Sophisticated enterprise asset management (EAM) software is a must for companies with business models that rely on maximizing output of expensive and complex assets. The right EAM software will help you not only ensure asset availability by seeing that necessary maintenance is performed, but allow senior management to manage and protect their overall investment, be it in an offshore drilling platform, nuclear power plant, manufacturing facility, jet aircraft or other asset.
The seven tips included in this article are from some of the top EAM minds in IFS North America and IFS AB, and are designed to help ensure that you get the most out of EAM software so that you can get the most out of your assets.
1) Consider PAS-55 and demands it places on EAM.
PAS-55 is a new publically available standard for asset management from the British Standards Institute, and is making rapid inroads globally. PAS-55 can be a great way to prove to stakeholders like customers, stockholders, regulators and customers that you are following best practices to ensure reliable operation, control costs and maximize return on capital assets. This standard deals only peripherally with EAM software, but does place one major requirement on information technology systems used to manage asset data that ought to impact EAM software selection.
PAS 55 requires that IT systems used to manage asset data allow for sharing of information and the retention of knowledge across the organization with a special focus on outsourced activities. Specifically, EAM must address all phases of the asset life cycle, including the processes of planning and engineering of the asset, maintenance and operation of the asset and the eventual retirement or decommissioning of the asset.
In order to facilitate compliance with PAS-55, EAM and other software used to manage asset data needs to deliver an accurate and consistent view of all asset information – one version of the truth – insuring policies, plans and actions are based on an accurate understanding of the history and current status of your asset infrastructure. In order to accomplish this, an EAM software product must actually address all phases of the asset life cycle, and not many do. It must also provide portals or other methods for outside parties like engineering firms and maintenance contractors to use the system so that everyone touching that asset data is interacting with a single database in real time.
The bottom line: Whether you plan to immediately implement PAS-55 or not, full asset life cycle support ought to be something to look for in an EAM software selection cycle. It is one best practice that makes measurable and practical sense in managing the life cycle of capital assets. And you never know when PAS-55 compliance will appear on your organization’s agenda, perhaps at the bequest of customers, investors and other stakeholders.
2) Open your system to your contractors with simple technologies.
PAS-55 compliance is not the only reason to open your EAM application to suppliers like engineering firms and maintenance contractors. There are two more reasons that this is a good idea. First of all, as you plan maintenance work for the weeks ahead, if your contractors have visibility of your plans through your EAM system, they can be informed of the upcoming work, schedule their people and ensure that they have the right tools and materials available. If they are seeing that rolling schedule, they can be more responsive to your needs. This also reduces the amount of time necessary to manage those outside contractors by phone and e-mail.
Moreover, if the contractor can report their work activities directly into your system, you are getting real-time updates of work completed. That eliminates the delay that results when the contractor enters the data in their own system, and the data flows through reporting mechanisms within that contractor environment and back to the manufacturing maintenance team, which then has to enter that record of work back into the EAM, enterprises resources planning (ERP) or computerized maintenance management (CMMS) software. That repeated entry is wasteful and increases the likelihood of mistakes. Real-time data can also allow for tighter coordination between the contractor and internal maintenance staff or with other contractors working on that asset. Moreover, that real-time data could allow for more efficient use of the asset, as in the resumption of a production schedule immediately after a contractor finishes work.
The bottom line: Anyone engaged in an EAM selection process ought to ask hard questions about how the software can be extended to suppliers involved in the various stages of the asset life cycle. Are there different ways this can be achieved that work for the various outside parties that should be able to access your EAM system?
3) Consider the importance of project management on a macro level.
If you think of the life cycle of an asset as one long project – a project that might last for as long as 20 or more years – it becomes apparent that what you are really looking at is a project that starts with the engineering and construction processes. The project then comes to include the cost to maintain, operate and refit, and culminates with a well-informed decision to decommission and replace the asset. In the absence of fully functional, flexible and integrated EAM and ALM systems, managing the life cycle of the asset from cradle to grave is a challenge.
Even though asset management technology has made enormous leaps in recent years, in some ways it may have been easier to manage major assets 30 years ago than it is today. This is because years ago, industries tended to have their own in-house engineering departments that designed major refits as well as new construction.
What this means to a software selection process is that the ability of an EAM package to support plant design and engineering ought to be a major factor. Even in the vast majority of instances when an outside engineering group is responsible for design, their activities ought to be encompassed by the EAM platform to be used during the asset life cycle so that design data flows naturally into the maintenance and operations systems that will sustain the asset during its productive life.
Tight integration between ALM, project management and core EAM functionality is also necessary. Consider for a moment the situation faced by the chief executive and maintenance director at a coal-fired power plant that has one stop per year for major overhauls. There is a pressing need to meet the project timeline because each day of downtime is worth millions of dollars, and there is a significant degree of project complexity as outside contractors are hired, equipment is rented and perhaps additional maintenance shifts are added. Robust project management functionality that is integrated on a very granular level with a powerful EAM application can help manage the resources necessary to complete the required tasks in the time allotted. While the ability to manage to meet the deadline is one strong argument for integrated project and EAM functionality, even greater benefit can be realized of project and EAM functionality are tied into an overarching asset life cycle management (ALM) system and the general ledger. The ability to look at a plant shutdown from an ALM and financial perspective can help determine if it makes sense to bring in additional outside resources in order to shorten the amount of downtime. To what extent will the outside cost of hiring contractors and equipment increase total return on the asset in the intermediate to longer term?
Many asset-intensive companies do not have in place the proper tools to efficiently optimize the activities associated with a plant shutdown, and certainly do not have the right tools to proactively reduce planned downtime.
The bottom line: Asset management executives that get the right EAM tools in place and leverage them to their full extent will have lower overhead and greater productivity, while their competitors fumble to keep up. They will be able to make more intelligent decisions about the life cycle of the asset because they can manage it as one long project.
4) Consider the importance of project management on the micro level.
In a large-scale project environment like an asset-intensive industry, an effort to track the cost of operating and maintaining the asset is dependent on effective cost tracking on thousands of smaller projects. On this micro level, integrated project, finance and EAM functionality is critical. When working in a properly integrated enterprise application, it is much easier to structure a maintenance project to collect all of the cost, including procurement and work orders that are used to collect technicians’ time. Integrated functionality will also allow analysis of project cost by different breakdown structures, and each activity a can be assigned a different funding line.
Figure 1. In this screen from IFS Applications, a number of project management functions are integrated tightly with the rest of the enterprise.
Moreover, because a number of different departmental and functional activities can be tracked against a single project or in the aggregate, it becomes much easier to identify the periodicity of failures in specific pieces of equipment. This can be invaluable information as a maintenance director communicates with senior management during the capital budgeting process. Thorough information on what a specific piece of capital equipment costs to operate can inform a refit-or-replace decision.
But these decisions are much harder to make when the true cost of maintenance is lost to inefficiencies in administrative systems. Specifically, what are these inefficiencies that can hamstring your asset management efforts? Consider the challenge faced by maintenance teams engaged in a more complex maintenance project, like replacing a boiler system, without integrated EAM, projects and work order capability. This project likely involves internal staff time, contractors, inventory parts and materials purchased specifically for the project.
If this team is using a stand-alone project management system, they will at the very least have to retrain their maintenance technicians to use projects to capture materials and time rather than using the work orders normally used by technicians for other work. Even if you were to engage in this retraining initiative, project cost reporting capabilities may suffer and senior management still won’t have a clear idea of the project cost. Furthermore, forcing maintenance technicians to abandon their familiar work orders in favor of project management software can result in lost asset data. Integration from the work order at the front line to the project functionality at the managerial level to the ALM functionality at the senior management level reduces cost and inefficiencies and ought to be something to look for during an EAM selection process.
The bottom line: A maintenance department is involved with multiple projects every day. Ensuring that EAM software is capable of adequately managing and recording this project data should be a key consideration in EAM selection.
5) Consider the impact of an aging/shrinking workforce.
World demographics suggest that executives in the developed world ought to plan to run their business with fewer people in the future. The 78 million Baby Boomers in the United States workforce are starting to retire, and they will be replaced by a generation of just 50 million people. This creates a structural gap that cannot be ignored. Moreover, this younger generation has a completely different view of life, work and technology than their elders, and their expectations for how, where and with what tools they work will be much, much more stringent. Another interesting aspect of the aging workforce challenge is that it really only applies in the more developed countries. The developing world is still much younger on average than the developed world, with younger generations that are larger than older ones.
While this generational change will demand more efficient EAM and ERP systems, it will also create a real need for enterprise software to record the tacit knowledge and collective wisdom of a retiring generation of executives, managers and workers. This informal, tacit knowledge is a kind of corporate capital that will otherwise disappear from companies when this generation is leaving the workforce.
Tacit knowledge can consist of a number of things, including work strategies for certain situations like that stoppage that is planned for mid summer during peak vacation season, the complex redesign project that places severe demands on an engineering staff or troubleshooting and repair of unique and complex equipment. Older workers may even be able to diagnose equipment problems based on the sound machinery makes while it is running. This type of knowledge is hard to contain in the enterprise application, but that is exactly what enterprise software must do in order to help companies successfully negotiate this generational shift.
Getting this information out of the older generation will be difficult for a number of reasons. One reason is the fact that many people regardless of age see knowledge as power, and believe that if they freely share this information they become less valuable to the company. Proprietary information, in fact, should not be shared in a competitive market, but the real competition takes place outside the company rather than within the company. And when knowledgeable employees keep information to themselves, your company will be at a competitive disadvantage. Enterprise software like EAM will need to help build an environment where people are willing to share, willing to help each other and share what they know.
Many asset-intensive companies do not have in place the proper tools to efficiently optimize the activities associated with a plant shutdown, and certainly do not have the right tools to proactively reduce planned downtime.
The bottom line: Asset management executives that get the right EAM tools in place and leverage them to their full extent will have lower overhead and greater productivity, while their competitors fumble to keep up. They will be able to make more intelligent decisions about the life cycle of the asset because they can manage it as one long project.
Figure 2. Enterprise 2.0 features like this threaded discussion board within IFS Applications can pull tacit knowledge out of senior employees and retain it within the enterprise application.
Getting this valuable tacit knowledge out of senior people is also difficult because they are at that state of unconscious competence. They don’t know that they have something to share or what it is that they know would be valuable to others. If you ask someone to, before they are retiring, sit down with a white paper and write down all of the things they know, it would just not work. However, by leveraging technologies classified as Web 2.0 and Enterprise 2.0, we can get people to share because they are responding to organic, real time requests for expertise. Tools like wikis, message boards and even the traditional threaded discussion group can prompt senior employees to respond to queries from other employees, contribute to articles on important topics and capture that valuable data in the centralized application environment where it can benefit the company going forward. Wikipedia, popular discussion forums and even Facebook are examples of collaboration and information sharing facilitated by information technology platforms.
The bottom line: In evaluating EAM software, it is therefore clearly important to look for Enterprise 2.0-type of features that will facilitate this type of open, communicative environment.
6) Consider the importance of usability.
It only makes sense that EAM software functionality that can be understood intuitively, with minimal training and orientation, will offer lower total cost of ownership than software that is more abstruse and harder to comprehend and use. EAM software that is simple and offers an attractive interface will also prompt users to enter more data and interact with the system more frequently, which improves the quality of enterprise data. Systems that make sense from a usability standpoint will become more important as the aforementioned younger generation wields more influence in the workforce. Baby Boomers were willing to engage with enterprise software systems that frankly left a lot to be desired from a usability standpoint. They assumed that there was a good reason to enter the same data in multiple fields or bounce between several screens to complete a single process. The newer generations realize that this is just the result of poor software design, and are likely to complain or just use other systems outside of the EAM environment, resulting in fragmented data and inefficient, uncoordinated processes.
Figure 3. This screen from IFS Applications creates a visual illustration of production stops.
This can be said of all enterprise software. But in the case of EAM, we are often dealing with tremendous amounts of data, particularly when EAM is integrated with PLCs for automated fault reporting. These very sizable data stores contain – for the most part -- information on equipment and processes that are well within acceptable limits. A vanishingly small portion of this data, however, is of critical importance and interest because it has to do with equipment that requires immediate attention. Therefore, EAM software must allow managers to separate the boring many from the critical few. A number of graphical formats for representing data – including tree maps – can accomplish this very thing.
Figure 4. In this tree map from IFS Applications, the number of faults is represented by size and criticality by color. Users can drill down in the big red squares to find the reasons behind the problems.
The bottom line: In selecting EAM software, it is therefore important to look for cutting-edge usability improvements that will streamline adoption of the software in the enterprise and offer enhanced decision and managerial support in suggesting which maintenance tasks are most pressing at a given time.
7) Realize lean maintenance improvements by integrating EAM with ERP.
While many EAM packages are capable of standard maintenance planning and work management functions, the fact remains that the success of most preventive maintenance programs relies on securing the involvement and buy-in of people beyond the maintenance department. And that is why it is of critical importance for EAM functionality to be either part and parcel of a system of enterprise software used elsewhere in the business or be tightly integrated with an ERP package used company-wide.
A truly flexible EAM solution can either be implemented as a full-blown enterprise application including financials, human resources, manufacturing and other functionality or integrated with an existing ERP tool. The EAM functionality in IFS Applications, for instance, includes standard interfaces to SAP, Oracle applications and other products. Meanwhile, a best-of-breed “niche” EAM vendor may offer some degree of integration with a broader ERP package, but the inventory management and control, human resources, document management and purchasing functions are not as tightly linked with other applications because the underlying functionality in the EAM tool is not as robust.
Lacking very tight integration with other applications used within the company, an EAM package will create non-value-added work as some data has to be manually transferred from the EAM system into an ERP system. Furthermore, when EAM software does not integrate with other functionality like an ERP solution, what results is a suboptimal or redundant system when it comes to ordering spare parts because most purchasing functions are undertaken outside the EAM system. Maintaining good information on spare parts in inventory and avoiding over-buying of components is extremely difficult, particularly if some items to be purchased are used in both the manufacturing process and the maintenance process. Personnel scheduling is also hobbled by a stand-alone EAM tool because the scheduling functions in a best-of-breed maintenance application are not integrated with Human Resources software where information about vacations, employee qualifications and other data is housed.
EAM solutions that are part of broader enterprise applications can be very robust, in some cases rivaling best-of breed solutions. They will capture failure data, issue work orders, schedule people and materials and purchasing requirements. But unlike standalone EAM systems, these integrated applications can, for instance, leverage the purchasing functionality already resident in the ERP application. When EAM functionality is integrated with enterprise applications functionality used by other departments, when everyone is working on the same platform and on the same data, there are a number of efficiencies that result. And because everyone is working on the same data in the same environment, it is easier to communicate with others on whom a reliability-centered maintenance (RCM) initiative relies.
The bottom line: What this means to you is that it is important to consider the degree to which EAM software will create a data silo separate from the rest of the enterprise, which in turns creates non-value-added work. Lean maintenance improvements are achievable, on the other hand, when EAM is integrated with the rest of the enterprise.
Conclusion
While every business is slightly different, we at IFS believe that the above tips will prove useful to most asset-intensive organizations most of the time. The underlying idea that runs through all of these tips is that EAM ought to be seen as a strategic asset that can drive enterprise value when selected, implemented and used correctly.
About the author:
Patrick Zirnhelt is the director of sales for asset-intensive industries for IFS North America. He has more than 16 years of experience working with enterprise systems, which includes software development, implementation and sales. He is a professional engineer registered in Ontario and holds an MBA specializing in management information systems from the York University Schulich School of Business in Toronto and a bachelor of science degree in mechanical engineering from Queens University, Kingston, Ontario.
