Everybody talks about it...

Oct. 4, 2006
And what's that, you say? Well, it is alliances. End users and vendors both want alliances...some for even really good reasons. Here's the lead story from tomorrow's Emerson Exchange Conference Daily... The Magic Word Is Collaboration There is hardly an end user, and few vendors as well, who haven't participated in some sort of end-user/supplier partnership. Most of them end badly, too, because they seemingly are based on the principle that one or the other partner comes out significant...
And what's that, you say? Well, it is alliances. End users and vendors both want alliances...some for even really good reasons. Here's the lead story from tomorrow's Emerson Exchange Conference Daily... The Magic Word Is Collaboration There is hardly an end user, and few vendors as well, who haven't participated in some sort of end-user/supplier partnership. Most of them end badly, too, because they seemingly are based on the principle that one or the other partner comes out significantly ahead in the deal. Either the "evil end user" wants to beat down the vendor on price, or the "evil supplier" wants to force products on the end user that the end user may not want or need. Most partnerships have a short longevity. But there are several in the process industries that are demonstrably different. One such partnership is the quiet alliance that has been formed over the past few years between The Lubrizol Corporation and Emerson Process Management. "We don't like to talk about things until after we get them right," says Lubrizol's Bob Wojewodka, technology manager and process improvement team leader. "We believe in 'do first' and 'talk after.'" That said, Wojewodka and Chris Sickler, Lubrizol's operations support manager, have finally opened the kimono and given a masterclass on just how to run an alliance project. Lubrizol is a $3.62 billion specialty chemical company whose mission is to become the world's largest and most profitable specialty chemical company. Lubrizol has always had a strong global infrastructure and their Operations Management System, the heart of the alliance with Emerson, is designed to enhance efficiency and profit by improving automation and control systems. "We had islands of excellence throughout the company," Wojewodka recalls, "but they were just not melding into the overal operational excellence we wanted as an enterprise." So at the beginning of the process, Wojewodka and his team defined goals on an enterprise level, and worked down to the plant floor, and then back up again, clearly defining goals and objectives at every level. The alliance is different than most "purchasing agreements" in that there is very high level executive buy in. The Alliance Executive Team consists of vice presidents from both Lubrizol and Emerson, and they direct a Steering Team made up of high level members from Lubrizol, Emerson, and Emerson's Local Business Partners (LBPs). "It really is a great collaboration between the two companies," Wojewodka says, enthusiastically. Making it work The first key to making the alliance work was to recruit the right people from Emerson, Lubrizol, and the LBPs. "LBP participation was both good news and bad," Wojewodka says, "because not only were we trying to drive consistency within Lubrizol and Emerson, we also had to drive consistency from LBP to LBP throughout the Emerson organization." Selecting the core group was not based on who wanted to be involved, but from the senior management (vice president) level down to the plant floor, it became "who needs to be involved" instead. The core group needed to have the technical knowledge"”know what to do, and be able to do it, or direct the doing. They also needed to be high enough in their respective organizations to be able to influence them. "We recruited across disciplines," Wojewodka recalls, "Chemical engineers, statisticians, IT, control engineers, intstrumentation, maintenance, and purchasing. What we needed was that they understand the common vision." The Steering Team breaks into subcommittees. There is a team concerned with standardization of processes, both locally and globally; a team that is responsible for migration, a team that is responsible for finding business opportunities within the alliance; one that is focused on the integration and architecture of automation systems; and finally, the one that Wojewodka calls the "kid in a candy store" team: the Technology Team, responsible for implementation plans for new technologies from batch to asset management. These teams are cross functional, and also cross facility and cross countries, drawing members from Lubrizol and Emerson facilities everywhere Lubrizol is, globally. "The direction," Wojewodka says, "is that when people go back to their plants they are systematically implementing what was just agreed to." All of this, Sickler and Wojewodka insist, is in aid of building a stronger relationship with Emerson. "We needed to build trust, create value, and structural bonding to make this alliance work," Wojewodka says. Sickler describes what they did. "So we explicitly defined and documented processes, systems and workflow to address each of the areas of trust, value and bonding." Wojewodka again, "And now we have a structure and methodology to make the alliance work. The tool we use is an 'e-room' collaboration tool." "This gives us a place to collaborate, meet, document," Sickler says, "with realtime information sharing and folders for every project and every team. We share project folios for projects that are current, proposed projects in the near term (1-1.5 years out) and proposed projects further out (more than 1.5 years distant). Everyone involved, Emerson, Lubrizol, LBPs, all have access to the e-room." Let there be METRICS "So how do you tell if a project like this is working?" Wojewodka asks rhetorically. "We started by having a brainstorming session that produced a huge list of potential metrics, and we eventually were able to whittle the list down to a small family of metrics"”5 to 6 KPIs (key performance indicators) that were meaningful at a high level but that we could also use to drill down deep into the process systems of the plants." First, the data need to be gettable. "We needed information that was both available and accessible," Sickler says. "And it needed to be manageable for ongoing maintenance and updates." The metrics also had to be meaningful to both Emerson and to Lubrizol, or they wouldn't be able to define the success of a collaborative project between equals. "Finally, we cut the extended list down to 12, and selected the seven most important of those," Wojewodka says. [see sidebar] "We track these metrics with a passion!" Wojewodka says. "We survey every six months. We chart and display the results so everybody can see them." Is the process working? Sickler thinks so. "We're starting to use the process in pre-project planning and pre-approval projects too." [sidebar] How to decide if it is working or not These are the metrics, weighted as shown: "¢ Quantified Business Results 30% "¢ Total Dynamic Market Share 15% o How much of Lubrizol's business is Emerson getting "¢ Customer Satisfaction 15% o How happy is Lubrizol with the alliance o How happy is Emerson with the alliance "¢ System Reliability 15% o Does the stuff work as advertised? "¢ Meeting Commitments 15% o Does Emerson keep its word? o Does Lubrizol live up to its commitments? "¢ Migration Status 15% o How much legacy replaced with DeltaV "¢ New Business Revenue 10% o How can Emerson become a bigger Lubrizol customer? o How can we bring Emerson further into Lubrizol?

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