1. Optimizing Your Equipment’s Life Cycle
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

2. 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.

3. Why Focus on Asset Reliability
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

4. What is Equipment Life Cycle?
Optimizing Equipment Lifecycle: Enterprise Asset Management
What is Equipment Life Cycle?
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle

5. Why Optimize Equipment Life Cycle?
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 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 % to 30%
Increased equipment service life 2 years

6. Equipment & Asset Life-Cycle
Optimizing Equipment Lifecycle: Enterprise Asset Management
How QAD EAM Assists
Project controls
Asset management
Plant maintenance
MRO / spares inventory
MRO purchasing
EAM Project Controls
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle
EAM Asset Management

7. Project Engineering Challenges
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?

8. EAM Project Controls: Key Capabilities
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
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle
EAM Asset Management

9. EAM Project Controls: Roadmap
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Project Controls: Roadmap
Manufacturing
Inventory master
Work order costs
BOM
Service and support management
EAM Project Controls
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle
EAM Asset Management

10. Typical Asset Management Challenges
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%

11. EAM Plant Maintenance: Key Capabilities
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 or page
EAM Project Controls
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle
EAM Asset Management

12. EAM Plant Maintenance: Roadmap
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Plant Maintenance: Roadmap
Share scheduling information with production scheduler
MSW/PSW
Graphical EAM work order scheduling
Visibility into equipment availability from production
EAM Project Controls
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle
EAM Asset Management 12

13. Typical MRO Environment
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

14. EAM MRO: Key Capabilities
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
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle
EAM Asset Management

15. Equipment & Asset Life-Cycle
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM MRO: Roadmap
Share RFQ with suppliers via SC Portal
Contract purchasing
EAM Project Controls
Commission
Operate
Maintain
Retire / Replace
Design
Construct
Equipment & Asset Life-Cycle
EAM Asset Management

16. EAM: Business Intelligence
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

17. EAM Roadmap: Business Intelligence
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.

18. EAM Roadmap: Business Intelligence
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
Start with a high-level KPI

19. EAM Roadmap: Business Intelligence
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
Drill-down to further detail

20. EAM Roadmap: Business Intelligence
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
Drill-down to further detail

21. EAM Roadmap: Business Intelligence
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

22. EAM Roadmap: Business Intelligence
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
Projects
Cash flow forecast
Expenditure analysis
Budget summary
Indirect purchasing
Spending analysis
Spending by equipment
Purchases by vendor
Purchases by commodity
Rush orders
Late receipts
MRO inventory
Inventory turns
Slow moving inventory
Inventory value trends
Stock out analysis
Financials
Operational expense cash flow
Actual vs. Budget
Top cost center by % of budget

23. EAM Roadmap: Business Intelligence
Optimizing Equipment Lifecycle: Enterprise Asset Management
EAM Roadmap: Business Intelligence
Maintenance
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
Maintenance (by period)
Total maintenance cost
Service request count
Work order backlog
Count
Labor hours
Average days open
PM compliance

24. QAD EAM Status March 2011: general available (GA) Supported versions
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

25. Review Project controls Plant maintenance MRO inventory and purchasing
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

26. Optimizing Equipment Lifecycle: Enterprise Asset Management
Metrics Affected
Process
Benefit
Value
Manage PM
Production yield
Scrap / rework
Equipment service life
+10 to 20%
-20 to 50%
Manage labor resources
Labor utilization
+10 to 25%
Manage uptime
Maintenance downtime
Optimize inventory
Inventory value - availability, common across plants
Stock-outs
-20 to 30%
-30 to 50%
Manage spend
Annual purchases
-10 to 20%
Officially source items
Approved suppliers, best price
- 5 to 10%
Control project costs
Manage costs within budget
Save services

27. Next Steps Get involved in customer advisory groups
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

28. Questions & Answers Bo Hagler bgh@qad.com Nancy Majure nnm@qad.com
Optimizing Equipment Lifecycle: Enterprise Asset Management
Questions & Answers
Bo Hagler
Nancy Majure

29.
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