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
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.
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
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
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 10% to 30% Increased equipment service life 2 years
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
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?
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
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
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%
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 email or page EAM Project Controls Commission Operate Maintain Retire / Replace Design Construct Equipment & Asset Life-Cycle EAM Asset Management
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
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
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
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
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
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.
EAM Roadmap: Business Intelligence Optimizing Equipment Lifecycle: Enterprise Asset Management EAM Roadmap: Business Intelligence Start with a high-level KPI
EAM Roadmap: Business Intelligence Optimizing Equipment Lifecycle: Enterprise Asset Management EAM Roadmap: Business Intelligence Drill-down to further detail
EAM Roadmap: Business Intelligence Optimizing Equipment Lifecycle: Enterprise Asset Management EAM Roadmap: Business Intelligence Drill-down to further detail
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
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
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
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
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
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
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
Questions & Answers Bo Hagler bgh@qad.com Nancy Majure nnm@qad.com Optimizing Equipment Lifecycle: Enterprise Asset Management Questions & Answers Bo Hagler bgh@qad.com Nancy Majure nnm@qad.com
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