Cycle of Insanity Part 2

Chris Pepin: Hi, this is Chris Pepin. I’m the founder of Progressive Reliability, and thank you for taking the time to listen to our podcast. You can also find a white paper from this podcast on our website, proreli.com. We are Progressive Reliability, and so the shorthand should make it quick to look up. PRORELI. You can also type in ProgressiveReliability.com and it will take you to the site as well.

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All right, ladies and gentlemen, welcome back to the Cycle of Insanity podcast series here with Tim Goshert and Doug Plucknette. My name is Chris. I’m your host and the founder of Progressive Reliability. This is the second in a three-part series where we’re going to talk about some of the areas that are most affected by the cycle you heard about in the last podcast.

If you’re coming to us for the first time, the cycle of insanity is something that was developed and coined by Tim around just the cyclical nature of what can happen in market fluctuations and pull back such as the one we’re in the middle of, in the COVID era.

Tim, today I know we want to get a little closer in what happens with equipment reliability and productivity, and as well as people in the talent management side of things. So why don’t you let us know some of what happens when the cost-cutting measures come through? Then the initial benefit, the initial financial benefit wears down. And all of a sudden we’re stuck with having bigger and bigger issues crop up because all the PMs have been pulled out.

Tim Goshert: Typically, what happens is when you have something like has happened with COVID-19 and the markets are depressed, companies certainly try to figure out a way to weather the storm. They batten down the hatches and they typically go back to what they think are just pure, essential activities at the time.

When that occurs, certainly proactive maintenance strategies, such as condition monitoring, sometimes planning and scheduling systems, those are targets for the company to want to save short-term costs. They see that work being done by those individuals in those different areas as something for the future, it doesn’t affect the day-to-day. In fact, if a company had been doing those proactive activities for a period of time, they’re reaping the benefits today. The company said, “Well, we don’t need that now. And then we can take that away.”

The initial steps, people then maybe are laid off, furloughed or even maybe are downsized and lose their jobs, the operation or the plant organization typically doesn’t miss them for the first three, six, nine months, because they’re really … Work that was done nine months ago is put to plan in the operation and the position it is today.

As those things aren’t done month after month after month, slowly the effects of that will show up. Typically, maybe a year or it could go a year and a half, things really start getting worse because proactive activities that are keeping the plant healthy, keeping things running correctly, aren’t being done. Over time, it deteriorates.

That’s typically what happens in the systems. It would be normally you don’t see it right away and you save the costs. But a year, year and a half later, the plant is in a much different health situation than they were previously.

Chris Pepin: Doug, what can you tell us about what you’ve seen, on your side of things? Can you share a little bit about where you’ve been in the same situation as Tim, and some of the more tactical challenges that have come up, as well as what you’ve had to do to overcome?

Doug Plucknette: Really, as far as COVID was concerned, there was two schools that were impacted. Those that were deemed essential, lots of those were food companies. So, they stayed with their people right on. But what they had to do was then determine who was actually essentially getting the product out the door. So it would be some operations people, some maintenance people, mainly hourly. A little bit of direct supervision, probably not any higher than that.

So when that goes on, it seems like things go as usual, but they’re really focused on just keeping the equipment running, and they lose sight of doing things like PMs and condition monitoring and operator care tasks that would be minor lubrication, things like that. They’ll skip a lot of those things, and they can get away with that for some time. In fact, there’s often a little bit of joy that goes on cause they realize, “Well, we can run without all these daily meetings that go on. Run quite well.”

What happens is, down the road, that tends to catch up with you. We’re kind of in that phase right now where this initially took place back in March, and you can get away with that for a number of months. Then what happens is it catches up with you.

The other school were the companies that were deemed non-essential and they had to shut down completely. Boy, a lot of impact that can occur with equipment is just suicidal. Things like [inaudible 00:06:03] bearings from the equipment just sitting there with a normal resident, not turning. And when you start back up, you’ll tend to see a lot more of those types of rotating equipment failures, because the equipment has just been sitting there in one spot. Lubrication, if you’re not on top of it, tends to separate. You’ll see some lubrication issues immediately.

The same thing goes then after they do start up, there tends to be a focus. They’ll have a rash of these emergency demand-type things, or they’ll lose sight of doing their regular routines of preventative maintenance and condition monitoring. Again, that catches up. So, it’s one of those things that you have to be very careful and put a lot of thought into what’s the right way to manage this. And take a step back and think about it before you just take action.

Lots of things that can be done, but really it comes down to understanding equivalent criticality. We’ve preached that from time to time and saying, “All right, let’s take a look at what’s out there. Let’s take a look at what work orders have come in. Let’s take a look at some of the things we may not have thought about in terms of our critical assets. And let’s focus on those first, when we come and start back up. Or even if we have been running, let’s focus on those critical assets and do things correctly in terms of those starting out the gate or as we continue on.”

So yeah, looking at this, I’ve seen a number of different places where they lose sight of that and they get overwhelmed by how many work orders are out there, how much has shut down and how much has failed. That’s where a tailspin can come in. When you do, you have to step back and say that, “All right, we have to prioritize, and the best way to prioritize is by understanding criticality. All right, what’s going to bite us the worst?”

By the way, that might even take a second look, because things may have changed that way too. What products are in demand? You saw the folks in the paper industry go through that, for sure with toilet paper and paper towels, and the folks in the cleaning business with disinfectant. I’m sure they were not anywhere near ready to say, “Well, we need to run full out to try to keep up with demand here, and we need to keep our stuff running.” So, there’s a lot of thoughts that goes into what’s the right thing to do.

Chris Pepin: Tim, another management issue comes about under all this. Just to explain, there’s a lot of stress on equipment. There’s a lot of equipment operating abnormally. What about the talent side of things, where all of a sudden there’s a real desire to start cutting expensive head count and managing expenses with respect to internal people?

Tim Goshert: Yeah. Of course, people are the resource part or are a large cost for any company. In these kinds of conditions, typically the ones that are closest to the product being made, they’re not considered essential. With continuous improvement teams, the proactive liability teams, the condition monitoring teams, they’re not considered to be that. Then they’re either furloughed or laid off for a period of time.

Or in the case of Doug’s second example, where the company will shut down completely where then no one’s needed, those people may look for other jobs and not be even be available in the marketplace when that plant starts up. So, the people side of the game is very … It was affected greatly.

I think the forward looking companies in my experience are the ones that know this. They see it over at the bottom of the valley, and they understand that there’s lots of good talent in the marketplace and they look to find good talent, maybe at a discount. Discounted rate for people that really want work but they have great talent. And they actually build staff during this period of time.

I worked for a company for 30 years that that’s how they operated. They understood business is cyclical. Marketplaces can be very good at times and very poor at times. A low-cost provider wins typically, in those cases. If you look for the long-term, they would invest in the bottom of the valley. They would invest in finding plants that are being shut down and they would buy it for 20 cents on the dollar. Or they would understand that different markets for people are depressed and they needed that talent. They would actually invest in the talents and go out and invest.

So right now, clients that I’ve been working with, I’ve been advising them that if they have positions that there are long-term positions that they need and they have vacancies, and many do, now is the best time in the best market to go find the talent you need for long.

Now, that takes courage to do as an organization when maybe tomorrow is unknown or it’s very, very gloomy, especially going into this winter. It takes courage to do that to invest. But typically the ones that do that, in my experience, are the ones that survive in the end.

Chris Pepin: Yeah, it is an interesting time and there’s certainly a lot of reshuffling going on. We’ve come across several people that we know who’ve been asked to take early retirement practice from really well-known and very successful companies. They’re starting to come out into the market and we’re finding a lot of re-purposing opportunities there.

What we’re also finding though, Tim, what does somebody do if they’re at one of those facilities where they’re dealing with cutbacks and where they are running on a shorter staff? Or because of COVID outbreak fears, they’re running with far less people. What are the opportunities for them? And what can you do if you’re in one of those less advanced sides of the situation?

Tim Goshert: Well, as a person, if you’re unfortunately maybe furloughed or laid off or asked for early retirement, I think you should see that as an opportunity for your next step. I’ve seen this happen in the last six months to a few people that I know. What I found is they ended up finding a very good job, maybe in a completely different industry. One example that comes to mind is someone from one industry went to the paper industry that is definitely needing help in the liability area. If you saw that change recently on LinkedIn, that was there.

So I think if you’re affected by that, you have to tune your résumé up. Make sure you work on looking for opportunities. And in the meantime, then learn. Right now, I think it’s a great opportunity to get all kinds of free information on all different areas in webinars. I think if you were at home, unemployed and wanted to learn more, you could spend three to four hours each day with free training and webinars to hone your skills.

Chris Pepin: Tim, you’ve mentioned that there is a real opportunity to hire people with a lot of skills from downsizing facilities. What I’m curious about is, how difficult is it a hire somebody from a different type of manufacturing? So, for instance, somebody in the food business, taking somebody from the paper business, or chemicals.

A lot of times there’s hesitation, especially in recruitment and especially with, let’s face it, really, really busy leaders who don’t want to chew through a bunch of unqualified résumés. What are the advantages of going outside of your vertical and what have you seen with that in the past?

Tim Goshert: Well, if you’re hiring and looking for people in the reliability area or maintenance area, I think there’s huge benefit for hiring somebody from a completely different industry that has seen other ways in other manufacturing processes.

There is this need by some companies. They say, “Well, I’m only going to hire people that have worked in the food business, because they only do this and they only understand this. And if you don’t work in the food business, you can’t understand the food equipment or things like that.” I’ve heard the same thing in the oil and gas business where they say, “Well, we need somebody from the oil and gas business.”

But I believe in the reliability and maintenance world is that equipment is equipment. Equipment fails due to failure modes. And yes, there’s inherent failure modes to equipment. A pump has a certain failure mode that will run across all types of industries. Now, there is the industry-specific [loads 00:16:11], but I think people understand the equipment and understand how to manage the health of equipment.

That’s transferable from one industry to another industry, another industry. Actually, I think it’s an advantage because the person that you bring in from X industry into your industry, they’ll bring things that you may have not thought of that can be applied to your business.

Now, in my past, I worked for a global food company predominantly, and we had plants all over the world. But where I learned the most, from how to do maintenance different or how to do reliability different, was from people in completely different industries; the steel business, the paper business, the tire and rubber business, the oil and gas businesses, where I learned and then I applied those learnings to the businesses that I was at.

I see that happening in industry. The progressive companies are benchmarking with not only within their industry, but they’re going outside to learn new things that they can apply and get competitive advantage by doing that.

Chris Pepin: Doug, tell us a little bit about your experience here, because we know that you’ve obviously been a consultant for a number of years here and have been in the trenches in a number of different places. Tell us from your RCM perspective, what you’ve picked up on, where you’ve been able to learn from others and where you can see this cross-pollination really working for you.

Doug Plucknette: In terms of the people side of this, I’ve had a bit of fun with what went on with COVID in terms of people that I’ve built relationships with over the past 20 years, a couple that … One in particular there called me and said, “Hey, I’m thinking about retiring. They’re offering me a package, but I’m nervous about that.” I kind of chuckled and said, “Well, are you really going to retire? Because, knowing you, you’re the kind of guy that keeps busy, enjoy the job that you had. What are your thoughts?” He says, “Yeah, I might go do something. Maybe I’ll do the consulting thing like you do, or maybe I’ll pick something up part time in terms of maintenance management.”

I said to him, “Well, to me, it’s a no-brainer. You’re a guy that’s got a lot of skills. You worked for a big company. You have a great résumé. Take that retirement. Are they offering you an incentive to leave as well?” And he’s like, “Yeah.” I said, “Holy smokes. You can’t beat that. So, you’re getting 100% of your retirement, plus an incentive to go. And you have disability to probably go out there and land something really good in a short amount of time. How much time off do you want?”

In the end, here’s a guy that eight or 10 years ago when I first started working with him was worried about, “At what age will I be able to retire? I didn’t put that much in my 401k,” to a point where now he’s … The next job he took was a 25% increase in pay. Plus, he’s got his retirement check coming. Plus, he stacked a bunch of money in the bank that he got for an incentive, so it worked out great for him.

I have worked with a lot of tradespeople over the last six months and telling them … Especially those that have gone through apprentice programs to say, “This is really an opportune time for you. Companies are going to be looking.”

In those companies, as Tim talks about, if you’re smart, you’re looking to upgrade. Because you know that there’s a bunch of companies that had to lay people off. If they laid off really skilled, good maintenance people, and you’re working for a place that has taken any Tom, Dick and Harry off the street, you ought to be saying to yourself, “Man, there’s some really good people that I could go out there and upgrade my maintenance crew,” so they understand precision maintenance and reliability and all those things that you want your maintenance guys to understand. So, there’s certainly an opportunity there.

From the RCM perspective, this has been an interesting thing. Tim talked about, gee, one of the things that happened is the folks that are there to run those teams for eliminating defect and do things like root-cause analysis and RCM, they may have been deemed not essential. So, getting people to understand that maintenance strategy that you worked on developed two years ago is still just as important today as it was then. It’s even more important because now you’re in this conundrum of, “What should we be doing?” Yeah, there’s really a lot to think about in those terms.

I’d just like to say that again, if you’re one of those people that’s home, gosh, that’s a tough, tough situation. It’s one that I can say that really, I’ve never been through. So I can’t sit back and say, “Hey, I get it. I got you.” But it is a time that while you’re studying, make use of that time.

There’s lots of training out there. Even the online courses, some of those that are available through consulting companies like mine, yeah, those are great to take. But you aren’t going to get a college degree by doing them. That’s just something to increase your knowledge. So then maybe you take a CMRP test or something like that for a certificate. But realistically, great time to do some online courses that work towards a degree program.

And most companies pick that stuff up. They see people that do that and make the effort to do that as more valuable. They’re saying, “Hey, there’s a person that despite being furloughed or laid off, they’re still looking to improve themselves.” And that’s somebody you want to hang on to, when we start back up.

Chris Pepin: That actually transitions really well from the top 10% conversation we had on the last podcast, by making sure you protect and maintain your momentum. So even if things are not going right or not going the way you want them to, still getting up and showing up every day for your career and for your skills, it puts you in that rarefied air where the opportunities come a lot faster and a lot better.

Doug Plucknette: Absolutely.

Tim Goshert: I’d also like to add on that. I think if you go into an interview situation, that might be a question the interviewer has. “Well, what have you done since you have been laid off? What steps have you taken to find a job? What have you done?” Or if it doesn’t come up as a question, I bring it up and say, “This is my … This is what I’ve done. I’ve done this, this webinars, these types of training. I’ve tried to increase my skills in this.”

That just gives you an edge in a competitive hiring environment, maybe to get the job that you really want. So, it’s a period of time not to … You need to be aggressive and learn and get out there in the world.

Doug Plucknette: For those young guys out there, I tell my son and my son-in-law that are both tradespeople, Life isn’t a race. I started out in the trades and I did the night school thing, and it took forever. It really did. But it keeps your mind fresh.

As you guys just pointed out, when it comes down to what are the opportunities going to be in the future? When somebody sees that you’ve continued on to learn, man, it makes all the difference in the world. Whether you’ve completed that degree at or not, to just be able to say, “Yeah, I’m working towards this, and here’s what I’ve been doing and here’s the courses I’ve taken. This is the direction I’d like my career to go,” to be able to say those things makes a huge difference.

Chris Pepin: Doug, have you found that it’s almost as if you never really arrive? There’s just to be within that kind of mindset that you don’t get there. You never know at all, and you could never possibly learn it all, and you just keep trying. That allows you to be really comfortable with where you’re at, because you’re better than you’ve been, but there’s always something else you can get as well.

Tim Goshert: Yeah. I get that, Chris. My own experience was that I’ll say for 19 years, I was one of those that would have agreed 100% wholeheartedly. You never really arrive. It’s just a good thing to do.

I can tell you that I tell people today that it took until I was 40 till I realized what I really wanted to do for a living. My career at that time was half over with. So for 19 years, I turned the wrenches, worked as a lead man, a journeyman, a supervisor. When I realized that the supervision thing was, “Well, I don’t want to do that,” and I was going to night school, I knew I wasn’t going to be stuck to doing that. I knew there could be more.

Sometimes it just takes a while to realize, “Hey, this is what I want to do.” It’s 60 now. I could tell you, there might be some other things I might do. So I guess I could agree with, have I really arrived? There might be more. And that’s one of the things.

Just keep that positive attitude to say if you keep learning and keep applying, and are interested in what’s going on, whether it’s in manufacturing or anything else in life … Gosh, I have a friend that became a minister at 55. The rest of his life, you would have never thought that this is what this person would do. So, there’s a lot out there. Just keep learning. Keep applying yourself.

Chris Pepin: Yeah, it almost sounds like that iterative process of finding what’s better or what’s interesting has brought you to a point where you could stop working and you really don’t want to, because it’s just … You found interesting stuff.

Doug Plucknette: Yeah.

Chris Pepin: That’s what we want to encourage our audience to do. There’s plenty of opportunity. What I think is rare out there is the person that wants to continue to learn and wants to continue to grow and try new skills and learn new things.

Tim Goshert: Kodak, in working with our reliability group, the thing that our maintenance organization pointed out that we needed the most help in was kitting and scheduling.

So we did benchmarking with a bunch of other companies. Then somebody whose wife worked in a hospital said, “You need to come to a hospital to learn how to kit and schedule.” Because every doctor, while they might all be doing any surgery, they have different size hands. They have different techniques, and every doctor has a different kit. There might be six tools that are the same, but there’s two of them in there that are different. How do you schedule that? How do you make…

Our jobs are never that different when it comes to replacing a pump. There’s a difference with bolt size, probably. But in terms of how they did that process was probably the most helpful of all the other places where we benchmark with. Because the differences they had to deal with, in making sure that that kit was perfect each time. Every surgery doesn’t go as well as planned. So there might be a couple extra tools they asked for in there, and you got to make sure they’re all there.

Outside of that, in terms of preparation, it still comes down to … This is probably what scares me the most about where we are. You look at the companies that said essential and non-essential, and then we say maybe some of the ones that they listed as non-essential are the ones that keep the boat going in the right direction in terms of the planning and scheduling and understanding criticality and what should go first.

I don’t know how to make that happen, other than to tell people, “You need to look into that, because that is something that’s going to come back and bite you.”

Chris Pepin: Tim, you got any thoughts here?

Tim Goshert: Well, to the companies that are in that situation, they have tough decisions to make. They have to survive the current situation, and then they have to also provide the foundation to be able to survive … I mean, to launch and do what they need to do when we get over this COVID-19 issue, which we don’t know when that’s going to be.

So they really have a tough job making the right calls, and I think Doug’s right. When it comes to doing reliability activities, it goes back to what’s critical to your business? You have to keep those activities. You have to keep those resources that do those activities, and you need to steer the boat in the right direction. It’s a difficult job, but the ones that do that the best in these stormy seas are the ones that will survive and, well, really excel in the future.

Chris Pepin: Well, with that, I think we’ll close out our second conversation here along the Cycle of Insanity. We thank you all for listening and stay tuned for part three, coming up. Thanks everybody. Thanks Tim, and thanks Doug.

Doug Plucknette: Thank you. And have a good one too.

Tim Goshert: Yep. Thank you.

Chris Pepin: This is Chris Pepin. I thank you so much for listening in on our podcast. You can catch us on the web at proreli.com. That’s proreli.com. Go ahead and reach out to me directly cp@proreli.com.

You can also look up Progressive Reliability, and we are all over LinkedIn. So if you’d like to comment, see our team, see some other media that we’re putting out, it’s always there. And our white papers are available on our website as well. We look forward to getting in touch with you and hearing more what you think about our podcast and bringing more value in the future. Thanks again for your time.