ArcelorMittal Alcoa Joint In-Plant Training – Fred Schoeneborn
> Sachin Nimbalkar
There is a slide on your background, your experience, so I think I’m going to make you presenter. Yes, so let’s open your presentation.
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And start this webinar. Perfect. So basically, Fred, I’m showing your slide number 1, basically title slide.
> Fred Schoeneborn
Perfect, Perfect. What I’d like to do is basically give you a whole intro into this session as far as this particular In-Plant Training webinar that we’re talking about. Number 1: I am just delighted to be part of this webinar program here because what’s happening is you’ve got two of the best companies that I’m aware of that have the greatest energy programs. And again, I’ve been involved with them so I know how good they are. So to have Larry from ArcelorMittal and Walt from Alcoa, both participating in an In-Plant Training that’s going to happen next week. I think it’s going to be unbelievable. I’m just delighted that DOE and Oak Ridge are able to put this together. It’s something that I believe will be a world-class event. And it’s something that, as Sachin says, where whoever is going to be there is going to be the beneficiaries of wonderful information. So just a little bit about me, I always believe that when someone’s giving a talk, you really ought to know who that talker is that’s giving the information.
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Here’s just a little history on myself. I spent the better part of my career working for Mobile Oil. During that time, I was a global energy manager for Mobile. I really enjoyed finding energy as one of those items that really brought a whole new career to my life because originally I was building buildings for Mobile. And I built those buildings all over the world. One of the most fun things in life was to build the buildings where you find oil. And Mobile used to have this great saying that God’s ultimate joke was where to put the oil because it’s in some pretty rotten places, I can tell you that. So I built buildings in those places and then all of a sudden, I discovered that energy was an item that we were just not taking care of. So I created the energy program, and as part of that program, I found DOE and I found the EPA program. I found a lot of things where governmental voluntary programs could really be very, very helpful. So I say in here that I currently work with ArcelorMittal. I work with Alcoa. I work with ExxonMobil. I work with many people. And the one item that I always want to stress, and people have heard me say this, is the lack of implementation that happens during energy programs. In my old case, I know, I ran the energy program and I used to grant publish. As you can see in my agenda where I say that 103 million dollars was saved over 4 years, but I can tell you that the 103 million dollars was literally found money. They were not implemented. So somehow because of my many years with Mobile, they gave me a pass on this. And I was able to claim the 103 million dollars over 4 years, but I can tell you that was not actually implemented savings. So when I became a consultant, I kind of realized that also. So with that, I’d like to go to the agenda slide.
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The first thing that I want to talk about is the Implementation Challenge, why implementation is such a challenge. Then I want to talk about the barriers and what you can do to make it happen. What are the enablers? An implementation strategy I’m going to talk about, rewarding implementation, and then the prize that we’re going to unveil at this In-Plant Training is the actual new Implementation Guidebook that we will have available for everybody that is coming to the In-Plant Training in Cleveland. DOE is literally printing them, so you will have actual hard copies there. So when I do my presentation on Friday the 22nd, we will have an actual hard copy of the Implementation Guidebook there. I also want to talk a little bit about the value of replication. Replication is obviously a follow on to implementation, but it’s something that we need to go ahead and also talk to.
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So, on the next slide I want to talk about what you’re going to see. You’re going to see a wonderful implementation opportunity. But actually because people like Arvind Thekdi and Sachin are going to find things. They’re going to find things, there’s no question in my mind. I’ve had the opportunity to work with both of those people at various sites. I know they’re going to find things. So, I might say you found things. Now what? But I would also like to go to what the plant manager says, how a plant manager sees this. So in my case, I’d just like to give you a little bit of information about my participation with senior management. I had the pleasure of working with the chairman of ExxonMobil during my time. And I can tell you that top people think a little bit differently. They will always give you all the information that you think you should be getting. They want you to be able to read between the lines. They’re not going to spell out things for you. So a plant manager may not say this, but I can tell you that this is what a plant manager thinks. One saying that he has will be “I can’t spend potential savings.” You go ahead and you put potential savings in front of a plant manager. There’s nothing a plant manager is going to do with it because the plant manager can’t spend potential savings. An assessment is going to have the In-Plant Training in Cleveland at both Alcoa and the ArcelorMittal site. It’s going to cost time and effort for the people at the plant. So it’s not free. There’s an effort involved, there’s a logistics effort involved. There’s been a lot of planning on the part of Larry and Walt who have been involved in weekly calls just to organize all this. There have been several people like Mike Caulfield, several other folks, who have been involved with this, from the actual plants themselves. So you’re talking about a lot of people having been involved in it, so it is going to cost effort. The other thing that the plant manager will have in the back of his head is that, or her head, is that this assessment, this In-Plant Training Assessment is going to be something that the person at the plant will be accountable for. “You’ve talked me into doing this, and now I’m going to approve you doing it, and you will have done it, but I will want results.” So they’re going to grant the whole deal. The person who is actually running the In-Plant Training for Alcoa and for ArcelorMittal is accountable.
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The last bullet on that slide may not necessarily be something that you are aware of, but that is that corporate has a very peculiar way of controlling the money that will come out of an assessment. The way they can make sure that they truly do get the money that you say will be available is they will reduce the budget for that particular plant. And that is one way that I say corporate will seize the money identified which is one reason why it’s so important to have the information that will come out of an In-Plant Training until it is fully verified by the plant kept confidential. Don’t have people going around and saying “Is this kind of money available?” until the plant says “Yes, this is real money that we agree is available.” That’s a very important item.
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On the next slide, I’ll about a little bit about the implementation and the lack of focus. Up until now, implementation has never been part of an assessment focus. When you’re doing an assessment, you hire wonderful people. You bring wonderful people in like you’re doing here in Cleveland, folks like Arvind Thekdi, who as far as I’m concerned is world-class, at identifying opportunities. And you have somebody like Arvind Thekdi there. We have a heavy breather on our call I think, alright. The next thing is you have somebody like Arvind Thekdi there. And what will happen is you really just think about bringing in the experts and finding opportunities. Nobody thinks about the actual implementation that is necessary to make this thing happen. Implementation has never been part of training like it is being done right now and my compliments to Oak Ridge National Lab and DOE. This is the first time that I am aware of where implementation is really part of a training effort. Implementation has never been part of an agenda and I say that it has been treated as a stepchild of activities because it was a given. Everybody pats each other on the back once we find things. But then the implementation kind of just happens. Okay, so what happens as far as the barriers that DOE looked at?
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Prior to this In-Plant Training, DOE did assessments that were done as far as bringing people to sites to look for opportunities. And then what happened is that things did not get implemented. And I got involved with a gentleman by the name of Tony Wright, you probably know. Tony was at a job similar to what Tom Wenning has today. And Tony was the fellow who brought me in and he said we’re having a hard time with implementation. Things aren’t getting implemented. And I think the number he threw at me, he said we only implement 16% of the savings, 16, one six of the identified savings! Those are identified savings that have 2 years of payback or less. So as far as I’m concerned, it’s a no-brainer that things should be implemented. So I said, well Tony, what is the problem? He says, well we did a review of all of the findings that were used from all these assessments. And the list you see on the slide here says here is what we found, what people said to us why things are not getting implemented: unattractive return on investment, the lack of manpower to make things happen, the change in policy or funding for energy reduction, process-related limitations, concern regarding operational changes, limitation of technology, red flags by employees who were kind of concerned, and then political issues. Those were the main bullets that DOE came up with as to why people are not implementing. These are the reasons that people gave DOE. This is why we’re not implementing. But I believe it is a whole other issue which on the next slide you will see what I call Latent Implementation Barriers.
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I say the barriers are really in cases where implementation did not get a seat at the table. If you never talk about implementation upfront and make it part of the overall program, it just is not going to go ahead and happen. That is just the way I see it and that is just the way I see the overall lack of implementation being recognized. The case was not made for the benefits of implementation. If you don’t let people know upfront here’s the situation that will make things happen easier for implementation, then it’s never going to happen. And the failure to implement was never understood by the stakeholders. So what I’m saying on the next slide are implementation enablers.
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Here is what I consider enablers to make implementation happen. And there are some very basic things and some things that you may or may not be aware of. By the way, I just want to let you know before that these slides that I’m talking from are going to be made available to you and I encourage you to steal as much as you can from these slides. Anything that you think will be worthwhile in your career or in the measures that you’re trying to give to management or your team, use these slides. And one of my favorite expressions is Plagiarism Saves Time. So you go ahead and steal my things. You just go ahead and do it, not a problem. Okay, now the number one enabler that I believe is you’ve got to go ahead and you’ve got to sell the benefits of implementation. And this is one of those golden rules of selling. Anything that is sold, this golden rule that says “Lead with benefits, do not lead with features.” Unfortunately, technical people have the real need to explain features. And there’s that old joke where I ask you what time it is, you tell me how to build a watch. What you want to do is let people be aware of the benefits. That’s how people sell. When people sell you a car, they don’t talk about the heartaches you’re going to have with the mortgage or the payments or the potential gas situation or the inability to get a parking space and all these other good things that come with owning a car. No, no, they’ll talk about the wonderful fun you’ll have owning a vehicle that does zero to sixty in 4 seconds, that can go ahead and do all these wonderful things for you, make you look good in front of your fellow compatriots as far as “Guys, look at what a nice car I have,” etc. But they always tell you the benefits first. Never start off with features. That goes the same way when you’re selling implementation. You want to speak dollars when you’re quantifying opportunities. Never talk about anything else other than dollars. Dollars is the reason for companies to be. Alcoa and ArcelorMittal, the reason for those companies to be is to make money. It is not to have an energy program or to do any other things that you think might be important. At the end of the day, it is to make money, so speak money. Make the site leader accountable. This is another wonderful enabler. Make the site leader accountable. That person again who is there and part of the In-Plant Training and who is running the logistics of getting people into the plant and getting Arvind Thekdi and other experts around, make that person responsible. This person is accountable for the In-Plant Training. He certainly is the owner. He is responsible for the implementation. And also, the performance is determined by implementation, not the identified opportunities. Get anything out of this, it is the implementation. Now the next slide I use…
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…is a real eye-opener for me personally. As I told you, my experience with Mobile was one where I kind of sold my savings that were identified as real savings and I kind of got away with it. Then when I became a consultant and I did very similar things, and during this one company’s senior management presentation, we went ahead and we put up a slide, very simply that what you see here. The slide showed identified savings of 80 million dollars. And these 80 million dollars was something that was identified over a 4 year period. And the actual savings that were identified were 2 year payback or less. And this was a real case. I know there are people on the call who literally know exactly what I’m talking about because they have been part of the overall effort that I’m discussing. The next thing what happened is we showed the implemented savings. Okay, well people asked how much has really been implemented? So at the end of the day we showed implementation. And implementation in this case is that lower line. And you see it’s only 18 million dollars over 4 years. So this person had a great line. This was a senior manager from this company. He had a wonderful line. He said “You did not cash the check. You left 62 million dollars on the table.” That was such a profound wake-up call for me personally that I recognized that this particular company that I worked with, that we stopped all assessments and went and asked why are things not implemented, because I consider this, as I said at the top of the slide, the Implementation Career Trap because if management hears that you left 62 million dollars on the table, that’s not going to help your career go north. So it’s one of these things where people recognize that the fact that we got to do something with it. So this particular case was my wake-up call. So the next thing I want to talk about is the implementation helpers.