5 Jan PPM vs Eternal Improvement – How to Cost Decision Making
Posted at 10:00 in Resilience by Rene Willemsen
With UK organisations seeing their assets and infrastructures subject to constantly evolving risks, it’s only natural that for many, risk and cost mitigation are number one on the agenda.
As the recent UK Climate Change Risk Assessment highlighted, organisations are clearly taking steps (albeit insufficient) to combat the network interdependencies and significant flood risks that threaten them. I commend this too: regardless of how short-sighted some of their current actions to protect assets might be, they’re being pre-emptive and reacting in the interim in lieu of a longer-term resilience solution.
It might not be perfect, but it’s a step in the right direction.
However, if these interim solutions create a reliance on short-term protection measures such as stock-piling flood barriers, organisations can quite easily incur needless costs in the long-term. This is an especially pertinent risk considering asset management decision making is largely driven by human judgement rather than data.
On a more positive note, this also means that there are clear financial advantages for organisations willing to take a long term, improvement driven approach to protecting assets.
But what exactly does this approach require?
Firstly, it requires organisations move away from the traditional protection model and instead move toward one driven by resilience (see here). Secondly, I believe it demands they re-evaluate their existing relationship with PPM.
PPM vs Eternal Improvement
Preventative maintenance has been industry practice for a significant amount of time, its core principles adding undeniable value to businesses long before the term PPM was coined. As a result, it would be ridiculous to call for this approach to be abandoned – it is one of the most effective ways of ensuring assets and systems are running compliantly and optimally. However, what I do believe is that to implement PPM in its traditional sense – as a preventative measure alone – can be costly in today’s climate where environmental risks seem to be developing at a greater rate than our reactions to them.
The reason I believe this is costly is due to maintenance, by definition, doing nothing to create additional resilience in assets. It only ensures they are compliant and functioning at the “required” standard. The problem today is that this standard needs to be in a constant state of flux and improvement to meet the growing demands of climate change, network interdependencies, unexpected regulatory changes and other risk factors. Those who don’t adapt to this new standard might not realise how vulnerable or unprepared they are until disaster strikes and they find they do not have the resilience measures in place to effectively minimise collateral damage or prevent business disruption.
For these organisations, the decision not to adapt means each disaster causes more financial damage than is necessary. The cost of returning assets to their previous state is also higher due to a lack of resilience and contingency measures. The irony of this is that some organisations will only restore the assets to the previous standard, failing to learn from the process or develop new measures to cope with similar events in the future.
This is why organisations need to adopt an Eternal Improvement approach built on data-driven decisions. Semantics aside, this is essentially the same concept as continuous improvement, but I’d like to emphasise the indefinite, ‘eternal’ nature of this commitment to improvement.
This is because in today’s climate, sitting still basically means moving backwards. You either take steps to adapt to new risks constantly, or you become vulnerable: there is no middle ground. This means planned preventative maintenance must become planned improvement maintenance.
In addition to scheduled maintenance checks, organisations should use all the information and resources available to them to assess their assets’ ability to cope with a new set of risks. Applied across a whole site or infrastructure, this periodic assessment process will help raise organisation’s collective resilience to evolving risks and in the long-term, lower the TCO of assets.
As floods, environmental disasters and economic uncertainty continue to threaten the UK, I grow increasingly confident that data-driven decision making and a commitment to Eternal Improvement that will mark the difference between those that thrive, and those that fall victim to the cost of doing nothing new.
This post originally appeared as a LinkedIn Pulse post.