tricks of the trade

I asked this question in another post but would like to know some of the methods others use. How do you convince management to spend money now to save downtime later?? I would like to hear from both sides, what it would take to convince you as management and success stories from guys on the floor. I know one of the most effective ways is to hit 'em in the pocket books but I am not sure of the way you would approach something like this.

They probably don't want to hear how great you are. Feed them with numbers, great numbers - with $ sign in the prefix. Make sure your presentation is well organised, anticipate all the tricky questions and let the answers flow out smoothly.

Justification

In my experience of 30 years in the maintenance field management has always been willing to listen to new improvements. Whether they be with machines or personel. Where the burden of proof lies is with the people presenting the improvements. It is up to you to present a solid justification for why this proposal would be benificial. Management has always in my experience wanted to see where the process can make "MORE MONEY." Is this not the reason we are all working? Disect the proposal to be and lay out the savings. Less labor hours, better products, less downtime, less overtime, better trained employees, etc. Where it will bite you is if you try to present something to management when you are unsure of what you want and what is needed. Do your homework.
I believe training is always a positive, but you MUST HAVE trainable employees. Lazy employees always make it bad all the way around. Face it many people in maintenance, electrical work, supervision and so forth, don't need to be there. I believe you are born a maintenance man (or woman) as well as an electrician or so on. Some are leaders some are followers and some are tag alongs looking for free handouts. If you haven't got it you haven't got it. My dad always said "Son ugliness is skin deep but zzzzz lazyness goes plumb to the bone."

Willie

Persistence Pays off.

I could speak from both sides-- started out and am still chiefly a design engineer, but promoted to a position now where I am half management, half useful. My bosses are extremely tight with money, always trying to save a few € (not $!).

Over the years I have hounded and pushed and pulled for certain items that look like they cost a lot, but would save much more in preventative ways. Now of course the bosses think that it is their idea, but I suppose as lomng as it gets done, I can get along.

It does come down to justification. "If you spend €100 now, you will save €300 next month". Simple but efective. Don't forget that not all benefits are directly translated into money. I have used employee morale as a justification for a couple items (happy people don't leave their job and work more producitvely, which I guess in the end translates to more money...).

Be sure you can deliver

I have seen numerous instances where a middle manager will pull numbers out of his ascot and present them to upper management as "net savings". Why would he do such a thing? Easy - he didn't have to deliver. We did, and when the top brass began getting ticked about it, they wanted to know what OUR problem was.

You may want to do a project very badly, but don't let the desire affect your judgement when it comes to savings. Don't commit yourself or your team to unrealistic fiscal and time savings.

Remember, "best case" never is.

TM

The "trick" is to show clearly and in writing the payoff from an improvement. In my business, if a guy comes to me with an idea, I make him put a case for it together. I'm fortunate in that I am still an engineer at heart, and I can usually tell if it's a good idea or not. But, you should pity the poor bean counter, who has no idea what you are talking about most of the time. You have to convert your ideas, and the reasons for implementing them, into a language he understands - namely, costs and savings.

You don't need to know ROI (Return On Invsetment) or present worth or double entry accounting to do that. You do need to analyze the problem, and state it clearly in writing. This includes the costs in lost production or wasted energy or whatever applies. You need to know the solution, and the cost of the solution, including material, manpower, and energy. You need to know the savings the solution will create, in dollars, or manpower, or energy, or increased production, or reduced scrap, or whatever. You need to state these savings in writing. Then, you divide the cost by the net savings per year, and you get the time required for the investment to payback by virtue of the savings. Then, the bean counters can decide if that is the best use of the money available at the time.

Remember, there are lots of competing uses for the cash your company has available. Some of these, like taxes and payroll and electric bills, are not optional. Others, like investments to improve productivity, are either optional or at least can be postponed if cash is short. It is the accountant's job to decide which of the many uses for cash are the best at any given time. If your idea has a payback of three years, and another has a payback of one year, which one should the company spend its money on? If management has a choice between an idea with a calculated payback of one and a half years, and another that just has you saying "This is a good idea and can save tons of money", which one should the company spend its money on?

After all, it is probably a good idea for you to have a little car to use for grocery shopping, a larger car for vacations and long trips, a big truck for hauling things around, a sports car for nights on the town, and a full sized used car for the kids to drive. Do you have all of these? Why not? Why should management treat their money or the stockholders money differently than you treat your own?

As every one has pretty much said, the key is in presentation.

This might help. At one company where I once worked, they had a formal presentation format that they liked. This format followed all major projects through the approval process and had several catagories. Below are those catagories:

Cost Detail: List out in reasonable detail where all money will be spent. Be sure to include all costs including a contingency.

Present Situation: Detail today's situation. Include positive conditions as well as negative. It is important to be unbiased in your analysis.

Proposed Project: Detail the project scope. Know your intended audience when writing this section. Do not be overly technical if the accountants and way-upper management have to sign off. The technical guys lower down the chain will typically ask for more detail if they want it.

Alternatives Considered: When possible, examine at least two alternatives and have other responsible folks involved with this research. The more backing you can get in this stage, the better.

Financial Justification: Here is the biggie. This is where the bean-counters will get interested. Tom Jenkins said it pretty well below - know your costs and savings.

Est. Annual Savings: Here is your bottom line.

As Tom also pointed out, knowing your ROI is probably not too important, but if you can figure it and any other important accounting measures, you might want to do so. Remember, when it comes to getting funding approved, the accounting department can make you or break you. Get them on your side.

Steve

Even then sometimes you just will not be able to convince the company to go with a good solid proposal, despite the ROI.

I worked at a company that had very poor lighting in our fab shop. I looked at the lights and realized that they were intended to be used on a 277 volt system. They were being ran from 230 volts. Needless to say they would not fire off properly, put out very poor lighting, and used massive amounts of current.

I did the ROI and presented it to the company. New lights would pay for themselves in three months in the worst case. But, here's the kicker, they rented the building and were fueding with the owner. So they decided against replacing the old lights even though they were fronting the electricity bill.

Several years later, the old lights began to fail from being ran on partial voltage for so long. I purchased one light to replace the defective unit with. After seeing the light that the new unit produced with the new ROI that I presented with solid figures taken from amp readings on the old and the new fixture we finally got new lights.

Payoff time for replacing all lights? Less than one month.
Cost of delaying the replacement? Somewhere on the order of $8,000-$10,000.
Total cost of new lights was around $350.

So I have to hit them in the pocket book eh. I guess if I check the downtime for each of the machines and assume upgrading the training of the electricians could eliminate 50% of that. The cost of a contractor coming in could also be factored in couldn't it. Then make sure the money lost on downtime is greater than the training costs. This would all have to be in a neat presentable easy to follow package (like steve has detailed), right.
One more thing though, I have a feeling there are too many variables in my plan. How do you properly estimate downtime saved??

thunda said:

I guess if I check the downtime for each of the machines and ASSUME upgrading the training of the electricians could eliminate 50% of that.

Click to expand...

Be careful with that word. Try to do a case study of some sort. Use the prior incidents, like you said. Then say if they had known XXX then the downtime would have been Y hours less. If you look at specific problems and how they were solved, you may be able to backtrack and come up with the numbers you want. Yes, you will have to guess at some point, but try to show that it is an educated one as possible.

Train yourself if you have to........

If you are trying to convince management to train you, and it seems like pulling teeth, enrol yourself in something anyway, and if they won't pay for it, keep an eye out for anyone hiring people with initiative. Bosses don't want to have to lead everyone around like a flock a sheep. If you have a mission, go out and do it. You know if you really need the training or not. Since Rockwell courses are priced so high, they won't send me to them. They have sent out too many guys in the past who come back with about 10% of what they should have learned. Now I'm enrolled in a reputable technical institute that will get me a Certificate in PLC Control Applications with about 12 intense weekends of training in a Rockwell sponsored lab. 6 courses @ $400 CDN each. The only kicker is I live 9 hours away from the school.