Optimize Your Manufacturing Equipment With EAMNancy MajureEAM Specialist, QAD Inc
From MRO to Project Management
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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.
Safe Harbor Statement
Optimize Your Manufacturing Equipment with EAM
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• 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
Presentation Agenda
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• 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
Overview
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Getting Started
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• Understand “equipment life-cycle”• Know your current status• Know why you should care• Understand Return on Investment • Define your strategic goals
Getting Started
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Equipment Life Cycle
Optimize Your Manufacturing Equipment with EAM
Commission
Operate
Maintain
Retire / Replace
Design
Construct
EAM Project Controls
EAM Asset Management
Equipment & Asset Life-Cycle
Acquisition Phase: budget controls,acquisition cost,reliability &maintain-ability
Operation Phase:maintenance,cost of ownership
20% of life cycle costs
80% of life cycle costs
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Know Your Current Status
Optimize Your Manufacturing Equipment with EAM
CM
CM
Reactive BestPractices
PM
100%
0%
>85%
<15%
PM
WorldClass
Stage 1Run to failureNo records
Stage 2PM Critical Assets (Cal)No CM recorded
Stage 3PM Program (Cal)Some CM recorded
Stage 4PM (Cal & DUOM)All CM recorded
Stage 5PMs and PdMsAll CM recorded
Functional Area Estimated Stage
Project Controls
Purchasing Processes
Inventory Controls
Plant Maintenance
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Know Why You Should Care
Optimize Your Manufacturing Equipment with EAM
Benchmarks Very Reactive2
Basic Maintenance Program2
Best Practice1
World Class1
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 Value1 – Maintenance and Reliability Best Practices, Ramesh Gulati
2 – Author’s estimated percentages
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Know Why You Should Care
Optimize Your Manufacturing Equipment with EAM
Example: QMI Manufacturing- RAV = $10,000,000- Annual Sales = $100,000,000
Benchmarks Very Reactive2
Basic Maintenance Program2
Best Practice1
World Class1
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 1 – Maintenance and Reliability Best Practices, Ramesh Gulati2 – Author’s estimated percentages
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• 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
Return on Investment
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• 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
Define Your Strategic Goals
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How EAM Supports Effective Enterprise
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Align With a Single System
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Indirect inventory processes
Project controls
Equipment efficiency
Maintenance processes
Indirect purchasing processes
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• Usability improvements - Rationalization of data entry - Reorganized screens
• Interface enhancements - Fixed asset integration - MSW/PSW exposure to EAM work orders - SCP integration
• Revision history
New in EAM 12.6 to Support Single System
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Usability – Reorganized Screens
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More logical data groupingImproved data entry flow
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Interfaces – Fixed Assets Interface
Optimize Your Manufacturing Equipment with EAM
Capitalize new asset Utilize actual spend from
- Project level, or
- Job level
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Interfaces – MSW/PSW
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Exposes EAM WO’s to scheduling Provides production visibility to required equipment downtime
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• Export RFQ’s to Supply Chain Portal• Import responses for purchasing
Interfaces – Supply Chain Portal
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• Supports compliance • Provides detailed traceability
Revision History
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EAM and Project Controls
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• “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
What is Project Control?
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• Capital- Profit enhancements- Increase capacity - Replacement
• Expense- Annual rebuilds- Marketing / legal / etc.
• Customer Funded - Progressive billing - Very common in
automotive verticals
Types of Projects Managed in EAM
Optimize Your Manufacturing Equipment with EAM
Key characteristic: results in new asset(s)
Key characteristic: no assets created
Key characteristic: customer owns asset
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EAM and Equipment Optimization
Optimize Your Manufacturing Equipment with EAM
Indirect inventory processes
Project controls
Equipment efficiency
Maintenance processes
Indirect purchasing processes
Utilize EAM to • Control budget • Improve design • Track real-time financials • Manage customer funding• Capitalize assets • Commission to operations
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• Project allocations • Fixed asset cross reference • Enhanced cost analysis • Analysis by activity
NEW in EAM v12.6 Projects
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Project Allocations
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Project Level
Job Level
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Fixed Asset Cross Reference
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Enhanced Cost Analysis
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Analysis by Activity Code
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EAM and Indirect Inventory / Purchasing
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• “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
Indirect (MRO) Inventory and Purchasing
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• 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
Indirect (MRO) Best Practices
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EAM and Equipment Optimization
Optimize Your Manufacturing Equipment with EAM
Indirect inventory processes
Project controls
Equipment efficiency
Maintenance processes
Indirect purchasing processes
Utilize EAM to • Authorize • Control • Link to indirect • Analyze • Improve
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EAM and Equipment Optimization
Optimize Your Manufacturing Equipment with EAM
Indirect inventory processes
Project controls
Equipment efficiency
Maintenance processes
Indirect purchasing processes
Utilize EAM to • Control• Right-size • Standardize • Analyze • Automate
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• Blanket orders • Redesigned quotes• Improved purchasing workflow • Intrastat support• Physical inventory by location
NEW in EAM v12.6 Inventory/Purchasing
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Blanket Orders
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Redesigned Quote Module
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• “Previously authorized” concept • Additional controls
- Modifications to ordered POs - Rerouting visibility - Status alignment with ERP
Improved Purchasing Workflow
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Intrastat Support
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EAM Functional Area: Maintenance
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• 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
What is Asset Maintenance?
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• 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
Maintenance Best Practices
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EAM and Equipment Optimization
Optimize Your Manufacturing Equipment with EAM
Indirect inventory processes
Project controls
Equipment efficiency
Maintenance processes
Indirect purchasing processes
Utilize EAM to • PM & CM • Measure • Analyze • Improve
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• Equipment mapping to ERP• Production line mapping to ERP• New/improved reporting
NEW in EAM v12.6 Maintenance
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• Supports MSW/PSW interface • Another step towards production driven
maintenance
Equipment Mapping to ERP
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• Supports MSW/PSW interface • Another step towards production driven
maintenance
Production Line Mapping to ERP
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• Incorporates “Transaction Date” ranges • Retrofitted back to 12.4.2.3
New/Improved Reporting
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Conclusion and Next Steps
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• 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
How Do I Optimize Equipment?
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EAM and Equipment Optimization
Optimize Your Manufacturing Equipment with EAM
Indirect inventory processes
Project controls
Equipment efficiency
Maintenance processes
Indirect purchasing processes
Utilize EAM to • Align indirect processes • Work at peak efficiency • Deliver on strategic goals
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• 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
Next Steps
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Questions & Answers
Optimize Your Manufacturing Equipment with EAM
Nancy MajureEAM Specialist, QAD [email protected]
Kate FenelloEAM Product [email protected]