Optimizing Equipment Lifecycle: Enterprise Asset Management
Optimizing Your Equipment’s Life Cycle
Bo Hagler – Director, R&D, QAD
Nancy Majure – Director EAM N.A., QAD
Optimizing Equipment Lifecycle: Enterprise Asset Management
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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Optimizing Equipment Lifecycle: Enterprise Asset Management
Why Focus on Asset Reliability
As much as 50% of capital investment in new
equipment is made to compensate for the
under−performance of existing equipment.
• Reputation
• Customer satisfaction
• Repeat business
• Competitive advantage
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Optimizing Equipment Lifecycle: Enterprise Asset Management
What is Equipment Life Cycle?
Construct
Commission
Design
Equipment & Asset
Life-Cycle
Operate
Retire / Replace
Maintain
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Why Optimize Equipment Life Cycle?
• Cost savings
- Reduction in maintenance expense
10% to 30%
• Areas of savings
-
Increase in production yield
Reduced maintenance downtime
Reduced scrap / rework
Reduction in annual purchases
Improved labor utilization
Increased equipment service life
3% to 5%
20% to 40%
5% to 10%
5% to 15%
10% to 30%
2 years
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Optimizing Equipment Lifecycle: Enterprise Asset Management
How QAD EAM Assists
• Project controls
• Asset management
- Plant maintenance
- MRO / spares inventory
- MRO purchasing
EAM Project Controls
Construct
Commission
Design
Equipment
& Asset
Life-Cycle
Retire /
Replace
Operate
Maintain
EAM Asset Management
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Project Engineering Challenges
•
•
•
•
•
•
•
AP recorded, spreadsheets
Last updated?
Purchase costs only?
Internal labor?
Internal materials?
Subcontractor services?
True acquisition cost?
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Project Controls: Key Capabilities
•
Spending control
-
•
•
Electronic workflow approval
Spending alert notification
Provide segregation of duties
Project work breakdown
structure
Customer projects
- Customer reimbursements
- Scheduled supplier payments
- Margin
EAM Project Controls
Construct
Commission
Design
Equipment
& Asset
Life-Cycle
Retire /
Replace
Operate
Maintain
EAM Asset Management
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Project Controls: Roadmap
• Manufacturing
-
Inventory master
Work order costs
BOM
• Service and support
management
EAM Project Controls
Construct
Commission
Design
Equipment
& Asset
Life-Cycle
Retire /
Replace
Operate
Maintain
EAM Asset Management
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Typical Asset Management Challenges
• Overall equipment effectiveness (OEE)
-
Global average is 55%
• Average unplanned / reactive work is 55%
-
World class is <10%
• Operating environment
-
40% of failures are a result of operator error
• Production losses due to breakdowns
-
Average range 5% to 10%
• Average overtime is 10% to 20%
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Plant Maintenance: Key Capabilities
•
•
•
•
•
Supports preventative
maintenance (PM) / PDM
PM’s triggered based on actual
production
Analyze repair costs for labor,
material and contractor
expenses
Measure mean time between
failure (MTBF)
Breakdown alerts via email or
page
EAM Project Controls
Construct
Commission
Design
Equipment
& Asset
Life-Cycle
Retire /
Replace
Operate
Maintain
EAM Asset Management
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Plant Maintenance: Roadmap
•
Share scheduling
information with production
scheduler
-
•
MSW/PSW
EAM Project Controls
Graphical EAM work order
scheduling
-
Visibility into equipment
availability from production
Construct
Commission
Design
Equipment
& Asset
Life-Cycle
Retire /
Replace
Operate
Maintain
EAM Asset Management
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Typical MRO Environment
•
•
•
•
Annual MRO purchases can equal 1% to 5% of
revenue
In most cases, MRO is expensed at receipt
Unnecessary or incorrect purchases can range
from 10% to 25%
As much as 30% of MRO inventory is obsolete
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM MRO: Key Capabilities
•
•
•
•
•
•
•
Manage company catalog
for MRO items
Automatic stock replenish
Supplier price schedules
Consignment inventory
Transfer parts across plants
Request for quote (RFQ)
Requisition approval
workflow
EAM Project Controls
Construct
Commission
Design
Equipment
& Asset
Life-Cycle
Retire /
Replace
Operate
Maintain
EAM Asset Management
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM MRO: Roadmap
• Share RFQ with suppliers via SC Portal
• Contract purchasing
EAM Project Controls
Construct
Commission
Design
Equipment
& Asset
Life-Cycle
Retire /
Replace
Operate
Maintain
EAM Asset Management
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM: Business Intelligence
• Make better decisions
• Support “intentional” decision
making
- from preparation
- to decision making
- to implementation
• Manage by Fact
• Improve shareholder value
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
• An out-of-the-box, performance management tool
that instantly transforms transactional data from
EAM into visually-depicted trends.
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
• Start with a high-level KPI
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
• Drill-down to further detail
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
• Drill-down to further detail
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
•
•
Data can also be analyzed through cubes
September release will include mobile device
access to QAD BI data
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
Projects
MRO inventory
•
Cash flow forecast
•
Inventory turns
•
Expenditure analysis
•
Slow moving inventory
•
Budget summary
•
Inventory value trends
•
Stock out analysis
Indirect purchasing
•
Spending analysis
Financials
•
Spending by equipment
•
•
Purchases by vendor
Operational expense cash
flow
•
Purchases by commodity
•
Actual vs. Budget
•
Rush orders
•
•
Late receipts
Top cost center by % of
budget
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Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
Maintenance
Maintenance (by period)
• Top equipment by cost and
by MTBF
• Top equipment failures
• Top reason by downtime
• Planned vs. Unplanned work
orders
• Planned vs. unplanned
labor hours
• PM vs. CM work orders
• Work order count by priority
• Equipment availability
• Total maintenance cost
• Service request count
• Work order backlog
― Count
― Labor hours
― Average days open
• PM compliance
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Optimizing Equipment Lifecycle: Enterprise Asset Management
QAD EAM Status
• March 2011: general available (GA)
• Supported versions
- 2007 SE through 2010 SE
- 2007 EE through 2011 EE
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Review
• Project controls
- Bring projects in on-time and within budget
- Control excessive spending
• Plant maintenance
- Increase equipment efficiency
- Lower cost of repairs
• MRO inventory and purchasing
- Right-sizing inventory lowering obsolete items
- Minimize stock-out thereby limited equipment
downtime
- Eliminate unnecessary purchases
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Metrics Affected
Process
Benefit
Manage PM
•Production
•Scrap
Value
yield
/ rework
•Equipment
service life
Manage labor resources
•Labor
utilization
Manage uptime
•Maintenance
•Production
Optimize inventory
downtime
•+10
•-20
to 20%
to 50%
•+10
to 20%
•+10
to 25%
•-20
to 50%
yield
•+10
value - availability,
common across plants
•-20
to 30%
•-30
to 50%
•-10
to 20%
•Inventory
•Stock-outs
purchases
to 20%
Manage spend
•Annual
Officially source items
•Approved
suppliers, best
•-
Control project costs
•Manage
costs within
•Save
price
budget
5 to 10%
services
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Next Steps
• Get involved in customer advisory groups
• Stop by the EXPO for a demo
• Ask your account manager for an EAM
Q−Scan
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Optimizing Equipment Lifecycle: Enterprise Asset Management
Questions & Answers
• Bo Hagler
• Nancy Majure
bgh@qad.com
nnm@qad.com
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www.qad.com
© QAD Inc
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