Design is often an iterative process of trying something,
testing, modifying and testing again. In this environment, particularly for
companies supplying the aerospace and defense industries, it's critical to have
an asset management system that can quickly adapt to changing schedules and
changing technical demands.
But too often, the management of test equipment consists of
software solutions imposed from above or ad hoc processes that vary by
These approaches rarely stick. They're piecemeal solutions,
addressing only symptoms and not the cultural causes at the root of the
problem. As a result, typical test equipment utilization rates run between 6
and 20 percent. That's a lot of equipment sitting idle on shelves, in drawers
and elsewhere. This low utilization effectively prevents management from being
able to invest in the newer and better technology that engineering
organizations often need to get their jobs done.
It's clear that the realm of test equipment management is ripe
for innovation and performance improvement. What's needed is a more
comprehensive approach involving not just processes and software, but also all
the people who will make test equipment management work right at your company.
By managing their test equipment assets in this more holistic
fashion, numerous companies have increased utilization by a factor of four.
Perhaps most importantly, they've also dramatically reduced the lead time for
engineers seeking specific pieces of test equipment, and the equipment they get
has far greater capability than what they used to get.
Behind The Numbers
When you're dealing with $100 million or more worth of
test equipment, as is common in aerospace and defense product development, it
helps to have an accurate picture of how that equipment is being used, where
it's housed and whether it's enough to meet future demand.
But a deep dive into the data about your equipment is only the
beginning of an effective solution. The crux of the challenge, after all, is
the lack of faith engineers have in the management of the equipment. The
stockpiling that results is what exacerbates low utilization. This tactic,
while it may appear to work in the short term, limits your company's capacity
to afford more technologically capable equipment and ultimately thwarts
innovation and speed.
How do you change those habits and drive lasting, meaningful
change? Both accountability and incentive, two concepts often missing from test
equipment management initiatives, will be crucial.
To eliminate the hoarding of equipment and other behaviors that
prevent success, a holistic solution must identify, measure and encourage
change. You'll need a system that pinpoints where process breakdowns occur and
facilitates dialog to address the problems promptly and directly - thus
injecting trust into the new processes.
Meanwhile, effective test equipment management must also
incorporate practices aimed at producing and maintaining strategic alignment -
continually evaluating the satisfaction of all employees, creating communications
that spur action in support of the new approach, and finally institutionalizing
these improvements through ongoing measurement, analysis and adaptation.
Making The Persuasive
Don't underestimate the need for investing in the culture-focused
aspects discussed above. Otherwise, an incomplete solution inevitably will fade
away, failing to provide the lasting changes need to do your job better.
However, a more comprehensive approach requires the buy-in of people from
across the organization to succeed.
That audience includes financial managers. Be sure to give them
the full picture of the costs at stake. Often, objectives focus myopically on
total bottom-line dollars saved, overlooking the myriad costs that comprise the
total and directly impact the engineer's ability to do his job.
Time is your scarcest resource as an engineer. If an asset
management solution costs an engineer time or distracts them in a way that
prevents a schedule from being met or an innovation from occurring, then that
solution has done more harm than good.
The more complete the solution, the more quickly and fully it can
deliver results in these areas that grab the attention of financial managers.
One major multinational aerospace company, for example, produced
savings of more than $10 million in the first year using its new test equipment
management system. These savings were achieved through reductions in test
equipment purchases and the labor associated with tracking maintaining and
managing these assets.
Another element of that company's solution that made the
transition easier was a phased rollout. They launched and tested the solution
at one location, then implemented it throughout the company. People throughout
the company aligned behind the changes because they'd already seen the results
in action. Engineers soon embraced the program and became advocates because
they could more easily and quickly get the test equipment they needed.
As the new system matures, having accountability and incentive
structures in place will be even more important to lasting success. So, too,
will be ongoing communications with all the engineers who will make your
program work. Leaders of a test equipment management initiative must
continuously share a vision for the changes and the crucial role each person
must play in its success.
When you understand what drives financial performance on an
income statement, you can quickly come to the conclusion that you must do
everything you can to increase revenues. And in this domain, that means getting
new products through development. Asset management has to keep costs low and
leverage the infrastructure so that more people and resources can be devoted to
additional product development to grow revenues faster.
In this way, it will not only help eliminate the time-wasting
search for equipment and make getting tests done easier for you and your fellow
engineers, but it will also dramatically improve the future prospects for your
job and your company.
Paul McNamara is founder and CEO of The Sente Group, a
national services provider that helps leaders in aerospace and defense improve
business performance in their test environments.
Thanks for an informative article, Paul. Given the cost and sophistication of modern test equipment, a holistic equipment management strategy is essentially mandatory. At the same time, an article like this makes me fondly recall the old days, working with tube-based oscilloscopes. The test-equipment management strategy back then was, if the equipment acted up, you gave it a good whack on the side.
Thanks Alexander. It may seem hard to believe be ocassionally we find old vacuum tube equipment (or old equipment generally, even if it's not vacuum tube) piled away "just in case the program comes back". While that concern does need to be cared for (and we do) the mentality of holding on / hoarding equipment is costly to the design engineer in ways they may not be able to imagine. Thanks again for your post.
Excellent article Paul. The need for a holistic approach is necessary on the other side of industry too, where you're not dealing with $100M setups. In those cases, however, the problem is not so much of the wrong approach being pushed down from above, but rather no unified approach whatsoever. Equipment, procedures etc. are just procured on as-needed basis and nothing is tied together.
Thanks Jack. I couldn't agree more with what you say. Large companies can be thought of as collections of smaller lab entitites Often each lab has its own process, procedure and spreadsheet -- almost identical to what you are talking about. We've actaully got a refined set of processes, supported by software tools and including people strategies. While we often write about the "big guys", as you say, the approach works for smaller companies as well. We are working on a couple of new offers that are scaled but but we think we will helpful to smaller companies. Thanks again.
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