RAM Insights

Uncover Your Buried Treasure

How Can You Achieve Top-Quartile Performance?
The Solomon RAM Study shows that constant improvement is the only
way you can maintain or increase your performance with respect
to your competition. The pace and direction of that improvement
will determine whether your performance is keeping up with the
competition. Uncovering the level of opportunity and the areas
you can improve is essential when determining where you need to
focus your efforts. The RAM Effectiveness Index is a measure of the
dollar value lost because of unreliability and inefficiency. A RAM
Effectiveness Index of 5 says that you are losing 5% of your Plant
Replacement Value (PRV) due to lack of plant availability and are
either under- or over-spending to provide that availability.
2011
2012

9.08
8.56

RAM Effectiveness

As you can see in

Figure 1, in 2012 for
performance above the
study average (secondquartile performance
and above), RAM
Effectiveness increased
by 7% to 14% from
2011. Interestingly
for third- and fourthquartile performers the
performance stayed flat
or declined.

RAM14-03

10

6.32 6.27

5.3
4.57

3.53

4.77

4.26

3.05

Q1

Q2

Avg

Q3

Q4

Figure 1. RAM Effectiveness

What Does This Mean?

The gap between first-quartile and fourth-quartile performance
is widening. Top performing organizations are working on three
objectives:
Creating a failure-free culture
Running their assets at a higher level of availability
Spending the appropriate amount on resources to deliver that
availability
Average top-quartile performance was 2.4 times better than average
fourth-quartile performance in 2011. In 2012 that gap widened
and the average top-quartile performance was 3 times better than
average fourth-quartile performance.
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The top half organizations are getting better, while the lower half organizations are not. An organization
that had mid-second quartile performance in 2011, had to improve 7 percent to stay at that level. If
they stayed stagnant with no improvement, then they would have dropped to lower second quartile
performance. First-quartile had to improve 14 percent just to stay flat. You have to put in effort just to
stay where you are.
An organization that had mid-third quartile performance in 2011 would have had to improve by 25% in 1
year to move into the bottom of the second-quartile in 2012. This rarely happens in the course of 1 year.
Working on the three objectives that top performers focus on is a journey and not a sprint. That is why
practicing the stewardship of measuring improvement on a regular basis is essential to understanding
where you are versus the competition and where opportunities lie that will allow you to improve. Unless
you measure there is no way of knowing.

Failure-Free Culture
A failure-free culture is the single thing that drives RAM effectiveness the most and can be worked on
without spending any money. The first question is: Does your organization believe that it can become
failure-free? Top-quartile performers do not focus on creating an outstanding maintenance department
that can fix and repair equipment rapidly. They focus on eliminating the failure in the first place and
increasing the reliability of every piece of equipment. In a cost-appropriate manner they are able to
deliver high asset availability and proactively address organizational and asset issues before they become
disruptive. By moving the culture toward failure-free operations, you can improve your RAM effectiveness.

Appropriate Spending Level

Top performers typically do not have the lowest spending rate. They have found the appropriate level
of spending that drives the failure-free culture. They realize that in some situations (staffing, parts
availability, training, etc.) more spending is the appropriate action and in other areas (routine unjustified
preventative maintenance, staffing for emergency maintenance, overtime, etc.) less spending is the
appropriate action. As these organizations become more failure-free what they quickly learn is that this
method is the best way to lower their maintenance cost. Not fixing assets is the goal but staffing with the
right personnel to accomplish this is essential. Top performers realize that emergency maintenance and
excessive overtime are indications that asset availability is lacking.
Top-performing organizations prioritize and work on improving the high impact areas and know that
failure-free performance is their goal. As a result they deliver greater customer satisfaction, higher
employee engagement, and increased profitability.
By investing in participation in the Solomon RAM Study you can determine if you are making progress in
all of these areas. You will find out how much opportunity you have for improvement. By signing up for
a multi-year subscription you will be assured to understand both direction and pace on a regular basis.
The investment you make in understanding your business opportunities will be the key measure of your
reliability journey and help you uncover your buried treasure.
For more information, contact:
Jeff Dudley at +1.989.430.1521 or
Jeff.Dudley@SolomonOnline.com.

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