A Strategy for Better Test Equipment Management

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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 department.

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 Argument

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.

For more information, go to http://www.sentegroup.com.