Nothing's Going Wrong, So Pay Up

The votes are in. Charlize Theron received the Oscar for her performance in Monster, and was widely judged as very deserving.

William Hung is the worst singer ever uncovered in the "American Idol" tryouts, and he's landed a record deal. What kind of performance metric is that?

What if you designed the worst machine ever, and then received top dollar to support it because it always failed and took 12 hours to fix every single time? I think it might happen once.

So you and I build machines and processes, we stay on top of technology to provide our customers with the best solutions to their problems, and we also find those "acceptable" manufacturing and design methods to produce solutions.

I think we can agree that some solutions are considerably better than others. But why is that?

Most of us are looking for ways to stem the flow of good jobs from the motherland, and we've talked about innovation as a way to keep the work in our own backyard. So, in the spirit of preserving our jobs, let's find a metric, other than "it works" to measure performance.

Charging for meeting performance metrics might not be a new concept in some circles, but perhaps there is a twist to it that the likes of the average Joe has yet to consider.

Performance can be identified or measured in many ways beyond the obvious. A support call answered in two hours costs more than a response that takes eight hours. You pay for three copies of the "manual" when one is free. What about the process solution itself?

Many designers don't put a lot of effort into built-in diagnostics because it takes time, money and effort, and normally, if diagnostics are installed it is covered by a vague statement in the quote. The hard stuff--if this happens, and this happens, then someone could get hurt,is what usually gets addressed.

So, what if the raw stock is a little off spec, and it jams the bowl feeder? How does it get reported? How often can/does it happen? How long does it take to fix?

If your process design handles bad stock better than the next guy,then think of it as a selling feature. If your diagnostic system is the reason it takes only two minutes to report and fix the problem when it happens, that's worth uptime and money to your customer.

As part of any quote, performance might be measured by percent uptime. I haven't seen very many that do. There still is an expectation that things will fail.

So as part of a service contract, particularly if the right metrics are in place, why can't we--as an industry--create a performance standard?

One hundred percent uptime means that the machine doesn't fail,a realistic expectation, but only because of the time and effort put into the design. The effect on operations when it does fail is minimized because of the same design. Performance metrics.

So how should you charge for this? Is it expected? I'll suggest it is expected but not measured.

Put operator interfaces onto the process, wireless links to databases, provide access to online help systems, and connect the machine and/or operator to the supplier to dramatically reduce downtime.

This costs you money. Why can't you charge the customer when he doesn't have to call?

By implementing some measure of performance, you can tailor a service contract that charges the customer on a regular basis to support the infrastructure, and he would be charged when the machine does not mess with his bottom line, which, in fact, increases his bottom line.

If I install an energy management system that doesn't save energy, I would still be paid for the work, even though the customer isn't realizing any benefits.

However, if the energy management system I install saves the customer millions, then why shouldn't I reap the partnership benefits? If I was paid a percentage of those savings, I might retire early.

So, how about when a process fails? If it can be back up and running in 30 minutes rather than two hours, that is a benefit. The systems you put in place make that happen.

Measuring the impact of not being the cause of downtime has merit, and real dollars can flow into your coffers if the job is done right, and the contract is constructed for the benefit of both parties. Of course, the technology has to be there,as always.

Performance metrics can mean big positive bucks for you and your customers. New technology is always on its way to help. If that helps you, great. There's no charge.