as well about convenience it's probably the easiest way to sell people on the value means managing out let's say your pure love your ops manager your Quality Manager HR I'm all the peers that you have being able to sell that value you want to sell it in process improvement with your asset utilization with your lower downtime higher profits those types of things commitment of selling up 95% of the time when you sell up above you your boss and above you're going to sell financial value of maintenance and what what we have to offer so again managing down you'll sell the value based on convenience of being a proactive maintenance pervert okay your job is to also remove obstacles for those people empowering them to do the the things that they did fit and then overcoming you know the objectives that people put in front of you things that don't add value being able to kind of shoot those down where you're in meetings you know 78% of your day is one of the hardest things and then not making excuses they try to be a solution provider I understand how hard it is at times when your hands are tight and there's certain things you can't do but don't make excuses don't use it as an excuse they're managing out at spier level again you sell the value based on process improvement and we sell less frustration for their employees for the ops manager the quality manager all their employees how easy life gets when things are more reliable offer to help train their employees and this is one of the hardest things because we like to blame them for their incompetence able we're the ones that are considered subject matter experts and when we do the training we determine the mindset which is the way that I look at it is if I'm going to train operations I'm training them with my agenda in mind so that they gain the same mindset as we do at worst oddly aligned to gain to achieve whatever our objectives are understand the gaps and there's always gets and between whether it's employee competencies systems processes or whatever it is understand your gaps and then offer solutions to them to help fill those gaps and develop a partnership if operations is a customer yes but they're more a partner it's a strategic partner because without us they don't run and without them we don't have a job so it's a partnership it's not necessarily a customer relationship we can debate that against and managing up you want to educate on the maintenance function what is it that you do what's your purpose what value are you bringing to the table and you want to sell that value financially okay getting to understand the business side of things how to convert a a failure that was early detected and how to convert that to dollars right understanding their vision and their goals and how you can mold your vision and goals to theirs so that they think that you're aligned with them and then communicating your political campaign and this is where we have the hardest time a lot of us and that's bragging about ourselves and our team and the good job that we're doing we think we should be recognized for our hard work and I get it you should but in the real world we're not so we do have to brag about it a little bit as long as it's true there's another run with bragging about it when you're bragging beauty here is that the whole other thing so some business basics I like to cover is one is one is competitive advantage and why is it important one is what is cashflow and why is it important what's a cost savings versus a cost avoidance there's a lot of gray area and a lot of confusion there I'll try to clear that up and then KP is things that we track so why do we need to understand the business basics and that's the most important question to understand is because we have to be able to speak their language they're not going to take the time out to learn what we do so we have to convert what we do to their language and be able to explain it in their terms so that they understand it the light bulb goes off what is competitive advantage and there's two types of competitive advantage there's comparative and differential a comparative advantage is basically a like a price point it's cost where differential advantage is my product is completely different than everybody else's and that's my competitive advantage so here at Smuckers we produce cake mix there's a lot of cake mix a lot of competitors a lot of private label but for the most part there's three it's us Duncan Hines and Betty Crocker okay so we have a comparative advantage when you walk into Walmart Costco whoever and you decide to buy our cake mix okay you assume that those top three brands the quality is the same most people do what they look at is what is the cost and if all of them are a dollar twenty nine there's very few people that are brand loyal these days they just grab whatever whether it's the package that they like whatever but if we're cheaper then everyone is going to buy ours for the most part they're going to buy our product okay so our goal is in order for us to raise volume we have to lower our costs to produce so that we have a competitive advantage so we can gain market share okay so you have to understand what your competitive advantage is if it's differential it could be some sort of technology that you guys have that no one else has that's your competitive advantage you've got to be able to speak to that okay and then with competitive advantage it gives you more stability as a company and it's more sustainable more long-term so cash flow this was taken out of Philips latest book but understanding cash flow versus profits it gets a little hairy you have to understand a lot there but basically cash flow is the amount of cash you have on hand after everything is paid for a plus whatever you've tied up cash in so the example I like to use is I own the store room here at smokers so the store room is mine as well as me every part I put on my shelf I'm tying up cash in the organization and when I started here we had about six million dollars in inventory and currently we have about four and a half million dollars in inventory while working our way back down and but we freeze up a million and a half dollars in cash flow in the last year and a half that's something that you can sell to the organization how do we do that we do that through planning and scheduling work early detection of failures kidding the work and taking care of it before it felt so that I don't have to store 12 of them on my shelf because I'm worried that it's going to fell in the future if we're predicting failures fairly enough and we're scheduling the work we're kidding the parts we have enough time to order the part from the manufacturer I don't have to store it on my shelf so we are reducing our on-hand inventory that's how you free up cash flow that's one way of selling that to the organization so a cost savings cost savings is a legitimate benefit in the business case it basically it's a cost reduction okay so I'll give some examples but here's one here so you have whatever brand of kilowatt Barry okay as long as it's the same brand like for like brand but say you get one from applied and you get one from motion okay whichever one's the cheapest you have a cost saving okay so if the ABC firm here will say that applied if they want a hundred bucks for this bearing and I can get it for motion for seventy-five dollars at the cost savings of twenty-five bucks what I do is I capture those in a spreadsheet which I'll show you later and a cost avoidance is when you avoid paying more for something else so an example would be is I get that bearing for 75 bucks for motion and I've been getting it from them and next year they want to raise their price to 80 bucks and so I'll tell you what I'm going to shop around because I'm going to pay as much for that bearing and they said well I'll never mind we'll keep it at 75 okay you just avoided a five-dollar cost okay so it's the same thing in the example I provided the firm raises the price to 125 I say I'm not going to pay it they say never mind we'll keep it at 100 I just avoided paying that cost of 25 belts another cost avoidance is downtime avoided a can capture that as a cost avoidance so if you knew that this certain failure over a certain period of time costs $100,000 to the company but now you have predictive technologies and you predicted it early and you fixed it before it failed whatever the pride the cost of that job was - whatever all that downtime was that that would be your avoidance so if the job with labor in parts currently to fix it early cost you $10,000 and he knew the failure before it cost you $100,000 you now capture a $90,000 cost avoidance so you capture those and put those in the spreadsheet as well opportunity cost is a little tricky and I'd like to get into this much but it's comparing alternatives I was going to go to the a and decided to go company because they're a bit cheaper in the long run it costs me more if I were to win with company a what was my opportunity cost but those things can work against you so you got to kind of watch those I would track them myself but I wouldn't share them with anybody okay so here's an example the decisions made to run to failure it ends up costing the plant ten thousand dollars in lost production if I did live every month on that piece of equipment it costs me 30 bucks a month an example would be the opportunity cost was ninety nine seventy but I wouldn't really brag about that too much because it's saying that you made the wrong decision so you don't want to to set yourself up for a PR failure and so here's some of the watch out to you you want to track it yourself understand the decisions you made so you can make better decisions but you don't really want to share it unless people are are seeking advice or going with a certain brand or whatever but it turns into a blame game opportunity costs so today I told you you should with this and blah blah blah you get into finger-pointing it's not work and so some of the KPIs that we track here that I feel are important to show progress within our department when I'm selling it as a profit Center is the dollars of maintenance spend rav that's remained its budget divided by my RA be my dollars in inventory it's our IV which are both metrics set by essa Murphy the maintenance cost per unit produced that's huge for me because I want to understand what is my impact on the bottom line and your maintenance cost per unit ours currently our goal is seventeen cents per unit and our current is 13 cents Prine it's or 4 cents crema cheaper here today right another one is utilities when you're using the ultrasound ultrasound the huge one when it comes to utilities is what I do is I'll capturing the spreadsheet we write the work order we do the work we complete the early fixing the early I'll capture that is an avoidance okay well at the end of the year when we look at utility reduction I captured it again as a safety because we had a hard savings if I saved the company sixty thousand dollars on their electric bill this year because of the things that we've done I capture that and I want to brag about it so that you show that that ultraPro for ten or fifteen thousand dollars eight or five word for itself and it justifies headcount and those types of things to become more sustainable so here's here's the nitty-gritty so starting your political campaign the goal is is to capture as many caught savings as possible cost avoidance as possible what are the games from your condition monitoring and your predictive maintenance program and planning and scheduling showing how planning and scheduling frees up cash flow which frees up profits write defect elimination is another one okay what are some of the best practices that you're doing to eliminate defects proactively in your equipment it all those can be quantified to share your successes with the world and this is the hard part where you get a toot your own horn a little bit okay so what I do is every month I send out an email okay so I have a spreadsheet we capture stuff on spreadsheets and and I email it out to a select group of people everybody above me that's kind of how I brag about it so here are some examples okay especially in the storeroom I have I have my storeroom guys they capture their parts they always get two quotes and they compare between two companies like for like Parts I don't do a SKF burying versus a Chinaberry it's not apples apples I do an SK appearing against an ska or whatever it's always like for like parts okay I also do in-house rebuilds versus sending things out to be rebuilt or versus buying new we started taking on more rebuilt in here now that our our line efficiencies are going up our down frames going down is freeing up our guys to do more work in the shop so we're starting to take on rebuild the work capturing the rebuild cost me 30 bucks to buy bearings and slapping this gearbox versus sending it out or buying a new one for a thousand bucks so we capture that the software provided your CBM tools a ultrasound the Yui guys have done a great job with their spreadsheets you could track everything in their system and you use that spreadsheet or whatever that avoidance is you capture it and then I send out the email I always brag about early detection I've taught everybody ten times over here about the PF curve understanding the PF curve and early detection and the further you get down the curve and what the cost impact is I do that all the time so the key is early detection so that they understand that we have to have the tools to become reliable and one of the biggest arguments I've had here with people in this organization is they say we have to become more reliable before we can afford to use these tools or before we can launch these new tools and my argument to them is how can you become reliable without the tools and so changing that mindset and trying to get them to understand it all clean create a newsletter I've seen it done I'm not that artistic I'm pretty simple guy but you can get fancy stand out a newsletter bragging about some of the things that you've done it so here's an example simple spreadsheet the data was captured through the old lender and the new vendor where what the part was what the original cost was the new cost and if it's a savings or an avoidance okay and these are your cost savings your o-ring kit we save 10 bucks you'd be surprised on all these little parts as you go down in your spreadsheet you add it up at the end of the month and you save 25 or 30 thousand dollars the huge okay $30,000 a month times 12 months you can justify doing a lot of things that's something that we do a 1672 is my account bill for the store but these guys hold on to this another thing is this is the spreadsheet that Yui provides I just had a little section out but basically we did the decibel reading what was leaking we have the work order if it says na on there that's because we fixed it at the at that time so we didn't put in a work order to have it fixed at a later date but these have all been repaired it's a big list but it was right here seventeen thousand four hundred seventy four dollars and it was identified and we repaired it 100% repaired so what I do is they take that number and I add it in to my spreadsheet with my storeroom stuff I kind of compile all together and I'll send that out on a monthly basis whatever that number is we started doing this last August and so from last August the year-to-date so now we've captured almost a million dollars in cost savings and cost avoidances and I haven't captured everything it's hard to capture everything you have to set aside time you've got to get your guys engaged and get them to help you capture some of it as well here's another example okay this is an avoidance and so we had a vacuum pump failure this is one I wanted to give an attaboy to my my guys for detecting it early and taking care of it right away we had a huge safety issue the last time one of these bill we had won't blow up and they punched a hole in the wall with a choke that that came off of the vacuum pump and so what is the safety in fact they didn't even capture that in here but you can you can put a dollar value on the safety impact but this is an example so at the end of it we avoided eight thousand dollars by detecting this failure early another one is is we're realizing that future on our end is through oil analysis so we have huge gearboxes on our mixers and search blenders they take about 30 gallons of oil and used to it was like a quarterly basis some we would do by annually but it was 1500 bucks to replace oil we just did it on a time-based basis now that we're doing oil analysis and the last year and a half we haven't changed it once the oil still kissed so every quarter or every six months depending on what mixture it is I capture another 1,500 dollars in savings based off of oil consumption which is a good one it adds up that was short and sweet that's about all I got if there's any questions go ahead yeah thanks Joe I did have a couple of questions earlier in the presentation somebody wanted some clarification on what is what's our AV replacement asset value so your controller I'm gonna give you back control do you want control Doug now god you leave it there for a little while leave your email address up there so re V is replacement asset value your controller or your your plan accountant they should become your best friend B then they're asking you a million questions what's the cost of downtime per hour what's our overhead cost any these financial figures you can get fully more than willing to help you out the guy that we have working for us here he's excited cuz he gets to report all this up and say look what we're doing at the plant you know we've stayed the million dollars in the last year in the those are bragging rights for those guys but our replacement that's a value what that is is it's um if say there's a natural disaster everything is destroyed in your plant one of the costs to replace all of your asset at that location ours here is ninety three point three million dollars okay so you take whatever your budget is which my budget five million dollars last year divided by the ninety three point three million and that gives you a percentage of our IV and then they have standards depending on the industry where your level should be at because they're world-class so what kind of in the middle in between a bad and and world-class rat that good level and that's something that we struggle with here is if any of you have read the books from good the grade is working at what we do here but good is the enemy of great and trying to get people to say ok we're gonna what we do let's take it to the next level that's probably the hardest selfie Joe yeah ok great just want to make sure I didn't lose you there on the on the sound here another question came in for the text in your PDM program do you train them in multiple technologies or do you use specialists yeah that's a good one so so we're doing it in phases to understand where we were when I started almost two years ago when I started we had a planner scheduler and the storeroom buyer they it was wrapped into one role okay so I had my nurse scheduler buyer all in one role and I took my headcount I restructured my department and you know that I separated I I did it in phases so phase one was separated my buyer separated the planner scheduler role from the viral so I have a buyer now and a planner scheduler and within that restructure I was able to create two positions I called them the liability tech division I'm so currently you know with those two we're training them for all of all of the technical phase two we just hit here a month ago I separated planning scheduler I now have a dedicated planner I have a dedicated scheduler and then I added another reliability tech so what I've been selling to the group here at the plant is I would like to be 80 percent condition base which is world class benchmark it currently were about 10 percent so we're taking lead line Tech's off of the line in converting them because we have two Tech's per team we have four teams per shift so there's about eight mechanics but what I'm doing is leaving one to answer calls and I'm slowly converting more and more over to reliability texts so I would like to get to where they're specialized in one technology but they understand the value of all that but currently we're just going to do it alright okay great another question came in do you do all of your condition monitoring and PDM tasks internally or do you use outside service providers everything except for our vibration we do the is me which are keepers but we have an agreement with them that over the next five years they're gonna help develop our technicians so we have to Lou Decca vibe analyzer that we're doing on our own and we're doing the image RFP side by side slowly winging them off and getting our guys up to speed to where they can analyze their own so it's kind of a traditional fantastic Joe thank you so much that's a lot of great information anybody who has additional questions certainly feel free to email Joe or email at info at UE systems.com either way we'll get these questions to Joe and we'll get them answered just a couple other quick things here I'm gonna take the presentation slides back and uh just bear with me one second and just want to mention to everybody you can certainly visit Yui systems.com for information Joe had mentioned they use ultrasound extensively for a lot of different applications over at the JM Smucker Company so please take a look at our website for application information leak detection steam traps electrical bearings and then addition training courses actually Joe and his team have been gracious enough to host one of our training courses there at their company one of our level one ultrasound certification courses but we also offer steam trap examiner courses and coming soon some compressed air survey courses so please take a look at the website for that get connected there's a lot of great information like Joe shared out there with our ultra probe users group and our reliable asset world group on LinkedIn follow us on Twitter check out our sound advice blog so stay connected with us and stay connected with other people in the industry as I mentioned you know there's a ton of guys out there you know like Joe who have great programs and their facilities and be more than happy to talk in chair some of the information they have and also save the dates mark your calendars for next year this year's ultrasound world and reliable asset world conference were a smashing success we had great presentations there a lot of opportunities for networking so you know a save the dates for the conferences we've also got a a webinar coming up here next next month and that's going to be what was hot in 2015 and what's new for 2016 in ultrasound condition monitoring that's going to be presented by myself and my colleague Adrian Messer so please take a look at your email inbox and you'll see something out there in the next several weeks for that webinar to take place in December I think it's going to be December 16th actually that's a Wednesday but but check on that and of course our conference is coming up in May of 2016 10 through the 13th it'll be our 12th ultrasound world conference and our third reliable asset world conference so please again save those dates and stay tuned for future future webinars and future activities thanks for everybody for attending have a great and safe day any questions please shoot them to us by email