Planning and Capital- Where Does Risk Fit? Luke Anderson, FMP

January 1986 Space Shuttle Challenger- The cause of the catastrophe was determined to be the failure of the O-ring gaskets on one of the solid rocket boosters.

O-Ring Failure Engineers at NASA knew that the failure of the O-rings could occur, but with a very low probability of a catastrophic disaster. NASA determined that the erosion of the o-ring was an acceptable risk of flight - even though the O-ring actually deviated from expected performance". Basically NASA had overwhelming information that a flaw would happen – but they convinced themselves that flying with the flaw was acceptable.

Normalization of Deviance A team that was hired to investigate the catastrophe coined a phrase for this phenomena - called the normalization of deviance. The normalization of deviance is defined as: “The gradual process through which unacceptable practice or standards become acceptable. As the deviant behavior is repeated without catastrophic results, it becomes the social norm for the organization.”

Normalization of Deviance “The gradual process through which unacceptable practice or standards become acceptable. As the deviant behavior is repeated without catastrophic results, it becomes the social norm.”

Seventeen Years Later…2003 17 years after the study on the Challenger was published - The shuttle Columbia came apart due to damage in its heat shield as it was re-entering the earth’s atmosphere, and seven more astronauts died. That was 2003; but NASA had fallen prey to the normalization of deviance for a second time. Shuttles returning with damaged heat shields had become the norm and acceptable. So by no means am I trying to say that by me eating a donut or you being complacent in the status quo is what causes major infrastructure to fail but the principal is similar…as you cheat, shortcut or change repeatedly – it becomes acceptable and becomes your norm.

What is facility Normalization of Deviance?

Risk Management Identify Assess Prioritize

Identify

Assess

Prioritize

Risk Management Identify Assess Prioritize

Computerized Maintenance Management Create work items- Manual or Automated Prioritize & Assign Work Record Transactions (Labor & Materials) Report and Analyze

Types of Activities Planned vs. Reactive

SOPs

Learning from Mistakes Missed 9K shots, lost 300 games, 26x took final shot and missed- Ive failed over and over and that why I succeed

Risk Summary How Does a CMMS Mitigate Risk? Creates an executable plan, holds you accountable Instant access to all past inspections, work and repair incase of accident or emergency Standard Operating Procedures for all types of work. More accurate fiscal decisions driven by data Planned maintenance defers cost of replacement and can prevent major repair.

Cost Impact of Consistent Preventative Maintenance 50% - 65% reduction in the rate of emergency work Lower cost per work order with the average cost per work order being 28.6% to 39.3% less

In emergency work orders Rate of Emergency Work Rate of Emergencies Average for Group Rate of Emergencies for PM Masters Reduction in Emergencies PM Master Group 1.89% 1 out of 53 work orders 0.67% 1 out of 147 work orders 64.5% In emergency work orders

Jones Lang LaSalle PM ROI Study Developed a Financial Model

Establish $ per sq/ft for PM Work

545% ROI in a PM Program Accurate projection of replacement and extended asset life LOWER OVERALL COST OF OWNERSHIP

A.P.P.E.M Assess Prioritize Plan Execute Maintain

Reality

The Capital Plan

Who is responsible for the change? Staff/Parishioners? Leadership? Everyone?

Employers must manage change to allow EVERYONE to cope and adjust Leadership! Employers must manage change to allow EVERYONE to cope and adjust

Thank You Donovan Loomis Account Manager Donovan.Loomis@DudeSolutions.com Luke Anderson, FMP Luke.Anderson@DudeSolutions.com