From MRO to Project Management Optimize Your Manufacturing Equipment With EAM Nancy Majure EAM Specialist, QAD Inc Optimize Your Manufacturing Equipment with EAM Safe Harbor Statement The following is intended to outline QADs 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 QADs products remains at the sole discretion of QAD. 2 Optimize Your Manufacturing Equipment with EAM Presentation Agenda 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
3 Optimize Your Manufacturing Equipment with EAM Overview QADs 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 4
Optimize Your Manufacturing Equipment with EAM Getting Started 5 Optimize Your Manufacturing Equipment with EAM Getting Started Understand equipment life-cycle Know your current status Know why you should care
Understand Return on Investment Define your strategic goals 6 Optimize Your Manufacturing Equipment with EAM Equipment Life Cycle Acquisitio n Phase: budget controls, acquisition cost, reliability & maintainability
EAM Project Controls Construct Design 20% of life cycle costs Commissi on Equipment & Asset Life-Cycle Retire / Replace 80% of life cycle costs
Operate Maintain EAM Asset Management Operation Phase: maintenance, cost of ownership 7 Optimize Your Manufacturing Equipment with EAM Know Your Current Status
CM 100% >85% PM Best Practices Reactive World Class <15% PM CM
0% Stage 1 Run to failure No records Stage 2 PM Critical Assets (Cal) No CM recorded Stage 3 PM Program (Cal) Some CM recorded Functional Area Stage 4 PM (Cal & DUOM) All CM recorded
Stage 5 PMs and PdMs All CM recorded Estimated Stage Project Controls Purchasing Processes Inventory Controls Plant Maintenance 8 Optimize Your Manufacturing Equipment with EAM Know Why You Should Care
Benchmarks Very Reactiv e2 Basic Maintenan ce Program2 Best Practic e1 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 Value
1 Maintenance and Reliability Best Practices, Ramesh Gulati 2 Authors estimated percentages 9 Optimize Your Manufacturing Equipment with EAM Know Why You Should Care Example: QMI Manufacturing - RAV = $10,000,000 - Annual Sales = $100,000,000 Benchmarks Very Reactive 2 Basic Maintenan
ce 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 Gulati 2 Authors estimated percentages 10
Optimize Your Manufacturing Equipment with EAM Return on Investment 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 11 Optimize Your Manufacturing Equipment with EAM
Define Your Strategic Goals 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 12 Optimize Your Manufacturing Equipment with EAM How EAM Supports Effective Enterprise
13 Optimize Your Manufacturing Equipment with EAM Align With a Single System Project controls Indirect inventory processes Equipment efficiency Indirect purchasing processes
Maintenanc e processes 14 Optimize Your Manufacturing Equipment with EAM New in EAM 12.6 to Support Single System Usability improvements - Rationalization of data entry - Reorganized screens Interface enhancements - Fixed asset integration - MSW/PSW exposure to EAM work orders - SCP integration
Revision history 15 Optimize Your Manufacturing Equipment with EAM Usability Reorganized Screens More logical data grouping Improved data entry flow 16 Optimize Your Manufacturing Equipment with EAM Interfaces Fixed Assets Interface
Capitalize new asset Utilize actual spend from - Project level, or - Job level 17 Optimize Your Manufacturing Equipment with EAM Interfaces MSW/PSW Exposes EAM WOs to scheduling Provides production visibility to required equipment downtime
18 Optimize Your Manufacturing Equipment with EAM Interfaces Supply Chain Portal Export RFQs to Supply Chain Portal Import responses for purchasing 19 Optimize Your Manufacturing Equipment with EAM Revision History Supports compliance Provides detailed traceability 20
Optimize Your Manufacturing Equipment with EAM EAM and Project Controls 21 Optimize Your Manufacturing Equipment with EAM What is Project Control? 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 22 Optimize Your Manufacturing Equipment with EAM Types of Projects Managed in EAM Capital - Profit enhancements - Increase capacity - Replacement
Expense - Annual rebuilds - Marketing / legal / etc. Customer Funded - Progressive billing - Very common in automotive verticals Key characteristic: results in new asset(s) Key characteristic: no assets created Key characteristic: customer owns asset
23 Optimize Your Manufacturing Equipment with EAM EAM and Equipment Optimization Project controls Indirect inventory processes Equipment efficiency Utilize EAM to Control budget
Improve design Track real-time financials Manage customer funding Capitalize assets Commission to operations Indirect purchasing processes Maintenanc e processes 24 Optimize Your Manufacturing Equipment with EAM NEW in EAM v12.6 Projects
Project allocations Fixed asset cross reference Enhanced cost analysis Analysis by activity 25 Optimize Your Manufacturing Equipment with EAM Project Allocations Project Level Job Level
26 Optimize Your Manufacturing Equipment with EAM Fixed Asset Cross Reference 27 Optimize Your Manufacturing Equipment with EAM Enhanced Cost Analysis 28 Optimize Your Manufacturing Equipment with EAM Analysis by Activity Code
29 Optimize Your Manufacturing Equipment with EAM EAM and Indirect Inventory / Purchasing 30 Optimize Your Manufacturing Equipment with EAM Indirect (MRO) Inventory and Purchasing 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 31 Optimize Your Manufacturing Equipment with EAM Indirect (MRO) Best Practices
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 32 Optimize Your Manufacturing Equipment with EAM EAM and Equipment Optimization Project controls Indirect inventory processes Equipment efficiency
Utilize EAM to Authorize Control Link to indirect Analyze Improve Indirect purchasing processes Maintenanc e processes 33 Optimize Your Manufacturing Equipment with EAM EAM and Equipment Optimization
Utilize EAM to Control Right-size Standardize Analyze Automate Indirect inventory processes Project controls Equipment efficiency Indirect
purchasing processes Maintenanc e processes 34 Optimize Your Manufacturing Equipment with EAM NEW in EAM v12.6 Inventory/Purchasing Blanket orders
Redesigned quotes Improved purchasing workflow Intrastat support Physical inventory by location 35 Optimize Your Manufacturing Equipment with EAM Blanket Orders 36 Optimize Your Manufacturing Equipment with EAM Redesigned Quote Module 37
Optimize Your Manufacturing Equipment with EAM Improved Purchasing Workflow Previously authorized concept Additional controls - Modifications to ordered POs - Rerouting visibility - Status alignment with ERP 38 Optimize Your Manufacturing Equipment with EAM Intrastat Support 39
Optimize Your Manufacturing Equipment with EAM EAM Functional Area: Maintenance 40 Optimize Your Manufacturing Equipment with EAM What is Asset Maintenance? 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 41 Optimize Your Manufacturing Equipment with EAM Maintenance Best Practices 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 42 Optimize Your Manufacturing Equipment with EAM EAM and Equipment Optimization Project controls Indirect inventory
processes Utilize EAM to PM & CM Measure Analyze Improve Equipment efficiency Indirect purchasing processes Maintenanc e processes
43 Optimize Your Manufacturing Equipment with EAM NEW in EAM v12.6 Maintenance Equipment mapping to ERP Production line mapping to ERP New/improved reporting 44 Optimize Your Manufacturing Equipment with EAM Equipment Mapping to ERP Supports MSW/PSW interface Another step towards production driven maintenance
45 Optimize Your Manufacturing Equipment with EAM Production Line Mapping to ERP Supports MSW/PSW interface Another step towards production driven maintenance 46 Optimize Your Manufacturing Equipment with EAM New/Improved Reporting Incorporates Transaction Date ranges Retrofitted back to 12.4.2.3 47
Optimize Your Manufacturing Equipment with EAM Conclusion and Next Steps 48 Optimize Your Manufacturing Equipment with EAM How Do I Optimize Equipment? 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 49 Optimize Your Manufacturing Equipment with EAM EAM and Equipment Optimization Utilize EAM to Align indirect processes Work at peak efficiency Deliver on strategic goals Indirect inventory
processes Project controls Equipment efficiency Indirect purchasing processes Maintenanc e processes 50 Optimize Your Manufacturing Equipment with EAM
Next Steps 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 51 Optimize Your Manufacturing Equipment with EAM Questions & Answers Nancy Majure EAM Specialist, QAD Inc [email protected]
Kate Fenello EAM Product Manager [email protected] 52 www.qad.com QAD Inc 2012 53
