315 - Prioritizing Initiatives with Paul Daoust

Prioritizing Initiatives with Paul Daoust

Welcome Paul to the Podcast. Paul is the founder of Scio Asset Management. Although, briefly, tell us about yourself.

I have almost 30 years experience in engineering reliability maintenance and both strategic and holistic asset management. At Scio we are providing frameworks for leadership in asset management that is based on first principle decision making. Also launching Assetiers that is a platform for leaders to discuss the challenges that we have in asset management.

In this episode we covered:

• There are challenges in prioritising where to allocate resources in asset management. Have you seen this?
• How do we prioritise the initiatives that are already in place such as lean manufacturing, Six Sigma, 5S and reliability maintenance?
• There are diminishing returns in pursuing reliability best practice. Do we always have to be the best in class in these practices?

There are challenges in prioritising where to allocate resources in asset management. Have you seen this?

That is a primary challenge. It goes to the strategic organisational goals in terms of delivering value from the available resources. Resources are both fast in that there is lots of money and people to invest and they are scarce in terms of budgetIng. It is the leadership's job to direct the resources to maximise value.

How do we prioritise the initiatives that are already in place such as lean manufacturing, Six Sigma, 5S and reliability maintenance? Do we go for easy wins or strictly focus on our strategic goals?

I think it is multifaceted in the sense that we can focus on things like lean manufacturing that improve people's capabilities but at the same time focus on business processes to have good, better, and best practices. Organisations need to assess the value in all their practices. And if there is value then what is the cost of going for the best practice?

There are diminishing returns in pursuing reliability best practice. Do we always have to be the best in class in these practices?

The Law of diminishing returns might manifest for people who are in production especially if you calculate cost per unit. However, when a company reaches maturity, there is always room for improvements. The Beauty Curve shows that improvement at maturity frees up resources to be utilised in other areas. It has a compounding effect.

This is why companies that carry out best practices deliver more value since they already have a culture of continuous improvement. This runs counter to what is believed as The Law of Diminishing Returns.

The challenge is whether going for those incremental values is worth it and how to prioritise the allocation of the freed up resources to continue problem solving.

There is also a question of where to start. The key is to pick a place where you believe there is need and work on it. The less mature and more reactive the organisation is the more the opportunities. The key for less mature organisations is to first focus on the people and free up capacity. They have to work hard to reduce reactive maintenance and reallocate the people to places where they can solve more problems that prevent recurrences.

Once we have freed up these resources, how do we prioritise their reallocations?

You need to focus on the strategic goals such that everything you do is aligned with the objectives. You have to test the alignment of the improvement initiatives to the strategic goals. Make sure that there is value in making the investment. You also need to ensure that you start initiatives in amounts that you can manage. Do not overload people because there are normal roles that they have to perform other than the initiatives.

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