From MRO to Project Management
Optimize Your Manufacturing
Equipment With EAM
Nancy Majure
EAM Specialist, QAD Inc
Optimize Your Manufacturing Equipment with EAM
Safe Harbor Statement
The following is intended to outline QAD’s
general product direction. It is intended for
information purposes only, and may not be
incorporated into any contract. It is not a
commitment to deliver any material, code,
functional capabilities, and should not be
relied upon in making purchasing decisions.
The development, release, and timing of
any features or functional capabilities
described for QAD’s products remains at the
sole discretion of QAD.
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Optimize Your Manufacturing Equipment with EAM
Presentation Agenda
• Getting started with optimization
• How Enterprise Asset Management (EAM)
supports the Effective Enterprise
• EAM functional areas
- Project controls
- Indirect (MRO) inventory & purchasing
- Maintenance
• Using EAM to optimize equipment utilization
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Optimize Your Manufacturing Equipment with EAM
Overview
• QAD’s EAM solution supports the Effective
Enterprise by:
- Optimizing your asset utilization
- Delivering a complete suite that supports all
phases of the equipment life-cycle
- Incorporating best practice processes
- Enabling and promoting greater asset utilization
- Aligning asset performance with strategic goals
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Optimize Your Manufacturing Equipment with EAM
Getting Started
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Optimize Your Manufacturing Equipment with EAM
Getting Started
•
•
•
•
•
Understand “equipment life-cycle”
Know your current status
Know why you should care
Understand Return on Investment
Define your strategic goals
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Optimize Your Manufacturing Equipment with EAM
Equipment Life Cycle
Acquisition
Phase:
budget
controls,
acquisition
cost,
reliability &
maintainability
EAM Project Controls
Construct
20% of life
cycle costs
Design
Commission
Equipment & Asset
Life-Cycle
Retire /
Replace
80% of life
cycle costs
Operate
Maintain
EAM Asset Management
Operation
Phase:
maintenance,
cost of
ownership
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Optimize Your Manufacturing Equipment with EAM
Know Your Current Status
CM
100%
>85% PM
Best
Practices
Reactive
World
Class
<15%
PM
CM
0%
Stage 1
Run to failure
No records
Stage 2
PM Critical Assets (Cal)
No CM recorded
Stage 3
PM Program (Cal)
Some CM recorded
Functional Area
Stage 4
PM (Cal & DUOM)
All CM recorded
Stage 5
PMs and PdMs
All CM recorded
Estimated Stage
Project Controls
Purchasing Processes
Inventory Controls
Plant Maintenance
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Optimize Your Manufacturing Equipment with EAM
Know Why You Should Care
Benchmarks
Very
Basic
Best
World
Reactive2 Maintenance Practice1 Class1
Program2
Production
Breakdown Losses
25%-30%
15%-20%
5%-12%
1%-2%
Maintenance Cost
as % of RAV*
25%-30%
15%-20%
3%-9%
2.5%-3.5%
MRO Cost as % of
RAV*
15%-20%
10%-12%
2%-4%
0.25%-0.75%
*RAV
= Replacement Asset Value
1 – Maintenance and Reliability Best Practices, Ramesh Gulati
2 – Author’s estimated percentages
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Optimize Your Manufacturing Equipment with EAM
Know Why You Should Care
Example: QMI Manufacturing
- RAV = $10,000,000
- Annual Sales = $100,000,000
Benchmarks
Very
Reactive2
Basic
Best
Maintenance Practice1
Program2
Production
Breakdown
Losses
$25 - $30mil
$15 - $20mil
$5mil - $12mil $1mil - $2mil
Maint Cost as %
of RAV*
$2.5 – $3mil
$1.5 – $2mil
$300k - $900k
$250k - $350k
MRO Cost as %
of RAV*
$1.5 - $2 mil
$1 - $1.2mil
$200k - $400k
$25k - $35k
*RAV
= Replacement Asset Value
World
Class1
1 – Maintenance and Reliability Best Practices, Ramesh Gulati
2 – Author’s estimated percentages
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Optimize Your Manufacturing Equipment with EAM
Return on Investment
• 50% of companies experience payback in
less than 12 months
• Typical savings:
-
Reduction in maintenance expense 10% to 30%
Increase in production yield 3% to 5%
Reduced maintenance downtime 20% to 40%
Reduced scrap / rework 5% to 10%
Reduction in annual purchases 5% to 15%
Improved labor utilization 10% to 30%
Increased equipment service life 2 years
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Optimize Your Manufacturing Equipment with EAM
Define Your Strategic Goals
• Goals should
- Align EAM business processes
- Leverage single source EAM system
- Support equipment peak efficiency
• Measures for performance should
- Be easy to measure
- Drive the desired results
- Be difficult to manipulate
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Optimize Your Manufacturing Equipment with EAM
How EAM Supports Effective Enterprise
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Optimize Your Manufacturing Equipment with EAM
Align With a Single System
Project
controls
Indirect
inventory
processes
Equipment
efficiency
Indirect
purchasing
processes
Maintenance
processes
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Optimize Your Manufacturing Equipment with EAM
New in EAM 12.6 to Support Single System
• Usability improvements
- Rationalization of data entry
- Reorganized screens
• Interface enhancements
- Fixed asset integration
- MSW/PSW exposure to EAM work orders
- SCP integration
• Revision history
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Optimize Your Manufacturing Equipment with EAM
Usability – Reorganized Screens
• More logical
data grouping
• Improved data
entry flow
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Optimize Your Manufacturing Equipment with EAM
Interfaces – Fixed Assets Interface
• Capitalize new
asset
• Utilize actual
spend from
- Project level, or
- Job level
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Optimize Your Manufacturing Equipment with EAM
Interfaces – MSW/PSW
• Exposes EAM WO’s to scheduling
• Provides production visibility to required
equipment downtime
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Optimize Your Manufacturing Equipment with EAM
Interfaces – Supply Chain Portal
• Export RFQ’s to Supply Chain Portal
• Import responses for purchasing
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Optimize Your Manufacturing Equipment with EAM
Revision History
• Supports compliance
• Provides detailed traceability
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Optimize Your Manufacturing Equipment with EAM
EAM and Project Controls
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Optimize Your Manufacturing Equipment with EAM
What is Project Control?
• “Birthplace of Assets”
• Budgetary control PLUS . . .
• Design
- Reliability (measured by MTBF)
- Maintainability (measured by MTTR)
• Construction
- Standardized spares
- Accessibility
• Commission
-
FMEA
RCM
BOM
Maintenance plan
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Optimize Your Manufacturing Equipment with EAM
Types of Projects Managed in EAM
• Capital
- Profit enhancements
- Increase capacity
- Replacement
• Expense
- Annual rebuilds
- Marketing / legal / etc.
• Customer Funded
Key characteristic: results in
new asset(s)
Key characteristic: no
assets created
Key characteristic:
customer owns asset
- Progressive billing
- Very common in
automotive verticals
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Optimize Your Manufacturing Equipment with EAM
EAM and Equipment Optimization
Project
controls
Indirect
inventory
processes
Equipment
efficiency
Utilize EAM to
• Control budget
• Improve design
• Track real-time financials
• Manage customer funding
• Capitalize assets
• Commission to operations
Indirect
purchasing
processes
Maintenance
processes
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Optimize Your Manufacturing Equipment with EAM
NEW in EAM v12.6 Projects
•
•
•
•
Project allocations
Fixed asset cross reference
Enhanced cost analysis
Analysis by activity
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Optimize Your Manufacturing Equipment with EAM
Project Allocations
Project Level
Job Level
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Optimize Your Manufacturing Equipment with EAM
Fixed Asset Cross Reference
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Optimize Your Manufacturing Equipment with EAM
Enhanced Cost Analysis
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Optimize Your Manufacturing Equipment with EAM
Analysis by Activity Code
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Optimize Your Manufacturing Equipment with EAM
EAM and Indirect Inventory / Purchasing
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Optimize Your Manufacturing Equipment with EAM
Indirect (MRO) Inventory and Purchasing
• “MRO” – maintenance repair operations
• Repair parts plus . . .
-
Internally fabricated parts
Supplies
Consigned / vendor-managed
Free-issue / company catalog
• Goal is to ensure right parts are available
-
At the right time
At the right price
In the right quantity
To sustain availability of plant assets
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Optimize Your Manufacturing Equipment with EAM
Indirect (MRO) Best Practices
•
•
•
•
•
•
•
•
•
•
Utilize full EAM solution
Leverage buying power
Utilize EOQ analysis to right-size inventory
Secure inventory
Improve physical layout
Automate stock replenishment
Free buyers for more strategic activities
Know where parts are used
Standardize parts
Understand difference in Indirect
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Optimize Your Manufacturing Equipment with EAM
EAM and Equipment Optimization
Project
controls
Indirect
inventory
processes
Equipment
efficiency
Utilize EAM to
• Authorize
• Control
• Link to indirect
• Analyze
• Improve
Indirect
purchasing
processes
Maintenance
processes
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Optimize Your Manufacturing Equipment with EAM
EAM and Equipment Optimization
Utilize EAM to
• Control
• Right-size
• Standardize
• Analyze
• Automate
Indirect
inventory
processes
Project
controls
Equipment
efficiency
Indirect
purchasing
processes
Maintenance
processes
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Optimize Your Manufacturing Equipment with EAM
NEW in EAM v12.6 Inventory/Purchasing
•
•
•
•
•
Blanket orders
Redesigned quotes
Improved purchasing workflow
Intrastat support
Physical inventory by location
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Optimize Your Manufacturing Equipment with EAM
Blanket Orders
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Optimize Your Manufacturing Equipment with EAM
Redesigned Quote Module
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Optimize Your Manufacturing Equipment with EAM
Improved Purchasing Workflow
• “Previously authorized” concept
• Additional controls
- Modifications to ordered POs
- Rerouting visibility
- Status alignment with ERP
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Optimize Your Manufacturing Equipment with EAM
Intrastat Support
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Optimize Your Manufacturing Equipment with EAM
EAM Functional Area: Maintenance
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Optimize Your Manufacturing Equipment with EAM
What is Asset Maintenance?
• Preventive AND corrective maintenance
• Effective maintenance drives:
Increased output with the same assets
Reduced need for capital replacement
Reduced maintenance cost per unit
Reduced total cost per unit
Improved performance (cost, productivity, and
safety)
- Increased competitiveness
- Increased market share
-
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Optimize Your Manufacturing Equipment with EAM
Maintenance Best Practices
•
•
•
•
•
Record all work – PM and CM
Collect all costs to the asset and task level
Plan work
Schedule work
Improve PM program
- Predictive / condition-based
- Technology to detect potential failure
- FMEA and RCM activities
• Empower resources
• Change culture
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Optimize Your Manufacturing Equipment with EAM
EAM and Equipment Optimization
Project
controls
Indirect
inventory
processes
Utilize EAM to
• PM & CM
• Measure
• Analyze
• Improve
Equipment
efficiency
Indirect
purchasing
processes
Maintenance
processes
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Optimize Your Manufacturing Equipment with EAM
NEW in EAM v12.6 Maintenance
• Equipment mapping to ERP
• Production line mapping to ERP
• New/improved reporting
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Optimize Your Manufacturing Equipment with EAM
Equipment Mapping to ERP
• Supports MSW/PSW interface
• Another step towards production driven
maintenance
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Optimize Your Manufacturing Equipment with EAM
Production Line Mapping to ERP
• Supports MSW/PSW interface
• Another step towards production driven
maintenance
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Optimize Your Manufacturing Equipment with EAM
New/Improved Reporting
• Incorporates “Transaction Date” ranges
• Retrofitted back to 12.4.2.3
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Optimize Your Manufacturing Equipment with EAM
Conclusion and Next Steps
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Optimize Your Manufacturing Equipment with EAM
How Do I Optimize Equipment?
• Think “Effective Enterprise” where all business
processes are
- aligned,
- working at peak efficiency, and
- delivering the strategic goals of the organization
• Specifically
-
Align EAM processes
Maximize EAM as a “single system”
Utilize EAM to measure results
Continuously improve
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Optimize Your Manufacturing Equipment with EAM
EAM and Equipment Optimization
Utilize EAM to
• Align indirect processes
• Work at peak efficiency
• Deliver on strategic goals
Indirect
inventory
processes
Project
controls
Equipment
efficiency
Indirect
purchasing
processes
Maintenance
processes
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Optimize Your Manufacturing Equipment with EAM
Next Steps
• Stop by the Solutions Expo
• Schedule a demonstration
• Schedule free “EAM Operational Excellence
Workshop”
• Register for “EAM v12 Making the Switch to
.NET” class May 30 – 31 in Santa Barbara
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Optimize Your Manufacturing Equipment with EAM
Questions & Answers
Nancy Majure
EAM Specialist, QAD Inc
nnm@qad.com
Kate Fenello
EAM Product Manager
khf@qad.com
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www.qad.com
© QAD Inc 2012
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