of how individual weaknesses in each element of reliability add up. The first approach provides the impetus to move forward with the assessment. The second approach highlights detailed areas of loss that you never knew existed.
There are two advantages in developing an accurate Cost of Unreliability from both the top-down and the bottom-up. They are:
1.It is important for senior managers to know the total Cost of Unreliability from a business perspective to accurately understand the value of the entire opportunity. Without this information, senior managers may think that corrective action is too expensive. With an accurate Cost of Unreliability, they will know it is a good investment.
2.It is important to know the total Cost of Unreliability from a detailed perspective to provide a basis for closure. If there is a significant difference between the total “tops-down” Cost of Unreliability and the sum of the individual parts, the assessment will not pass the “smell test”. Either you have missed something or have exaggerated the value of something.
High Level Cost of Unreliability
In assessing the Cost of Unreliability from a top-down or outside-in perspective, we will be trying to understand the total loss of money that results from poor reliability. We want to assess the cost as senior managers, accountants, or investors would. They are not particularly interested in what is causing the loss of revenue. They are only interested the bottom line.
The first category of Costs of Unreliability is direct costs, which are those factors that have a direct cause-and-effect relationship with a reliability event. These costs include:
•The value of lost production — or the income that could have been made if production had not been interrupted.
•The cost of maintenance needed to perform repairs and restore operation.
The second category of Costs of Unreliability is indirect costs. These costs frequently have no direct cause-and-effect relationship, but are the result of poor reliability nonetheless. These costs include:
•The cost of being a reactive organization — or the cost of having to be prepared to respond to failures. An organization that performs a great deal of reactive maintenance needs to be larger than a proactive organization. It needs people both to keep things running and to respond to failures. It needs a larger staff to manage all the problems. Managing problems keeps senior managers from focusing on future improvement and keeps them focused on the past.
•The costs of sloppiness — sloppiness is impossible to confine to one thing. It is impossible to confine a management philosophy that condones poor reliability to reliability only. Poor reliability tends to infect other areas like quality, safety, and environmental performance. In assessing the Cost of Unreliability, it is important to include the impact poor reliability has on those areas.
•The cost of lost business — or the impact on your business from missing deliveries or making poor products while affected by poor reliability. Companies that accept poor reliability have two choices. First, their production and quality can suffer from poor reliability. If they want to prevent their poor reliability from affecting delivery schedule and quality, they have to have sufficient manufacturing capacity to both accommodate the losses and meet customer demands. Second, they can have an inefficient operation that ultimately affects product costs. In either case, the customer will ultimately be unhappy and look for another supplier.
Detailed Cost of Unreliability
In assessing the Cost of Unreliability from a bottom-up or inside-out perspective, we will be trying to identify each and every issue that results in poor reliability and to quantify the relative value of that specific problem. Although the accountants and investors are not interested in this level of detail, this information is needed to build a plan of attack for corrective action. It is important to understand specifically what weakness is resulting in poor reliability and how large an impact is being produced. To be effective in making changes, we need to know what to attack and in which order we should attack each problem.
The following sections go through each element in the lifecycle of a system and describe the issues that play a part in ensuring that the system is reliable, As the relative strengths or weaknesses of the individual elements are identified, it will be necessary for you to measure the impact by quantifying the cost of the fallout resulting from that problem.
Assess Basic New Unit Development Practices
How do you go about procuring a new system? How much effort goes into designing reliability into it? There are some items that would seem to be bullet proof and can be left to the “kindness of strangers.” By this I mean that if your design process adequately addresses integrity requirements, the reliability aspects are likely to take care of themselves. For example, when you purchase a compressor from a hardware store, you trust that the design requirements needed to ensure that the pressure vessel will not explode will also ensure that it will provide a long reliable life. That paradigm may or may not be correct. “Ruggedness” may ensure the reliability of very unsophisticated components, but not components that are delicate or “intelligent.”
But for now, let’s get back to the basic question. How much attention is typically paid to reliability as a part of the basic system development process? An even more basic question is: How do you manage the reliability aspects of the design process? Are the reliability aspects of the design process even understood?
Let’s begin this discussion by answering these questions. How are they addressed as part of the normal design process for commercial products where “design” is a matter of selecting desired characteristics? For commercially available products, the design process is a matter of selecting characteristics that describe form, fit, and function. When ordinary people purchase a new car, they address reliability in the very limited way, if at all. Apart from form, fit, and function, there are a number of integrity-related and reliability-related issues that purchasers typically choose to trust to others.
A few examples involve features that particularly careful buyers may change after they purchase a new car because the design features are not readily available from manufacturers or dealerships. One example is tires. It is not uncommon for particularly careful people to go to a tire store immediately after leaving the dealership with a new car. Doing so, they are able to trade the almost new tires on the car for a set of new tires with which they are more confident. Another example is based on personal experiences with car enthusiasts who choose to “blueprint” new cars as soon as they are delivered. The process of blueprinting a new car is typically reserved for high value or collector cars. It entails disassembling a significant portion of the car looking for missing or loose connectors and for key settings that are misadjusted during manufacturing. These individuals have little trust for the typical factory worker.
In either case, if it were possible to specify the way cars are assembled, some individuals would demand:
•Different and better tires
•Different quality control practices
•A run-in procedure prior to delivery to eliminate components likely to experience infant mortality
In most cases, however, car buyers would typically pick the color, the number of doors, and the kind of transmission and trust everything else to the manufacturer and the dealer.
Moving beyond typical purchases made by individuals, examples of integrity-related issues may involve the adequacy of the structural design and assembly. The complexities of these issues are beyond the understanding of most non-engineers. Therefore, most people tend to trust that they are being handled in
