Enterprise Asset Management
The term “Enterprise Asset Management” tends to be poorly understood.
While Enterprise Asset Management was once conceptualized as little more than the routine or corrective maintenance of operating equipment, a new perspective has emerged that imagines it from a broader, more holistic perspective.
Today’s philosophy requires that Enterprise Asset Management also include the development of comprehensive plans and strategies for the introduction, ongoing operation and renewal of plant and equipment.
And while moving from a more narrow focus on “Asset Maintenance” to a broader conceptualization that includes the entire “Asset Lifecycle” may seem like a subtle difference at first, this recasting of perspectives has an important impact on the evolution of the software tools and the methodologies we use to help manage operations.
To understand Enterprise Asset Management changes as relates to organizational structures, we can reflect on changes in the 1990s in the Computerized Maintenance Management Systems (CMMS) space, where we saw an evolution that created connections with functions as diverse as Human Resources, Finance and Supply Chain.
Enterprise Asset Management and the progress of Asset Management EAM Software, have driven similar changes to the organizational structure of modern asset intensive companies. This can be easily evidenced by the addition of positions such as “Corporate Head of Reliability” and regularly tracked metrics like “Asset Health.”
This expansion of the people and processes involved in Enterprise Asset Management has far reaching impacts.
Enterprise Asset Management (EAM): A Changing Perspective
Tremendous strides have been made in the past 20 years to identify asset failure modes, identify them at early onset, and adapt a more proactive approach to maintenance that reduces incidents of unplanned downtime
Technological advances in condition monitoring and the continued reduction in the price of associated solutions will only accelerate this curve. Within that context, supply chain integration offers fertile ground for continued improvement.
Thanks to the further extension and use of the internet of things (IoT) in industrial sectors and applications, industrial internet of things (IIoT) solutions like condition-monitoring tools can now provide real time feedback on operating conditions.
Artificial Intelligence (AI) powered solutions can also rapidly analyse patterns and identify failure modes in a way that was simply not possible before. In addition, visualization tools can illustrate asset health and provide exception reporting to highlight maintenance priorities.
Each of these modernizations can be integrated into a business’ Enterprise Resource Planning (ERP) or Enterprise Asset Management software to generate planned work in a pending status for scheduling. The integration of this cycle represents a tremendous step forward.
However, the missing linkage often tends to be the connection to spare parts inventory and the supporting MRO Supply Chain. It is worth remembering that in most cases it is not equipment that fails, but component parts. We forget this at our peril.
At Xtivity, our objective is to extend the Enterprise Asset Management philosophy to include the supporting MRO Supply Chain, and to ensure the right part is in the right place at the right time to support continuing asset health.
EAM Software & Know-How: Linking Assets to the Supply Chain
As inputs from internet-enabled equipment become more prevalent, asset operating conditions will become a more direct input to supply chain planning. As such, we can expect the actions of Maintenance, Supply Chain and Suppliers to become increasingly connected.
However, for many organizations, the data required to improve this connection already exists. They can and should embrace the opportunity by accepting the value of stronger functional linkages.
In the Enterprise Asset Management realm, two areas of immediate focus are Bill of Materials and Parts Criticality.
Asset Bill of Material
An Asset Bill of Material (BOM) provides the essential understanding of what it takes to keep an asset operational. A BOM outlines all the parts that comprise an asset. Some represent where parts are subject to monitoring and replacement, while others are structural, such as frames or housings.
Having BOMs in place most obviously benefits Maintenance Planners, helping them quickly identify what parts are required to complete repairs on physical assets. However they also provide Supply Chain functions with valuable insight into how and where parts are used. This helps improve the decision making process regarding stocking strategy, target availability, purchasing alternatives and transportation modes.
Yet, we still find BOMs to be generally overlooked across a number of asset-intensive industries, with most companies having BOMs in place on an average of only 10% of their assets. Unfortunately, even those BOMs are infrequently maintained.
When properly organized and tracked, BOMs can improve the efficiency and effectiveness of a number of core business processes, including those related to Maintenance Planning & Scheduling, Purchasing, Finance, and Inventory Management.
Specifically, BOMs help organizations with:
While a determination of an asset’s criticality is a common consideration in any Reliability program, following this up with an associated part criticality assessment is less common.
But in the realm of Asset Lifecycle Management, Part Criticality represents a huge opportunity to close the gap between Operations and Supply Chain, one that should not be ignored.
Whereas Bills of Material help identify where parts are used, determining the criticality of parts helps explain the relative importance of each part based on how it is used, where it’s used and the conditions under which it will fail – all necessary data within properly integrated EAM systems.
Done right, a part criticality ranking or value will help illustrate considerations such as:
As these considerations highlight, a robust criticality ranking requires cross-functional input.
Unfortunately, a problem that often occurs is that ownership of the process is typically assigned to only a single function — Maintenance. But, making and maintaining these determinations in an informational silo doesn’t involve all the key inputs that contribute to best decisions.
Another issue we often see is the binary assignment of parts, defined as being either “Critical” or “Non-Critical”. Often, no deeper insights are explored into the relative importance for each.
Furthermore, a close analysis of assignment dates tends to indicate that values were only set when the part was added to the catalogue, yet not updated to support the changing asset base or supply conditions.
As a result, establishing and maintaining effective part criticality values represents an opportunity in many, if not all asset intensive companies.
Not only are stocking decisions more informed as a result, with target availabilities reflecting the importance of the part, but the importance of supporting activities such as expediting becomes more transparent as well.
This also makes communication much easier for Operations teams, with one reflective value replacing the need for numerous emails or phone calls for clarifications related to the importance of outstanding orders.
Ultimately, Xtivity can help your organization develop and maintain a more robust stocking strategy, effectively balancing targeted service levels within working capital constraints to best support ongoing operations.