Enterprise Asset Management


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EAM & ERP Integration

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Enterprise Asset Management

  1. 1. Enterprise Asset Management EAM & ERP Integration MRO & Preventative Maintenance Anand Subramaniam
  2. 2. <ul><li>“ A nuclear power plant is infinitely safer than eating, because 300 people choke to death on food every year.&quot; </li></ul><ul><ul><li>- Dixy Lee Ray </li></ul></ul>
  3. 3. Highlights <ul><li>Current Challenges </li></ul><ul><li>Risk Exposure </li></ul><ul><li>Business - Drivers, Objectives, Value </li></ul><ul><li>Enterprise Asset Management (EAM) Overview </li></ul><ul><li>EAM & ERP Integration </li></ul><ul><li>Deploying Lean & Six Sigma </li></ul><ul><li>Parts Management </li></ul><ul><li>Maintenance Repairs & Overhaul (MRO) </li></ul><ul><li>Preventative Maintenance </li></ul><ul><li>Overall Equipment Effectiveness (OEE) </li></ul>
  4. 4. Current Challenges
  5. 5. Industry Challenges Industry Challenges <ul><li>Corporate / Social Responsibility </li></ul><ul><ul><li>Impact of industrialisation on the environment, EH&S </li></ul></ul>Market Consolidation Ongoing industry consolidation leading to over capacity <ul><li>Increased Demand </li></ul><ul><ul><li>Increased demand from industrialised nations </li></ul></ul><ul><li>High Staff Turnover </li></ul><ul><ul><li>knowledge drain and lack of skilled work force </li></ul></ul><ul><li>Value Chain </li></ul><ul><ul><li>Management of complex business processes, systems and procedures </li></ul></ul><ul><li>Price Volatility </li></ul><ul><ul><li>Commodity prices </li></ul></ul><ul><li>Increased Production </li></ul><ul><ul><li>Increased demand, leads to machines running at max capacity </li></ul></ul><ul><li>Material Management </li></ul><ul><ul><li>Management of MRO items, supply chain planning & logistics challenges </li></ul></ul>
  6. 6. What keeps “CXO” awake at night Improve Yield Improve Production Rate Increase Machinery Uptime Extend Asset Life Decrease Cost Defer Maintenance Actions Reduce Maintenance Cost Improve Availability Improve working capital Safety Compliance Meeting Delivery Schedules Increase Operating Earnings Reduce Inventory Reduce Asset Base Reduce Time to Market Increase Revenue
  7. 7. Business Challenges <ul><li>CAPEX </li></ul><ul><li>Disconnected systems not linking data between design & purchasing costs </li></ul><ul><li>Lack of tools to reduce design time & capital selection </li></ul><ul><li>Lack of data on life of asset and full project & product life cycle costs </li></ul><ul><li>Asset Status </li></ul><ul><li>Incomplete Asset Registers </li></ul><ul><li>Unknown Asset Value </li></ul><ul><li>Unknown Assets condition </li></ul><ul><li>Limited visibility about depreciation </li></ul><ul><li>Operating Exp. </li></ul><ul><li>Not able to accurately determine whether to repair, refurbish or replace equipment </li></ul><ul><li>Lack of visibility of operation data including maintenance costs </li></ul><ul><li>Utilisation </li></ul><ul><li>Lack of timely and accurate preventative maintenance data </li></ul><ul><li>Poor or inadequate planning and scheduling data of resource and maintenance activities </li></ul><ul><li>OH&S </li></ul><ul><li>Inconsistency and lack data transparency across the company </li></ul><ul><li>Lack of data auditability </li></ul><ul><li>Lack of central data source for health & safety </li></ul><ul><li>Lack of integration with employee, HR, data </li></ul>
  8. 8. Cause & Effect Operating Loss Categories <ul><li>Reduced Speeds </li></ul><ul><li>Effect = Capacity Loss </li></ul><ul><li>Under Nameplate Capacity </li></ul><ul><li>Under Design Capacity </li></ul><ul><li>Operator Inefficiency </li></ul><ul><li>Equipment Wear </li></ul><ul><li>Rough Running </li></ul><ul><li>Startup Rejects </li></ul><ul><li>Effect = Quality Loss </li></ul><ul><li>Scrap </li></ul><ul><li>Rework </li></ul><ul><li>Incorrect Assembly </li></ul><ul><li>In-Process Damage </li></ul><ul><li>In-Process Expiration </li></ul><ul><li>Production Rejects </li></ul><ul><li>Effect = Quality Loss </li></ul><ul><li>In-Process Expiration </li></ul><ul><li>Incorrect Assembly </li></ul><ul><li>In-Process Damage </li></ul><ul><li>Rework </li></ul><ul><li>Scrap </li></ul><ul><li>Breakdowns </li></ul><ul><li>Effect = Availability Loss </li></ul><ul><li>Unplanned Maintenance </li></ul><ul><li>General Breakdowns </li></ul><ul><li>Equipment Failure </li></ul><ul><li>Tooling Failures </li></ul><ul><li>Setup and Adjustments </li></ul><ul><li>Effect = Availability Loss </li></ul><ul><li>Operator Shortages </li></ul><ul><li>Major Adjustments </li></ul><ul><li>Setup/Changeover </li></ul><ul><li>Material Shortages </li></ul><ul><li>Warm-Up Time </li></ul><ul><li>Small Stops </li></ul><ul><li>Effect = Capacity Loss </li></ul><ul><li>Obstructed Product Flow </li></ul><ul><li>Cleaning / Checking </li></ul><ul><li>Component Jams </li></ul><ul><li>Delivery Blocked </li></ul><ul><li>Sensor Blocked </li></ul><ul><li>Misfeeds </li></ul><ul><li>Causes </li></ul>
  9. 9. Risk Exposure
  10. 10. Risks Risks Cost of Spares Costs of doing Less or Nothing Cost of Less Product Quality Overhead Costs Costs of Internal & External Labour Cost of Lost Image Costs of Downtime & / or Production Loss Consequences of Failures Potential Failures Reliability & Probability of failures Failure Modes Root Cause Failure Analyses
  11. 11. Business - Drivers, Objectives, Value
  12. 12. Business Drivers <ul><li>Higher Revenue </li></ul><ul><ul><li>Increased asset availability, reliability, uptime for improved business performance </li></ul></ul>Business Drivers <ul><li>Lower Costs </li></ul><ul><ul><li>Optimised labor and efficient material / inventory management </li></ul></ul><ul><li>Business System Consolidation </li></ul><ul><ul><li>Single platform for broadest asset and service management needs </li></ul></ul><ul><li>Risk Management </li></ul><ul><ul><li>Compliance with government, safety regulations, software licensing and environmental needs </li></ul></ul>Governance Improve visibility and control over expenditures Productivity Increase asset productivity and speed up repair cycles Continuous Improvement Drive continuous improvement through Analytics
  13. 13. “CXO” Objectives <ul><li>Manage Fixed Assets/ Resources </li></ul><ul><li>  Minimise investment in operating facilities </li></ul><ul><li>Optimise capital equipment and utilisation </li></ul><ul><li>Reduce lifecycle costs </li></ul><ul><li>Streamline asset accounting </li></ul><ul><li>Regulatory Compliance </li></ul><ul><li>Comply with regulatory requirement </li></ul><ul><li>Reduce risks via compliance tracking </li></ul><ul><li>OH&S & Accident Management </li></ul><ul><li>Lower risk of employee accidents </li></ul><ul><li>  Increase welfare levels for employees </li></ul><ul><li>Reduce Operating Costs & Increase Efficiency </li></ul><ul><li>Improve asset and maintenance management </li></ul><ul><li>Reduce transaction costs </li></ul><ul><li>Reduce inventory levels </li></ul><ul><li>Improving Customer Service </li></ul><ul><li>  Reduce error rate </li></ul><ul><li>  Automate & standardise process </li></ul><ul><li>  Minimise manual processes </li></ul><ul><li>Increase Transparency Accountability </li></ul><ul><li>Provide source of &quot;one truth&quot; </li></ul><ul><li>Support risk management </li></ul><ul><li>Training & Knowledge Management </li></ul><ul><li>  Attract & retain resources </li></ul><ul><li>Develop skilled, knowledgeable of workforce </li></ul><ul><li>Preventive & Corrective Maintenance </li></ul><ul><li>Improve ROI of fixed assets </li></ul><ul><li>Reduce lifecycle costs & down-time </li></ul><ul><li>Improve asset and maintenance management </li></ul><ul><li>Others </li></ul><ul><li>Supply Chain / Inventory optimisation </li></ul><ul><li>Quality Management : MRO / OEE </li></ul>
  14. 14. Business Value Business Value <ul><li>Visibility </li></ul><ul><li>Collaborative Enterprise </li></ul><ul><li>Sarbanes-Oxley </li></ul><ul><li>Customer Responsive </li></ul><ul><li>Product Production variables </li></ul><ul><li>Cost of Production </li></ul><ul><li>Increased Margins </li></ul><ul><li>Quality Integration </li></ul><ul><li>Compliance Reporting </li></ul><ul><li>Process Improvements </li></ul><ul><li>Timely Data </li></ul><ul><li>Traceability </li></ul><ul><li>Compliance Reporting </li></ul><ul><li>Timely Data </li></ul><ul><li>Business Status in Real Time </li></ul><ul><li>React to Business Issues </li></ul><ul><li>Analysis in time to react or take advantage of opportunities </li></ul><ul><li>Focused Maintenance </li></ul><ul><li>Expenditure </li></ul><ul><li>Asset Availability </li></ul><ul><li>Capital Utilisation </li></ul><ul><li>Reduced Costs </li></ul><ul><li>Performance Improvement </li></ul><ul><li>Performance Improvements over all manufacturing </li></ul><ul><li>Inventory Accuracy </li></ul><ul><li>Inventory Reorder </li></ul><ul><li>Minimise Inventory </li></ul><ul><li>Meet order requirements </li></ul>
  15. 15. EAM - Overview
  16. 16. Asset Management Why? Schedules preventive maintenance to prevent problems Improves asset performance to reduce downtime Extends asset life to avoid new capital purchases Improves processes such as warranty management and streamlines purchasing Tracks equipment according to regulatory guidelines
  17. 17. EAM Definition <ul><li>Optimal management of the physical assets of an organisation to maximise value . </li></ul><ul><ul><li>Encompasses design, construction, commissioning, operations, maintenance and decommissioning / replacement of plant, equipment and facilities </li></ul></ul><ul><ul><li>Manages assets across departments, locations, facilities, business units </li></ul></ul><ul><ul><li>Improves utilisation and performance </li></ul></ul><ul><ul><li>Reduces capital costs & asset-related operating costs </li></ul></ul><ul><ul><li>Extends asset life and improves Return on Assets </li></ul></ul>
  18. 18. EAM - Overview <ul><li>Inspection and Calibration </li></ul><ul><li>Asset Condition Monitoring </li></ul><ul><li>Mobile Inspection </li></ul><ul><li>Project Management </li></ul><ul><li>Redeployment / Disposal </li></ul><ul><li>Alignment with Business Strategy </li></ul>Enterprise Asset Management System <ul><li>Financial Optimisation </li></ul><ul><li>Capital Investment Planning </li></ul><ul><li>Core Financials </li></ul><ul><li>Human Resources </li></ul><ul><li>Time and Payroll </li></ul><ul><li>Skills Management </li></ul>Maintenance Management System <ul><li>Asset Registers </li></ul><ul><li>Asset Valuations </li></ul><ul><li>Asset Maintenance Schedules </li></ul><ul><li>Procurement and Inventory </li></ul>
  19. 19. Functionality Overview <ul><li>Asset Management </li></ul><ul><li>Track history and detail cost tracking </li></ul><ul><li>Asset hierarchy with documents and drawings attached </li></ul><ul><li>Serialised inventory </li></ul><ul><li>Preventive maintenance schedule </li></ul><ul><li>Warranty claim tracking </li></ul><ul><li>Manufacture / Work Orders </li></ul><ul><li>Work orders for single or multiple pieces of equipment </li></ul><ul><li>Priority and problem codes </li></ul><ul><li>Attach documents and pictures </li></ul><ul><li>Capture internal and external costs </li></ul><ul><li>Preventative Maintenance </li></ul><ul><li>Resources, and material lists </li></ul><ul><li>Time and / or meter-based preventive maintenance (PM) </li></ul><ul><li>PM schedules & routes </li></ul><ul><li>Assign multiple equipment to a PM schedule </li></ul><ul><li>Inspections record </li></ul><ul><li>Purchasing </li></ul><ul><li>Integrated with work order to requisitioning </li></ul><ul><li>Purchase approval flow </li></ul><ul><li>Blanket purchase orders </li></ul><ul><li>Purchase order receiving and supplier returns </li></ul><ul><li>Electronic record and signature </li></ul>
  20. 20. EAM & ERP Integration
  21. 21. Integration - EAM & ERP Modules EAM Product & Maint WO Transactions Costs Updates WO Updates, Catalogs Purchase Produce Inventory Projects Service Suppliers Asset Depreciation Service Request Linked to WOR / WO WO Materials, Reqs Linked to WO & Workflow Time & Attendance Receiving Project / Task, WO Costs Accounts Payable General Ledger Accounts Receivable Fixed Assets Facility Management Human Resource Posting Integration Chart of Accounts WO Billing Depreciable Assets Requisition, PO, Matching & Reconciliation Employees & Skills Maintainable Assets Time Entry Customers
  22. 22. Linkage – EAM, ERP & Other Systems EAM Integration Performance Analytics Roadways & Pipelines Fleet & Transportation IT Assets Building & Facilities Enterprise Resource Planning Manufacturing Drilling & Services Labor Management Bridges IT / GIS Assets Material Management Construction/ Infrastructure Service Request Work Management Preventative Maintenance Maintenance Repair & Overall Purchasing
  23. 23. Asset Performance Process Flow Forecasting Resource Planning Material Request Work Requests Entry Work Order Generation Task Planning Work Scheduling Work Order Update and Close Out Asset Performance Procurement Manufacture Projects Inventory Services Time & Attendance Human Resources General Ledger Fixed Assets Accounts Receivable Facility Management Accounts Payable Suppliers Customers
  24. 24. Deploying Lean / Six Sigma
  25. 25. Quality, Cost, Cycle Time Improvement Sales & Marketing Information Technology Engineering Supply Management Service Finance Sales & Operational Planning Production Waste <ul><li>Poor Quality & Excess WIP </li></ul><ul><li>High Material & Supply Costs </li></ul><ul><li>Lengthy Approval Process </li></ul><ul><li>Error Prone Order Processing </li></ul><ul><li>Incorrect Dispatching </li></ul><ul><li>Conflicting Demand Signals </li></ul><ul><li>Duplicate & Erroneous Data </li></ul><ul><li>Isolated Departmental Systems </li></ul>
  26. 26. Parts Management
  27. 27. Challenges - Parts Management <ul><li>Low Revenue </li></ul><ul><li>Effect </li></ul><ul><ul><li>Lower productivity </li></ul></ul><ul><ul><li>Unplanned changes </li></ul></ul><ul><ul><li>Delay new products intro </li></ul></ul><ul><ul><li>Can’t ramp production </li></ul></ul><ul><ul><li>Can’t get parts </li></ul></ul><ul><ul><li>Cause </li></ul></ul><ul><ul><li>Inefficient part search </li></ul></ul><ul><ul><li>No analysis tools </li></ul></ul><ul><ul><li>unavailable parts </li></ul></ul><ul><ul><li>Part list errors </li></ul></ul><ul><ul><li>Wrong parts </li></ul></ul><ul><li>High Inventory </li></ul><ul><li>Effect </li></ul><ul><li>Quality problems </li></ul><ul><li>High field failures </li></ul><ul><li>Excess & obsolescence’ </li></ul><ul><li>Panic buying </li></ul><ul><li>No respond to demand changes </li></ul><ul><ul><li>Cause </li></ul></ul><ul><li>Use of non-std parts </li></ul><ul><li>Lack timely information </li></ul><ul><li>long lead-time </li></ul><ul><li>No qualified suppliers </li></ul><ul><li>Use non-preferred vendor </li></ul><ul><li>Inconsistent part description </li></ul><ul><li>High Cost </li></ul><ul><li>Effect </li></ul><ul><ul><li>Mfg downtime </li></ul></ul><ul><ul><li>Part shortages </li></ul></ul><ul><ul><li>Part misplaced </li></ul></ul><ul><ul><li>Part duplication </li></ul></ul><ul><ul><li>No volume discount </li></ul></ul><ul><ul><li>No supplier relationships </li></ul></ul><ul><ul><li>Costly expedites </li></ul></ul><ul><ul><li>Cause </li></ul></ul><ul><ul><li>Unplanned allocation </li></ul></ul><ul><ul><li>Stock-outs, or errors </li></ul></ul><ul><ul><li>No part or tool re-use </li></ul></ul><ul><ul><li>SC partner misaligned </li></ul></ul><ul><ul><li>No visibility </li></ul></ul><ul><ul><li>Obsolescence </li></ul></ul>
  28. 28. Parts Management - Impact on Business <ul><li>Spend Aggregation </li></ul><ul><li>Procurement Expense </li></ul><ul><li>Direct / Indirect Materials Cost </li></ul><ul><li>Supplier & Material Rationalisation </li></ul><ul><li>Raw Materials Inventory </li></ul><ul><li>Throughput </li></ul><ul><li>Equipment Uptime </li></ul><ul><li>Parts / Spares Inventory </li></ul><ul><li>Replacement Part ID </li></ul><ul><li>Revenue </li></ul><ul><li>Selling Expense </li></ul><ul><li>Customer Retention </li></ul><ul><li>Competitive Advantage </li></ul><ul><li>Market Share </li></ul><ul><li>Maverick buys </li></ul><ul><li>Supplier proliferation </li></ul><ul><li>Parts proliferation & duplication </li></ul><ul><li>Disparate parts & supplier databases </li></ul><ul><li>Ineffective Supply Chain communication </li></ul><ul><li>Lack of visibility to inventories </li></ul><ul><li>Can’t locate parts & spares </li></ul><ul><li>Maverick buys </li></ul><ul><li>Disparate data sources </li></ul><ul><li>Lack of standardised product information </li></ul><ul><li>Can’t see product inventory </li></ul><ul><li>Can’t compare products </li></ul><ul><li>Lack of competitive differentiation </li></ul>Key Success Metrics Factors Preventing Success <ul><li>No tools to find parts </li></ul><ul><li>Lack of technical detail </li></ul><ul><li>Lack of standardisation </li></ul><ul><li>Can’t find alternates </li></ul><ul><li>No lifecycle status info </li></ul><ul><li>No tools for parts re-use </li></ul><ul><li>No visibility to supplier preferences </li></ul><ul><li>Engineering Productivity </li></ul><ul><li>R&D Costs </li></ul><ul><li>Time to Market </li></ul><ul><li>Product Quality </li></ul><ul><li>Design for Supply Chain </li></ul>Product Design Supply Chain / Procurement Manufacturing & MRO Sales & Marketing Core Business Process
  29. 29. Maintenance Repairs & Overhaul (MRO)
  30. 30. Maintenance Repairs & Overhaul W arranty & Returns Management Spare Parts Management S ervice Contract Service Notification Service Operation – Planning & Control Service Order Process Manage Contracts MRO
  31. 31. Why MRO is required? <ul><li>Product / service control </li></ul><ul><li>Cost analysis </li></ul><ul><li>Spare parts & advance shipment </li></ul><ul><li>Contract management for different types of customer service </li></ul><ul><li>Complex functional location and equipment structure definition </li></ul><ul><li>Monitor equipment already on the customer side </li></ul><ul><li>Service notification to record the service request from customer side </li></ul><ul><li>Check, update, and / or track warranty information </li></ul><ul><li>Price calculation for different types of component/product, combining with customer/service level </li></ul><ul><li>Quotation for chargeable spare parts </li></ul><ul><li>Free of charge service within warranty period </li></ul><ul><li>Resource billing for chargeable service / components </li></ul><ul><li>Control for the return of defected component </li></ul><ul><li>Periodical billing for customer contract </li></ul><ul><li>Balance Spare Parts Debit </li></ul><ul><li>Returned Component Credit </li></ul><ul><li>Service planning to control the schedule / task for the preventive maintenance </li></ul>
  32. 32. Preventative Maintenance
  33. 33. Need for Preventative Maintenance <ul><li>Creation of regular service contract </li></ul><ul><li>Creation of service plan to assign contract and task list </li></ul><ul><li>Schedule the service plan </li></ul><ul><li>Monitor service orders generated by service plan </li></ul><ul><li>Change the service plan for date and priority </li></ul><ul><li>Control issue / deletion of component in service order </li></ul><ul><li>Monitor delivery of spare part </li></ul><ul><li>Overall completion confirmation </li></ul><ul><li>Service order settlement </li></ul><ul><li>Monitor service order closure </li></ul><ul><li>Monitor service notification for major repair if defect found </li></ul><ul><li>Bill for service contract </li></ul><ul><li>A dvance shipment of s pare part </li></ul>
  34. 34. Preventative Maintenance Flow Service Contract Cost Work Complete Service Order Progressive Billing Service Plan Maintenance Service PlanSchedule Equipmenet Location Create Service Order Service Parts Confirm Work Done Defect found? N Y Close Service Order Perform Repairs Create Notifications for Repair Certificatify Process Service Order Delivery of Spares Amend Service Order (Date, Priority) Shipment of Spares Perform Service (routine, anual)
  35. 35. Overall Equipment Effectiveness (OEE)
  36. 36. Overall Equipment Effectiveness <ul><li>OEE = Availability x Performance x Quality Yield </li></ul><ul><li>Availability = Time Available for Production – Downtime / Time available for production </li></ul><ul><li>Performance = Ideal Cycle Time x Number of Parts Produced / Operating Time </li></ul><ul><li>Quality Yield = Total Number of Parts produced - Defect Number / Total Number of Parts Produced </li></ul>
  37. 37. <ul><li>“ A single death is a tragedy, a million deaths is a statistic.&quot; </li></ul><ul><ul><li>- Josef Stalin </li></ul></ul>
  38. 38. <ul><li>Good Luck </li></ul><ul><li>http://www.linkedin.com/in/anandsubramaniam </li></ul>