The executives running a company don’t see what the troops on the ground see. Consequently, differences of opinion often occur about how the company should allocate resources.
At the extremes in a fictional world, an electrician or maintenance technician would have a candy store full of the latest test equipment, and the CFO would save money by not purchasing any test equipment. In reality, electricians and technicians know there’s an upper limit on what can be purchased, and CFOs know there’s a lower limit.
The problem is one of reaching agreement in the middle. For example, you write a capital request for purchasing 10 new DMMs that have features you badly need. The CFO sees the request and thinks, “Didn’t we buy everybody one of these last year?” He takes a walk and, sure enough, every electrician he sees has a DMM on his belt or tool pouch. He denies the request.
Now, let’s revise this scenario. Let’s say your plant has a large number of variable frequency drives (VFDs). You’ve had a lot of downtime in the associated systems. Over the holidays, you took a road trip to visit your cousin who lives in another state. You and your cousin, who is also a maintenance electrician were talking shop. The motor problems came up.
Your cousin said his plant also had those problems, but then he showed you the DMM he’s been using to solve them. It has a VFD mode that permits accurately analyzing non-sinusoidal waveforms and noisy signals in the controllers. This feature would have saved four hours on Line 3 last week. And unlike your DMM, this one has a low impedance input filter that eliminates those ghost readings that took you down the wrong path for days.
Now that you’re back from visiting your cousin, you want one of those meters. How do you get the value across to the CFO?
One way to do this is to go through the last few months of downtime and repair reports. Look for half a dozen outstanding examples. Talk to the other electricians and technicians to get some examples and background information.
For each line or major piece of equipment that was down, determine the excess downtime that would have been prevented if only the responding electrician or technician would have had this one DMM. Then multiply the revenue per hour of that line by the excess hours of downtime. After you have this value for each line or piece of equipment, add up the individual values to get X.
On the cover sheet of your capital request, state that in just six examples the total revenue lost was X. Make a reference to an attachment that shows the math.
For example, “The plant lost $1.7 million in revenue from just six incidents involving excess downtime that would not have been incurred if the responding technician would have had this instrument (see Attachment 3). The total number of incidents is 28; this is just a sampling.”
In the attachment, be consistent in how you describe each incident. Most important, be concise. You want this to be not just readable, but scannable. Executives rarely have time to pore over dense material. Toward that end, it’s also smart to pull out anything you find yourself repeating and put it in explanatory text that follows the six examples.
Don’t go down a wish list of meter features. Sure, you’d really like to have Bluetooth and other connectivity, and maybe some other features that exist only in a high-end meter. Limit your capital request to those you can show from the data, to be real revenue savers. Nobody likes to drink from a fire hose, and executives are especially that way.
If, for example, you’ve never had an incident in which lack of Bluetooth caused a quantifiable loss of revenue, then don’t go there. Or maybe you did have plenty of such incidents, but in your case the VFD mode just doesn’t lend itself to quantifying any savings. Pick a key feature or two. The other ones you want will probably come with the meter anyhow, and you can later write reports about the downtime you saved with your trusty new meter.
When you can speak based on the data, and speak in financial terms, you can present a compelling case. You remove opinion and bias from the discussion and help executives to decide based on the merits of a case rather than their perceptions of your alleged misconceptions.
Just make sure you’re using good data and you can verify anything you use.
