Lately, national politics seems dominated by discussions about the expansion of the federal government. Congressional proponents & opponents of such growth probably have a mix of benevolent and malevolent intentions – but evaluating their intent is misguided (as we all know what the road to hell is paved with!) When a new topic gets on the radar screen of congress, the first question that should be asked is: can the federal government realistically manage Idea X effectively? Or is this better handled by state & local communities (if not individuals)?
Similar ‘decision-rights’ questions should be asked inside our companies, especially in the field of RAM (Reliability & Maintenance). A corporate office is well-suited to address some topics; other times, it is just getting in the way. Where should the line be drawn?
One legitimate area for centralization is equipment naming conventions. Standardizing this across multiple plants can seem tedious and frustrating in the short-term – every plant already has a language for referring to equipment that is known and understood by the workers. But the enterprise also has a need to understand & address systemic problems. Doing so requires a common language. Without that consistency, every equipment name has to be time-consumingly re-translated into a common language, which is an extremely error-prone exercise. The result can be bad data, confused communication, and poor decisions that impact the entire enterprise.
However, there are other times when a corporate entity inappropriately exerts its influence. For example, it may be tempting to have a reliability engineer write preventive maintenance (PM) inspections for plant equipment and then upload that inspection into each plant’s Computerized Maintenance Management System (CMMS). But even if this is well-intended, it rarely works.
First of all, the most effective inspections are ones where the plant feels a sense of ownership. If the PM is dictated from afar, it may be greeted by the plant with irritation & passive/aggressive compliance. Secondly, PM frequencies will change over time, depending on equipment age. Unless the plants are exactly the same, the one-size-fits-all approach won’t always make sense. Third, inspections need to be logically clumped into common routes so they become schedulable events. This is very difficult to do from afar and may legitimately vary from plant to plant. Finally, if the plant cannot refine a PM without going through a maze of red tape, the inspection will be ignored or pencil-whipped. PM tweaks should be commonplace and easy to accomplish.
Here are some other examples of this dynamic:
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Advantageous Centralization |
Problematic Centralization |
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Requiring all plants to keep good refractory records. (Advantage: This will ensure that good data is available for continuous improvement) |
Telling plants what kind of refractory they are required to use in each section of the kiln. (Problem: Kilns are different. Proper refractory choices only come from accurate, site-specific record-keeping) |
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Taking advantage of a corporation’s economy of scale by establishing global purchasing arrangements for commodity goods (Advantage: Increased profit margins through cost savings for the plant) |
Enterprise-wide agreements for non-commodity services like machining, welding, or engineering. (Problem: Service quality may vary widely from community to community, even if those local service providers are owned by the same company) |
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Creating an expectation that all plants produce daily maintenance schedules. (Advantage: Resources are productively allocated when scheduled) |
Creating the daily work schedule for the plant from the corporate level. (Problem: There is too much complexity at a plant for an individual to do this effectively from afar) |
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Building corporate support in specialized skills such as software programming, advanced failure analysis, or vibration spectrum analysis. (Advantage: Plants may not have those skill sets available locally. There may not be enough daily demand to warrant a full time employee with that expertise) |
Failing to fully engage the plant in an evaluation of the skilled support that is provided. (Problem: The advanced skill set won’t add value if the plant has no buy-in for the recommendation) |
The corporate office needs to strategically choose its battles and only push for centralizing the things that it can realistically manage effectively. If the wrong battles are chosen – or if too many battles are in progress – then the corporate office may lose the ability to manage the things it is obviously well-suited to address.
What do you think? When is centralization justified? When should decision-making be squarely in the hands of the plant?